Grain shippers see win for Canada’s economy in new federal transportation legislation

WINNIPEG, Manitoba, May 19, 2017 (GLOBE NEWSWIRE) — The Western Grain Elevators Association would like to thank Transport Minister, Marc Garneau, the Minister of Agriculture and Agri-Food, Lawrence MacAulay, and their colleagues on a bill tabled Tuesday to modernize Canada’s rail transportation system.

“This is an important step forward for the grain sector and has been many years in the making,” said WGEA Executive Director, Wade Sobkowich. “The legislative changes in Bill C-49 will ensure accountability and create a more commercially oriented rail freight environment.”

The cornerstone of the Bill is a provision that gives shippers the ability to arbitrate reciprocal penalties for performance failures into Service Level Agreements.

“Every sound business relationship has to be built on accountability,” explained Sobkowich. “Through this legislation, the Government is rebalancing the relationship between the rail carriers and their shipper customers by holding both parties financially accountable to perform.”

Another key component is to ensure that service requirements are based on shipper needs rather than the capacity the railways are willing to supply. The strengthened definition of adequate and suitable service in the Bill helps to remove ambiguity about the railways’ obligation to provide railcars, crews and locomotive power to move grain efficiently to end use customers.

The effective extended interswitching provisions that WGEA members have been using extensively were not made permanent. The new provisions for “Long-haul interswitching” contained in the Bill will require further assessment to see if they continue to create more competition in the system as the extended 160km interswitching provision has these past 2 years.

“What we were looking to see in the Bill was a mechanism that would continue to inject competition into the system by giving shippers service options in the same simple, non-bureaucratic way that we were beginning to see with extended interswitching,” explained Sobkowich. “We will work with the Government to ensure the new mechanism not only guards against monopolistic behavior, but also creates proactive competition like the current tool does.”

The Bill also contains important provisions that give additional oversight to the Canadian Transportation Agency, improve on the reporting and contingency planning of the rail companies, and maintain the Maximum Revenue Entitlement to protect our farmer customers from exorbitant rate hikes. “Combined, these provisions will all help to improve transparency and improve the efficiency of the system that benefits all stakeholders,” said Sobkowich.

The WGEA is an association of grain businesses operating in Canada which collectively handle in excess of 90% of western Canada’s bulk grain exports. Its members account for approximately one fifth of bulk railway revenue in Canada and pay annual total freight of one and a half billion dollars. For more information on the WGEA’s perspective on the rail environment visit: www.wgea.ca

CONTACT: Contact: Wade Sobkowich, Executive Director, WGEA (204) 942-6835 or wgea@mts.net