The federal government says that new rail transportation rules will help clear up the backlog of grain in Saskatchewan.
This spring, the government passed an Order in Council for Bill C-30, that amended the Canadian Transportation Act and Canadian Grain Act to ensure that crops were moved as quickly as possible.
The move was done largely because of a bumper crop for western farmers, who saw record harvests in 2013, but were struggling to get their product to market due to massive transport delays.
According to the Government of Saskatchewan, at its peak in March of 2014, the grain backlog in Western Canada was about 80,000 rail cars or 7.2 million tonnes of grain.
An initial regulation by the government earlier this year required CN and CP to ship 1 million metric tonnes per week.
Now the backlog is at 2.43 million tonnes.
“(It was difficult to) sell on time, get the cash flow they were expecting. It might have been even trying to take advantage of the price that was out there and they couldn't because there was a backlog or they couldn’t market it at the time the wanted to,” he said.
Bill C-30 regulations begin
Bill C-30 brings in a number of rules that are meant to help farmers get their grain to market faster. It was put into force on Aug. 1.
“One thing we have done is clearly defined some of the practices that will be required, so that there aren’t long-winded legal debates that take months and months in court. The railways have always been experts at throwing a barrage of papers and lawyers up in front of shippers,” said federal Agriculture Minister Gerry Ritz.
- Extending the earlier requirement that CP and CN must move a minimum volume of grain to Nov. 29
- Requiring CN and CP to provide information on grain movement to help monitor flow of the rail-based supply chain
- Regulations to give farmers more accountability from grain companies
- Regulations to clarify terms between grain companies and shippers to provide more predictability in rail service
- The government has also implemented penalties for the railway companies when they do not meet the standards set.
Farm group applauds changes
The changes are being applauded by the Grain Growers of Canada who say the mandated weekly volume will ensure that last year’s backlog will continue to clear. The organization is expecting a large carry over from last year’s harvest as well as a near-average harvest in 2014.
“Back last October if you had asked me how are the railways getting along with you, it always seems to me like they’re a monopoly,” said Gary Stanford, president of Grain Growers of Canada.
Stanford said he's pleased the government has stepped in to help.
“Railways have been around 100, 140 years, this is the first time it’s happened, for us as farmers, we feel like we have some backing, we have some support and we are looking forward to the future,” Stanford said.