The Conservative government's plan to end the Canadian Wheat Board's monopoly over barley and wheat marketing in Western Canada is causing some concern for short-line railway operators in the Prairies.
Agriculture Minister Gerry Ritz announced Monday that the government would introduce a bill in the House of Commons Tuesday that will see the monopoly ended by August, 2012. While Ritz denied the change would mean the end of the wheat board, there are many who believe it could not survive in a dual-desk system.
Without the wheat board, or even with a weakened wheat board, many short-line companies say they won't survive either.
"I think within days or months for sure you would see some short-lines in some financial trouble where they don't have any income coming in and you would see them go under fairly regularly the first year," said Lonny McKague, a director with Red Coat Road and Rail Ltd., a short-line railway in Saskatchewan's southwest.
Red Coat, like the 13 other short-line railways in the Prairies, primarily ships producer cars for farmers marketing to the wheat board. Farmers load the producer cars themselves, which are taken by the short-lines to major railways and shipped to port. That's where the wheat board unloads the grain and ships it overseas.
According to the Canadian Wheat Board, farmers loaded 12,784 producer cars in the 2010-11 farming season. Of those, the wheat board says 463 (about three per cent) were loaded with non-board grain.
Producer cars compete with the shipping systems used by grain companies. While farmers will still have the right to ship them without the wheat board, it's believed many companies won't accept the cars at port. Farmers would instead drive their crops to the companies' nearest terminals, thus eliminating the need for short-line railways.
McKague said he has already seen building and investment halt along the 115 kilometres of track operated by Red Coat Road and Rail over concern about the line's future.
He said there is still work being done on a planned tourist train, but he's worried about the impact of the Canadian Wheat Board debate on its viability. "If you don't have a rail line you can't run a tourist train," he said.
However, the chair of the Ogema Heritage Railway Association said plans for the tourist train are going full-speed ahead.
Glen Myren, who is also mayor of Ogema, said they are still working on the train and will be holding a fundraiser and kickoff in Ogema on Nov. 4.
A previous version of this story quoted Lonny McKague as saying plans for the tourist train had been put on hold. That was not correct. Plans are still underway.Oct 21, 2011 1:10 PM CT