Alberta demands 'penalty' on railways for grain backlog

The province is turning up the heat on Canada's rail companies to try and get them to deal with a backlog of grain.

Provincial agriculture minister Verlyn Olson to push for federal legislative change

The growing backlog of grain waiting to be transported to market by rail could result in farmers being short the money they need for spring seeding, the head of the Alberta Federation of Agriculture warns. (Andrew Vaughan/Canadian Press)

Alberta is turning up the heat on Canada's rail companies to try and get them to deal with a backlog of grain.

For months, farm groups have been demanding help to get last year's record harvest shipped. Much of the crop is piling up in elevators — leaving farmers in financial limbo — and the province's agriculture minister says Canada's rail lines are to blame.

"The rail companies said they planned to move about 5,500 cars per week," said Minister Verlyn Olson. "We are nowhere near that number."

Olson says the federal government needs tougher legislation so that it can "level direct monetary penalty on railways when they fail to meet their obligations."

That would require legislative change on a federal level — something Olson says he will push for when meeting the Federal Agriculture Minister Gerry Ritz in Winnipeg next week.

Alberta's minister of agriculture, Verlyn Olson, says railway companies need to face tougher penalties for inadequate services. (CBC)

"The consequences for inadequate service needs to be immediate and shared by all to better ensure that our products move to port as quickly and as efficiently as possible," Olson said.

In a recent opinion article published in some Prairie newspapers, the president of Manitoba's Keystone Agricultural Producers laid blame for the bottleneck squarely on 'abysmal service' by Canada's two major railways.

Doug Chorney suggested the monopoly Canadian Pacific Railway and Canadian National Railway hold in the marketplace allows them to provide inadequate service without fear of consequences.

"This is not a once-in-a-lifetime situation," he wrote. "Instead, it will be the norm in a few years. Will we wait until then to fix our rail system, or will we begin to do it now?"

Railways blame cold weather for backlog

Transport Canada says the government is continuing to monitor the effectiveness of of the Fair Rail Freight Service Act, which the Conservative government passed last year. 

However, farm groups say the legislation isn't working and needs to be amended.

While CN says cold weather starting in early December is behind the downturn in its transportation performance, grain farmers say competition from oil producers is delaying their efforts to get last fall's record harvest to markets.

Rail shipments of oil in Canada have gone from about 6,000 train carloads in 2009 to an estimated 14,000 this year, according to Statistics Canada and the Canadian Association of Petroleum Producers.