The decision by the Federal Government to impose stricter fines on railway companies and enhance grain transportation is seen by some as good news.
Verlyn Olson, Minister of Agriculture and Rural Development in Alberta, praised the decision in a press release. “We are pleased that the federal government has brought forward the Fair Rail for Grain Farmers Act, which addresses some of our concerns and will help strengthen rail transportation system performance in the immediate and long-term.”
For some however, it falls short on an overlying issue of product transportation.
Levi Wood, president of the Western Canadian Wheat Growers, applauded Bill C-30 legislation fining railways $100,000 per day if they do not meet minimum shipping loads but is disappointed transportation stayed fixed at one million tonnes per week.
“We just don’t see it has the necessary penalties or the necessary car allotment to really alleviate the backlog,” said Wood.
He estimates a $7 billion loss to the prairie economy and suggests the railway companies, Canadian Pacific and Canadian National, need to be ramp up their transportation loads.
“It’s been the single biggest issue in Western Canadian prairie and agriculture this year,” he stated.
Farmers are waiting for their grains to be taken to port but are somewhat at the mercy of the railways lines. Wood says crops were large across the Prairies, which created a strong sense of optimism but not being able to sell the crop has been disheartening.
“That backlog of cars is still huge and it’s going to take a long time to alleviate,” said Wood.
It is believed there will be a backlog of grain orders is six million tonnes heading into the 2014 harvest.
“As we head into the new crop, the real problem is that these issues might mushroom again based on what happened this year on the Prairies,” explained Wood.
He hopes this legislation will be enough for the railways to move grain on their own. Wood is not in favour of the government being involved with businesses but suggests in this case, with only railways providing service, it may be a good thing for farmers.
“The railways are a duopoly at best. And in many cases are simply a monopoly because people are only served by one of the railways and I think that is some of our concern,” said Wood.
Transport issue affects the whole country
Wood feels transportation should be a national concern.
With new trade agreements and markets being opened up, product transportation is going to become increasingly important.
“It’s an issue that really faces every industry. How are we possibly going to send more stuff out when we’re constrained in our ability to do that?” asked Wood.
“That really affects our brand as a country,” he added.