NEW CLOG, OLD INERTIA
Transportation bottlenecks are hindering the delivery of a key Alberta export. The complaint may sound numbingly familiar, but this time, the commodity is different. Just as a lack of pipeline capacity is choking off the export of bitumen at a cost to Alberta producers of hundreds of millions in revenue, a critical shortage of rail cars is backlogging millions of tonnes of grain across Western Canada.
The potential economic cost of leaving grain in bins and elevators instead of loading it on waiting ships to send to market is enormous in its own right. The last grain crisis of 2013-14, which stranded much of the nation’s harvest for months, cost the Canadian economy an estimated $8 billion.
Those numbers aren’t just abstract losses to the national GDP but serious hits to the livelihoods of individual farmers. This latest backlog threatens to disrupt the cash flow for producers just when they need revenue the most. Farmers who can’t transport their grain are prevented from using last year’s crop to pay off loans as they come due and the next planting season looms.
From a broader perspective, Canada’s credibility as a trading nation is at stake.
Increasingly, our reputation among global customers is that of a supplier with aging and inadequate transportation infrastructure which fails to deliver its products on time, whether it’s canola or crude.
Just as in the last grain-transportation crisis, Canada’s two major railways have let farmers down. The latest Ag Transport Coalition report showed CP and CN supplied only 32 per cent of the grain cars requested by producers. The companies blame harsh winter conditions for the poor performance. There’s also been a surge in demand for cars to carry oil shipments.
But in another parallel between backlogged bitumen and grain, critics blame the Trudeau government for lack of action on the graincar shortage in much the same way that it’s criticized for seemingly grudging support for pipeline development.
Farmers want Ottawa to follow the Harper government’s move four years ago and order the railways to move minimum amounts of grain or face fines.
While Bill C-49 would help farmers with cash flow and force rail companies to ship grain under threat of penalties, the proposed legislation is stalled in the Senate because the bill also includes more contentious provisions around a new air passenger bill of rights. Farmers can’t wait much longer.
With grain joining bitumen as another vital Alberta export hampered by the failings of a federally overseen infrastructure system, it’s time for action from the Trudeau government.