Railways must boost grain shipments to ease logjam
WINNIPEG • Ottawa is forcing Canada’s two main railway companies to double the amount of grain they ship in a week to try to unclog a transport bottleneck that has left piles of grain sitting in bins across the Prairies.
Transport Minister Lisa Raitt said Cabinet has passed an orderin-council that gives Canadian National Railway Co. and Canadian Pacific Railway Ltd. a month to start moving a minimum of one million tonnes of grain in 11,000 cars each week.
If CP and CN don’t meet the requirement, Ms. Raitt said they face fines of up to $100,000 a day. The Conservatives are also promising legislation when Parliament resumes that will help ensure agricultural products get to market.
“This is a very serious situation,” Ms. Raitt said at a news conference in Winnipeg on Friday. “We have to demonstrate that Canada can maintain an efficient transportation system which is capable of moving our grain to market. This is an issue of great significance and we have to address it in a timely manner.”
Farmers and provincial governments have been complaining loudly that a bumper grain crop is still sitting in bins while prices fluctuate. Last year’s harvest was up by about 20 million tonnes.
Ottawa has already chipped in $1.5-million for a five-year transportation study and ordered rail companies to report monthly on their performance.
CN and CP did not get a heads-up about Friday’s announcement, Ms. Raitt said.
Agriculture Minister Gerry Ritz said farmers are increasingly frustrated by the “poor performance of the railways.”
“The railways have dropped the ball,” he said. “This situation is not acceptable.”
Ed Greenberg, spokesman for Calgary-based CP, said the railway will comply with the order. But he called the move unfortunate and suggested it didn’t take into account the “entire supply chain.” The issue is complex and goes beyond the railway, he added.
The backlog has not been caused by a shortage of locomotives or crew, Mr. Greenberg said.
“It’s been a combination of an extraordinary crop size combined with extreme weather that has resulted in this situation,” he said. “And despite an extraordinary crop size that was not forecasted by anyone, and periods of extreme winter weather, our railway has continued to move record amounts of grain.”
CN’s Jim Feeny said the company can comply with the order if everyone in the supply chain works together.
The challenge in moving the biggest Prairie grain crop in history is unprecedented, he said. The company has been doing everything it can to keep grain moving but it has been hampered by extreme cold, Mr. Feeny said. Many farmers praised the order. “Obviously the government heard us,” said Dan Mazier, vice-president of Keystone Agricultural Producers, who was part of a delegation that met with Ms. Raitt last week. “This is great news from a farmer’s perspective.