Changes will ensure no more grain backlogs: minister
It will take time for new transportation legislation and infrastructure to take effect, but Canada’s agriculture minister is adamant Prairie farmers should not face another costly grain backlog this winter.
Lawrence Macaulay ’s assurance that government is dealing with the problem comes months after the railways, for the second time in five years, struggled to get Saskatchewan-grown grain to port.
“The farmers certainly realize that we’re moving on this issue. It’s a major move, and it’s a necessary move. And it will be done,” Macaulay, the MP for Cardigan, P.E.I., told reporters in Saskatoon on Thursday.
Those steps include the passage this spring of Bill C-49, the Transportation Modernization Act, which aims to make the major railways more accountable through financial penalties and other measures.
They also include Canadian National Railway Co.’s promises to buy 1,000 new grain hopper cars and spend millions of dollars on new infrastructure, including $210 million in Saskatchewan this year.
CN is also consulting with farmers and grain groups this summer as it develops its shipment plan for the winter.
Canadian Pacific Railway Ltd., meanwhile, pledged to spend $500 million on 5,900 new hopper cars over the next four years, with 500 of those coming into service before the end of 2018.
Both railways must, by the end of the month, submit to the federal government a report outlining their ability to move the required amount of grain during the crop year, as well as contingency plans should weather intervene.
Macaulay said he is “quite confident” both railway companies’ plans will be sufficient to prevent another backlog, in part because the issue of grain transportation is not new to any party involved.
“This must be dealt with, not only dealing with what we have but, in fact, dealing with a lot more. We’re going to produce more agricultural product … more efficiently and it must move, too.”
Ottawa aims to increase agricultural exports to $75 billion by 2025, a target Macaulay said is part of the justification for his announcement on Thursday of a $6.3-million investment in the Western Grains Research Foundation (WGRF).
That money, together with $2.7 million from various industry groups, is expected to pay for a five-year “integrated crop agronomy cluster” aimed at streamlining crop production in Western Canada.
Asked whether the anticipated increase in farm production will make grain transportation more difficult, WGRF research committee chairman Keith Degenhardt acknowledged more can always be done.
At the same time, Degenhardt noted, a push to get grain companies as well as railways to invest in hopper cars might help smooth the shipment of grain to port, and on to markets around the world.
While the economic impact of this year’s grain backlog is not known, it is thought to be significant, and resulted in CN ousting its chief executive and issuing an unprecedented apology.