Movement on Transportation Issues

Farmers have reason to be optimistic about upcoming amendments to the CTA

by Delaney Sieferling

Farmers wondering how the changes to rail transportation regulations in Canada will affect them this marketing season will have to wait a bit longer to know the full impact.

But for now, there are some solid reasons to be optimistic, says Greg Northey, Pulse Canada’s Director of Industry Relations.

One of these reasons is that Bill C-49, released in May of this year by the Federal government and meant to amend the Canada Transportation Act (CTA), shows that the government has listened to the agriculture industry’s concerns over rail transport in recent years.

“The government did appear to listen and they have attempted to address the longstanding concerns of shippers,” he says. “The government has directionally shown it is interested in trying to increase service, performance, and capacity for shippers. That is the outcome we have always been after, but they have tried to strike a balance with railways which may dilute the overall impact of their proposals.”

The bill introduced several amendments and Pulse Canada is now busy trying to interpret what the proposed changes might mean for the pulse industry, and what it can do to ensure that the intended outcomes will be achieved, Northey says.

“It is going to be a real focus for us to make sure that the regulation produces something that is useful.”

Bill C-49 Amendments 

Northey says there are two major components of the bill that are notable for the pulse industry.

The first is a focus on data and information. The government has proposed the development of two new regulations on data, indicating that carriers will be asked to provide more information going forward, including performance and service indicators that will be made public.

Once the bill gets passed, work will begin on the development of these regulations and it is expected that government will consult with industry on the specifics of the information to be collected from railways, Northey says.

However, between the passing of the bill and the passing of that regulation, the government has initially requested that the railways provide some performance service indicators that they now collect in the United States.

“Those indicators are not detailed or timely enough to provide really effective monitoring of the railways, but they provide us a starting point to build a system of railway performance information that is most effective for the grain sector.”

Bill C-49 also proposes a provision that all grain shipped in containers is excluded from the maximum revenue entitlement (MRE) calculation. “This particularly impacts the pulse and special crops sector because we are the ones that move the most containerized grains,” Northey says.

The government’s justification for this provision is that this amendment would allow for increased railway investment and innovation in containerized supply chains, and also potentially an increase capacity for grains. This is another area that will require follow-up from the pulse industry to ensure the proper outcomes are met once the bill is passed, Northey says.

“If that is the outcome the government is after, then that is great. As a sector, we now need to make sure that the government has a plan to make sure that happens as a result of the change,” he says.

Bill C-49 also introduced long-haul interswitching for distances up to 1,200 kilometres (km), or 50 per cent of the total haul in Canada, whichever is greater in lieu of maintaining the extended interswitching provision as it was (for distances within 160 km of an interchange). Bill C-49 also introduced reciprocal penalties for shippers and railways in their service level agreements, an attempt to improve rail service.

Although some of these amendments sound positive for the pulse industry, and many agriculture groups are cautiously optimistic in response to the proposed changes, it will be key to keep a close eye on how things unfold, Northey says.

What Pulse Canada is Doing

Since the bill was released earlier this year, Pulse Canada has been busy preparing an official response to it.

The first step in doing so is to fully understand what has been put forward, clarify what is unclear, and define what the implications of the amendments will be for the pulse industry, Northey says.

“The challenge with legislation is the impact of certain provisions is uncertain until they are put into practice,” he says. “But we also know the outcome, we expect more capacity, better service, and competitive rates, so focusing on ensuring those outcomes gives us a good framework for assessment.”

Pulse Canada representatives have met with Transport Canada to get clarity into what they intended with some of the introduced provisions and has also met with legal experts and other agriculture organizations, such as the Crop Logistics Working Group, to go through the bill clause by clause to try to grasp how the new regulations might impact the industry.

As a result of all this work, Pulse Canada plans to issue a full report, which will be presented to the government and will also be made available to the public.

It is expected that the bill will come before parliament and the senate later this year, and be signed late this year or early next year.