Transportation Legislation Drives Impact for Farmers
August 17, 2018
Bill C-49 is a solution to allow Canadian grain farmers to get products to market
By Megan Madden
Over one third of the global pulse trade can be attributed to Canada’s peas and lentils. For trade of this scale to succeed, the pulse industry relies on an efficient transportation system to get pulses to their destinations — whether domestic or international. On average, half of the grain produced in Canada is exported beyond our borders, and the percentage of pulses exported is even higher at 80 per cent. These Canadian pulse products are moved to over 150 markets around the world, and consistent, reliable rail transport is a key to those products arriving in a timely manner.
The Transportation Modernization Act (Bill C-49) is intended as a long-term solution to give Canadian grain farmers a strong, reliable, and efficient transportation system so they can get their products to market safely and in a timely manner. This bill received Royal Assent on May 23, 2018 — Royal Assent is the final stage of the legislative process, the formal process by which a bill passed by both Houses of Parliament becomes law. It is only once Royal Assent has been given to a bill that it becomes an Act of Parliament and part of the law of Canada.
This Act was developed from consultations with stakeholders including representatives of the agricultural sector such as Pulse Canada, where Saskatchewan Pulse Growers (SPG) farmer directors sit on the board. Pulse Canada worked with a wide variety of agriculture industry stakeholders including shippers, processors, and producers to develop their submission to the Canada Transportation Act Review, which included suggestions such as establishing reciprocal penalties between railway companies and their customers, and clarifying the definition of “adequate and suitable” service. “Accountability was a significant component that the pulse sector was asking for,” says Greg Northey, Director, Industry Relations with Pulse Canada. “The railways themselves need to be held accountable when there is no service provided, and previously, there were no consequences.”
This bill has strengthened the reciprocal penalties for railways, he explained. Currently, shippers face penalties when service is not provided, but C-49 ensures railways can now be held to the same standard and face financial penalties. In setting the criteria for penalties, the
government has recognized the need for them to be sufficient to encourage the efficient movement of the shipper’s traffic, and encourage performance of the railway system while remaining balanced between the shipper and the railway company.
“We hope the outcome is that railways structure capacity to avoid penalties and provide good service consistently,” says Northey.
The Government’s bill will also:
- Permit the Canadian Transportation Agency (CTA) to initiate investigations into issues facing the supply chain with the approval of the Minister of Transport
- Add soybeans as an eligible crop under the Maximum Revenue Entitlement
- Allow shippers to use the new long-haul interswitching remedy, even if they are served by more than one railway or are within 30 kilometres of an interchange, if the railway or interchange is not in the reasonable direction of their movement
The introduction and management of metrics and measurement were a significant contributor to these positive changes, adds Carl Potts, Executive Director of SPG. “Pulse Canada worked with the Ag Transport Coalition to ensure that performance metrics were in place and that the data could be used to identify bottlenecks in the system. At a particularly low point, we were able to determine that only 30 per cent of cars were being delivered versus what was in demand.”
These metrics will also be valuable to the CTA as Bill C-49 gives them increased ability to act on their ‘own motion power’ to investigate complaints and service levels without having to wait for shippers to launch expensive and risky level of service complaints in order for the Agency to investigate and act.
Combining previous pieces of the Act, this bill also allows for long-haul interswitching (LHI). Currently, most shippers are captive to a single large railway such as Canadian Pacific or Canadian National, but now LHI allows shippers to introduce competitive forces in their rail service by requiring their local carrier to transport traffic to the nearest interchange, where a competing carrier can then move it to the final destination. “The outcome of this pro-competitive measure will depend on whether shippers can access it through a quick and efficient application process,” says Northey.
“There is no one silver bullet to the transport issue,” says Potts. “These changes have the potential to work together as a package to improve the consistency and quality of service not only for shippers, but directly for farmers, as grain shipping backlogs result in major costs at the farmgate. The ultimate measure of success will be improvements in the level of service and system performance we see.”