Last growing season western Canadian grain farmers produced 50% more crop than average, yielding about 76 million tonnes of Canadian grain. That heavy yield, combined with a long and extremely cold winter, has put significant pressure on the handling and transportation system, slowing it down. In an effort to maintain Canada’s reputation as a world supplier of grain to international markets, and to move more grain through the transportation system, Transport Canada and Agriculture and Agri-Food Canada came together to announce a plan of action. This plan included setting regulations for the Canadian railway companies, enhancing monitoring, research and marketing programs for the grain sector.
Agriculture Minister Gerry Ritz and Transport Minister Lisa Raitt introduced the Fair Rail for Grain Farmers Act in Parliament in late March. This new legislation will make changes to the Canada Transportation Act and the Canada Grain Act, aiming to get more grain to market quickly in response to last year’s record crop year for Canadian grain producers. New regulations are hoped to increase efficiencies in the grain handling and transportation system, strengthen contracts between producers and shippers and increase transparency in the supply change.
“For the past several months, the bumper crop of grain produced in Canada has not been moving fast enough to Canadian ports. This issue affects more than just our farmers – it affects trade and Canada’s ability to supply our markets around the world. We are taking this action to more than double grain shipments in order to preserve the integrity of Canada’s transportation system and our reputation as a global supplier.” The Honourable Lisa Raitt Minister of Transport
The Order in Council announced in early March obligates the Canadian National (CN) and Canadian Pacific (CP) railways to increase their capacity to carry at least 500,000 metric tonnes of grain per week. The two rail companies are also obligated to report on the volume of grain moved each week so the overall performance of grain movement can be analyzed in a more timely matter. This came in effect on April 7th, 2014. CN and CP face a penalty of up to $100,000 per day if they fail to comply. Proposed legislation extends these requirements to August 3, but as it stands they are only imposed until June 7th, 2014.
These changes will also extend the limits for inter-switching. Currently producers are able to switch their goods from one rail to another, at a fee, if they are within 30km of an interchange. With the Fair Rail for Grain Farmers Act, this range will be extended to 160km. This means that the number of grain elevators with access to both railways moves from about 14 elevators to 150 elevators within multi-service radius. This will greatly increase the amount of Canadian grain moved and assist in response to the incredible yield and the growing world market.
“Farmers and our economy need a system that works today and tomorrow, with the capacity to move what is grown.” Agriculture Minister Gerry Ritz
The Government of Canada has taken other steps to help improve the performance of the entire rail supply chain. The Grain Monitoring Program will be enhanced to include more frequent reporting in order to expand the quality and quantity of data collected. The Government is investing $1.5 million, matched by industry, in a Pulse Canada-led project of the pulse, oilseeds and grains industries in order to improve efficiencies and overall supply. They’re also investing over $73.6 million in grain research and implementing marketing freedom for western Canadian wheat and barley growers.
For those seeking to export Canadian grain, this is positive news. Barr-Ag Hay and Grain Exporters are always looking for opportunities to better serve our customers overseas, providing them with the high-quality Canadian grain they require. This new legislation will help move our fantastic Canadian crops from the eastern slopes of the Canadian Rockies to international shipping ports and to our customers in a timely manner.