Canadian grain producers yielded 50 percent more crop than average last growing season. This incredible yield combined with a long and brutal winter, put major pressure on the handling and transportation system, causing the system to slow significantly. This resulted in changes made to the Canada Transportation Act and the Canada Grain Act. These changes created regulations for Canadian railways, obligating them to ship at least 500,000 tonnes of grain per week and issue weekly reports. This legislation is called Fair Rail for Grain Farmers Act and was introduced in the early spring.
This growing season is shaping up to be as productive and experts are predicting it could be the second largest yield on record. In order to prevent another back log, the Canadian government has announced new regulations that will require the both Canadian National (CN) and Canadian Pacific (CP) railways to ship more than their combined 1 million tonnes of grain, extending into the autumn harvest.
Starting in early August and lasting until November 29th, both railways must each more 536,250 tonnes of crops each week. If they fail to do so they could face a penalty of $100,000 per violation.
The government deems this action necessary in order to preserve the integrity of Canada’s transportation system and its reputation as a global supplier of Canadian grain. These new regulations are hoped to increase efficiencies, strengthen relationships between Canadian grain exporters and their international customers.
Last year, billions of dollars worth of crops was left on farms during the winter. Although CP and CN picked up the pace in the spring and summer, left over grains from last growing season were still estimated 20.9 million tonnes as of last month, according to Agriculture and Agri-Food Canada.
These regulations will make it easier for Canadian grain producers to deliver crops to buyers. The railway companies are able to conduct interswitching in more parts of Alberta, Saskatchewan and Manitoba. This means that they will be able to transfer cars from one railway’s line to the line of the other, creating more efficiencies in the handling and transportation process.
Canadian Grain Exporters
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 Canadian crops from the eastern slopes of the Canadian Rockies to international shipping ports and to our customers in a timely manner.