Farm organizations are generally positive after taking an initial look at long-awaited federal grain transportation legislation.
The bill addresses a number of priorities brought foward by farm organizations and grain shippers, including reciprocal penalties, maintaining the Maximum Revenue Entitlement (MRE or rail revenue cap) and a new long haul interswitching provision.
CN and CP Rail lobbied for the elimination of the MRE saying it reduces incentive to invest in buying new equipment and improving service levels. A news release from the Alberta Wheat Commission indicates the MRE will be retained with modifications that reflect individual railway investment.
The legislation is lengthy with 73 pages of technical information, so it will take a few days to sift through all of the details.
“From what we see so far, we are fairly satisfied about what is being brought forward,” says Todd Lewis, president of the Agricultural Producers Association of Saskatchewan. (APAS) “Hopefully, it will give us a better transportation system.”
Farm organizations formed a united front following the massive grain backlogs that occurred during the winter of 2013-14. The delays cost farmers hundreds of millions of dollars in lost sales and late shipping penalties.
The draft legislation refers to ”adequate and suitable” rail service, which could be left to interpretation.
“It’s not very clear language still on what provides reasonable service,” according to Dan Mazier, president of Keystone Agricultural Producers. “I still think there needs to be a very good definition that everyone can agree on. Bottom line is if they (railways) agree to show up at a certain time and they didn’t show up at a certain time, that costs everyone money. That’s the kind of problem we’re trying to fix as farmers.”
The legislation includes long-haul interswitching, but the initial details are not defined. The current interswitching radius is 160 kilometres and was extended from 30 kilometres by the former Conservative government three years ago. The interim legislation is set to expire on August 1 and farm groups want it extended until the new legislation takes effect.
Federal Transport Minister Marc Garneau may have more to say during a speech in Edmonton on Thursday. It is unclear if there will be enough time to pass the bill before Parliament goes on its summer break in a few weeks.
The federal government also says the Grain Monitoring Program will continue for another three years. It provides an independent monitoring and reporting of the Western grain handling and transportation system.