Grain farmers want action on railway bottleneck

Severe shortage of rail cars has left millions of tonnes of in-demand grain trapped across Western Canada

March 2, 2018

OTTAWA – A severe shortage of rail cars has left millions of tonnes of in-demand grain trapped across Western Canada and farmers warn that billions of dollars in economic activity could be lost unless the government acts soon.

Representatives of the agriculture industry were in Ottawa on Thursday pressuring legislators to provide relief to grain farmers unable to access the money they need for the coming growing season. A lack of rail capacity means producers can’t transport last year’s crop to market to pay off that season’s input loans, they say.

Planting season is around the corner and last year’s loans are coming due, said Ron Bonnett, head of the Canadian Federation of Agriculture, adding that government inaction could mean serious hardship for farming families across the prairies.

“We need action,” Bonnett said. “We’re going to have farmers who are struggling to pay their bills and families that are suffering because of inaction by government and by the railroads.”

Bonnett said the inability to move grain from bins, elevators and fields across the country is eroding the credibility of the grain industry and he warned that a lack of government action could plunge the country into a grain crisis as serious as in 2013-14, which cost the economy $8 billion.

Proposed legislation, Bill C-49, would give the government the tools to help farmers with cash flow and compel railways to move the grain or face penalties, but those measures are tied to separate provisions around a new air passenger bill of rights _ provisions that have raised concerns in the Senate, where the bill has stalled.

Agricultural Minister Lawrence MacAulay said he and Transport Minister Marc Garneau are urging the Senate to pass the legislation.

“We put an excellent bill together,” MacAulay said, adding that he has told Canadian National Railway executives to fix the bottleneck as quickly as possible.

“A lot of consultation was done in order to make sure we put a bill in place that would address not today’s issue, not tomorrow’s issue, but for years down the road. That’s what Bill C-49 is all about.”

But for Dan Mazier, who heads Manitoba’s Keystone Agricultural Producers, the buck stops on Garneau’s desk. The transport minister has repeatedly refused to split the bill’s sections in order to let the rail provisions pass more quickly.

An Ag Transport Coalition report released late last month found Canada’s largest railways supplied only 38 per cent of the grain cars requested by producers on time over a week-long period in mid-February.

The report pegged Canadian National’s performance over that period at 17 per cent – marking a sixth consecutive week of declines.

The grain crisis four years ago saw the then-Conservative government order the biggest rail lines to double the amount of grain being moved or face penalties as high as $100,000 a week.

On Thursday, Opposition MPs pushed the government to act before the House of Commons begins a two-week break next week.

John Barlow, a Conservative agriculture critic, called the rail car backlog a crisis.

“If we wait any longer, it’s going to be much too late for our producers to get their goods to market,” he told reporters.

Barlow was flanked by NDP MP Alistair MacGregor, who echoed his colleague’s call for urgent action.

“This is an issue that is of the utmost seriousness and it demands action across party lines,” he said, adding that Opposition politicians pushed the government without success to separate the grain transportation measures, which are widely supported, from the rest of the omnibus bill.

Saskatchewan MP Randy Hoback, a former chair of the Western Canadian Wheat Growers Association, highlighted the cost to farmers of rail delays forcing ships to wait in harbour, which adds up to thousands of dollars a day.

“You’ve got grain in the bins. You’ve got consumers wanting that grain. You’ve got ships sitting in harbour. And the only thing holding you up is rail.”

Kate Fenske, a spokeswoman for CN Rail, said in an email that “challenging conditions” are to blame for the company’s performance.

“As weather continues to improve, so is our network fluidity,” she said.