Wheat Growers statement on the FPT meeting of Transportation Ministers
CALGARY, AB: Today, Wheat Growers Directors—Stephen Vandervalk (Vice President, Alberta; grain farmer near Fort Macleod), Margaret Hansen (Vice President, Saskatchewan; grain farmer near Langbank), and Graeme Manness (Vice President, Manitoba; seed and grain farmer near Domain)—released the following statement ahead of the FPT Transportation Ministers meeting in Toronto:
“The Wheat Growers encourage Canada’s Transportation Ministers to take real action to achieve positive outcomes for our Grain Handling and Transportation System (GHTS). These discussions and decisions will form the basis of the GHTS rules for the next decade, so the stakes are high. There are several key long-standing issues for tens of thousands of western Canadian farmers that need to be addressed.
“The Wheat Growers support a commercial and efficient GHTS, recognizing the need for government regulation to foster greater service, competition, and accountability in the rail sector. As Canadian Class 1 railways are in monopoly positions, most shippers are served by one carrier and are subject to monopolistic pricing and service strategies. There is a fundamental problem of railway market power and service levels, which negatively impacts the needs of Canadian grain farmers and agriculture industry to be competitive in global markets. Therefore, in this instance, government has a critical role to play in establishing a regulatory structure that strikes a measured and appropriate balance.
“The 2013/14 crisis in grain transportation impacted the entire value chain, damaging Canada’s strong brand and reputation, resulting in lost Canadian sales. The crisis cost us as farmers, and it cost grain handling firms, exporters, value-added processors, and, ultimately, the Canadian economy as a whole.
“We believe Canada’s Transportation Ministers have the opportunity at this meeting to work towards real and improved outcomes for the GHTS in Canada, and the Wheat Growers submit to the Ministers these key solutions for their consideration:
- Make extended interswitching permanent
The extended interswitching provision is providing competition, is being used by grain shippers, and is proving to be an effective tool to provide additional competition between the two Canadian Class I railways, as well as with other North American carriers.
- Define ‘adequate and suitable’ railway service
This term is not well defined and has been the point of dispute between railways and shippers for many years. The rail service provision should be defined as demand-driven, or Canada’s economy will be hamstrung in efforts to fully capitalize on global marketing opportunities.
- Ensure commercial accountability
There is a further imbalance of market power because of a lack of commercial accountability existing between the railways and grain shippers. Reciprocal penalties for poor performance and level of service should be in place for both parties in a given commercial transaction, which requires a legislative backstop. Without increasing commercial accountability, there is little that can be done to systematically address poor service and performance, and little recourse for shippers to hold the railways accountable—commercial accountability is key to greater economic growth and avoiding the next grain transportation crisis.
- Strengthen Canadian Transportation Agency (CTA) investigative authority
The CTA should be given greater authority to investigate railway service issues, including the power to issue ex parte orders in time-sensitive situations, which would relieve shippers of carrying the sole burden for challenging circumstances of poor performance and service.
“The Wheat Growers thank Canada’s Transportation Ministers for their work today and in the coming months, and encourage them to work towards achieving these positive outcomes to improve our grain handling and transportation system, which will benefit Canada’s farmers, agriculture industry, and the national economy.”
About the Wheat Growers:
Founded in 1970, the Western Canadian Wheat Growers Association is a voluntary farmer-run advocacy organization dedicated to developing public policy solutions that strengthen the profitability and sustainability of farming, and the agricultural industry as a whole. For more information, please visit wheatgrowers.ca.