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Railways face big fines

Fed-up feds set targets, penalties on grain transport

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OTTAWA is forcing Canada’s two main railway companies to double the amount of grain they ship in a week to try to unclog a transport bottleneck that has left piles of grain sitting in bins across the Prairies.

Transport Minister Lisa Raitt said cabinet has passed an order-in-council that gives Canadian National and Canadian Pacific a month to start moving a minimum of one million tonnes of grain in 11,000 cars each week.

If CP and CN don’t meet the requirement, Raitt said they will face fines of up to $100,000 a day. The Conservatives are also promising legislation when Parliament resumes that will help ensure agricultural products get to market.

"This is a very serious situation," Raitt said at a news conference in Winnipeg on Friday. "We have to demonstrate that Canada can maintain an efficient transportation system which is capable of moving our grain to market. This is an issue of great significance and we have to address it in a timely manner."

Farmers and provincial governments have been complaining loudly that a bumper crop is still sitting in bins while prices fluctuate. Last year’s harvest was up by about 20 million tonnes.

Ottawa has already chipped in $1.5 million for a five-year transportation study and ordered rail companies to report monthly on their performance.

CN and CP did not get a heads-up about Friday’s announcement, Raitt said.

CN’s Jim Feeny said the company can comply if everyone in the supply chain works together. The challenge in moving the biggest Prairie grain crop in history is unprecedented, he said.

The company has been doing everything it can to keep grain moving but it has been hampered by extreme cold, Feeny added.

"We have hundreds of employees in those locations who have spent the last three to four months working night and day outside in temperatures that have persisted at -30, -35, -40 and even beyond at times with very little respite," he said.

"But the reality is, when you get that kind of cold, across that kind of territory, for that length of time, with no breaks, it has a severe effect on the mechanical ability to operate trains."

Ed Greenberg, spokesman for Calgary-based CP, said the railway will comply with the order. But he called the move unfortunate and suggested it didn’t take into account the "entire supply chain." The issue is complex and goes beyond the railway, he added.

The backlog has not been caused by a shortage of locomotives or crew, Greenberg said.

"It’s been a combination of an extraordinary crop size combined with extreme weather that has resulted in this situation," he said. "And despite an extraordinary crop size that was not forecast by anyone, and periods of extreme winter weather, our railway has continued to move record amounts of grain."

Agriculture and Agri-Food Minister Gerry Ritz said farmers are increasingly frustrated by the "poor performance of the railways."

"The railways have dropped the ball," he said. "This situation is not acceptable."

The order was universally applauded by the producer groups.

"Obviously the government heard us," said Dan Mazier, vice-president of Keystone Agricultural Producers, who was part of a delegation that met with Raitt last week. "This is great news from a farmer’s perspective.

"The government keeps on telling us they want us to produce more so we can export more. We’d better have a transportation system that can support all that."

Levi Wood, president of the Western Canadian Wheat Growers Association said, "This action was necessary to stem the financial losses to Prairie farmers and the western farm economy... We look forward to even further measures to substantially improve competition, capacity and service in the rail sector."

The hope is these measure will alleviate the backlog that has infuriated farmers since the bumper crop came off the fields.

Gary Stanford, president of the Grain Growers of Canada, said "We will continue to monitor the situation closely to ensure that the grain backlog is cleared as soon as possible."

Greg Cherewyk, chief operating officer of Pulse Canada, said rail companies have taken grain farmers for granted because they have no other choice to get their product to market.

"We have two national carriers in this country that have focused relentlessly on trimming excess capacity," he said. "That means you can walk, but you can’t run. You can never trip because you’ll never catch up."

Some weren’t impressed.

Saskatchewan Liberal MP Ralph Goodale called the order "far too little and it’s far too late."

"They’re not really requiring the railways to do anything out of the ordinary," he said. "So all of this militant talk, the railway-bashing that’s been going on, they’re not prepared to back it up with any kind of specific measure that is over and above business as usual."

 

— The Canadian Press with files from staff

Republished from the Winnipeg Free Press print edition March 8, 2014 B6

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