Canola farmers welcomed this week’s introduction of the long-awaited Transportation Modernization Act. Bill C-49, which earlier this week was tabled in the House of Commons by Transport Minister Marc Garneau, includes many of the reforms that farmers have been seeking to modernize rail service for Canadian shippers and build long-term reliability in the export pipeline.
“With over 90% of canola destined for export markets, and rail transportation the only reasonable means to ship product to export position, canola farmers have been seeking real change that makes our transportation system more efficient and more reliable,” says Rick White, CEO of the Canadian Canola Growers Association (CCGA).
“It’s been several years of intense work to achieve some of these milestones,” says White. “At first glance, C-49 appears to address many of the reforms that farmers have been asking for, while striking a balance between the needs of shippers and the railways.”
Canola farmers and the broader shipper community have repeatedly identified increased accountability and improved transparency, as critical to long-term commercial success. “New data and reporting requirements, such as railway winter contingency plan reporting, will certainly increase transparency.” says White.
“The introduction of reciprocal penalties into service level agreements, something farmers and shippers have repeatedly asked for, has the potential to elevate railway accountability in the supply chain and make our pipeline more responsive to customer needs.”
Canola farmers were particularly pleased to see that the Maximum Revenue Entitlement (MRE) has been preserved in C-49. “The MRE is extremely important in maintaining Canadian farmers’ competitiveness in the global grain trade,” says White. “In the absence of real commercial competition, the MRE serves as a check and balance to control rail shipping costs paid by farmers.”
While there are positive elements within Bill C-49, an area of concern for canola farmers is the gap that will be created when extended interswitching provisions contained in Bill C-30 expire on August 1, 2017, with no predictable timeline for implementation of the new bill. “While C-49 introduces a new concept called Long Haul Interswitching as a replacement, the concept appears quite complex and will require considerable evaluation to assess its workability,” says White.
“In the interim, we encourage the Government to continue the extended interswitching provisions until Bill C-49 is implemented,” says White. “This would provide a temporary regulatory bridge for those held captive to only one railway after August 1st.”
“The Transportation Modernization Act is a positive step toward a more transparent and responsive rail system for shippers,” says White. “We thank Minister Garneau for listening to farmers concerns and look forward to representing canola farmers’ interests throughout the legislative process.”
CCGA represents more than 43,000 canola farmers on national and international issues, policies and programs that impact farm profitability.
Source : Saskcanola