I woke up to -30 this morning and with the windchill, it was -42. Not a pleasant start to the week and unfortunately, if you listen to the weather forecast, we are in for another week of this. When you live in Saskatchewan and Canada, you understand that we get a lot of winter most years. That’s one of the reasons we do so well at the winter Olympics. Like many others, I was up at 6:00 AM Sunday morning glued to my television set to cheer Canada on to another gold medal in men’s hockey. Congratulations to all of our athletes and congratulations to all of the families and organizations across Canada who support our Olympic participants.
I wish I could say the same for Canada’s grain handling system and in particular, our two major railways that don’t seem to believe that Canada gets winter anymore and like the rest of us, they should be prepared for it. I am not sure how many years that railways had been operating in Canada but I know they have performed in winters far worse than this one. We only have to remember one year ago when we had snow banks piled 8-10 feet high to know what winter is like. Last year’s winter started in October and lasted until May and yet almost all of our majority commodities were making it to market on time.
Now all of a sudden because of some cold weather, the CEOs of our two major railways say they can’t move the product. The only difference that anyone has been able identify is the fact that CP Rail took over 400 engines out of service and thousands of their employees in an effort to drive up shareholder price so that Hunter Harrison can justify his obscene salary. By doing so, he has told the rest of the country to sit on your commodities and wait until spring. CN is doing a little better than CP but then again they are still recovering from when Mr. Harrison ran that railroad.
It has always been a fact of life that in the winter time you have to have more diesel power not less because that is how you supply the air to the braking systems on trains. You cannot keep pulling long trains unless you have the air power to stop them. And that means in Canada, you have always needed more engines, more crews and more ability to operate than you do in summer.
Because pretty well everyone that ships commodities by rail understands these parameters, when Bill C-52 – The Fair Rail Freight Service Act – was brought before Parliament last year for passage, certain amendments needed to happen in order to guarantee adequate rail service. The Coalition of Rail Shippers (CRS), after several years of consultation, told the Federal Government the current Act would not work because the service guarantees did not have sufficient clout to make the railways live up to their service obligations and therefore, amendments were needed.
There were 6 amendments brought forward backed by everyone including the Western Grain Elevator Association which represents the companies that move most of our grain. These 6 amendments, in my view and in the view of most of our farm organizations, would level the playing field and force everyone involved in the system to live up to their obligations. It appears the Harper government listened to the railways and denied the amendments put forward by the Coalition of Rail Shippers. Those amendments have been studied, they have been well documented as to their legality and could easily be brought back to the Parliament of Canada debated and passed as a starting point to fixing the current situation we are in.
None of the current shippers particularly the ones with farm commodities are going to enter into service agreements under the current legislation to spend their money on lawyers while the railroad’s lawyers drag this process through the courts and at the end of the day, even if they win the action, have the penalty money paid to the Federal Government. All of these costs under the current system would end up being past down to the farmer. This is an absolute no-win solution except for the railways and the Federal Government.
The other glaring weakness that showed up as I attended an APAS grain transportation symposium in Assiniboia last week was that the railroads have not been required to report the number of hopper cars or diesel power in their fleets since the demise of the Canadian Wheat Board’s logistics group. Mr. Mark Hemmes of the Quorum Corp – the company which was appointed by the Federal Minister to monitor rail movement before and after the demise of the CWB - said that it has never been part of their mandate to report how many hopper cars were available even though that was something the old CWB was able to report on at any given time. When I questioned him on this fact, he said that the Minister had asked the railways to provide that information but as of now, no information had been forthcoming.
It is absolutely crucial that farmers and other shippers know what is available so that a proper benchmark of the railways performance can be achieved. It is also important to know how many railcars are currently across the 49th parallel and in service in the United States. That information was available from the CWB if those cars had Canadian grain in them.
If we are going to solve the current mess, we need to pick solutions which are doable in the short term. Both of the items mentioned above could be dealt with in a matter of weeks if the Federal Ministers are of a mind to do it. They have a majority government. Instead of Mr. Wall sending his Ministers to Winnipeg to ask the grain companies to enter into service agreements which are useless or also sending some of the same Ministers to visit the railroads and asking them to play nice, he and his Ministers should be in Ottawa demanding that the things that can be fixed in the short term get done. They should be holding the 13 Saskatchewan Conservative MPs feet to the fire to get these necessary things done through the Federal Caucus. I believe the only thing that railways in this country have ever understood are politicians who are prepared to back up their rhetoric with action. There is no point in waiting until 2015 to review Bill C-52 because by then, Saskatchewan and western Canadian agriculture will have lost billions of dollars of income, our international reputation with our customers will be severely damaged and potentially hundreds of young farmers could be out of business.
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These issues must be debated for “The Right Reasons”.