OTTAWA, Ont. – The federal government has laid down the law and told Canada’s Class 1 rail carriers they must move more grain.
Transport minister Lisa Raitt issued an Order in Council (OIC) establishing minimum volume thresholds for the amount of grain CN and CP must carry. Effective immediately, the railways will be required to increase the volumes carried each week, over a period of four weeks, to a combined target of 1,000,000 tonnes per week, which is more than double the volume currently being moved.
The OIC, which was issued under section 47(1) of the Canada Transportation Act, also created penalties that will be imposed if the railways fail to comply with the directive. Non-compliance can cost the rail carriers up to $100,000 per day.
In addition to the short-term response, the government also announced longer term plans for dealing with the agricultural transportation in Western Canada crisis brought on in part by higher than average crop yields, a harsh winter with cold temperatures, and more competition from natural resources producers for rail capacity.
Agriculture minister Gerry Ritz said the government intends to introduce legislation covering the agricultural logistics system when parliament resumes sitting.
"The current grain logistics system is not meeting demand and today our government is taking concrete action to ensure the livelihoods of farmers and our overall economy,” said Ritz.
“By making the Order in Council and working to introduce legislation, our Government continues to act in the best interests of our farmers while ensuring Canada maintains our global reputation as a reliable grain shipper.”