SASKATOON, Sask.–Saskatchewan Premier Brad Wall has appointed a delegation of provincial cabinet ministers to meet with grain and rail companies on the matter of delayed grain shipments in the province.
Touted as a possible “Keystone XL domino effect”, many are blaming a backlog in Western Canadian grain movements on the surge in oil transportation by rail, reported the Financial Post.
Insufficient pipeline capacity (caused by environmental opposition to oil sands growth) is in turn leading to a surge in oil by rail shipments.
“This grain movement backlog is a very serious situation for the entire province and it is a high priority for our government,” Wall said in a statement. “The delays in moving grain have led to lower prices for our producers at the farm gate and are harming our reputation as a reliable supplier of agriculture products throughout the world. We want every possible avenue explored to ensure our producers have the ability to market and deliver their grain in a timely manner.”
Wall also apparently suggested that the federal government slap fines on railway companies for poor performance, and that transportation of grain, which is seasonal, be made a priority over other commodities.
“There is a disproportionate hit on agriculture,” from tight rail capacity, Mr. Wall said. “You can make the case that certain times of the year, post harvest until now, there is a real acute need for some attention to agriculture.”
There have been many cold winters in the past and similarly large crops, but “we haven’t seen this degree of backlog,” Mr. Wall said.
The rail capacity shortage is resulting in increasing demand for trucking, but “spare capacity is also scarce and rates are soaring”, said the report.