Grain backlog prompts Ottawa to keep closer tabs on rail companies: Ritz

WINNIPEG – A transportation bottleneck that has left a bumper crop of grain still sitting in some fields is prompting Ottawa to keep closer tabs on rail companies.

Agriculture Minister Gerry Ritz said Monday he is acting on the advice from a crop logistics working group to change grain monitoring so rail companies will have to report monthly on their performance. Right now, companies report every three months.

Railways know they can do better and increased transparency will help pinpoint problems as they arise, he suggested.

“They have to be transparent in why, when they’re asked for 150 cars, they only spotted 100,” Ritz said during a news conference. “They may say, ‘That’s historically what we’ve done.’ That’s not good enough.

“The new era of transparency and accountability will say if we asked for 150 cars, then that’s what we expect to get.”

The announcement is the latest attempt by the federal government to appease farmers who are frustrated about a huge backlog of wheat and other crops building up outside jammed grain elevators. The backlog stems from problems moving a record harvest of grain — up about 20 million tonnes.

Ottawa has already chipped in $1.5 million for a five-year transportation study. While some farmers are skeptical that increased monitoring will help tackle the backlog, Ritz said the government is determined to ensure Canada has reliable grain shipment.

“To win and maintain our markets, Canada must not only be competitive on price and quality, but also on service and deliverable reliabilities,” he said. “Our government knows that action is needed now.”

Dan Mazier, vice-president of Keystone Agricultural Producers, said increased monitoring is a step in the right direction. But the Manitoba grain producer said it won’t fix current problems.

“We can monitor it all day long, but the bottom line is we’ve got a pile of grain to get rid of,” he said. “There are delays that are months and months behind. This is a nice step forward, but we have further to go to get some action.”

Farmers argue grain shipments are not as high a priority to rail companies as oil, potash and coal. They also say rail companies can’t respond quickly to a bumper crop immediately after harvest.

Mark Hallman, communications director for Canadian National Railway (TSX:CNR), said the company is reviewing the new reporting measures and “awaits further details.”

“CN continues to make major efforts to meet the demands of an exceptionally large Canadian crop this year, and is working as hard as it can to overcome the difficulties of the winter season that are affecting grain and other traffic segments,” he said in an emailed statement.

Gordon Bacon, CEO of Pulse Canada, said he would like to see the new rules in place this year. The country’s economy depends on solving this issue, he said.

“If we’re going to expand our economy, continue to grow exports in everything from coal and minerals, forestry products and agricultural products … we have to have a system that will meet that,” Bacon said. “If we don’t, it’s the performance of the Canadian economy that will suffer.”

Liberal Ralph Goodale said his party advised the Conservatives two years ago that they should study potential logjams when the government abolished the Canadian Wheat Board, but that advice was ignored. Now, he said, farmers are paying the price.

“The industry and the government were just not ready for anything but a very ordinary crop,” Goodale said. “This situation is so damaging for farmers … the government has to pull out all the stops to make sure that they’re maximizing the movement (of grain) wherever they possibly can.”