WINNIPEG – A rail bottleneck that left grain sitting in bins across the Prairies has prompted Ottawa to move up a statutory review of transportation legislation.
Transport Minister Lisa Raitt says the review is to take place in 2014 — a year earlier than required — to address challenges that include moving grain.
The review is also to look at the safe movement of goods through communities, federally regulated passenger rail services and the aviation sector.
“This review comes at a critical time when we need, more than ever, a safe, efficient and clean transportation system to move goods and people, and help Canadian businesses seize new opportunities and continue to compete internationally,” Raitt said Wednesday in Winnipeg.
“We need to create the right conditions for a system that has the capacity and flexibility to respond to global and domestic demands.”
Recommendations from the review panel are expected to be submitted to Raitt by late next year.
Agriculture Minister Gerry Ritz says he hopes the railway part of the review will be completed by the end of this year.
Western Canadian farmers harvested a record 76 million tonnes of grain last year, but it sat in bins or at elevators through the winter.
Canadian National (TSX:CNR) and Canadian Pacific (TSX:CP) said the size of the crop and an unusually cold winter delayed movement. The companies have said they had to use shorter trains during freezing temperatures to ensure brakes could be used properly and that meant less capacity.
Ottawa ordered rail companies to double the amount of grain they move each week to a minimum of one million tonnes and using 11,000 cars. If they don’t meet the requirement, they could face fines of up to $100,000 a day. The federal government has since passed legislation to further regulate the railways.
Ritz says he pleased with the way things are moving now.
“They’re getting closer to making me happy. I mean there was a lot of time in between they didn’t make anybody happy,” Ritz said after a news conference in Regina.
The agriculture minister also notes that the United States is developing similar legislation for railways. U.S. regulators are requiring BNSF Railway and Canadian Pacific to provide weekly updates on their efforts to catch up before harvest.
“We weren’t alone in having logistical problems this year, some of it due to the cold weather, absolutely. But I mean we get cold weather every year. A lot of it more due to the fact that both railways decided to please their shareholders as opposed to please the shippers,” he said.
The Alberta government welcomed the review, saying being able to effectively move goods to market is essential in maintaining Canada’s export economy.
“Market access is an issue that goes beyond any one industry or commodity group,” said Agriculture Minister Verlyn Olson in a news release.
“That’s why, as a government, we are collectively working to ensure that all interests are represented and will continue to advocate for our export industry and be actively engaged in the review. We strongly encourage representatives from all commodity sectors to participate in the review process to ensure their concerns and suggested solutions are put on the record.”