Western Grain Elevator Association

Western Grain Elevator Association

August 01, 2014 16:02 ET

WGEA Comments on Grain Transportation Regulations

WINNIPEG, MANITOBA--(Marketwired - Aug. 1, 2014) - The Western Grain Elevator Association (WGEA) today commented on the regulations and Order in Council announced by the federal government related to the implementation of the Fair Rail for Grain Farmers Act (Bill C-30).

The WGEA is of the view that the measures clarified in the regulations under the Canada Transportation Act are a step in the right direction, and the volume thresholds are set at quantities the trade finds realistic. "We now know the volumes we can expect to move, and therefore to which we can sell," said Sobkowich. "Certainty of car supply is paramount and the WGEA members can work with these levels." The WGEA adds that shippers, not railways, must be the ones to select the corridors in which they require car supply, in order to make sales that both meets market demand and returns maximum value for the grain industry.

The WGEA looks forward to advancing its views on remaining gaps through the CTA Review process that will be starting later in 2014. "One of the outstanding gaps is railway penalties," said Sobkowich. "The WGEA has asked Transport Canada for over a decade for reciprocal penalties with railways, however, this is a measure that the regulations clarify will not be eligible for arbitration into a Service Level Agreement."

Grain companies are all subject to unilateral railway tariffs, supported by statute, for the elevator's failure to perform. As an outcome of Bill C-30, grain companies will now be subject to penalties in producer contracts for their failure to accept farmer deliveries. Yet railway companies still do not have the legislated requirement to pay penalties to grain companies. "This remains the main missing link. Grain companies will be held accountable to pay penalties to both railways, and producers, while the railways remain exempt from the same measures," continued Sobkowich.

While it is true that Bill C-30 allows the Canadian Transportation Agency to require the railway to compensate the shipper for "expenses" incurred as a result of inadequate service, these expenses would be determined by the Agency; (a) well after they have been incurred, and (b) only after the shipper invests the time and expense of filing a Level of Service Complaint. In other words, the award of "expenses" will not be an element that the grain shippers can rely on when contracting with producers, and grain shippers will not in a position to be able to complain to the Agency on the majority of service failures.

Despite these outstanding concerns, the WGEA views this as an evolving process and remains committed to working with government and railways to arrive at solutions that are effective and sustainable.

The WGEA is an association of grain businesses operating in Canada, which collectively handle in excess of 90% of western Canada's bulk grain exports. Its members account for approximately 20% of railway revenues and pay annual total rail freight of over one billion dollars.

Contact Information

  • Western Grain Elevator Association
    Wade Sobkowich
    Executive Director
    204-942-6835
    204-943-4328 (FAX)
    wgea@mts.net