Canola Farmers Welcome Introduction of Reciprocal Penalties in New Vision for Transportation

Winnipeg, Manitoba – November 3, 2016    Canola farmers welcome the inclusion of reciprocal penalties as one major element of Transport Minister Marc Garneau’s new long-term vision for transportation. This and other important provisions will help modernize rail service for Canadian shippers and exporters, and support growth in Canada’s economy.

“Grain shippers have long been bound to performance standards with financial penalty, however, no mechanism has existed for shippers to hold railways commercially accountable for their level of service,” says Rick White, CEO of the Canadian Canola Growers Association (CCGA). “Incorporating reciprocal penalties into service level agreements has the potential to elevate the accountability in the supply chain to include the railways.”

The Minister released his Transportation 2030 plan today in Montreal, which included the introduction of reciprocal penalties in service level agreements, a refined definition of “suitable and adequate” provision of service, improved timeliness of Canada Transport Agency decisions, and addressing the long-term future of extended interswitching and the Maximum Revenue Entitlement. 

“Canola farmers and the broader shipper community have repeatedly identified these elements as critical to building long-term reliability in our export pipeline,” says White. “With over 90% of canola destined for export markets, and rail transportation the only reasonable means to ship product to export position, these provisions have the potential to bring real change for canola farmers.”

The Minister’s announcement comes after a lengthy process of legislative consultation and review. A review of the Canada Transport Act was launched in May 2014, with the CTA Review Report tabled February 2016. During the past eight months, the Minister has consulted extensively with Canadians, culminating in today’s long-term vision.

Canola farmers have outlined three key priorities for rail transportation, including: a) addressing the fundamental problem of railway market power, b) injecting competitive signals into the bulk rail system to improve rail service and better serve global markets, and c) having a more reliable and efficient rail system that grain shippers and our global customers can rely on.

“Rail transportation is critically important for farmers,” says Brett Halstead, President of CCGA. “With no viable alternative, farmers rely on railway transport to move grain to international markets.” The changes outlined in today’s speech will support the modernization of Canada’s rail transportation system, and help Canada’s grain and oilseed industry fully realize its export potential.

“Today’s announcement is a positive step toward a more transparent and responsive rail system for shippers,” says Halstead. “We look forward to working with the government and other stakeholders to ensure the details of the vision create progressive change into the future,” says Halstead.

CCGA represents more than 43,000 canola farmers on national and international issues, policies and programs that impact farm profitability.

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Contact:
Kelly Green, Director of Communications
t: 204.789.8821  e: kellyg@ccga.ca