By Alex Binkley

It didn’t take long after Transport Minister Marc Garneau finished outlining his Transportation 2030 strategy in a Montreal speech for praise to come rolling in from across Canada. While legislation to improve air travel drew a lot of media attention, for shipper groups the focus was on a bill the Minister promised for next spring to balance the power of the railways and shippers.

Garneau said the legislation will allow reciprocal penalties in service level agreements between railways and their customers, better define adequate and suitable service and improve access to the Canadian Transportation Agency for shippers with service complaints. The government will also address the future of extended interswitching limits in Western Canada and the Maximum Revenue Entitlement (MRE) on grain transportation.

The 2030 strategy is based on recommendations from the Canada Transportation Act review headed by former cabinet minister David Emerson and consultations by Garneau and his department. It also promises an early review of the Railway Safety Act, locomotive cab event recorders, a national marine safety plan and the development of a transportation data regime.

Grain Growers of Canada said the inclusion of reciprocal penalties, a clear definition for adequate and suitable service and extended interswitching “demonstrates that the government recognizes the importance of agriculture and rail shippers in our country’s economy. Canada’s grain farmers rely on efficient and competitive rail service to deliver products to markets all around the world”, says Vice-President Jeff Nielsen. “I urge the Minister to ensure that the required legislation is passed and in place for the 2017-2018 crop year,” which starts next August.

Canadian Federation of Agriculture welcomed plans to resolve longstanding issues linked to service agreements between shippers and railways. However it was concerned about the lack of information on the government’s intentions for the MRE regulation that protects farmers, who lack competitive options when it comes to shipping grain, said President Ron Bonnett. MRE was introduced by the Chretien government in 2000 to limit what CN and CP can charge farmers for hauling grain. CFA said it remains “an essential component of modernizing the Canadian Transportation Act.

“Transportation costs represent a significant portion of western grain farmers’ expenses. That’s why farm groups have been advocating for a full costing review, which would lead to an accurate and up-to-date MRE,” Bonnett added. “We’re still waiting for the government to fulfill its promise to launch the costing review, as it had stated it would, prior to the 2015 election.”

Non-agricultural shippers also applauded the proposed bill. Forest Products Association of Canada (FPAC) and Mining Association of Canada (MAC) welcomed Garneau’s “concrete measures” to improve transportation system and generate enhanced data for the benefit of those who use the transportation system. “Transportation is a vital issue that impacts Canada’s competitiveness and export performance, and lack of access to a reliable and efficient system has challenged the forest sector,” says Derek Nighbor, CEO of FPAC. “We are delighted that the government is now taking action that will help the forest products industry get its goods to market and support Canada’s future growth and prosperity. We look forward to working with the government and our transportation partners on our shared interest of improving our transportation system.” The largely rural-based forest products industry is an export sector that has often faced bottlenecks and struggled to access reliable and effective transportation to get its goods to market in a timely manner. Transportation alone represents up to one-third of the production costs of any forest products firm.

Mining companies require an effective and reliable transportation network to get their goods to market and to grow their businesses, said Pierre Gratton, MAC’s President and CEO. “The reliability of the transportation network is also a key consideration when companies determine whether or not to invest in Canada. We are hopeful that the government delivers on its commitment to create a more transparent and balanced transportation system.”

CP President and COO Keith Creel said the railway is reviewing “the full content of the Minister’s agenda and look forward to working collaboratively with all stakeholders on key issues, such as the MRE, interswitching and reciprocal penalties.” Creel urged the Minister to act quickly on the locomotive recorder issue “by implementing LVVR as a preventative, proactive, behaviour-changing tool. Without a pre-emptive disciplinary option, the use of LVVR would do little to improve safety.”

CN President and CEO Luc Jobin said the railway supports “a predictable regulatory environment that encourages innovation and efficiency and takes an end-to-end view of the entire of the supply chain.” He offered no comments on the specific provisions of the proposed railway bill. Like CP, CN welcomed the plan to bring in locomotive cab recorders. “We believe this technology is a powerful and important tool in the investigative process to get to a better understanding of causation, which will lead to improved safety practices – something we all want.”

Wendy Zatylny, President of Association of Canadian Port Authorities, said that while there are many details in the 2030 strategy “to be filled in, this is very much a good foundation to work from.” Ports need the ability “to be flexible and able to adapt to changing market forces,” she said. “Measures such as the removal of barriers to financial flexibility would empower Port Authorities to pursue trade-related opportunities and reduce current restrictions that may serve as obstacles to growth. We live in a highly-competitive world and it is critical that Canada has the policies in place to ensure we are able to maintain continued growth and prosperity.” A proposed Canada Infrastructure Bank needs to “recognize the value of small and large projects, inland as well as tri-coastal transportation, and trade corridors that span the country.” A study by ACPA and Transport Canada “found a capital investment requirement of $5.8 billion to meet growing demand. Of this, $1.9 billion (or 33 per cent) is related to the rehabilitation of existing port assets. Public funding of strategic port infrastructure is critical to assist in maximizing Canada’s economic output.”