GrainsWest Fall 2018

Fall 2018 grainswest.com 39 FEATURE BY TREVOR BACQUE • PHOTO COURTESY OF GOVERNMENT OF CANADA With C-49 law, all sides are in harmony for the moment SIGNED, SEALED AND DELIVERED ANY USED THE WORD “HISTORIC.” OTHERS preferred “amazing” or “unprecedented.” Of all the adjectives ascribed to Bill C-49, one thing is clear—there has not been anything like this in all of Canada’s railroading history. Bill C-49, the Transportation Modernization Act, came into force May 23, 2018, after one year and one week being bandied about in Ottawa and now sets up a dramatic fall harvest and ensuing six months of grain movement. The bill was born out of the 2013/14 Winter to Forget, during which the rail backlog not only wreaked havoc on orders and grain movement, but also made international buyers question Canada’s ability to move grain into port position. One person who used the word “historic” is Tom Steve, general manager of the Alberta wheat and barley commissions. In a rare occurrence, virtually all agriculture industry groups were united behind the push to facilitate the bill’s safe passage in Ottawa. “Farmers, exporters, processors, all coming together with a common voice, or, as common as we could get it,” he said. “We have some minor differences, but for the most part what the government of Canada saw was a united ag sector voice and that resulted in a really solid piece of legislation.” Steve also said work done by the Senate Standing Committee on Transportation and Communications helped Marc Garneau, the federal Minister of Transport, to morph M C-49 from a “good piece of legislation into an excellent piece of legislation.” Bill C-49 was enhanced by last minute amendments in three key areas, including long-haul interswitching (LHI), own motion power (OMP), and the inclusion of soybeans in the maximum revenue entitlement calculation. The LHI now lets shippers access the provision, even if they are served by more than one railway or are within 30 kilometres of an interchange, or if the railway or interchange is not in the reasonable direction of their movement. Regarding OMP, ag industry representatives were pleasantly surprised with this clause, which lets the Canadian Transportation Agency (CTA) investigate railway issues without first being tipped off by shippers. The key feature of C-49 is the provision that empowers shippers to negotiate service level agreements (SLAs) with railways that include reciprocal penalties if service falters. “It’s what the legislation rests on in our view. It provides for the ability of grain companies to negotiate SLAs to provide for equal accountability of the shippers and the railways,” said Steve, who referred to the new measure as a hammer. “That’s something we haven’t had before. Those agreements won’t be negotiated overnight, but they do provide the framework for a truly accountable rail environment.” Canada’s largest service provider is accepting of the results and acknowledged the railway had plenty of time in Ottawa to make its voice heard, and it did so. “It was a very open process with minister Garneau,” said Sean Finn, CN executive vice president of corporate services. “We all had a chance to put our arguments forward; it wasn’t done in a vacuum. The rail industry is happy to move on to invest in our business and serve our customers. We prefer to operate on a commercial basis, not regulatory.” Finn dubbed the new regulations right for investment and to that end CN has purchased 1,000 new hopper cars, 200 locomotives and poured hundreds of millions of dollars into network upgrades. One of the amended provisions is LHI, which now jumps from 160 to 1,200 kilometres with the guarantee that the grain will almost certainly move in the desired direction, as well. “We would have preferred to see something that wasn’t long haul, but we understand the rationale,” said Finn. “As long as we understand the rules, the burden is on CN to serve its customers in such a way that they go with us all the way to a destination.” The extra 1,040 kilometres will connect farmers in the most remote areas of the Prairies to an interswitch destination headed to the West Coast, if desired, whether Vancouver or Prince Rupert. Included in C-49 is another new detail that required a rail plan presented to Transport Canada by Aug. 1 that detailed what the railways believe is going to happen post-harvest in terms of supply. A subsequent plan was also submitted to Transport