“People see rail issues, but don’t necessarily think of all of the
players. We are pushing for a short-line lens,” said Gauthier,
pointing to the
Fair Rail for Grain Farmers Act
and the Order in
Council intended to clear the backlog on the 2013 harvest as an
example of creating one problem while trying to solve another.
“The legislation that was trying to address this issue might
seem to settle the issue for farmers, but doesn’t factor in impact
on other commodities and short-lines. As a result, the short-lines
didn’t get as many cars as they needed,” Gauthier explained.
The RAC is also working with government on changes to
regulations requiring upgrades to public crossings, safety
regulations and insurance requirements.
“We are trying to explain to government how to make
regulations in a way that will not damage the operators,” he
said. “We have to remind them to help smaller railways because
they don’t have the same resources as the big railways, and
government should facilitate that. It’s not for the railways, it’s for
the shippers.”
Across the Prairies, each province has taken a different
approach to short-line railways. Alberta offers no funding
or support for short-line purchases or track maintenance.
In Manitoba, the government has provided loans to help
companies buy branch lines and get established. In
Saskatchewan, a government program provides cost-shared
funding to offset the cost of rail maintenance.
“Saskatchewan’s network of short-line railways is vital for
getting grains to market and an increasingly important factor
in oil transport, as well,” said Nancy Heppner, highways
and infrastructure minister and minister
responsible for the Saskatchewan Grain
Car Corporation. “The short-lines are a
Saskatchewan success story and we’re
proud to continue our investment in
railway infrastructure so they can continue
to be viable into the future.”
Saskatchewan’s policy recognizes the
social, economic and environmental value
of keeping industrial traffic on the rails
and off the roads. While taxpayers pay the
costs of maintaining roads and highways,
rail companies pay the costs of maintaining
tracks on their own. Based on cargo
capacity alone, one car on the rails keeps at least four trucks off
the road. Since the program started in 2008, Saskatchewan’s
short-line industry has grown to 13 from eight companies and
added over 900 kilometres of rail to the network.
“When railways were first built in Saskatchewan, the towns
and villages were built with them. You can see the decline
where the branch lines have gone and all those towns have
dried up and gone away,” said Roger Gadd, general manager
of Great Western Railway (GWR). “We are keeping our part of
southwest Saskatchewan alive and vibrant just by being there.”
Spread out along 495 kilometres of track, GWR is the
largest short-line railway in Saskatchewan. With over 40
siding locations, it services the most producer loading sites in
Canada, as well as two crude oil loading facilities. When CP
operated the line, it employed no more than six people; today,
GWR employs 26 between its head office in Shaunovan, its
maintenance shop in Assiniboia and at each of the producer
sites along the line.
It’s not just the Saskatchewan provincial government that
sees the value. Like many short-lines, GWR’s shareholders
include farmers, private citizens, regional government and
municipalities on the line. That kind of investment creates a
stability of its own.
In southern Manitoba, Lake Line Railway has knit together a
diverse portfolio of business opportunities and is strengthening
the local value chain as a result. The 50-kilometre stretch of
track between Gimli and Selkirk was purchased from CP in
2012, just as grain marketing shifted away from the single desk.
“We did the business plan in the CWB era when there was a
$1,000-per-car advantage to selling grain to the line company,
but by our starting date CWB was gone,” said Randy Penner,
president of Lake Line.
However, he explained that the end of the single desk
created an opportunity for the short-line to engage with U.S.-
based grain buyers.
“We are fitting more into niche or smaller markets that larger
companies aren’t interested in serving,” Penner explained.
“There are smaller companies buying from individual farmers
that are more grain-specific, loading three or four cars and
sending them south to a specific mill.
We’ve created activity in the area by
having a short-line.”
Lake Line isn’t just feeding markets to
the south. The railway also works closely
with the Diageo Distillery in Gimli, the only
distillery in the world that makes Crown
Royal. Lake Line collects, cleans and
delivers fall rye from farmers on the line
to the distillery, and hauls tankers of the
finished product to the main line destined
for the bottling plant.
“We open the doors to other companies
to be competitive, or for niche marketing
like the fall rye,” said Penner. “It’s a small market, but if we can
create a need for it in this area, farmers will grow it.”
Despite the challenges, optimism is pervasive in the short-line
industry. As environmental and social pressures push for more
efficient, sustainable options, the outlook for rail continues to
improve.
“Short-lines have proven that we can develop a plan that
brings long-term viability to a line, and hope to communities,”
said GSR’s Pellerin. “We see a lot of things come and go, but
the rail lines have been around for 100 years, and will likely be
around for 100 more.”
Spring
2015
grainswest.com
39
“The short-lines are a
Saskatchewan success
story and we’re proud to
continue our investment
in railway infrastructure
so they can continue to be
viable into the future.”
–Nancy Heppner
