Rail shipping crunch prompts ministerial intervention but doesn't go far enough to rectify the underlying challenges for chemistry producers

This past week, Transport Minister Marc Garneau and Agriculture Minister Lawrence MacAulay sent a letter to Canada’s largest rail shippers – Canadian Pacific (CP) and Canadian National (CN) – expressing their serious concerns and disappointment at the levels of service offered in recent months.

The letter notes “forestry, energy and chemical shippers have indicated that they have lost significant business and opportunities due to the inability to move their products in a timely and efficient way.” The letter, however, was also clearly oriented towards clearing up a backlog of grain shipments.

In a normally functioning economic market, a supplier who cannot meet demand will find his or her customers going elsewhere for better service or price. Unfortunately, chemistry customers cannot do that because the market for rail freight services in Canada is not normal. We are often captive shippers without feasible alternatives.

While CIAC appreciates the actions of the two ministers and is largely supportive of changes in Bill C-49, without any means of enforcing accountability, moral suasion is not enough.

CIAC, with six other industry associations representing significant rail freight traffic, collaborated on a follow-up letter to both ministers outlining the real, underlying problem of the system – the lack of a workable and enforceable mechanism to ensure railways provide pro-active and predictable responses to capacity issues. The letter notes that Bill C-49, as it currently stands, will not change the current context and will not alleviate the immediate crisis for grain and other commodities.

CIAC will continue to advocate for amendments to the Bill, now in the Senate, that create an appropriate mechanism under the auspices of the Canadian Transportation Agency.

We will be closely watching the response from the railways. The ministers instructed both to come up with a plan (and post it to their websites) for more efficient commodities shipping by March 15.

For more information

Kara Edwards
Director, Transportation
Phone:(613) 237-6215 ext.224