Alberta Wheat Commission sees lack of detailed solutions in CTA Review report
FOR IMMEDIATE RELEASE
(Calgary, Alberta) February 25, 2016 – Following the release of the Canada Transportation Act (CTA) Review report by Transport Minister Marc Garneau, the Alberta Wheat Commission (AWC) is disappointed in the lack of specifics around measures to improve railway accountability and the recommendations on the Maximum Revenue Entitlement (MRE) and interswitching.
“We still need to go through the report in detail, but our first reaction is that it is short on specific recommendations on how to address the imbalance in railway power,” says Kevin Auch, AWC Chairman. “While we look forward to discussing the report with the new government, some of the recommendations may not provide solutions to the lack of competition and accountability we have with grain transportation in Canada.”
The CTA Review report, which was submitted at the end of December by the Honourable David Emerson, Chair of the Review, was commissioned to review the current transportation system as a way to look at long-term solutions to grain transportation problems, and as a response to the grain transportation crisis in 2013-14 that backlogged grain movement and cost farmers billions of dollars in losses.
AWC is pleased to see the report acknowledge the need for a mechanism to reinforce accountability and predictability of transportation services and performance, but feels it lacks detailed solutions.
AWC’s final submission to the CTA Review Panel recommended the development of standardized reciprocal penalties, along with measures to increase interswitching efficiencies between rail lines.
“There is very little mention of reciprocal penalties to increase railway accountability, and the recommendation to sunset the increased limit in interswitching to 160 kilometers is very concerning as this will weaken competition between shippers and railways,” added Auch.
AWC will continue to lobby the new government on the need for reciprocal penalties as a long- term solution to ensure both parties receive fair service through competitive and commercial service level agreements, improved accountability from both parties and encourages both parties to better align capacity supply and demand.
In addition, the Report also recommends eliminating the Maximum Revenue Entitlement (MRE), which limits the amount of revenue Canadian National and Canadian Pacific can earn shipping regulated prairie grain.
“We believe the elimination of the MRE will impose higher costs on farmers with no evidence it will lead to better service,” concluded Auch. “This is important for our industry when there are only two major players.”
AWC will continue to review the report and consider how these recommendations could impact our growers.
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