Grain shipments

Mr. Keith Creel
President and CEO
Canadian Pacific
7550 Ogden Dale Road SE
Calgary AB T2C 4X9

Mr. Jean-Jacques Ruest
Interim President and CEO
Canadian National
935 de la Gauchetière Street W
Montréal QC H3B 2M9

Dear Mr. Creel and Mr. Ruest:

We are writing regarding our serious concerns with respect to the railways’ failure to meet the expectations of shippers and customers over the course of this winter. While the situation is not as dire as it was in 2013-2014, railway performance has been disappointing. To that end, we are requesting that you take further action.

A reliable freight rail system is a critical part of a healthy Canadian economy that supports middle class jobs and economic growth. It ensures that our producers and industries can get their goods to market. Our government is committed to working with all supply chain partners to ensure that the rail sector can meet the needs of Canadians and the broader Canadian economy.

Over the course of the winter, we have heard concerns from shippers in a variety of sectors who are experiencing severe challenges due to rail service and capacity issues. For example, forestry, energy and chemicals 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. Canada’s international reputation as a reliable supplier is at stake.

Recent weeks have also witnessed growing concerns from grain farmers and shippers over the lack of rail cars, the slow turnaround time of trains, and the reduced pace of rail movements from grain elevators to ports. In particular, we are hearing that the backlog in rail service has meant that Prairie elevators are approaching capacity. All combined, this creates significant difficulties for our farmers who need to deliver their grain in order to secure cash flow to pay off past loans and purchase inputs for the upcoming crop year.

We understand that there have been challenges for the railways this year, including a larger than expected grain crop and adverse weather conditions, but it is imperative that everything be done to ensure the efficient movement of grain and other commodities.

To these ends, we are requesting that you provide the following information:

  1. A clear description of how your companies intend to mitigate the immediate backlog in the coming weeks; and
  2. Your plans for maintaining fluidity for the remainder of the current crop season once the backlog is clear.

Given the importance of this information to your customers and to Canadians, we ask that this information be published on your website by Thursday, March 15, 2018. Please also provide us with a copy.

Furthermore, while Bill C-49, the Transportation Modernization Act, has not yet received Royal Assent, we trust that you have already begun positioning your companies to respond to the requirements outlined in the legislation.

Among the many important measures proposed in the Bill is a new requirement for you to publish each summer, before the beginning of the crop-year, a report on your railways’ abilities to move the year’s grain crop, based on initial estimates of the crop size. In addition, there is a requirement to publish, by October 1st, a winter contingency plan for the movement of grain, taking into account all commodities, because we all know Canadian winters can be harsh.

We expect railways to undertake robust planning exercises to develop these reports, in collaboration with shippers and producers. These reports will improve transparency in the rail transportation network, enabling supply chain partners to plan their operations accordingly, and helping to reduce the kind of challenges that have arisen this year.

We know that you are a critical player in the Canadian economy and we understand the vital role you play in supporting a wide range of businesses and industries across the country. In fact, since Confederation, the economic prosperity of Canada has been interconnected with the success of its railways.

We appreciate your ongoing cooperation.

Sincerely,

The Honourable Marc Garneau, P.C., M.P.
Minister of Transport
The Honourable Lawrence MacAulay, P.C., M.P.
Minister of Agriculture and Agri-Food
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