Poor rail service costing Agricultural sector, Canadian economy, industry insiders say

Canada’s rail service issues are driving demand for change from industry experts, including some in the agricultural sector who say poor rail services are spending money on them.

from January 2nd to April 2ndThe delivery rate for cars was 53% on the Canadian National Railway (CN) and 65% on the Canadian Pacific Railway (CP).

In response, Wade Sobkowich, Managing Director of the Western Grain Elevator Association (WGEA), wrote to the Canadian Department of Transportation to request an investigation. According to Sobkowich, the agency refused, saying that the overall harvest year achievement rate, which began on August 1, 2021, has exceeded 70%.

Sobkowich told The Epoch Times that he was disappointed that the investigation had not taken place.

“I explained how bad the service was in January and February. The grain industry is quite expensive and I feel the problem is systematic,” he said.

According to WGEA, member companies paid $ 16 million in shipping charges and contract extension penalties between August 1, 2021 and January 31, 2022. Until 30th. Sobkowich says that when this happens, Canada’s reputation will suffer and buyers from other countries will look elsewhere.

“I’m worried next year because it was a much smaller crop than usual,” he said.

“We want you to come forward in case of problems and investigate why rail services were so poor so that the same problems wouldn’t repeat next fall. Better crop. “

CN and CP did not respond to the comment request sent by email. however, Western ProducerA CN spokesman said the floods in BC caused the backlog and the work time lost due to COVID also caused problems. A CP spokesman said railroads would have to cope with rising feed grain imports from the United States due to inadequate domestic supply. Both said they have caught up with the challenges and have dramatically improved their services in the last few weeks.

according to The Canadian Railroad Supplier Association, Canada has 49,422 kilometers of railroads. CP owns 49.1 percent, CN owns 25.6 percent, and other railroads own the remaining 25.3 percent. The association estimates that railroads have averaged about $ 1.8 billion annually over the past five years, investing 20% ​​of their revenue in infrastructure.

Due to lack of competition, railroads do not always meet the needs of customers who have no other place to turn, Sobkovich said. This prevents Canada from delivering the full amount of the desired product when the buyer is willing to pay the most.

“They know you’re going to move that grain in the end anyway, so they want to flatten the demand so that we move one-twelfth of the crop every month. [and] They can enjoy 100% asset utilization, “he said.

Quorum Corporation, which monitors grain shipments, From August 2021 to March 2022The tonnage of grain delivered from ports in western Canada to destinations in western Canada decreased by nearly 44% year-on-year. Meanwhile, total grain shipments to all destinations in Western Canada fell by just over 41% year-on-year.

Quorum president Mark Hems said the railroad was on track until the floods in British Columbia in November.

“It took them forever to recover from it. It was only in the last couple of weeks that we found that the rails were performing as normal,” Hems said.

“For the next few years, especially as this year’s harvest begins and the railroads are approaching the next fall when the problem isn’t being solved, there will be a lot of debate, and that will be a bigger one, I. Can tell you that. “

Greg Gormick, a railroad analyst and policy adviser at On Track Strategies, told The Epoch Times that Ottawa’s hands-off approach allowed Canada’s rail services to go off track.

“In Ottawa, nothing is spent on railroads. In the United States, at least there is a legitimate P3. [public-private partnership] The project is underway, “he said.

“The function of the railway is [a lot] It has something to do with Canada’s national economy. Looking at the combination of traffic and volume, you can see how the economy will change. So this is not trivial. “

Gomic, who got his first railroad job in 1978, says that past generations of politicians have increased their understanding and familiarity with railroads. He says billions of dollars in federal taxes for airlines and aviation during the pandemic would have been better utilized for rail infrastructure.

“For every dollar the government puts in, whether it’s the federal government or the state government, it’s likely to be able to adapt the railroad to it, so it’s double the impact. In the case of CN, they’re in this capacity. I want to relax the constraints. It’s a mess. “

Lee Harding


Lee Harding is a Saskatchewan-based journalist and think tank researcher and contributor to The Epoch Times.