Thank you, Larry.
I would like to thank the Standing Committee on Agriculture and Agri-Food for taking seriously the issue of CN's delisting of producer car public sites and for inviting me to talk to you.
My name is Cam Goff. As you may be aware, I am an elected director of the Canadian Wheat Board. However, today I'm here as a producer car loader, and I'm not representing the board.
I want to register my grave concerns about CN's intentions, which I feel will deal a major blow to both the present and the future ability of western Canada’s farmers to access local rail transportation for moving their grain to market.
I farm as part of a family operation near Hanley, Saskatchewan, just south of Saskatoon. We grow a variety of crops such as wheat, barley, winter wheat, durum, and flax, etc., and my brothers and I have been loading producer cars for the last 15 years.
The existence of public sites spread out across the Prairies gives farmers an additional avenue to ship their grain and provides checks and balances to the grain handling and transportation system. This helps to keep the major players honest and brings an important element of competition to the ongoing consolidation in the grain industry.
It's the broad geographic positioning of sufficient density that makes these public sites useful to farmers as an effective safety valve. Closing public sites will inevitably increase the distance the majority of farmers have to haul and this will reduce both opportunity and profitability.
CN argues that lack of use of these public sites makes these sites unnecessary and an economic drag on the system. In comparison, I'd just like to point out that all hot water heaters in homes have a safety valve installed to prevent an explosion in case the controls malfunction. These valves are mandated by regulation on every heater installed in this country, and the fact that very few of these valves ever perform their function in no way lessens the critical need for their inclusion. It does not allow the manufacturer to eliminate them as a cost-saving measure.
During the last 12 years, producer car usage has steadily increased from 3,000 cars to a record 12,467. This is an indication to me that the number of public sites should be increased, not reduced. The economic savings to producers who choose to load their own rail cars can approach, by my reckoning, $2,000 a car. This saving, along with the economic activity generated locally in the town and the retention of local rail service, is endangered by this proposal.
Farmers need the choice of railcar loading as an option for grain movement. Having the maximum number of public loading sites available helps ensure reasonable access to this cost-saving option.
It has to be realized that many factors affect the practicality of an individual loading a producer car. CN only guarantees a penalty-free loading time of eight hours, so time is critical. A farmer has to haul an auger to the loading site—and you can only go as fast as your tractor goes—set up the auger, return home, load the truck, drive back to the site, and start loading the car, all of this after the farmer has previously driven to the site to confirm that the car was dropped off and is capable of holding grain.
From my experience, I can assure you CN's performance on delivery timing and railcar condition has a lot of room for improvement. It's unwise for a producer to assume that a railcar will arrive in good time and in good condition.
A farmer’s right to access public producer car sites was enshrined in legislation near the turn of the 20th century after a hard-fought battle against the grain companies and railways of the day. This access was legislated to ensure that farmers had the ability to choose between the services offered by the big companies and the savings and convenience afforded by local self-loading.
These issues are as relevant now as they were then. Farmer access to public producer car loading sites for loading railcars was not granted for the railways’ convenience or economic benefit. It was granted for the benefit of grain producers. The legal right to order a railcar is useless if there is no mechanism in place to ensure the car is placed within a practical distance.
These public sites have proven their value many times. I know of two instances where producer groups were able to use their local public sidings to force CN into negotiations.
These groups had been trying to enter into commercial agreements with CN to establish producer car loading facilities, but they were met with antagonism and lack of cooperation. It wasn’t until they had gained CN's attention by loading at multiple public sites and becoming a source of irritation that CN grudgingly entered into negotiations. As well, there's another ongoing case, where CN has been ignoring two different groups that have been trying for several years to establish commercial facilities.
One of the biggest concerns I have is the process that allows the potential abandonment of 30% of the loading sites on CN's list to be left to the sole discretion of CN. CN may have followed all the procedures laid out in the act, but the act is flawed in this regard. I'm asking for your help in correcting this legislative defect to maintain producer choice. It must be dealt with by the appropriate bodies.
Decisions as far-reaching as this one, which affect so many people across so wide an area on such a large scale, must not be left to a single party with self-interested motives. A transparent system would include a much more effective public notification system. Farmers and all levels of governance should be involved.
The onus should be put on the railways to prove why these sites need to be abandoned. The entire producer car loading system should be subject to scrutiny by all affected parties. It should be designed to ensure the best placement of sites and the best use of resources. I think all concerned realize that if sites are abandoned and infrastructure is removed, it would be a loss to our rail system forever.
In a world that is struggling to reduce consumption of non-renewable resources and that realizes rail is the most efficient method of land transport, we have to maximize the use of our ecologically sound assets. These public loading sites were never intended to be a source of extra revenue for the railroads. They were intended to impose checks and balances by allowing farmers the ability to ship their production using an alternate method and from reasonably convenient locations.
I do not believe that commercial discussions have anything to do with public producer car sites, which are a regulatory issue, not a commercial one. Producers would be waiving their regulatory protection by entering into a commercial arrangement on these sites. This is an unacceptable and unnecessary capitulation to CN's strategy for eliminating farmer choice.
One could imagine a city transit system arguing that stops three blocks apart are uneconomical, given the extra time it takes to stop and start, the wear on the equipment, the extra fuel used, and the wages for the driver. Reducing the number of stops by spacing them one kilometre apart would certainly reduce costs to the transit company, but it would also likely drive usage to a point where it could be argued that the entire system should be abandoned.
In closing, I ask that you do what you can to stop the delisting of these public sites. We must ensure that legislation protects the maximum number of farmers and maintains the greatest possible access to this important avenue for grain movement. The checks and balances these public sites provide must not be underestimated. Our recent experience with the current economic crisis should have taught us the folly of allowing self-regulation by big business.
I urgently request that you pass this matter on to your colleagues in the appropriate department so you can enact legislative change. Please ask for their immediate involvement in this process. I just want to remind you that CN has agreed only to leave these 53 sites intact until January 1, 2010.
Thank you for your consideration. I hope for a positive response.