Good afternoon.
My name is Larry Hill and I'm the chairman of the Canadian Wheat Board's board of directors. I farm near Swift Current, Saskatchewan. As mentioned, Ian White is with me today. He's the CWB's chief executive officer.
I'd like to thank the committee for inviting the CWB to speak on this issue today.
The CWB markets wheat and barley on behalf of the grain producers in western Canada. As such, we are a significant player in the grain handling and transportation system and we are very concerned with how that system is structured and how it works.
The CWB has been a supporter of producer car loading because it puts money in farmers' pockets and because it brings an important element of competition into a system that continues to undergo significant consolidation.
Shipping grain by producer cars saves farmers between $800 to $1,200 a year, depending on their location. This translates into added returns of over $10 per tonne, which, in the context of today's lower prices, can mean the difference between making and losing money on a typical prairie farm. In large part, this is why more and more farmers are looking at loading producer cars.
In the 2008-09 crop year, there was a record amount of grain shipped by producer cars in western Canada. In all, 12,447 cars were loaded. This represents over 1.1 million tonnes of grain. Considering that only 10 years ago the volume of producer cars had fallen to only 3,000, there is clearly a significant trend here.
It should also be noted that the vast majority of grain shipped by producer cars is wheat, durum, and barley that the CWB sells on farmers' behalf. The CWB facilitates the sales agreements and port authorizations that have to be in place before grain is moved. It also works with the Canadian Grain Commission to secure car supply from the railways for producer car shippers.
Beyond the immediate impact that shipping producer cars can have on a farmer's bottom line, there are many other underlying benefits that grain producers will often cite in explaining why this is an important option for them. Producer car shipping reduces the distances they have to travel to haul their grain. It reduces the wear and tear on local roads. It keeps money and economic activity within their communities. All of these are good and valid reasons.
The CWB therefore is in favour of a grain handling and transportation system that allows farmers to have access to producer car loading as a viable option, both now and in the future. By the same token, it's opposed to measures that would substantially impair the growth and development of producer car shipping in western Canada.
The delisting of 53 producer car loading sites by CN is certainly of concern to the CWB. The loss of this many sidings can only have a negative effect on the farmers of western Canada and on the availability of the producer car shipping option.
The CWB applauds the efforts of the federal government in getting CN to delay the delisting of these sites until at least 2010. This gives all parties time to take a second look at the proposal and determine if it is really in the best interests of western Canada to proceed.
Among the facets of the issue that need re-examination during this period, the CWB would like to suggest the following.
Given the growth of producer car loading shipments, past usage should not be the sole consideration of whether or not a site is delisted. Once a siding is gone, it is gone forever. Therefore, some consideration needs to be given to the potential for future use.
The process for delisting needs to be more transparent. As pointed out by the Saskatchewan Association of Rural Municipalities when it appeared before the committee, several concerned parties did not come forward with complaints and comments until after the 60-day notification period. This suggests that different ways of notifying the public, and farmers in particular, must be found. As well, there needs to be more transparency in how the railways determine which sidings are delisted so that concerned parties are in a better position to develop long-term strategies for keeping their producer car loading sites and to mitigate the risk of delisting.
The CWB believes there would be benefit in more closely aligning how producer car sidings are delisted with the kind of protection that is afforded to urban rail sidings. Section 146.2 of the Canada Transportation Act requires a 12-month notification period prior to the elimination of a siding within a metropolitan area.
In addition to having to list on their website the urban sidings that are up for delisting, railways must alert interested parties, including the various levels of government and local transit authorities, of their intentions. Further, the entire process for eliminating urban sidings is well defined in the Transportation Act. Similar safeguards and protocols need to be put in place for producer car sidings.
In summary, the CWB works closely with many producers who feel that the ability to ship their own grain by producer car is an important tool in their grain marketing tool box. The CWB wants to make sure their ability to use this important tool is not taken away from them piece by piece.
Thank you. We welcome your questions later.