Thank you, Mr. Chairman.
I'd like to thank the committee for inviting me to present on behalf of the Alberta Wheat Commission and the wheat farmers this commission represents.
Also here with me today are Jeff Jackson and Erin Gowriluk. Jeff is our marketing manager and interim operations manager, and Erin is our policy analyst.
I am also a director on the Cereals Canada board and at the Western Canadian Wheat Growers Association. As you can see, I like wheat.
I'm a director on this commission. I farm in the area around Bentley, Alberta, in west-central Alberta.
This year's transportation backlog has affected all commodities and has threatened Canada's brand and reputation as a consistent and reliable supplier. Bill C-30 is an important first step on the path to the long-term solutions required to build a sustainable and reliable rail transportation system in Canada.
We thank you for your actions so far and for this opportunity to speak to the regulations that will be developed as a result of the proposed legislation.
We join our shipping partners in seeking a more specific definition of “adequate and suitable” so that railway service obligations meet the transportation needs of the shipper within the context of the Canada Transportation Act. Adjustments are required to remove the ambiguity of these terms, and the definition should be adjusted to ensure that the transportation needs of the shipper are met.
Bill C-30 will build on the temporary provisions put in place as part of the order in council announced on March 7. One of these provisions is that if the railways are failing to perform, the Government of Canada may impose minimum volume requirements and fines of $100,000 per day for failure to meet these obligations. However, this is just a prerequisite to move prairie grain and does not specify where that grain needs to go. More recently, we witnessed the rail companies’ refusal to provide service for shipments destined for the U.S., in order to move more grain to west coast port terminals.
In addition to international markets, the western Canadian wheat producers also rely on the domestic feed industry. The Animal Nutrition Association of Canada has expressed concerns over the shortage of railcars allocated to the movement of western grain to the B.C. Lower Mainland. All corridors are important, and a lost customer in the U.S. is just as costly as a lost customer in Asia, so in addition to the overall shipping requirement as specified in Bill C-30, there need to be corridor-specific guidelines as well. The input of the supply chain should be considered when setting corridor minimums.
Further to this point, we ask that the government consider increasing the daily penalties if movement does not improve and direct that revenue to programs that support shipping infrastructure, such as the Building Canada fund.
We also seek increased accountability through the inclusion of reciprocal penalties as a mandatory component of service level agreements. Currently, there are no service level agreements in place. The key reason for this is the railways’ refusal to include penalties if they fail to deliver on their contractual obligations. Without these penalties in place, there is no reason for a shipper to attempt to conclude a service level agreement. Railway tariffs impose set penalties on shippers if they fail to meet their contractual obligations; for example, loading and unloading cars within a specific timeframe. The regulatory package that follows Bill C-30 must ensure that penalties are also in place for railway non-performance.
For these reasons, we see this bill as an important step forward and we thank all parties for their willingness to expedite this legislation. The regulatory package that follows also needs rapid attention and we stand ready to be a constructive part of that discussion.
We emphasize the need for the Canadian Transportation Agency to immediately begin the capacity planning exercise for the 2014–15 shipping season and include shippers, carriers, and commodity groups in this process. In addition, it is very important to begin the review of the Canada Transportation Act as soon as possible. Long-term change is needed in this system that encourages an increase in capacity for all corridors.
Bill C-30 would require the Canadian Transportation Agency to become directly involved in grain logistics capacity planning. A key element of this role will be the dissemination of information on the supply of, and demand for, transportation services.
The Alberta Wheat Commission supports this new role for the agency. We emphasize the need for the Canadian Transportation Agency to immediately begin a capacity planning exercise for the 2014–15 shipping season. This planning process must include shippers, carriers, and commodity groups. We note that sales are being made into this time period and it is critical that shippers have an understanding of the capacity that might be available.
The Alberta Wheat Commission also wants to emphasize the need to gain certainty past 2016 when the provisions under Bill C-30 may sunset. This planning horizon for producers and shippers extends beyond a few months, and all participants in the value chain need to know what regulatory environment they will be functioning in at least a year in advance, if not more.
We commend the government for their recent efforts to grow the international marketplace for Canadian agriculture, more recently in the development of free trade agreements with the European Union and South Korea. Western Canadian producers are poised to meet the growing demands for their products, but we require an efficient transportation system to ensure that we can fulfill the demand and grow the Canadian economy. Canada's reputation as a consistent and reliable supplier of quality products requires an efficient and effective rail system that's committed to on-time deliveries to our valued customers across this country and around the world.
Canada is a country built on railways. In 1867 Canada was united by the promise of a transcontinental railway. Our growing infrastructure needs can be attributed to the growing demand for our quality products. Our international reputation was built over time and has required significant investment from a variety of stakeholders. We need to work together to protect that investment and respond to the growing demand for Canadian products.
Thank you.