Canadian Canola Growers Association Hub Article
Bill C-49, The Transportation Modernization Act, became law on May 23 after more than a year working its way through the legislative process. The Act moves us forward in building a more predictable and reliable transportation system for farmers, exporters, and global customers.
If you haven’t been actively following the long process, here are two things included in Bill C-49 that should most directly benefit farmers:
- Railway transparency: New public reporting requirements for railways will increase transparency into their operations. Weekly and annual reports will help ensure all parties, including grain farmers, have better information on transport volumes and potential issues, before they become problems.
- Investment in the supply chain: A change to the calculation of the Maximum Revenue Entitlement (MRE), which will encourage capital investments by the railways.
- Carrying capacity is expected to increase by as much as 15-25% as railways invest in replacing the aging fleet with a new generation of grain hopper cars. In fact, on May 24, CN announced its plans to acquire 1,000 new high-cube grain hopper cars over the next two years.
Also of note, soybeans and soybean products will fall under the rate-protection mechanism of the MRE, providing regulatory parity for a crop that has grown to be of significance in Western Canada.
In addition, other changes that will impact shippers should benefit farmers as the transportation system becomes more efficient. These changes will increase supply chain accountability:
- Reciprocal financial penalties and dispute resolution can now be included in arbitrated service level agreements.
- The legal concept of “adequate and suitable” service that railways must provide shippers has been clarified.
- Introduction of long-haul interswitching.
One reason for the long process is that the legislation is broad, touching on Canadian transportation issues beyond rail shipping and the grain sector. It addresses some long-standing policy issues that have been years in the making, stemming back to the 2013-14 grain crisis and earlier.
For farmers, the actual impact of Bill C-49 will take several years to fully understand, as data is collected on the use and success of these new tools and processes. We will continue to monitor the situation and report on progress.
Thanks to the Canadian Canola Growers Association for generously sharing this content.
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