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Michael Bourque, Railway Association of Canada: Facts - Not Politics - Should Shape Canada's Grain

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    Michael Bourque, Railway Association of Canada: Facts - Not Politics - Should Shape Canada's Grain

    From Railway Association of Canada

    http://www.railcan.ca/rac/presidents_message/home/2014-11-25?year=2014&month=11&page=1

    and Todays Financial Post as well.


    Facts – not politics – should shape Canada’s grain transportation policy

    Based on recent media coverage and comments by prairie politicians, it is clear that there is confusion around the so-called Fair Rail for Grain Farmers Act, and related quotas, as well as distortions aplenty about the railways ability to move grain.

    At the risk of suggesting that facts, and not politics, have anything to do with this legislation or the quotas, let me set the record straight about rail service during the past year.

    The 2013-2014 grain crop was the largest ever by a large margin: almost 20 million metric tonnes larger than average, an increase larger than the amount of potash Canada exports in a year. All of this additional grain was destined for export — not for domestic consumption- (just because there is a record crop doesn’t mean we all have a second bowl of Wheaties every morning). Essentially all export grain moves by rail.

    As Canadians will know only too well, last year’s winter was the coldest in 75 years. More than 7,000 properties in Winnipeg were at risk of frozen water or sewer pipes — in June! Further evidence of the “polar vortex” included the highest number, and highest percentage, of U.S. flight cancellations in more than 25 years (75,000 by four major carriers) and widespread ice coverage on the Great Lakes (92 per cent, the second-highest level on record).

    Railways, like other outdoor operations, are affected by winter. In the depths of winter they are uniquely challenged due to the nature of their component technologies – steel wheels, steel rail, and long compressed air brake systems. No amount of legislation, blame, fire or brimstone will change this fact. Nonetheless, this past winter, both CN and CP set records for moving grain. CP moved 16% more grain than ever before, a record which will hold for a considerable amount of time. Railways make a decent return on grain and we would have moved grain without quotas being set.

    Apparently, quotas make such good politics that a simple quota system won’t do. Now Regina MP Ralph Goodale is suggesting that the Order in Council needs to be re-jigged to “reflect sensitivity toward quality variability, corridors west, east, south and north, the needs of shortline operators and producer car shippers, and Canadian domestic consumers and processors, among others". Who needs commercial markets when you’ve got bureaucratic planners?

    This approach, one that is an affront to all things market based, might make for good prairie politics. But, it’s not a solution.

    Instead, we must realize that, from farm to customer, we are dealing with ever-changing and evolving global supply chains. These supply chains include on-farm storage; trucks; roads; inland elevators and terminals; railways; export terminals and ports. Last year, it included the seaway and even icebreakers! We need to ask ourselves whether we are taking advantage of all the supply chain options to address the issues faced last winter. For example, if Asia is an important market, why are we not pre-positioning grain there, so that we can move it quickly when demand is high?

    It is a fact that rail rates for grain have been largely flat, tracking inflation, for more than ten years. Today, the average rail rate to ship a tonne of grain from the Prairies to Vancouver is about $35. Because of the “maximum revenue entitlement”, these rates are also lower than the average for other commodities and have grown less than inflation. How can we encourage more investment in the grain supply chain?

    One hopeful development is the review of the Canada Transportation Act, led by David Emerson. This is an opportunity to look at the bigger picture in a non-political way. Let’s hope this review will lead us to decision making that is based in fact.

    Michael Bourque
    President & CEO
    Railway Association of Canada

    #2
    Wonder if he could explain 1997. And the elimination of the crow rate and branch line abandonment.

    Wasn't that all about facts and that farmers were supposed to get some of the benefits of efficiencies.

    Comment


      #3
      Buyers can pre position grain any time they want. We should have surge capacity in my opinion. That is the problem.

      Comment


        #4
        I take it the sane types are responsible for the ****ednup shute openning on the drag auger undernthe pit. Muther ****er at adm watson fir the last two years. I said get a farmer to go under there and fix it. Was told we have been under there hundreds of times. I dont think so. Its not ucking hard.

        Comment


          #5
          QUOTE...

          "Railways make a decent return on grain and we would have moved grain without quotas being set."

          ........

          "It is a fact that rail rates for grain have been largely flat, tracking inflation, for more than ten years. Today, the average rail rate to ship a tonne of grain from the Prairies to Vancouver is about $35. Because of the “maximum revenue entitlement”, these rates are also lower than the average for other commodities and have grown less than inflation. How can we encourage more investment in the grain supply chain?"


          MY WORDS...

          REALLY, you want to talk inflation and where our commodity prices are relative to a two or three decades ago. My commodity prices are NOT INDEXED to inflation I can only wish they would have tracked inflation. Cry me a ****ing river...arrogant asshole!!! The Primary Producers of this Industry have no way of recouping steadily increasing costs. When I have the ability to pass on my increases, we'll talk!!!

          I'm tagging out Cotton... your turn.

          Comment


            #6
            Gives you some insight into the arrogance of some Canadians.

            Comment


              #7
              And then last year the ethanol plnt in belle plain has issues with straw from grain piles. Apparently I t took two months to clear a shute in one bin unload. Like **** get rid of the grate on top of the shute. But noooo.

              Comment


                #8
                It's always great to hear the a different perspective on an issue that affects us. In this case it is Michael Bourque, a Frenchmen from Quebec in a railway lobby group.

                It was disappointing to only hear excuses and no solutions.

                It would of been a breath of fresh air to hear possible solutions such as:
                -new spending on infrastructure (twin railways to ports)
                -improved air brake technology
                -eliminating the unionized gravy train at railway companies
                -better cooperation with grain terminals.
                -More focus on grain vs oil.
                -Utilizing inter switching
                -Allowing additional railway companies on Canadian tracks

                Comment


                  #9
                  Excellent points 88.

                  Chime in anytime hopalong, you and Mr. Bourque speak the same language.

                  If someone "guaranteed" you profit with some convoluted formula would you complain? Are all the pieces of the formula even relevent today (pieces and prices). How often are they reviewed?

                  Comment


                    #10
                    Given there is no "real competition" I guess they can complain because they could charge what they want.....

                    Comment


                      #11
                      Farmaholic

                      You realize the free market advocates have to huddle like socialists before they blitz these threads?

                      Comment


                        #12
                        I think of myself a a free market advocate and I don't need to huddle with anyone. I doubt Hopalong does either.

                        The thing is, just complaining about the lack of rail accountability and efficiency won't fix anything. IF YOU FOCUS ON THE PROBLEM, THE PROBLEM GETS BIGGER. IF YOU FOCUS ON THE SOLUTION, THE SOLUTION GETS BIGGER.

                        So, what is the solution? Let's hear ideas AV'ers. More creative solutions than open running rights please, because that dog won't hunt.

                        Comment


                          #13
                          Braveheart, just afew posts up are some solutions.

                          Ask Sasktel about the equivalent of open running rights. Other service providers were able to use their infrastructure to compete against them. How is it the ****ing sacred cow, aka Railroads, should be immune to competition?

                          Comment


                            #14
                            I think Oliver88 hit the nail on the head.

                            As usual better reporting from all players.

                            Ordering cars months in advance that matches contracts signed.

                            Railways have to start putting money into their infrastructure for faster service.

                            The government has to be involved as either a regulator with teeth or as a service provider when others refuse.

                            Level of service agreements, what stage are they at? Government told me yesterday that's between graincos and railways. And no one is doing anything.

                            Contact the Chinese if they are willing to build another railway. That too will require government involvement.


                            Plenty of ideas have been presented on this forum and to government that ultimately has to make the changes by legislation. It's obvious this government won't. Sadly I vote for them.

                            Comment


                              #15
                              Braveheart

                              I do not see any farm group putting solutions out there and most have said on this forum individuals don't count, they have to belong to a herd to be a validated idea.

                              And if the people in these organizations can't read the solutions on sites like this. Well I am sure you can see where the problems starts and why solutions don't get implemented.

                              Comment

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