By Kayla Bruch

Hoback scrutinizes CN and CP Rail over grain backlog

Sep 22, 2014 | 4:54 PM

After much debate about a grain backlog in the Prairies, Prince Albert MP Randy Hoback thinks there is a simple solution.

Hoback said CN and CP Rail needs to provide adequate service to farmers as well as Western Canada as a whole. 

“They need to make sure they have the capacity to handle the growth that were experiencing; not only in the agriculture sector but in potash, oil and gas and other sectors that we rely on rail to get their goods to market,” said Hoback. 

This is why Hoback spoke up in the House of Commons on Sept. 18, hoping the government would back his opinion. However, he said they didn’t see it his way.

“The problem is they are trying to say there was no grain left to move on the Prairies, which is hogwash, I have farmers in Arborfield who are waiting for rail cars to load,” said Hoback.

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Hoback said canola yields used to be around 20 bushels an acre; now they are pushing 65 bushels an acre.

He said the reality is that they haven’t had the capacity in the past to meet the demand and its time they step up. Hoback said they have a lot more product that has to go to market and rail is the only efficient way to do it.

“They should be adding capacity instead of laying people off,” said Hoback. “Making sure that they’ve got an efficient system in place to handle the product. ”

According to the Fair Rail for Grain Farmers Act, the railways have to maintain a certain volume of grain moved every week to export position. Hoback said the railways didn’t provide adequate service to get grain to market during the last winter season.

“We were setting up a scenario where we had an excess of 50 plus ships sitting in Vancouver waiting for farmer’s grain that was stranded on the prairies, all because CN and CP didn’t have the capacity to haul the grain,” said Hoback.

Hoback said not have the capacity to transport grain forced the companies to prioritize their grain delivery. This means not everyone’s products were delivered to market and farmers were paying heavy demarche costs. Hoback wants to ratify this situation and make sure farmers get as much as they can for their products.

“By having a timely visit of their product to market, gives them a higher price, lower basis and a better net return to their profitability on the farm,” said Hoback.

Hoback said every other sector figures out a way to work in the cold and the railways should do the same.

Mark Hallman, director of communications and public affairs with the Canadian National Railway Company said they believe any Canadian penalties against CN in regards to transportation of western Canadian grain would be unwarranted.

“Given that it’s the current balance of the grain supply chain that has not allowed CN to meet the government’s Order-In-Council minimum grain volume requirement,” said Hallman.

Hallman noted a few key points in CN Rail’s defence:

• Country elevator stocks have been in-line with the five-year average since the beginning of the new crop year. This means there is ample storage room available for farmers to deliver their grain in the Prairies.

• Waterfront elevator stocks are 20 to 30 per cent higher than the five-year average, and West coast terminals are nearly full at 96 per cent of working capacity. This means the grain necessary to load vessels at the ports is available at the coast.

• CN’s weekly demand has been less than 5,000 cars per week on average for the last several weeks – i.e. below the level required to meet the new OIC target of 536,250 metric tonnes per week.

Hallman said so far CN has not received any notice of violation from the federal government.

kbruch@panow.com

On Twitter: @KaylaBruch1