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Ottawa is considering the legislation in response to a grain backlog in the Prairies. (DARRYL DYCK For the Globe and Mail)
Ottawa is considering the legislation in response to a grain backlog in the Prairies. (DARRYL DYCK For the Globe and Mail)

Conservative bill to ease grain backlog closer to becoming law Add to ...

The Conservative government’s bid to ease a multibillion-dollar backlog of Prairie grain is one step closer to becoming law, despite ongoing questions about its details and complaints by Canada’s two major railways.

Bill C-30 was tabled March 26 in an urgent bid to force railways to ship more grain after a bumper crop, and passed third reading in the House of Commons on Monday. That came after a weeks-long delay caused by a complaint over a government error, whereby a committee went too far in altering the bill by adding an amendment the Speaker ruled was out of bounds.

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Bill C-30 is aimed at easing a backlog by expanding government power to set minimum shipping levels for railways. It also expands grain sellers’ power to choose a different railway – many had just one choice – and creates a new process for the Canadian Transportation Agency (CTA) to force a railway that fails to hold up its end of a deal to repay certain costs to grain shippers.

The government has aimed the bill at farmers and regularly criticized the railways, which have fired back at Bill C-30. In a statement Monday, CN called the bill “an intrusive and heavy-handed piece of legislation” that will do little to get more grain moving.

“CN is disturbed that the government, through Bill C-30, has decided to punish railways with re-regulation for an outsized crop and winter conditions totally beyond their control,” said the CN statement, from spokesman Mark Hallman. Canadian Pacific has also spoken out against the changes, but declined further comment Monday.

The Tories faced a delay after an amendment to the bill – the one giving the CTA the power to order railways to compensate shippers – was essentially struck down. In a May 1 ruling, the Speaker of the House of Commons, Andrew Scheer, said the amendment was outside the scope of the initial bill, and therefore had been off-limits. He was ruling after a complaint raised by Independent MP Brent Rathgeber.

The government then quickly sent the bill back to committee, this time with permission to essentially re-insert the amendment. The committee met and did so on Monday. Later in the day, the bill went back to the House and passed third reading.

“Our government encourages the Senate to review and pass this Bill as quickly as possible,” Agriculture Minister Gerry Ritz, who has criticized Mr. Rathgeber for making the complaint, said in a written statement released by his office Monday. It said the bill is meant to “ensure our grain and other commodities are moving to the marketplace in a predictable and timely manner.”

CN took particular issue with the disputed amendment, saying it is “regulatory overkill” that would give the CTA “unprecedented power” without giving railways any judicial due process.

“The [CTA] amendment – instead of fostering supply chain collaboration – will generate continuous finger-pointing and conflict between railways and their customers,” CN warned, later adding: “The Federal Government has a clear choice to make. The Government can either continue down the path of deregulating the grain handling and transportation system – a successful commercial approach that’s been ongoing for the past 30 years – or decide to cast the regulatory net squarely on all participants in the supply chain, not just railways.”

Wade Sobkowich, executive director of the Western Grain Elevator Association, noted the CTA change only requires railways to pay “expenses,” as opposed to damages. That section, like many in the bill, remains murky and has not yet been defined, Mr. Sobkowich said, making it impossible to know what effect the bill will have.

“The bill’s been proceeding pretty well, very quickly, more quickly than you normally see legislation progress. That’s a positive thing,” he said, adding that it’s nonetheless “still murky, devil’s in the details. We’ll see how the regulations work out.”

In particular, Mr. Sobkowich warns that mandatory minimums for shipping will force railways to pick routes that are easiest for them – potentially freezing farmers out of lucrative routes to the United States, for instance, or favouring those who live closer to ports.

Last year’s crop was 76-million tonnes, roughly 50 per cent higher than the 10-year average, government figures show. Cold weather forced railways to run shorter trains and added to a backlog.

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