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Report On Business Rail, ports in Canada’s West will need cash injections to handle commodities surge

Cars wait at a rail terminal outside of Hardisty, Alta.

Amber Bracken/The Globe and Mail

Big investments in both rail and marine infrastructure will be required to accommodate an acceleration in commodities shipments, particularly oil, over the next decade, says the Conference Board of Canada.

In a report released Thursday, the agency said annual tonnage of commodities shipped by rail will grow more quickly than in the past, rising 30 per cent to 260 million tonnes by 2025, up from 200 million tonnes in 2011.

The Conference Board said Canada's shifting trade patterns are putting additional pressure on the country's railways and ports to meet the growing demand for Canadian commodities.

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Wheat, forest and energy products, especially crude oil, are expected to be the main growth drivers, with rising exports bound for Europe and Asia.

"Improving the performance of Canada's transportation supply chain is essential to ensure that Canadian exports remain competitive in the global marketplace," said the 135-page report, which didn't put an estimate on the cost of upgrades.

Rail corridors between the Prairies and the United States and from the Prairies to British Columbia are expected to experience the most pressure from rising shipments. That will put pressure on Canadian National Railway and Canadian Pacific Railway to continue investing heavily in rail infrastructure to accommodate the increased demand, the Conference Board said.

The two railways spent, on average, more than $1.25-billion a year combined between 2005 and 2014 and appear to be focusing long-term spending in line with the report's forecast, the board said.

The largest increase in rail volumes is expected to be for transporting energy products from Saskatchewan and Alberta to the United States.

The board said ports in Central and Eastern Canada have enough capacity, but that B.C. ports will need to be expanded to accommodate 7 million more tonnes of agricultural products by 2025.

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