The former Canadian Wheat Board is expanding its grain network under new owners – and a new name – with the construction of a year-round shipping terminal in Hamilton.
G3 Canada Ltd. said on Tuesday the 50,000-tonne port facility at the western edge of Lake Ontario will load wheat, soybean and corn grown in Southern Ontario onto Great Lakes ships and rail cars destined for G3's ports in Trois-Rivières and Quebec City and buyers overseas.
Grain "production in Ontario has been growing at a pretty dramatic rate and we've been eyeing this [new terminal] as a key component in our eastern origination strategy for some time now," said Karl Gerrand, chief executive officer of G3.
The terminal will compete with Richardson International Ltd. and Parrish & Heimbecker Ltd., which have terminals at the port, and other well-established agriculture companies in the region.
Mr. Gerrand said G3's terminal, which will cost more than $50-million and is expected to be ready for the 2017 harvest, will offer rail service using the shortline Southern Ontario Railway to connect with the two major Canadian railways to Quebec so shipments will not halt when the St. Lawrence Seaway closes for the winter.
"We felt it was a real plus to be able to operate year-round," Mr. Gerrand said in an interview from Winnipeg, where G3 has moved into CWB's offices.
After the federal government ended the Canadian Wheat Board's monopoly on buying western Canadian wheat and barley in 2012, CWB began building and buying a network of elevators, port terminals and two grain ships as it transformed into a full-service grain handler to compete with the other agricultural companies that began buying and selling western grains.
In April, 2015, U.S.-based Bunge Ltd. and Saudi Agricultural and Livestock Investment Co. took control of CWB with an investment of $250-million.
The transition of the Canadian Wheat Board was completed with the aid of about $350-million in taxpayers' money.
In addition to seven grain elevators in Western Canada and four in Quebec, G3 has a port terminal in Thunder Bay, Ont., and is the early stages of designing and building a grain terminal at the Port of Vancouver.
Another four grain handling facilities are being built in Manitoba and Saskatchewan.
Mr. Gerrand said the Hamilton terminal completes the Southern Ontario grain pipeline, and the company will focus on expanding its reach in the Prairies with new inland terminals in Saskatchewan and Alberta that will feed the planned Vancouver terminal, which serves Asian markets.
Mr. Gerrand said the company is not considering a purchase of any Viterra grain assets that Glencore is believed to be trying to sell.
"If there's any opportunity to invest in assets that are already in play, I'd certainly be interested but I don't think Viterra's going to come to market in the way the media has rumoured it to be," he said.
The disappearance of the wheat board remains controversial in parts of the Prairies. Some farmers have welcomed the chance to sell their crops to a handful of buyers that offer competitive prices. Others say they miss the certainty of price and delivery the wheat board offered.
A group farmers that calls itself Friends of the Canadian Wheat Board is pursuing a class action lawsuit in federal court, arguing the federal government shortchanged farmers $720-million in the final year of the board's monopoly.