Recent History – 1999
March 22, 1999
By Mark Nielsen, Daily News Staff
The Canadian Wheat Board (CWB) has released an action plan intended to give farmers a better deal in the nation’s grain transportation system. The plan is in answer to the Estey report on the grain transportation, which was released in late-December. It calls for a more competitive and lower-cost grain transportation environment and to strengthen commercial contracts between the CWB, grain companies, and railways.
District One director Art Macklin said that the Canadian rail system is essentially a duopoly, so the plan calls for the federal government to impose rates that would be consistent with what would be charged if there really was competition.
“What we’re saying is let’s use the appropriate tools where they work best,” he said.
“In some areas competition will function and will be beneficial, and where that can be implemented that’s great. But in some areas, it would be very naive to think that the railways are going to compete with each other.”
In late-December, Justice Willard Estey released a report with recommendations for reforming the grain transportation system. Grain producers say it heavily favours the rail companies at the expense of their interests.
Prime among those concerns is removal of the freight rate cap. The CWB points to the United States as an example of what will happen if non-regulated rates are allowed in a non-competitive environment.
The statutory rate from Edmonton to Vancouver is $27.25 per tonne while the rate from Shelby, Montana to Portland, Oregon, which is roughly the same distance, is $52 per tonne.
The CWB also opposes Estey’s recommendation to eliminate the Car Allocation Policy Group and to eliminate the CWB’s role in transportation and handling.
Macklin said the government wants to have the final changes in effect by August 1, 2000.