Interswitching refers to a regulation to ensure shippers located where only a single railway operates can access points that are not served by that railway. The issue is especially concerning for Canadian grain shippers because over 90 per cent of grain elevators are served by a single line.

The government recently announced it will run an 18-month pilot program to test the idea of raising the interswitching radius within the Prairie region from the standard 30 km, to 160 km.

The idea of testing the waters with a “pilot” was a compromise to bridge the gap between the two sides. But the only thing the two sides seem to agree on is that the pilot is a cop-out intended to punt the issue down the field and ask questions already answered.

Transport Canada already tried out the 160-km radius between 2014 and 2016. From the railways’ perspective, that program was sunsetted for a reason, and they see no sense in re-testing an idea that didn’t work.

“Now, the government wants to resurrect a policy it already recognized was a failure,” said Marc Brazeau, president of the Canadian Railway Association.

On the other hand, grain shippers saw the 2014 trial as a success, and they think the policy should have continued.

“I don’t know why we need a second pilot; it should have been made permanent right off the bat,” said Wade Sobkowich, executive director of the Western Grain Elevator Association (WGEA).

Keep an eye out for an in-depth look at the interswitching controversy in the next issue of the Manitoba Co-operator, where we will examine both positions in detail.

— Don Norman reports for the Manitoba Co-operator in Winnipeg.

The post Preview: Railways, grain shippers at loggerheads over interswitching appeared first on Farmtario.

“It depends on whether employees that aren’t vaccinated will get vaccinated, or would they leave their jobs,” Wade Sobkowich, executive director of the Western Grain Elevator Association (WGEA) said in an interview Thursday. “In that case do we end up in a deficit of human resources to keep the grain supply chain functioning?”

The Canadian government will “make vaccination mandatory in federally regulated workplaces,” including grain elevators, through regulations under Part II of the Canada Labour Code, it announced in a news release Tuesday.

“The government will consult with key stakeholders, including representatives of small and medium-sized employers, as it works expeditiously to finalize the new regulations, which would come into force in early 2022,” the release says.

Why it matters: Vaccination rates are generally lower in rural areas where most grain elevators are. When new federal regulations require all elevator employees be vaccinated against COVID-19 or lose their jobs it’s possible some facilities will be short-staffed.

The WGEA wants more details about Ottawa’s new vaccine mandate, but as of Thursday Sobkowich said he understood ongoing COVID testing would not be allowed in lieu of vaccination.

That’s Hugh Wagner’s interpretation too. The general secretary of the Grain and General Services Union also believes, based on legal opinions, if enacted with a clear, consistent policy and allowing workers time to get vaccinated, employers can demand workers be vaccinated.

“(I)f an employer goes about it the right way, following those steps that I have just laid out, then they likely can implement a mandatory vaccination policy and the employees will have to adhere to it if they want to continue to their job,” Wagner, whose union represents about 800 workers, mainly in Saskatchewan working at some Viterra and Richardson facilities, said in an interview Thursday.

“We have also advised union members that there may be situations… be they medical or reasons of religion, where an individual can raise a question or a challenge as to an exemption, but that is a very high bar to overcome.

“I’ve told people very explicitly that you might say it’s against your religion but actually with all the major religions on board with vaccinations, what you’re really saying is it’s your interpretation of your religion. That won’t get you a get-out-of-jail-free card.”

Asked if he thought grain companies can implement the vaccine mandate with a minimum of disruption, Sobkowich replied: “I hope so. It depends on the region. It depends on how employees react. It’s difficult to predict at this point.”

There are a number of elevators in Manitoba’s Southern Health District where the following six municipalities have the lowest vaccination rates in Manitoba:

(Source: Manitoba Health)

As of Dec. 8 more than half of the COVID-infected patients in Manitoba intensive care units (ICU) were from Southern Health, which accounts for just 15 per cent of Manitoba’s population. Of those infected patients 92 per cent were either not vaccinated or had just one dose.

Meanwhile, the number of ICU cases continues to grow forcing Manitoba Health to cancel more surgeries and diagnostic procedures. Doctors Manitoba puts the backlog of 152,000.

“The (WGEA) member companies are fully supportive of as many Canadians receiving the vaccine as possible,” Sobkowich said.

“The grain companies continue to promote vaccinations among workers. It’s a sensitive issue and one that needs to be approached considering the perspectives of all the stakeholders. There are a number of questions that really need more fleshing out. In the midst of getting on board with the government’s mandate there are a number of questions that need to be answered.”

Some of them include rules around employers asking employees about their vaccination status, he said.

Vaccination is the best line of defence against COVID-19, the government release says.

“It not only protects those who are vaccinated, but it protects vulnerable populations like young children who aren’t yet able to get vaccinated,” the release says. “To finish the fight against COVID-19, protect workers and their families, and ensure businesses can get back up to speed, we need to do everything we can to keep public spaces safe, particularly as we continue to face new variants.”

Mandatory vaccination is already required for employees working in the federally regulated air, rail, and marine transportation sectors, and travellers using these modes of transportation.

There are about 18,500 employers in federally regulated industries, including federal Crown corporations, which together employ 955,000 people. That’s about six per cent of all Canadian employees.

The majority (87 per cent) work in companies with 100 or more employees, the release says.
These figures exclude the federal public service.

Including the federal public service, there are approximately 19,000 employers and 1.3 million employees, which represents about 8.5 per cent of all employees in Canada.

All federal public servants in the Core Public Administration, including RCMP members and reservists, must be vaccinated against COVID-19.

This requirement applies whether employees are teleworking, working remotely or working on-site. More than 95 per cent of employees have attested to being fully vaccinated and approximately 98 per cent have had at least one dose.

“Employers who do not comply with their obligations under the Canada Labour Code may be subject to compliance and enforcement measures, including administrative monetary penalties,” the release says.

“In recognition of Indigenous peoples’ right to self-determination and self-government, Indigenous governing bodies and First Nation band councils will be exempted from the new requirements. The government of Canada will work with Indigenous partners to provide information on the new measures should they wish to follow the same approach, however, doing so will be at their discretion. This is also in line with the Government’s commitment to implement the United Nations Declaration on the Rights of Indigenous Peoples.”

A copy of the consultation paper on the new vaccination mandate may be requested from the Labour Program by email.

— Allan Dawson is a reporter for the Manitoba Co-operator.

The post Elevators hope mandatory vaccination doesn’t disrupt operations appeared first on Farmtario.

Wade Sobkowich, executive director of the Western Grain Elevator Association (WGEA), says that designation will have a practical application.

“Hopefully it ends all confusion about grain workers at elevators, railway workers and anybody else required for moving grain, as to whether they should be showing up for work under the new distancing and safety protocols and doing their jobs,” he said.

The official designation has never been granted, despite Agriculture and Agri-Food Minister Marie-Claude Bibeau often saying it is, stating the obvious: “People have to eat.”

So have Prime Minister Justin Trudeau and Deputy Prime Minister Chrystia Freeland.

Why it matters: The sector needs not only to produce food, but workers to process and transport it to domestic and international markets.

Some might argue Canada should focus on feeding itself in these unprecedented times, but the WGEA disagrees.

“Exporting grain is a priority if you want goods from other countries,” Sobkowich said. “Other countries have been in touch with our government wanting some certainty about supply during this crisis. Everybody in the world needs food so you have to reciprocate and you have to continue to keep grain and other products that go into processing food flowing.”

Part of the concern about declaring grain movement ‘essential’ stems from labour regulations, Sobkowich said. For example, longshoremen can’t strike against moving grain.

“But when we talk about grain being essential we’re not talking about the capital ‘E’ definition in the Labour Code,” he said. “We’re talking about the critical infrastructure to keep the supply chain flowing (during COVID-19).”

Canada normally has a “highly robust and resilient” food supply chain, but COVID-19 threatens the system, a policy paper by Agri-Food Economic Systems warns.

“The coronavirus pandemic and COVID-19 threat creates risks that can undermine operations at critical points of the agri-food supply chain due to absenteeism,” Agri-Food Economic Systems said in a release March 22. “It could also threaten the movement and security of segments of the workforce necessary in agri-food.

Employers might have to create a trained pool of temporary workers that can be called on if more employees stay home, Ted Bilyea, an Agri-Food Economic Systems associate and co-author of a policy note on the issue, said in the release.

Industry and government need to acknowledge the potential risks and be prepared to act, report co-author Al Mussell, Agri-Food Economic Systems research lead, said.

“Our agri-food system’s resilience lies in our ability to recognize the risks posed by an emergency, and to expedite the changes needed to secure it,” he said.

The importance of feeding Canadians isn’t lost on Chris Bernardi, chief union steward at Maple Leaf Foods’ Heritage hot dog and sliced meat plant in Hamilton.

“It was sort of an eye-opener, you know, when we took these jobs making lunch meat, we didn’t think we would be essential workers,” Bernardi told Matt Galloway, host of CBC Radio’s The Current, on Wednesday

“But to be honest with you, it’s an honour to me. And a lot of my members feel the same way. We are happy to be on the front line and able to make sure that this country is going to keep eating, because that’s very important.

“I would say if you don’t see your favourite hot dogs or your favourite lunch meat today, they’ll be there tomorrow. We are working around the clock to keep the food chain running and that as long as people realize they don’t have to panic buy because… we are blessed in Canada.

“We do have a great food supply. We do have a lot of natural resources. We’re going to keep the food chain running. And people just have to realize, instead of buying 10 packages today by one package this week, you know, maybe just two packs of hot dogs, because we will keep those hot dogs and lunch meat coming.”

— Allan Dawson reports for the Manitoba Co-operator from Miami, Man.

The post Ottawa expected to ‘officially’ declare ag an essential service appeared first on Farmtario.

“We are are going to do everything in our power to keep grain moving at this time,” he said Monday in an interview, adding that so much depends on how employees are affected by the pandemic.

“If people need to stay home, how do you function, how do you continue to operate?

“There all kinds of things that need to be navigated here, but I don’t have a solid protocol for the grain companies yet and I don’t know that we’ll get to a single one for all the companies. There are probably going to be differences from one company to another as to how they are handling operations. Hopefully there will be a general approach on handling this crisis situation.”

Meanwhile, the Canadian Grain Commission (CGC) will focus on providing statutory services, including inspecting export grain.

“While we might change how some of our programs and services are delivered, we are going to maintain all core activities,” CGC spokesman Remi Gosselin said in an interview Monday.

“As per the Canada Grain Act and regulations, all licensed grain companies will be notified that they will be required to continue their obligations, including, but not limited to licensing and reporting requirements. We will also continue to ensure that farmers are fairly compensated for grain deliveries to licensed grain companies under our Safeguards for Grain Farmers Program.

“We will focus on everything that’s core like grain inspection, collecting and publishing data, payment protection — all those things will continue.”

Why it matters: Canadian grain farmers and Canada’s economy depends on grain exports. It’s uncertain how COVID-19 will affect Canada’s ability to continue exporting. For now, grain is still moving.

CGC staff who can, will work from home, Gosselin said. Many CGC employees were sent home Monday afternoon, he said.

Other employees, such as grain inspectors and laboratory technicians, will continue working in offices and grain terminals.

“It’s more internal service where people can work at home,” he said.

Sobkowich said he was pleased to hear federal government wants to keep trade going. Reporters peppered Prime Minister Trudeau and other cabinet ministers with questions Monday as to why Ottawa was blocking most foreigners from entering Canada, but not Americans where COVID-19 appears to be wider spread.

Health Minister Patty Hajdu said Canada and the United States need access to each other for food and medications, in addition to others forms of commerce critical to both economies.

Deputy Prime Minister Chrystia Freeland said requiring all those entering Canada, including Americans coming from the U.S., to self-isolate for two weeks, should discourage tourists while allowing essential workers to do their work.

“We do think it’s right to recognize the economy and people’s need for sustenance as essential and the grain sector is a big part of that, as is every link in the supply chain between the grain sector and our customers,” Sobkowich said.

So far grain companies haven’t noticed any reduction in rail service for grain and haven’t been told to expect one, he said.

“Each federally regulated employer is trying to figure out how to keep operating on a business as usual basis as much as possible while protecting their employees,” he said.

Although some mills and processors in importing countries have shut down in wake of COVID-19, people still need to eat, he said.

“You don’t need to go buy a new couch, but you do need to go and buy bread so we think overall there is going to be a negative impact on the economy, but we feel agriculture should be able to weather it better than most.”

— Allan Dawson reports for the Manitoba Co-operator from Miami, Man.

The post Handlers focus on keeping grain moving despite COVID-19 appeared first on Farmtario.

Wade Sobkowich, executive director of the WGEA, said the organization’s membership of major grain-handling companies are concerned their competitors could get a leg up if improper federal subsidies are provided.

He said he understands that rail access is an important service to the community of Churchill, but clear divisions must be made on what support Ottawa will provide. “That has to be clear — that federal funds are not going to private companies,” he said.

The WGEA represents grain handling companies responsible for hauling about 90 per cent of Western Canada’s bulk grain exports.

The Hudson Bay Route Association (HBRA), a supporter of the northern rail line and the port at Churchill, doesn’t see a problem with such funding, if certain conditions are followed.

HBRA second vice-president Wayne Bacon said the federal government has in the past subsidized shipments on the rail line by $9 per tonne in the days following the end of the Canadian Wheat Board’s monopoly on Prairie wheat and barley.

With that incentive, he said, even large shippers such as Richardson International used the Churchill line.

“I don’t think it can be specific funding just for, say, two or three different companies to use, but I think if it’s open for anyone to use, I don’t see the problems.”

Bacon, who also operates Northern Lights Railway and farms near Kinistino, Sask., said the reopening of the Churchill rail line and port could be a boon to local short lines through central and northern Saskatchewan and Manitoba.

Government incentives are going to be critical in the early going, he said, to find capable people to operate the facilities.

But Sobkowich said the situation can become complicated if subsidies are paid to an enterprise that will then compete with existing export terminals.

“If the government is propping up the rail line to get grain for export, it gets pretty messy to try and figure that out.”

Large grain companies have excess capacity at Thunder Bay, Ont., he said, and federal money that supports a company that will draw business to Churchill, away from existing terminals is unfair.

WGEA members are interested in using their own terminal spaces at Thunder Bay and the West Coast, and have no assets in Churchill, he said.

“The future of the (Churchill) port for grain exports, the opportunities are probably limited,” he said.

However, Bacon said he thinks grain companies will take advantage of Churchill, especially if there is a freight rate subsidy. He added he found it difficult to find space for producer cars at Thunder Bay.

Arctic Gateway Group, a public-private consortium, has bought the rail line leading to Churchill, the Port of Churchill and a nearby petroleum storage compound. Arctic Gateway is made up of grain and pulse processor AGT Food and Ingredients and Fairfax Financial Holdings, which together own 50 per cent. Missinippi Rail Limited Partnership owns the other 50 per cent.

The sale price was not disclosed.

In a news release, the president of Fairfax said Ottawa has already promised long-term assistance, although details were vague.

“The government of Canada acknowledges the value and importance of our inclusive group and is supportive of our efforts providing a long−term support package through Western Diversification and Export Development Canada” Paul Rivett, president of Fairfax Financial Holdings, said Tuesday.

The facilities were bought from OmniTrax after the Denver-based shortline rail operator, owner of the railway and port since 1997, said it could not afford to fix the rail lines, which were damaged by flooding and washouts in 2017.

Since the sale to Arctic Gateway, repair crews have been dispatched with hopes of getting the line operational before winter.

— Terry Fries writes for Commodity News Service Canada, a Glacier FarmMedia company specializing in grain and commodity market reporting. Follow CNS Canada at @CNSCanada on Twitter.

The post Grain firms warn of competitive fairness on Churchill assistance appeared first on Farmtario.

Export terminals at Vancouver, Prince Rupert and Thunder Bay put through 35.945 million tonnes of grain last crop year, according to the Grain Monitor’s week 52 report, exceeding the 2014-15 record of 35.76 million.

The number doesn’t include domestic or shipments to the U.S.

The final number could change, but a new record is certain, Mark Hemmes, president of Quorum Corporation, the firm hired to monitor Western Canada’s grain handling and transportation system, said in an interview Friday.

“Overall I think it’s the biggest year we’ve seen in tonnes moved,” he said.

Vancouver, Prince Rupert and Thunder Bay terminals unloaded a record 399,203 cars shipped from country elevators versus 384,782 in 2014-15.

The Western Grain Elevators Association (WGEA) is pleased with the rail service its members, which include the West’s major grain companies, received, executive director Wade Sobkowich said in an interview last Wednesday.

“The railways need to remain on their game whereas before (when rail service suffered) we might have said they needed to get on their game,” he said.

Canadian National Railway (CN) did an excellent job moving grain to export all last crop year, while Canadian Pacific Railway (CP) struggled earlier, but picked up the pace the last half the year, he said.

“We would expect the railways to continue servicing the grain industry as they have been,” Sobkowich said. “They have been performing well and we are looking at a crop that it is smaller than it was last year so we have greater confidence that they are going to do that.

“In addition we have C-49, (federal legislation) which we expect to pass in the early fall, hopefully, and then shippers will have more tools to hold the railways to those service standards that they have already been achieving.”

The WGEA estimates Western Canada’s crop at 60 million tonnes, down from last year’s 76 million tonnes — the West’ second biggest crop, behind the 77 million-tonne record set in 2013.

Railway officials said last week they are ready to move the 2017 crop.

“CN is aware of the variance in crop size from the different organizations that forecast this,” Doug MacDonald, CN vice-president of bulk, wrote in an email. “From discussions with our customers, CN expects a similar number of orders on its network as the prior crop. We are ready to move it.”

CP has said it’s also ready.

“At CP, moving grain is embedded in our DNA and has been for more than a century,” the company’s chief marketing officer, John Brooks, said in a news release Monday.

This is the second grain movement record in the last three years and comes just four years after a massive backlog in grain shipped by rail that prompted the federal Conservative government to order the railways to meet weekly shipping targets or face fines.

That unprecedented action, which the railways criticized as draconian, but which was welcomed by farmers and grain companies, was followed up with the Fair Rail for Farmers Act, an early review of the Canadian Transportation Act and C-49, the Grain Modernization Act tabled earlier this year by the current Liberal government.

CN moved a record 21.8 million tonnes of grain in 2016-17 — seven per cent more than the prior three-year-average, beating the one-year record set in 2014-15 by two per cent. And that’s despite more -25 C days and more snow than 2015-16 or the three-year average and a slow start to grain movement due to a wet fall, CN said in a summary of the last crop year.

In addition CN set six new monthly shipping records between the peak months of September and March when grain prices are highest.

CN is calling for federal infrastructure investment for Vancouver’s congested North Shore.

“We gave our customers what they were looking for by significantly expanding our commercial product offering,” MacDonald said. “CN expanded commercial agreements that guarantee car supply in advance to our customers both large and small. This commercially-driven innovation includes reciprocal penalties which drive accountability for both shippers and CN, and allows our customers to make market-based decisions.”

Last crop year, customers secured about 70 per cent of CN’s car supply in advance under commercial agreements subject to car commitment guarantees, he added.

CN credited its record performance to a combination of factors, including investing $3 billion in infrastructure the last five years, having crews, cars and power ready, a fair and predictable car allocation policy, which saw CN communicate a maximum weekly supply chain capacity of 5,500 carloads during the fall and spring, and 4,000 carloads during the winter.

CP moved about the same amount of grain last crop year as in 2014-15 and two per cent more than the five-year average.

CP’s Dedicated Train Program (DTP) has improved grain movement and will be even more important this crop year, accounting for more than 75 per cent of CP’s grain service, Brooks said.

CP is working toward 8,500-foot long trains with a minimum of 134 cars of export grain in Canada, moving 20 per cent than traditional 112-car trains.

“Through infrastructure investment and collaboration with grain companies and port operators, this enhanced train model allows railways, elevators, and ports to increase throughput and better utilize resources,” CP said in a release.

“The end result is more grain transported to market more efficiently than ever before.”

Improved communications and infrastructure investments, contributed to a new grain movement record, Hemmes said.

“Richardson… is almost like a new terminal (in Vancouver),” he said. “Viterra has spent a ton of money on both Cascadia and Pacific.

“The money put into Alliance — and they are putting in more — is really starting to show positive results.

“Prince Rupert… just keeps getting better and moving more and moving it faster. Those kind of efficiencies are just as important as anything and probably more important than what the railways are doing because they are turning cars faster. The grain companies are getting better between co-ordinating between the country and the ports. So things are moving smoother that way. I would attribute it as much to capital investment by the grain companies and communication between all of the stakeholders.”

— Allan Dawson is a reporter for the Manitoba Co-operator at Miami, Man. Follow him at @AllanReporter on Twitter.

The post New record set for Prairie grain throughput in 2016-17 appeared first on Farmtario.

Recommendations in the report broadly encompass the adjustments required to the Canada Transportation Act to ensure the Canadian economy prospers in the long run.

“Canada’s new rail transportation policy that the government plans to table in the spring of 2017 will largely shape how the grain sector and other rail-reliant industries do business well into the future and it is critical that we get the details right,” said Wade Sobkowich, executive director of the WGEA in a release. “For grain handlers and the 100,000 growers who rely on rail service to get their product to customers, there is no more important issue today.”

The Canadian Oilseed Processors Association (COPA) has also issued a statement supporting the committee recommendations.

The committee has recommended important provisions on financial penalties which are especially critical to drive balanced accountability in grain by rail logistics and which have been a long-standing request on behalf of the entire grain value chain.

The WGEA is also pleased with the recommendation to extend interswitching limits to create real competition for those facilities falling within 160km of interchanges. It said extended interswitching is a valuable provision for grain shippers and it is important it becomes a predictable and reliable long-term tool.

The WGEA also noted the committee’s recommendation to clarify the definition of “adequate and suitable” accommodation which sets out the spirit and intent of how railways should meet the requirements of shippers.

“The service obligations and capacity of the railways is critical to help Canada meet the economic opportunities we have with customers at home and abroad,” said Sobkowich, “the definition of ‘adequate and suitable’ is really there to ensure the system focuses on the market demands of those customers and not be based on what the railways might be willing to supply.”

The post Grain elevators applaud the Parliamentary Committee’s rail recommendations appeared first on Farmtario.

A February report recommended that Ottawa institutes transportation system changes, including phasing out a 16-year-old cap on revenue that Canadian National Railway and Canadian Pacific Railway (CN, CP) earn hauling western grain.

Transport Minister Marc Garneau has spent months meeting shippers and railways, and has a last meeting on Thursday (Oct. 20) with farmers. He will announce decisions this autumn, spokesman Marc Roy said.

Railways struggled to move the huge 2013 harvest during a harsh winter, angering farmers. The former Conservative government imposed grain volume minimums and expanded interswitching, the transfer of cars from one railway’s line to another’s.

Expanded interswitching remains, while Ottawa removed monthly grain minimums but kept the authority to impose them again.

Railways say the measures, including the revenue cap, distort markets and offer less reason to invest.

“We can buy more modern cars, larger capacity cars if we let the commercial process work,” CP chief operating officer Keith Creel said in an interview. “Mistrust between the railway and the farmer is going to have to be healed for that to happen.”

CP asked Ottawa to scrap the cap and eliminate expanded interswitching, which allows U.S.-based BNSF Railway to take certain Canadian shipments without adequately compensating railways for using their railroad, Creel said.

BNSF declined to comment on compensation. The railway has not made requests to Ottawa regarding interswitching, said spokesman Mike Trevino.

CN wants Ottawa to move away from regulated grain volumes, expanded interswitching and the cap, said spokeswoman Kate Fenske.

Farmers fear they won’t get fair treatment without the cap, since nearly all 400 Western Canada crop facilities are served by a single railway.

“There isn’t competition in the system,” said Ron Bonnett, president of the Canadian Federation of Agriculture.

Grain companies want Ottawa to preserve interswitching, which introduced needed competition, said Wade Sobkowich, executive director of the Western Grain Elevator Association, whose members include Richardson International and Viterra .

Canpotex, the offshore potash exporter for PotashCorp, Mosaic Co. and Agrium, wants equal treatment of commodities, and no reinstatement of grain minimums, said CEO Ken Seitz.

“We don’t want the government to pick winners and losers,” said Brendan Marshall, vice-president of economic affairs at Mining Association of Canada, which includes Teck Resources Ltd.

— Rod Nickel is a Reuters correspondent covering the agriculture and mining sectors from Winnipeg.

The post Railways urge Ottawa to loosen grain hauling rules appeared first on Farmtario.