It seems that effects of last year’s rail transportation issue is still being felt as the Saskatchewan Chamber of Commerce recently released its report, “The Impact of Rail Access on Saskatchewan’s Export Potential.” The recommendations in the report are not surprising, but they seem to confirm some of the same things stakeholders have been saying for months.
“We knew that there would be some recommendations that would be a no-brainer, but you need to repeat it until everyone does it,” said Steve McLellan, CEO of the provincial chamber. “The biggest single thing is enhancing the supply chain and better communication.”
It’s not a new idea, but McLellan says it needs to be done better than it’s been done before. The potential is there, but people need to commit to it.
Unfortunately, McLellan says that part of the problem is that the involved parties each come with a perspective of needing to look after his or her own interests first.
“They come with perspectives that aren’t healthy. They all rely on each other, but they’re not getting along to the extent that they should,” he said. “Some of these shippers are frustrated with each other too.”
In the executive summary of the report, it details the values of Saskatchewan’s ten largest international commodity exports in 2013. That information is then followed by the province’s largest rail commodities, of which almost all cross over into the largest international commodity export list. The purpose of this information is to illustrate how valuable rail transportation is to the provincial economy, particularly because it’s one of the most landlocked provinces in the country. It depends on rail transportation for nearly all of its major exports.
The summary then goes on to state the challenges shippers have with rail not being efficient or capable of handling the quantities required. Despite delivering 22 per cent more grain from western Canada than in the 2013-14 crop year, it still wasn’t sufficient. At that rate, the summary explains how it would be nearly impossible for the province to hit its Growth Plan target of $59 billion by 2020.
“As previously noted, the implications of the province’s Plan for Growth for the rail system is, at minimum, an additional 20 million tonnes of goods originating from the province by 2020 (relative to 2012),” stated the summary. “This represents almost a 50 per cent increase in originating tonnage.”
Some of recommendations attempt to speak to all the shippers and be inclusive by explaining to them how it would be beneficial to them to get on board. For example, if farmers could start supporting pipelines, that would free up more access to rail by shifting the shipment of oil to that avenue. If not, all the oil shipments will continue clogging up rail transportation and making it more difficult for grain shipments to get through.
Moreover, pipeline access might need more support. McLellan says that the people currently opposing it are either doing it to accrue more financial benefit or are trying to reduce the use of fossil fuels by restricting market access for oil.
“They believe it will reduce overall consumption, but it won’t. It just means that oil is going to come from other markets that have the advantage, like the Middle East and not Canada,” he said. “Then there are those who just say they don’t want the pipelines going through their land or water source. The conversation would be better if everyone were perfectly honest.”
Beyond that, McLellan says there are some recommendations that stakeholders can jump on right away. Farmers can start pushing for more permanent storage for their grain and newer grain hoppers that can be more efficient and require less maintenance. The provincial government can start reducing the rail tax on fuel and ministry officials can start looking at areas of supply chain options and redundancies.
“There are competing interests just for access to rail,” said McLellan. “That’s a good thing because it means we have product that needs to be shipped. It’s also a bad thing because of the limitations to what we can ship. We need to take the competitive nature out of it— now there are ways that everyone can win.”
Beyond the competing issues between shippers, there are also competing issues with communities. With increased rail transportation, there will be more blocked crossings and more trains rolling through town at all hours blaring horns. McLellan says communities need to have conversations about that and citizens have to go to their politicians and request that they focus on those issues.
According to him, the stick the government used to poke rail companies with last year wasn’t the answer. It didn’t listen to the concerns of the rail companies and only worked marginally. This report proposes the carrot approach instead.
“If someone down the road wins, it doesn’t mean you’ve lost; it means everybody wins,” he said. “Many of the attitudinal stuff can happen overnight.”
