With the majority of grains produced in Western Canada intended for export, the grain trade relies on a complex supply chain in which rail transportation is the cornerstone. Rail makes it possible to cover the vast distances between grain elevators where farmers deliver their grain and the port terminals from where grain is shipped to international markets. Most grain rail traffic is bound for the ports of Vancouver, Thunder Bay and Prince Rupert.
Given the predominance of rail in grain transportation, Parliament was compelled very early on to take action to ensure that grain farmers could sell their goods. Today, the federal legislative framework covers both charges and the terms and conditions for interswitching, farmers’ ability to access competing railways. Recurring bottlenecks in rail transportation over the last decade have led to a series of reforms, adopted to improve the fluidity of logistics in grain movement. In particular, these reforms have been aimed at broadening the transparency requirements for railway companies and extending the interswitching distances.
The grain transportation system faces multiple present-day challenges. In addition to being captive to a limited number of railway companies, producers face a global consolidation of grain-trading companies, which impedes their bargaining power. Other concerns could prevent railway companies from operating at full capacity, for example, labour shortages in rail transportation and labour disputes. Lastly, climate change is also likely to drive the proliferation of extreme weather events that can cause delays in the rail transportation system.
Read the full text of the HillStudy: Grain Transportation in Western Canada
By Corentin Bialais, Daniel Farrelly and Khamla Heminthavong, Library of Parliament