Question Period Note: Winter Maintenance Grain Plans (CN and CP)

Rail service challenges

• A strong Canadian economy depends on reliable rail service throughout the year to supply the necessary resources to our industries, and to move goods to market.
• For Canada to remain competitive in world-leading industries, it requires all stakeholders, including railways, shippers, and other partners in the supply chain, to collaboratively share information and find solutions to ensure that the transportation system is able to meet the needs of the Canadian economy.
• The Government of Canada has heard concerns from shippers in various industries, including grain, about the upcoming winter season and railway capacity to meet the demand.
• Railways are required to each produce an annual Winter Contingency Plan, which outlines their planning efforts to enable the movement of grain and other commodities under winter operating conditions.
• In advance of publishing their plans, Transport Canada has reached out to the railways to highlight the importance of strong plans that enable a reliable and predictable supply chain.
• Supply chain resiliency remains a priority and Transport Canada will continue to monitor the situation closely and take reasonable steps, if necessary.

Responsive if asked about regulatory tools being considered:

• To enhance transparency and accountability, Transport Canada is developing amendments to the Transportation Information Regulations that would require major rail carriers to report more detailed service and performance information in relation to their Canadian operations.

Rail Service following 2021 challenges

• The freight rail sector in fall and winter 2021 saw many challenges, including the continued impacts of COVID-19 driving high consumer demand, shipping container availability issues, and major wildfires and flooding in British Columbia. The combination of these events had significant adverse effects on the rail network and rail-based supply chains.
• Despite a much smaller crop last year, both CN and CP experienced challenges moving grain. According to the Agriculture Transportation Coalition, order fulfilment rates fell below 50% for numerous weeks. Shippers in other industries have also reported an inconsistent or unreliable supply of empty cars into early March. Weekly service and performance data indicated significant spikes in dwell times at origin, particularly in January, and declines in train speeds.

Grain and Winter Contingency Plans

• The Canada Transportation Act requires that each year, CN and CP each produce two annual reports. The Grain Plan (due August 1) assesses the railway’s ability to move the required crop of grain in the crop year. The Winter Contingency Plan (due October 1) describes the railway’s contingency plans to enable it to move grain, along with other traffic, when faced with winter operating conditions.
• In response to the poor service performance, Minister Alghabra wrote separately to CN and CP in April 2022 and asked them to consider including an analysis of past service performance in their Grain and Winter plans, as well as targets for key service indicators.
• The subsequent Grain plans released by CN and CP did not include any forward-looking analysis of service performance, prompting escalating concern from the grain industry.
• In response, several grain stakeholders including Pulse Canada, the Western Grain Elevator Association, and the Western Canadian Wheat Growers, launched the “Canada’s Ready” initiative, which calls on CN and CP to provide detailed, in-depth transparent plans with significantly more performance information, alongside monthly updates on their performance. Several of these stakeholders have also reached out independently to the media to highlight their concerns.
• Transport Canada continues to engage CN and CP on the importance of their Winter Contingency Plans, highlighting the importance of having robust performance metrics.

National Supply Chain Task Force

• The National Supply Chain Task Force was launched in response to the pressures put on Global supply chains by the COVID-19 pandemic, growing impacts of climate change, and fallout from the Ukraine-Russia conflict. The Task Force provides independent advice to the Minister Alghabra in the form of a report regarding short and long-term actions to alleviate supply chain congestion.
• The Task Force report presented their final report to Minister Alghabra in October 2022. The recommendations will help inform the development of a National Supply Chain Strategy.

Location: National