Canada Plans to Extend Grain-by-Rail Rules for CN and CP

Updated on

Canada’s new government intends to extend for another year rules that force the country’s two major railway companies -- Canadian National Railway Co. and Canadian Pacific Railway Ltd. -- to move grain.

The provisions, which were introduced in 2014, were due to expire Aug. 1, according to a statement from Transport Minister Marc Garneau. The government now wants to include the issue in its broader review of the Canada Transportation Act.

“Postponing the repeal of these provisions would allow the government to fully assess the freight rail transportation system for all commodities, in the context of its response to the review of the Canada Transportation Act and the development of a long term plan for the sector,” Garneau said in the statement.

A bumper crop in 2013 and a cold winter that followed left Canadian railways pressed to move grain, leading the government to set minimum shipment levels and introduce fines if railways don’t meet them.

Canadian National is “disappointed” by the decision and the rules are “unnecessary,” spokesman Mark Hallman said in by e-mail. Canadian Pacific spokesman Martin Cej also expressed disappointment and said “the grain supply chain has never been more efficient.”

(Updates with company reaction in fifth paragraph.)