Farmers Should Get $72M Break on Freight Costs: CTA

(CBC)

The Canadian Transportation Agency has ordered a big change to the regulation of freight costs – a change that could mean $72 million in savings for Prairie farmers.

The change announced Tuesday to “revenue caps” – the maximum amounts that CP Rail and CN Rail can earn from grain shipping – means farmers will now pay $2.59 less for every tonne of grain they send to the port of Vancouver.

Biggar, Sask.-area farmer Rene de Moissac calculated that he’ll save about $5,000 this year on freight rates, but he also said he wonders how many years he was paying too much. De Moissac thinks farmers should lobby to get some of that money back.

Other observers, like Saskatoon-based commodity analyst Larry Weber, think farmers and grain companies should now lobby for an improvement in rail service. “My main concern is by lowering the rates, are we going to get any better service than we’re getting today?” he asked. “The service today is already dismal.”

The change reflects the fact that railways’ maintenance costs for hopper cars have decreased, the transportation agency said.

The president of the Farmer Rail Car Coalition, Sinclair Harrison, said years of lobbying by his group has finally paid off. “We felt that farmers were paying an excess of $3,000 per car too much,” he said. “This announcement by the CTA backs up everything we said for 12 years.”

The railways have said they will appeal the ruling.