Grain Performance – 2022/2023 Crop Year
- Canada’s grain supply rebounded by 37% this crop year, and Canadian freight rail carriers each announced multiple monthly record grain movements over this past winter that helped producers meet global demand.
- Transport Canada has taken action to ensure service resiliency and capacity for grain shippers, including requirements for annual grain and winter operating plans and incentivizing rail carriers to upgrade their hopper car fleets.
- The Government will continue to identify policy adjustments that incent competition and prioritize efficient and reliable service.
SUPPLEMENTARY MESSAGES
- To support rail competition, the Government proposed in Budget 2023 to introduce legislative amendments to the Canada Transportation Act to enable a temporary extension, on a pilot basis, of the interswitching limit in the prairie provinces.
- While rail performance for the grain sector has been strong this crop year, shippers have continued to call for improved competitive access provisions to help incent reliable and predictable service.
- The temporary extension of the interswitching limit will enhance competition between rail carriers in the prairie provinces, and provide better access and greater transportation options for grain producers.
SUPPORTING FACTS AND FIGURES
- Following the drought-affected 2021-22 crop year, grain supply has rebounded to ~77.7 million metric tonnes (MMT), 37.3% higher than the previous year. Field crop production in Western Canada is ~73.8MMT, an increase of 50.6%.
- As of week 34 of the current crop year (ending March 26, 2023), on a cumulative basis, the total tonnage of grain moved by rail was 38.6% higher compared to the same period the previous crop year.
- Western ports have shipped 24.1 MMT of Western Canadian grain, a 51% increase over last year, with gains observed in Vancouver (17.1MMT, +62.5%), Prince Rupert (2.6MMT, +85.3%) and Thunder Bay (3.9MMT, +5.0%).
- Rail car cycle times year-to-date this crop year (to March 2023) are significantly below the historical five-year averages (FYA) at Canadian ports:
- Vancouver: 12.7 days (16.4 days FYA)
- Thunder Bay: 11.6 days (12.2 days FYA)
- Prince Rupert: 13.6 days (17.0 days FYA)
- Canadian National (CN) announced all-time monthly record grain movements for February 2023 (2.4MMT) and October 2022 (3.23MMT). Canadian Pacific (CP) also recorded record grain movements in January 2023 (2.29MMT) and October 2022 (3.14MMT).
BACKGROUND
The Transportation Modernization Act (Bill C-49), which was adopted in May 2018, included several tools and benefits for the grain industry. These included new requirements for CN and CP to produce grain and winter operating plans, which detailed each carrier’s commitment to transporting grain each crop year including during inclement weather conditions. Adjustments were also made to the determination of railway companies’ revenues subject to the Maximum Revenue Entitlement that provided financial incentives to upgrade their grain hopper car fleets. Subsequently, both CN and CP have undertaken efforts to acquire thousands of new hopper car assets, providing enhanced rail capacity for grain shippers.
Notwithstanding the strong rail service and performance this crop-year, grain shippers have raised concerns in prior years regarding the predictability and reliability of rail service since the passage of the TMA. Despite the reduced crop size in the 2021-22 crop year, rail service significantly deteriorated across multiple commodity groups, in part due to significant inclement weather events (fires and flooding in BC), pandemic-related restrictions, and particularly cold winter operating conditions.
Transport Canada officials worked collaboratively with CN and CP over the past year to highlight the importance of timely and reliable service and provided constructive insight on the preparation of their 2022-23 grain and winter operating plans. CN committed to operational changes within its plans, highlighting the expansion of on-time scheduled train departures for its largest railcar traffic processing yards.
The introduction of temporary extension of the interswitching limit, on a pilot basis, in the prairie provinces is expected to have a direct positive impact on the ability of grain companies and producers to negotiate their service commitments with railways and improve their competitive access to alternative carriers and markets.