Canada Raises Stakes for Major Railways to Increase Grain Transport

March 7, 2014 05:37 AM

Canada's government issued a Order in Council today that will force Canadian National Railway Co. and Canadian Pacific Railway Ltd., the nation's two largest railways, to transport at least 500,000 MT of grain per week, each, or face non-compliance fines of up to C$100,000 ($90,000) per day.

These actions come as Canada struggles to ship a record-large wheat and canola crop. Frigid weather this winter has further complicated the situation.

This order takes effect immediately and is effective for 90 days, though it can be renewed as needed. The order allows the companies four weeks to increase deliveries to a combined target of 1 MMT per week, which would be more than double the current volume being transported. The railways are also required to report regularly regarding the amount of volume carried.

Agriculture Minister Gerry Ritz also announced the government will introduce legislation when parliament returns to establish measures that "ensure Canada maintains a world-class logistics system that gets agricultural products to market more efficiently," according to the press release.


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