BC Minister of Jobs, Trade and Technology Bruce Ralston

“Minister Garneau needs to convey that the Prairie backlog at CN Rail is having a detrimental impact on northern B.C. families and businesses.” – Ralston

The BC Minister of Jobs, Trade and Technology Bruce Ralston is urging Canada’s transport minister to ensure a reliable supply of rail cars in northern BC, where the economy is suffering due to a chronic shortage of them, according to a press release.

“The impact of unreliable, and inadequate, rail service extends far beyond grain producers in northern B.C.,” Ralston stated in a letter to federal Transport Minister Marc Garneau.

“Lumber mills and other industries, from Dawson Creek to Fort Nelson, are also being seriously impacted by the lack of rail service.”

Ralston conveniently ignores the obvious solution: build pipelines to reduce shipments of oil by rail.

Apparently the Minister doesn’t appreciate the irony of the BC Government fighting Ottawa over building the Trans Mountain pipeline, which would relieve some pressure on Canadian rail.

Since 2015, oil by rail has continued to grow. According to the National Energy Board, there has been a nearly 30 per cent growth from Dec. 2015 where it was 106,704 b/d, to Dec. 2017 where it currently sits at 152,151 b/d.

“The minute we get (oil and gas products) on to rail, we start selling them at a massive discount. That’s not good. Meanwhile, the other folks that need rail start losing their profit margin because they’re having to bid up in order to get access — big consequences to the whole country. That’s why we need to operate like a country,” Alberta Premier Rachel Notley said last week in an interview with CTV.

Minister Garneau needs to convey that the Prairie backlog at CN Rail is having a detrimental impact on northern BC families and businesses, says Ralston.

“Companies looking to invest in northern B.C. communities are understandably discouraged from doing so because of the risk and uncertainty caused by CN Rail’s unreliable service,” he said.

Alberta oil producers must have rolled their eyes when they read that line. They have made the very same argument about the constrained Canadian pipeline system and investment in the provincial oil sector, only to have it fall on deaf ears in Victoria.

“While the recent apology from CN is an important acknowledgement of how serious the situation has become, longer-term solutions need to be found,” Ralston concluded.

Interim CN Rail CEO JJ Ruest said that the company will quickly improve the movement of Western Canadian grain and is directing additional people and equipment to clear backlogs across its network.

“We apologize for not meeting the expectations of our grain customers, nor our own high standards,” Ruest said. “The entire CN team has a sense of urgency and is fully focused on getting it right for farmers and our grain customers, regaining the confidence of Canadian businesses, and protecting Canada’s reputation as a stable trade partner in world markets.”

CN measures include offering incentives for key operating employees to delay retirement and postpone vacations, and for recently-retired operating employees to return to work; deploying qualified management employees to operate extra train; adding train crews in Western Canada: about 250 conductors put in the field in last three months of 2017, with about 400 conductors coming into the field in the first three months of 2018, and an additional 375 from April to June; leased 130 locomotives to increase capacity in Western Canada, almost all of which are now online; investing over $250 million this year to build new track and yard capacity in Western Canada to boost supply chain fluidity and build in capacity resiliency for future grain crops.

No doubt some of the improved CN shipping will benefit Alberta oil producers.

But pipelines are demonstrably safer and lower cost than oil by rail, and BC efforts to thwart Alberta access to Asian markets while complaining loudly about more timely market access for its resource producers is some bald-faced hypocrisy.