Ottawa Ontario - Proposed federal legislation aimed at getting more grain moving on the rails could actually have the opposite effect, Canadian Pacific Railway chief operating officer Keith Creel told a House of Commons committee Tuesday night.
 
Creel testified before the Standing Committee on Agriculture about Bill C-30, the proposed Fair Rail for Grain Farmers Act.
 
He warned that the legislation's extension of "inter-switching" limits, which would give shippers increased ability to transfer their traffic to an alternate railway, could slow down the grain supply chain due to increased handlings.
 
He also said allowing grain to be inter-switched to U.S. railroads could lead to a negative impact on the Canadian economy.
 
"The reality is the current grain supply chain, of which rail is only one component, cannot move these extraordinary volumes over this short period of time," said Creel in a release.
 
"We need solutions that will increase throughput of grain from farm to ship."
 
Both of Canada's railways have been vocal about their opposition to Bill C-30 since it was unveiled in the House of Commons last week.
 
In addition to extending inter-switching limits, the bill gives the government the ability to mandate grain shipment volumes and imposes penalties on railways for non-compliance.
 
CN CEO Claude Mongeau has called the introduction of the bill "a sad day for Canada," while CP CEO Hunter Harrison called it "grossly unfair."
 
"We are very concerned about the speed and lack of consultation by the government in making such significant changes to the rail transportation system that could result in unintended consequences for all stakeholders," said Harrison last week.
 
"We need to move away from reactionary legislative interventions that target unfairly one participant."
 
A CP spokesperson said Harrison has repeatedly offered to meet in person with the federal government, but has yet to receive a response.
 
The new legislation has also prompted concern from other industries that rely on rail transportation to move their product.
 
A group of five national trade associations, the Canadian Fertilizer Institute, the Canadian Steel Producers Association, the Chemistry Industry Association of Canada, the Forest Products Association of Canada, and the Mining Association of Canada, warned this week that current rail bottlenecks are affecting many sectors, not just agriculture.
 
"We feel that addressing one sector's concerns without considering the broader supply chain will result in a patchwork of policies that don't solve any fundamental issues," said Mining Association CEO Pierre Gratton in a release.
 
That is a legitimate concern, said Steven Paget, an analyst with FirstEnergy in Calgary.
 
He said bringing in this legislation opens the government to pressure to do the same if there are future transportation problems with potash, coal, or any other commodity.
 
"If this becomes the first of many short-term solutions, the railroads will be pushed this way and that way and nothing will get solved," he said.
 
Paget said having a comprehensive conversation about Canada's transportation and logistics system is a good idea, but only if elevator companies, shippers, and everyone else involved is required to contribute.
 
"What they (the railways) are most concerned with, when I speak to them, is they're being asked to make up for the sins of the entire supply chain," he said.
 
"It's as if there was an electrical power shortage and the government is blaming the wires for not transmitting enough power."
 
CP and CN have consistently blamed the transportation bottlenecks on an exceptionally harsh winter that has impeded their ability to haul last fall's all-time record crop.
 
Both say they are doing what they can to meet a federal emergency directive requiring them to double their volume of grain shipments.
 
CN said it provided 5,102 hopper cars for loading last week, the most in its history at this point of the season.
 
It marked the fourth week in a row the railway has delivered more than 4,000 cars.
 
The average of 4,550 cars per week is 21 percent greater than CN's average March performance for the last decade.
 
CP said it is not disclosing the weekly grain car numbers it has been reporting to federal officials.
 
However, a spokesman also said the results "show the railway is continuing to move record amounts of grain."
 
Amanda Stephenson.