Canada - With Easter less than two weeks away, an Easter egg in the federal government's 2023 budget calls for a new pilot program to again provide Prairie grain shippers with extended interswitching.
 
Finance Minister Chrystia Freeland's budget, released Tuesday, laid out a list of investments to "further strengthen Canada's transportation systems and supply chain infrastructure."
 
A non-financial line item in that envelope calls for the government to introduce amendments to the Canada Transportation Act for a "temporary extension, on a pilot basis" of the interswitching limit in the Prairie provinces, to "strengthen rail competition."
 

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Interswitching rules commit one rail carrier to pick up cars from a shipper, then deliver them to another railway for the line haul.
 
Federal rules generally allow grain elevators and other shippers to use interswitching for up to a 30 kilometre radius.
 
Expanding that maximum radius, the feds said Tuesday, "would support competition among rail carriers by enabling rail companies to access tracks owned by another rail provider within the limit, under rates regulated by the Canadian Transportation Agency."
 
The previous Conservative government set up a temporary extension of the interswitching radius, to 160 kilometres, in 2014, to the acclaim of several crop commodity groups, but that extension was sunsetted in 2016.
 
Tha Railway Association of Canada said Wednesday the 2014 extension was allowed to lapse "based on results from a previous pilot and recommendations contained in an independent study", a reference to a 2015 review of the Canada Transportation Act.
 
The RAC, which represents almost 60 railways in Canada including Canadian National and Canadian Pacific railways, ripped the current Liberal government's proposal as a resurrection of a "failed policy" that was "misguided and harmful to Canada's supply chains."
 
"This policy will cause Canadians to pay more for virtually everything that moves by rail," RAC CEO Marc Brazeau said Wednesday in a release, warning the policy "will incentivize congestion in our supply chains while disincentivizing private investment."
 
"This pilot has been done before," the RAC said, listing the impacts of "switching cargo multiple times" as slowing the movement of goods by one to two days, adding to greenhouse gas emissions and adding costs.
 
"The measures announced today will not improve the efficiency, capacity, or reliability of Canada's supply chains. They will do the exact opposite, as we saw under extended regulated interswitching that was in place from 2014 to 2016," Brazeau said.
 
However, supporters of the 2014 extension estimated in 2016 that about 150 grain elevators on the Prairies were able to make use of interswitching with the 160 kilometre radius, up from just 14 elevators previously.
 
One such supporter, Pulse Canada, in 2016 said freight rates were reduced on some routings, and that grain shippers were afforded more leverage in getting rail car capacity where needed, both as a result of the extended interswitching radius.
 
Gordon Bacon, Pulse Canada's then-CEO, speaking in favour of extended interswitching in 2016, said that "in cases where railways have lost business due to competition, they are actively campaigning to get it back by offering rate reductions and improved levels of service."
 
The RAC on Wednesday also panned another non-financial proposal from Tuesday's budget, namely, for legislation that would ban the use of temporary replacement workers in federally regulated workplaces affected by work stoppages.
 
The RAC said a ban on replacement workers would mean rail service "will be disrupted more frequently," strikes "will be more common and will last longer" and federal back-to-work legislation "will be required more often."
 
Tuesday's budget also earmarks $27.2 million over five years starting in 2023-2024 for Transport Canada to establish a "Transportation Supply Chain Office."
 
That office, the budget said, would "work with industry and other orders of government to respond to disruptions and better co-ordinate action to increase the capacity, efficiency, and reliability of Canada's transportation supply chain infrastructure."
 
The budget noted the measures announced Tuesday "are a down payment on Canada's National Supply Chain Strategy," which the government said "will be released in the coming months and will be informed by the recommendations of the National Supply Chain Task Force report."
 
Dave Bedard.