UPDATE 1-Canada extends grain transportation rules one year
(Adds Canadian National, Canadian Pacific comments)
By Rod Nickel
WINNIPEG, Manitoba, April 22 (Reuters) - Canada's new Liberal government on Friday extended by one year rules put in place in 2014 to speed movement of grain by rail, after an unprecedented backup of grain on the Western Prairies that year.
The former Conservative government took drastic steps to ease the backlog, including giving U.S. railways greater access to Canadian shipments and requiring minimum grain shipments by the country's two main railways, Canadian National Railway Co and Canadian Pacific Railway Ltd.
Those provisions were due to expire on Aug. 1, 2016. But the Liberal government, in office since November, said it needed more time to consider them.
Postponing the decision ensures that commodity shippers and railways can plan for the next year under predictable conditions, Transport Minister Marc Garneau and Agriculture Minister Lawrence MacAulay said in a joint statement.
Farmers and grain handlers rely on railways to move grain vast distances from western farms to ports and North American buyers.
The delay means that expanded use of interswitching - the transfer of cars from one railway's line to the line of another railway - remains in place for now, giving U.S.-based BNSF Railway Co further opportunity to handle Canadian shipments.
That provision has proved to be "an effective tool to provide additional competition" among railways, said Wade Sobkowich, executive director of Western Grain Elevator Association, whose members include Richardson International and Cargill Ltd . Continued...