POLITICS

Government is closely monitoring grain transportation: prime minister

03/12/2015 06:08 EDT | Updated 05/12/2015 05:59 EDT
SASKATOON - Prime Minister Stephen Harper says it's not in Canada's economic interest to have two railway companies with "extraordinary market power" dictating terms of the transportation industry.

The Prairies experienced months of railway backlogs after a bumper grain crop last year.

"We simply cannot accept outcomes where those two big companies would dictate to the market just what they think is satisfactory … that is not going to serve the wider interests of grain farmers or the Canadian economy," Harper said.

Canadian National (TSX:CNR) and Canadian Pacific railways (TSX:CP) were fined a total of $150,000 for failing to transport the minimum required grain volumes set out by the federal government.

The prime minister took part in a moderated question-and-answer session at the annual conference of the Saskatchewan Association of Rural Municipalities in Saskatoon on Thursday.

"For the most part the railways have fulfilled the obligations we set out," Harper said.

"The system is clearly not under anywhere near the strain it was a year ago, but nevertheless we remain concerned."

Farm lobby groups in Saskatchewan and Manitoba have said the fines didn't reflect the damage caused by the delays.

CN was billed $100,000 for violations related to shipments for the weeks of July 28 and Sept. 7. Canadian Pacific, which was assessed a $50,000 penalty for the week of Sept. 7, is disputing the fine on the basis that the shortfall was a result of matters beyond its control.

Last March, Transport Minister Lisa Raitt said fines against rail companies could total up to $100,000 a day for delays. But Transport Canada said in September it would fine the railways up to $100,000 weekly at the minister's discretion.

"We are tracking this very closely," Harper said.

Last year's backlog was due to a number of factors, including a large crop and a harsh winter that shortened the shipping season, he added.