April 22, 2018 10:17 pm
Updated: April 23, 2018 7:37 am

Concerns mount over impact of potential Canadian Pacific strike

WATCH ABOVE: Grain from western Canada is spending 22 per cent more time in grain elevators this year compared to last, and over 22 thousand orders have been cancelled so far; six times higher than the entirety of last year.

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Every day Canadian Pacific (CP) ships 65,000 tonnes of western grain across the country; more than half of that originates in Saskatchewan.

Grain, potash and oil make up over 75 per cent of the province’s exports, but a CP strike could bring all that to a screeching halt.

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“It’s going to take a bite,” said Jason Childs, an economics professor at the University of Regina. “I mean it’s not the end of the universe by any stretch of the imagination, but it could knock half a point off GDP growth, for example.”

READ MORE: CP Rail strike averted for now, unions say

Among the hardest hit would be the farmers, who have already had to deal multiple setbacks this season.

“We had a bad shipping season already, there’s been poor movement from both railroads, and now if half the trains aren’t running due to a strike, of course, it’s just going to make the problem worse,” explained Todd Lewis, president of the Agricultural Producers Association of Saskatchewan.

The longer their product sits in grain elevators — and on rails — the quicker it depreciates in value. Add to that leery buyers, who are unsure they’ll ever see the product they bought, and it’s a unenviable predicament.

READ MORE: APAS calling on railways to pay shipping penalties

“One of things that’s going to happen is the grain buyers and shippers are going to sit on product, and if their grains are full they’re not going to buy,” Childs continued. “This is going to hurt, ultimately, the price to farmers. There’s already a blocked supply chain; you’ve got nobody to sell it to.”

If producers can’t sell their grain, that means storing it. But after poor rail service this winter, some farmers are worried about running out of space.

“The elevators are full right now, farmers aren’t able to haul because of the other weather condition, but we need room at the elevators to be loosened up, and grain to be taken out of the country so that there’s room for grain when farmers are able to haul after seeding, so we need to make it happen.”

In the back of everyone’s mind is the 2013 disaster, when grain backlogs cost the nation eight billion dollars. Already, grain from western Canada is spending 22 per cent more time in grain elevators this year compared to last, and over 22,000 orders have been cancelled so far — six times higher than the entirety of last year.

© 2018 Global News, a division of Corus Entertainment Inc.

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