Our call for an interswitching extension

Throughout spring 2024, the Flip the Switch coalition, which includes the Canola Council of Canada (CCC) and Canadian Canola Growers Association (CCGA), launched an updated website and new engagement efforts with parliamentarians and political staff to advance extended interswitching. A major catalyst for these efforts was to debunk some of the claims made about extended interswitching and highlight the benefits of this policy for the grains sector and the broader Canadian economy.

What is extended interswitching?

Extended interswitching is one of the only ways to inject competition in Canada’s Class 1 railway system. For shippers who are physically located on a single rail line, extended interswitching will give them the ability to seek competing service from the next closest railway if it is within the 160km radius currently legislated within the pilot. This means better rail service, improved efficiency, and better access to markets for farmers and shippers.

“Extended interswitching adds a competitive element to grain shipping through access to competition,” says Brittany Wood, senior manager, transportation and trade policy, with CCGA. “It means enhanced grain supply chain fluidity, more predictability for farmers, and a strengthened Canadian reputation as a reliable supplier of high-quality canola.”

Why interswitching matters to farmers?

Of all licensed primary elevators across the prairie provinces, 97 per cent are located on a single rail line leaving them captive to service from only one rail network. Captive shipping situations can limit the ability for inland elevators to receive deliveries from farmers, which in turn restricts farmers’ ability to sell and be paid for their product. If delays persist, it can also affect the price a farmer receives for their crop if prices shift unfavourably.

What’s next?

The current extended interswitching pilot announced in the federal government’s budget 2023 is set to expire at the end of March 2025. The Flip the Switch coalition, in coordination with the Coalition of Rail Shippers and others, has been calling for an extension of the pilot by an additional 30 months.

This would provide shippers with a longer runway to use extended interswitching, provide the government with additional time to collect the data it requires to determine its effectiveness, and would align with the timelines for the statutory review of the Canada Transportation Act, at which point we will be advocating that the extended interswitching pilot should be made permanent.

“Extended interswitching benefits farmers, shippers, and consumers, which furthers a stronger agricultural sector,” says Chris Vervaet, executive director of the Canadian Oilseed Processors Association. “Extending the pilot and distance of extended interswitching are the first steps in making extended interswitching permanent, ultimately strengthening Canada’s economy.”

To date, the Flip the Switch coalition has met with several key stakeholders on this important file, including the Prime Minister’s Office, the Office of the Leader of the Opposition, the Minister of Transport’s office, the Minister of Agriculture and Agri-Food’s office, and several Conservative provincial caucuses. These strategic advocacy efforts are undertaken with the goal of extending the pilot by an additional 30 months.

Going into the Fall, CCC and CCGA will continue working with the Flip the Switch coalition partners and others to advance the conversation on extended interswitching.