Parliament’s shut down leaves farmers vulnerable

End of interswitching pilot threatens Canada’s grain sector

In March 2025, Canada's agriculture sector and broader supply chain will face a another setback with the expiration of the extended interswitching pilot program.

With Parliament prorogued until March 24th, there is effectively no opportunity to renew or make the program permanent before it ends, leaving grain farmers vulnerable to the monopolistic practices of rail companies.

The background to this is as follows: as a result of Budget 2023, a pilot trial was launched to increase the extended interswitching limit in the Prairies. It is believed the pilot “promoted fair competition, reduce transportation costs, and increase access for Canadian goods,” according to the interswitch.ca website.

The group argues the extended interswitching pilot has been a critical tool for the grain sector, providing access to competitive rail options that help improve rail service, reduce shipping costs, and ensure that producers can meet market demands more effectively.

By enabling shippers to access alternative rail carriers within a specified distance, it counteracts the monopolistic control of rail services and improves predictability throughout the supply chain.

The expiry of this program would represent a step backwards for the agriculture sector, once again leaving it without real competitive rail options.

This issue is further compounded by the missed opportunity in the recent Fall Economic Statement, which could have extended the pilot or made it permanent.

As a no-cost measure, it would have maintained essential competition in Canada’s duopoly of Class 1 railways, offering benefits to farmers, shippers, and the wider agriculture sector.

A government truly committed to supporting Canadian agriculture and boosting the economy must act swiftly to rectify this situation. Both the current 18-month pilot and the 2014-2017 program have clearly demonstrated that extended interswitching brings competitive advantages, not only to agriculture but to Canada’s overall economy the pilot group says.

They believe itis critical to ensure that competitive forces remain at the core of Canada’s rail supply chains, enabling the best service outcomes for the agriculture sector.

Failing to do so could hinder the growth and competitiveness of Canadian agriculture and limit farmers' ability to secure premium prices for their grain in global markets.