Chemical shippers call for rail improvements

TORONTO — The Chemistry Industry Association of Canada (CIAC) says logistics and transportation infrastructure concerns are among the threats to the competitiveness of the chemicals industry.

A new strategy paper by the trade group cited a number of "serious concerns" over regulatory framework, feedstock availability, infrastructure and logistics, electricity prices, and finance issues that have stunted the growth of domestic chemical production.

With regard to logistics, it says Canada’s rail system, especially in western Canada, is too often congested, and chemical firms face "arbitrary changes in the timing and frequency of delivery and pick-up of railcars that do not match production schedules."
CIAC says the problems are exacerbated by a poor economy which has taken its toll on manufacturing in central Canada and large parts of the U.S.

"North America and central Canada in particular has been experiencing serious erosion of its manufacturing base for some time," the study said. "This represents the key customer base for the chemical sector and is a competitiveness concern."

The rail industry recently pledged it would make improvements to the system after Transport Canada’s Rail Freight Service Review revealed that a majority of shippers are unsatisfied with the level of service from Canada’s major railways.

CIAC suggested a number of steps and initiatives for government and industry to meet challenges.

First, a two-year accelerated capital cost allowance (ACCA) for machinery and equipment used to upgrade material resources and add value; second, Canada needs to align federal and provincial approaches and strategies in the key area of environmental policy; and third, Canada must “actively encourage” value-added resource upgrading within the country, moving along energy and other value chains.