The federal government will introduce grain transportation legislation early next year.
Transport Minister Marc Garneau says the measures will be part of the Transportation 2030 strategy, which is the government's long-term plan for transportation in all sectors, including rail.
Garneau says the new legislation will allow reciprocal penalties in service level agreements between the railways and their customers, which include grain companies.
There is also a promise to better define 'adequate and suitable' service in the Canada Transportation Act.
The federal government will also address the future of extended interswitching limits and the Maximum Revenue Entitlement in early 2017.
Farm groups and grain companies are calling it a ''good first step.'
"Reciprocal penalities have been a big one for us," says Norm Hall, president of the Agricultural Producers Association of Saskatchewan. "Now the railways have more than just the threat of penalties. If you don't perform, there will be penalties."
Even though the 'devil will be in the details', Hall believes a united front from all farm organizations has made a big difference.
"This federal government---excuse my language---they had the balls to stand up to the railroads so far. Let's hope that continues forward."
Hall adds grain companies will also have to eventually pass on some of these savings back to producers in the basis.
Several farm organizations have issued news releases in support of today's federal announcement, including the Grain Growers of Canada, Sask Wheat Development Commission and the Canadian Canola Growers Association.
The Western Grain Elevator Association (WGEA) says Garneau's announcement to introduce reforms in Spring 2017 will go a long way to addressing key problem areas.
"In a true commercial environment, competition motivates a service provider to meet their clients' needs," says Wade Sobkowich, WGEA executive director. "Without competition, the railways feel no such obligation. Clarifying the definition will remove any uncertainty about railways' obligation to provide ''adequate'' and ''suitable'' accomodation for traffic. The definition must be clear that decisions on assigning cars, crew and locomotive power are to be based on what customers need, not on what best suits the railways' business."
Sobkowich says WGEA members also support efforts to have the 160 kilometre interswitching provision made permanent.