Rail cars wait for pickup in Winnipeg, on March 23, 2014.JOHN WOODS/The Canadian Press
Canadian National Railway Co. is boosting its grain-hauling capacity with a $115-million order for 1,500 hopper cars from National Steel Car Ltd. of Hamilton, Ont.
Montreal-based CN said on Thursday the new rail cars will allow it to load, move and discharge greater volumes of grain with increased speed, replacing some of the decades-old rolling stock that forms much of the Canadian fleet.
The purchase of the rail cars brings the company’s planned spending in Ontario to $1-billion by the end of 2022. This amount includes $250-million for a proposed – and locally opposed – container hub in Milton, west of Toronto. That project has awaited federal approval for several years amid opposition from local governments and residents who say the truck-train depot will bring unwanted noise, pollution and traffic to the area.
CN said the purchase of the rail cars will be good for Ontario’s economy and meet the growing needs of grain growers and buyers. Compared with the old rail cars, the new cars carry 10 per cent more grain and are shorter in length, allowing more crops to be carried on a train.
Grain shipping has been a rare bright spot for Canadian railways amid a slump in demand for most goods owing to the COVID-19 pandemic. In the most recent quarter, CN hauled a record 8.1 million tonnes of grain – mainly wheat, canola and corn – representing a 10-per-cent increase from the same period a year ago. Grain – mainly wheat, canola and corn – is CN’s second-biggest business by revenue, after shipping containers.
Almost half of the approximately 20,000 grain cars on Canada’s rails are owned by federal and provincial governments and are nearing the end of their useful lives. In 2018, the federal government made changes to the law that discouraged railways from buying new cars to move Western Canadian grain to ports for export, removing a provision that required rail companies to share a capital investment credit with their rival. CN and Calgary-based Canadian Pacific Railway Ltd. responded in 2018 with orders of 1,000 grain cars each.
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