By Darcie Doan, Brian Paddock, and Jan Dyer, Agriculture and Agri-Food Canada

This paper provides an overview of grain transportation policy in Canada over the last 100 years, including the inception of the Crop Rate, the replacement of the Crop Rate with the Western Grain Transportation Act (WGTA), and finally, the repeal of the WGTA.

Particular emphasis is placed on the structural change to the western agricultural economy that occurred following repeal of the WGTA in 1995. When grain transportation subsidies were removed, industry responded quickly to market signals through a diversification of crop patterns, an increase in livestock production, and an increase in value-added processing.

Agriculture is a dynamic industry. The forces of globalization, industry rationalization, new technology, and changing consumer demand give rise to new challenges and opportunities for industry and government alike. Canada’s experience with transportation subsidies demonstrates that the right policy can unleash the potential of the private sector to create new opportunities in response to changing conditions. Grain transportation subsidies were outdated, expensive, and an impediment to economic development on the Prairies. When these subsidies were removed, industry players responded quickly to market signals through a diversification of crop patterns, an increase in livestock production, and investments in value-added processing.

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