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Sunday, September 18, 2022

Bill Gates: Technological innovation would help solve hunger


A man carries a sack of wheat flour imported from Turkey in the Hamar-Weyne market in the capital Mogadishu, Somalia Thursday, May 26, 2022. Bill Gates urged world leaders not to give up on the goals they set to reduce hunger and poverty despite huge recent setbacks documented in a new report released Tuesday, Sept. 13 by The Bill and Melinda Gates Foundation. 
(AP Photo/Farah Abdi Warsameh, File)

THALIA BEATY
Mon, September 12, 2022 

NEW YORK (AP) — Bill Gates says the global hunger crisis is so immense that food aid cannot fully address the problem. What’s also needed, Gates argues, are the kinds of innovations in farming technology that he has long funded to try to reverse the crisis documented in a report released Tuesday by The Bill and Melinda Gates Foundation.

Gates points, in particular, to a breakthrough he calls “magic seeds," crops engineered to adapt to climate change and resist agricultural pests. The Gates Foundation on Tuesday also released a map that models how climate change will likely affect growing conditions for crops in various countries to highlight the urgent need for action.

In assigning technology a pre-eminent role in addressing the world’s food crisis, Gates puts himself at odds with critics who say his ideas conflict with worldwide efforts to protect the environment. They note that such seeds generally need pesticides and fossil fuel-based fertilizers to grow.

Critics also contend that Gates' approach doesn't address the urgency of the crisis. Developing “magic seeds” takes years and won’t immediately deliver relief to countries currently enduring widespread suffering because they rely on food imports or are experiencing historic droughts.


It’s a debate that could intensify international pressure to meet the shared goals for global prosperity and peace, known as the U.N. Sustainable Development Goals, ahead of a 2030 deadline. The 17 goals include ending poverty and hunger, battling climate change, providing access to clean water, working toward gender equality and reducing economic inequality.

"It’s pretty bleak relative to our hopes for 2030,” Gates, 66, said in an interview with The Associated Press. He added, though, “I'm optimistic that we can get back on track.”

Gates pointed to the war in Ukraine and the pandemic as the main causes for the worsening hunger crisis. But his message to other donors and world leaders convening for the U.N. General Assembly this September is that food aid won't be enough.

“It’s good that people want to prevent their fellow human beings from starving when conflicts like Ukraine interrupt the food supply,” Gates writes in the new report. But the real problem, he says, is that many food insecure countries don’t produce enough of their own food — a problem sure to be exacerbated by the consequences of climate change.

“Temperature keeps going up," Gates said. "There is no way, without innovation, to come even close to feeding Africa. I mean, it just doesn’t work.”

As he has for more than 15 years, Gates called for investment in agricultural research, highlighting corn seeds that thrive at higher temperatures and in drier conditions than other varieties. Those seeds were developed under a program of the African Agricultural Technology Foundation to which the foundation has given $131 million since 2008.

Since then, the Gates Foundation has spent $1.5 billion on grants focused on agriculture in Africa, according to Candid, a nonprofit that researches philanthropic giving. The Bill and Melinda Gates Foundation is by some measures the largest private foundation in the world and is best known for its work on global health, including vaccines. It began in its current form in 2000, after Gates left his CEO position at Microsoft, the tech giant he co-founded. Forbes estimates his net worth to be around $129 billion.

The foundation's spending on agricultural development is why Gates’ view on how countries should respond to food insecurity has taken on heightened importance in a year when a record 345 million people around the world are acutely hungry. The World Food Program said in July that tally represents an increase of 25% from before Russia invaded Ukraine in February and a 150% jump from before the pandemic struck in the spring of 2020.

In Ghana, field trials for four varieties of modified seeds began in 2013. But only this past summer has one been approved for commercialization, said Joeva Rock of the University of Cambridge. Activists there, she said, have asked whether those resources could have been better spent elsewhere.

“What would happen if those went into increasing funds to the national research centers in Ghana, to building roads, to building storage, to building silos or helping to build markets?” said Rock, who has written a book about food sovereignty in the country.

When asked, Gates acknowledged the importance of infrastructure like roads and other transportation systems.

“If you want your inputs like fertilizer to come in, if you want your output to go out, it’s just too expensive in Africa without that infrastructure,” he said, adding that building and maintaining roads is highly expensive.

Some researchers question the wisdom of pursuing the fundamental premise that Gates has embraced: Increasing agricultural production through the use of modified seeds along with fertilizers and pesticides. They point to the environmental footprint of industrial agriculture, including the use of fossil fuel-based fertilizers, the degradation of soil quality and the diminishing of biodiversity.

Alternatives could include agroecological interventions, like developing locally managed seed banks, composting systems to promote soil health and pesticide interventions that don’t rely on chemicals, experts said. Over time, those approaches can reduce the need for food aid and build more resilient farming systems, according to Rachel Bezner Kerr, a professor of global development at Cornell University.

Kerr, a lead author of the food chapter of the latest report from the International Panel on Climate Change, said that while the panel doesn’t make recommendations, “overall, the kind of focus on a few technologies and reliance on fossil fuel-based inputs isn’t in line with ecosystem-based adaptation” or a biodiverse future.

Mark Suzman, CEO of the Gates Foundation, defends its approach warning that limiting access to fertilizers means farmers cannot increase their yields.

“Fertilizer is necessary. You simply cannot meet the overall productivity gains without it,” Suzman said, speaking on a call with reporters.

In his interview with the AP, Gates himself dismissed criticisms of the foundation’s emphasis on modified seeds.

“If there’s some non-innovation solution, you know, like singing ‘Kumbaya,’ I’ll put money behind it," Gates said. “But if you don’t have those seeds, the numbers just don’t work." He added, "If somebody says we’re ignoring some solution, I don’t think they’re looking at what we’re doing."

Another project the foundation has funded is the development of computer models that try to measure crop loss caused by disease or pests. The idea is to direct research and responses to where they are needed most.

“It’s not just, how do we get through this crisis and get back to normal? It’s, what does the future normal look like?” said Cambria Finegold, the director of digital development for CABI, an intergovernmental nonprofit that is developing the models.

Melinda French Gates, the other co-chair of the Gates Foundation, highlighted in a separate letter the halting progress toward gender equity worldwide. Since January, the foundation has expanded its board, adding six new members to help direct its work, a move that followed the announcement of the Gateses' divorce last summer.

French Gates has agreed to step down after two years if the two decided they could not continue to work together. French Gates, who also founded an investment organization called Pivotal Ventures, was not available for an interview.

Gates said he is lucky that his former wife has continued to put her time and energy into the foundation. In July, Gates said he would contribute $20 billion to the foundation in response to the significant setbacks caused by the pandemic, raising its endowment to approximately $70 billion.

Through his giving, investments and public speaking, Gates has held the spotlight in recent years, especially on the topics of vaccines and climate change. But he has also been the subject of conspiracy theories that play off his role as a developer of new technologies and his place among the highest echelons of the wealthy and powerful.

Gates said he does not spend time thinking about conspiracies and that his foundation’s work has nothing to do with his personal reputation.

“If you go into these countries, they’ve never heard of me or the foundation,” Gates said. “Maybe in the rich world somebody is reading some internet thing, but the people we care about have never, will never, and it’s not important that they ever know who I am.”

___

Associated Press coverage of philanthropy and non-profits receives support through the AP’s collaboration with The Conversation US, with funding from Lilly Endowment Inc. The AP is solely responsible for this content. For all of AP’s philanthropy coverage, visit https://apnews.com/hub/philanthropy.

Saturday, September 17, 2022

NOT GOP STUPID

Texas A&M AgriLife to lead historic investment in Texas’ efforts to become ‘climate-smart’


Texas A&M AgriLife Research receives largest competitive grant in its history

Grant and Award Announcement

TEXAS A&M AGRILIFE COMMUNICATION

Texas A&M AgriLife Research is anticipating the largest competitive grant in the organization’s history, up to $65 million, to execute a five-year multi-commodity project to work with Texas’ large agricultural sector on expanding climate-smart agriculture and forestry practices.

The grants are not just historic for The Texas A&M University System, but for the nation, as part of a federal investment in 70 partnerships recently announced by the U.S. Department of Agriculture.

According to the USDA announcement, these federal projects will expand markets for climate-smart commodities, leverage the greenhouse gas benefits of climate-smart commodity production, and provide direct, meaningful benefits to production agriculture, including for small and underserved producers.

“We are proud to lead this major effort,” said Chancellor John Sharp. “The diversity of Texas’ climates, soils and agriculture allows a carefully crafted Texas Climate-Smart Initiative to serve as a model for future climate-smart programs nationwide. This grant further cements Texas A&M as the No. 1 research university in Texas and the Southwest.”

“Production agriculture is the backbone of the Texas economy,” said Jeffrey W. Savell, Ph.D., vice chancellor and dean for Agriculture and Life Sciences. “This grant proves that when we assemble a team of expert researchers and leaders, while simultaneously staying focused on being responsive to the needs of Texas and key priority areas, that real magic can happen. We’re proud to be creating meaningful solutions for the people of Texas.”

Project partners will be tasked with providing technical and financial assistance to producers to implement climate-smart production practices on a voluntary basis on working lands.

“Sustainable production systems that strengthen economies and bolster human health are cornerstone priorities for our research enterprise,” said Cliff Lamb, Ph.D., director of AgriLife Research. “Over the next five years, we will build on all the competitive advantages that make AgriLife Research the premier agency to lead a research initiative of this magnitude in Texas.”

Texas A&M AgriLife's internal members for this initiative include AgriLife Research, Texas A&M AgriLife Extension ServiceTexas A&M Forest Service and the Texas A&M College of Agriculture and Life Sciences.

For The Texas Climate-Smart Initiative, AgriLife Research will partner with the Texas Soil and Water Conservation Board, Prairie View A&M University, University of Texas – Rio Grande Valley, Tarleton State University, BCarbon, Nori, Plains Cotton Growers Association, Texas Wheat Producers Board, Texas Corn Producers Board, Texas Sorghum Producers Board, Texas Rice Producers Board, U.S. Rice Producers Association, Texas Organic Farmers and Gardeners Association, Texas International Produce Association, Texas Citrus Mutual, Texas Pecan Growers Association, Texas Small Farmers and Ranchers Organization, 100Ranchers, Texas Cattle Feeders Association, Texas Association of Dairymen, Texas Poultry Federation, Texas Forestry Association, Texas Chapter of National Women in Agriculture, Global Revive, Small Producers Initiative and American Plant Food.

Additional commodity-specific funding awarded to Texas A&M AgriLife Research for projects relating to climate-smart production  

Texas A&M AgriLife also will serve as a major contributor to four other partnership projects totaling $185 million that focus on cotton, beef and bison production, and sorghum systems:

  • U.S. Climate-Smart Cotton Program, led by US Cotton Trust Protocol: This project, with potential funding up to $90 million, will build markets for climate-smart cotton and aid more than 1,000 cotton farmers, including historically underserved cotton producers, across the country.
  • Climate-Smart Cotton through a Sustainable & Innovative Supply Chain Approach, led by ECOM USA, LLC: This project, with potential funding of $30 million, will strive to implement methods to restore soil and ecosystem health in cotton production through regenerative farming and best practices based on specific regions and needs.
  • Climate-Smart Beef and Bison Commodities, led by South Dakota State University: This project, with potential funding up to $80 million, will create stronger market opportunities for beef and bison producers, educate producers on practices best suited for their operations and manage large-scale data.
  • National Sorghum Producers Partnerships for Climate-Smart Commodities Project, led by National Sorghum Producers Association: This project, with potential funding up to $65 million, plans to implement climate-smart production practices across hundreds of thousands of acres of sorghum working lands over a five-year period, with the goal to reduce hundreds of millions of pounds of carbon emissions and develop markets for sorghum as a climate-smart commodity.

For a comprehensive listing of projects and participating organizations included, visit: https://www.usda.gov/climate-solutions/climate-smart-commodities/projects.

-30-

Saturday, August 20, 2022

Canada's golden crop isn't built for heat. Canola breeders hope to fix that

Jaela Bernstien - CBC

Canola is the golden crop of the prairies — both in terms of colour and profitability. But the signature export of Western Canada isn't adapted to long periods of heat, as farmers saw last year when extreme heat and drought cut canola yields drastically.

As climate change alters growing conditions, Canadian researchers are working with farmers to breed canola for a future of extremes, in the hopes of growing more heat tolerant varieties for the future.

Canola, sometimes called the Cinderella crop in reference to its success story in Canada, contributes more than $29 billion to the economy every year.

An abbreviation of the words Canada and oil, canola is a specific group of rapeseed varieties bred for cooking oil and animal feed. But before it made its way to North America, rapeseed was grown in Asia for thousands of years. Production in Canada only ramped up during the Second World War, to answer a critical shortage of lubricant oil for marine engines.


Climate change interrupts a Cinderella story

It wasn't until the 1960s that plant breeders in Saskatchewan and Manitoba developed
varieties that produced quality, edible oil. After that, it was a quick ascent to success.

But the industry took a hit when, in the summer of 2021, Western Canada was enveloped in heat and drought. Most of Canada's canola is grown in Alberta, Saskatchewan and Manitoba.

Due to extreme heat and drought, production fell to the lowest level since 2007 and canola yields dropped by 40 per cent, according to a report by Statistics Canada.

"2021 was ugly," said Dean Roberts, a small grains farmer who grows canola, wheat, barley, peas, lentils and flax in Coleville, in west central Saskatchewan.

Roberts, who spoke to CBC News while out for a drive scouting his fields, said last year the heat cut his canola yields in half, if not more.

"It was too hot and too dry for too long," said Roberts, who is a board member of the Canadian Canola Growers Association and a director of the board for SaskCanola.

"We can take a certain amount of heat and a certain amount of drought, but that was too much of everything."

Heat vs canola: A two-pronged attack

Heat doesn't just hurt canola by drying out the soil. The cool-season crop also suffers if there are long stretches of high temperatures during the flowering season, which is typically late June and early July in Western Canada.

Malcolm Morrison, a research scientist with Agriculture and Agri-Food Canada who specializes in oilseeds, said heat during flowering harms canola's pollen vitality, as well as its ability to self-pollinate and, ultimately, fertilization.

"Canola is not a tropical crop," Morrison said.

While sometimes the plants can recover after a few hot days by producing new branches with flowers, that will delay maturity — a problem for Western Canada's shorter growing season.

Heat can also make the flowers abort or fail to form seed pods — which means no oilseeds.

"You really get a two-pronged attack from the weather; you run out of moisture and the flowers abort, so you lose yield on both sides of that equation," Roberts said.

While his crops have fared better in 2022, Roberts knows the future will be unpredictable.

Greenhouse gas emissions caused by humans are contributing to more frequent and more intense heat waves, and Canada is no exception.

Roberts said he doesn't think any canola variety on the market right now could withstand a repeat of 2021.

"I think it's up to the plant breeders now to go back to their genetics and start chasing some of that heat tolerance as it gets to be more prevalent."

That's exactly what a team of plant breeders at the University of Manitoba are hoping to do.

Breeding plants for 20 years in the future

Rob Duncan, a professor at the University of Manitoba and a canola breeder, has been working on developing heat-tolerant varieties of canola, along with Chad Koscielny, North American canola breeding lead at Coteva Agriscience.

"You always have to be looking forward," Duncan said. "You are essentially predicting how the varieties you produce now [are] going to adapt in 10 or 20 years or the long-term future."

Duncan said they've had some promising results through selective breeding — mixing certain varieties of canola to create hybrids with better tolerance for heat.


© Austin Grabish/CBC
Canola is stored in bins pictured on a farm near Starbuck, Manitoba.

While the new varieties aren't ready for the commercial market yet, Koscielny said the goal is to help farmers be better prepared if there's a repeat of the 2021 heat dome.

"These hybrids have the potential to expand potential acres of canola, and minimize the impact of extreme environmental events," he said.

Morrison said he has faith that the scientific community will come up with viable solutions as growing conditions shift.

"We have to make our crops more agile," he said. "I think that one of the best ways of doing this is to have active plant breeding programs."

The difficult thing for farmers is climate change doesn't just make things hotter, but more unpredictable, Morrison said.

"If we could say that, oh, boy, we're always going to be able to plant our crop April 5 [from now on], but we can't because one of the things with climate change is that there's an increase in fluctuation."

Canola farmers no stranger to innovation

If breeders can develop a more heat-tolerant variety, it wouldn't be the first time that research helped canola farmers adapt to harsh elements on the prairies.

Roberts recalls how, on older varieties of canola, the pods would fall and shatter in a big windstorm. Breeding programs responded by developing more durable varieties.

He said heat will be the next challenge. "We're going to need more robust varieties in the future. I don't know if we're there right now."

Duncan agreed, and said farmers may also have to think about diversifying their portfolio, so to speak, by planting a combination of varieties of canola on their fields, some with tolerance to flooding, other with tolerance to heat.

He said breeding is just one part of the climate adaptation puzzle, and that farming strategies including no-till farming and irrigation are also part of the equation.

While Roberts acknowledges that's true, he said farmers are already doing everything they can on the ground.

"We've been dealing with climate change longer than the general public," he said. "We are tied very directly to our land and the weather."

"The genetics are where the biggest move is going to have to come from."

Our planet is changing. So is our journalism. This story is part of a CBC News initiative entitled "Our Changing Planet" to show and explain the effects of climate change. Keep up with the latest news on our Climate and Environment page.

Friday, August 19, 2022

Bangladesh tea strike boils as lowest-paid workers stand ground

Seeking $3 a day amid inflation, protesters draw sympathy from beyond industry

Striking Bangladeshi tea workers stage a demonstration at 
a plantation in the northeastern Moulvibazar District
(Photo by Mintu Deshwara)

SYFUL ISLAM, Contributing writer
August 20, 2022 

DHAKA -- A strike by the tea workers of Bangladesh is becoming a rallying point for the country, as accelerating inflation adds to frustration over meager wages.

Workers from over 160 tea plantations across the nation are demanding a raise to the equivalent of $3 per day, from the present standard of $1.20, which makes them the country's lowest-paid workforce.

"The tea garden owners have agreed to raise wages to only $1.40 per day, which we did not accept. We will wage a greater movement to realize our demand," said Nripen Pal, acting general secretary at the Bangladesh Tea Workers Union.

"We won't make any compromise unless we get proper wages," he said after a meeting with owners and government labor department officials on Wednesday night.

On Thursday, the union called for Prime Minister Sheikh Hasina's intervention.

The strike, which reached its seventh day on Friday, comes amid surging living costs in the wake of Russia's invasion of Ukraine, which has fueled price rises worldwide. In June, the nation's inflation rate soared to 7.56%, the highest in eight years, according to the Bangladesh Bureau of Statistics. Earlier this month, sudden fuel price hikes heaped even more pressure on consumers.

But tea workers have it harder than most -- a fact that has moved people from all strata of society to support their cause.

Abdus Shahid, a member of parliament in the tea production area of the Maulvibazar district, demanded that the minimum wage for the workers be $5. In universities in Dhaka and Sylhet, students have also rallied, calling the tea workers victims of "modern-day slavery."

On Friday, the Bangladesh Nationalist Party (BNP) -- the main opposition party -- issued a statement urging the plantation owners to accept the workers' demand. "Steps need to be taken to enhance tea workers' wages to help them come out from starvation, poverty and sufferings," said Mirza Fakhrul Islam Alamgir, the BNP's general secretary.

There are 100,000 permanent tea workers and 50,000 more temporary laborers in 167 tea plantations in Bangladesh. They support some 500,000 dependents. But even their $1.20 a day is not guaranteed: If they collect less than 23 kilograms of leaves, they get paid less.

The Bangladesh Tea Association (BTA), a body of landowners, said in a statement that the workers earn the equivalent of $4 a day, including benefits such as free housing, 3.5 kg of wheat rations per week and access to medical care.

"We will settle the wage issue and [have] requested the workers to resume work," said M. Shah Alam, chairman of the BTA.

The workers argue the medical facilities mentioned by the BTA are poor and inadequate, while the housing amounts to shanties that they are expected to pay for.
Tea workers union leaders speak at a meeting on Aug 17. 
WOMEN TEA WORKERS NOT REPRESENTED BY THEMSELVES, 
NON TEA WORKERS, MALES ARE THE SO CALLED UNION LEADERS
(Photo by Shafiqul Islam)

Either way, their situation compares unfavorably to their peers in other sectors, including day laborers and rickshaw pullers who can earn around $8 to $10 a day. Tea workers in neighboring countries are relatively better-paid as well: In the Indian state of Assam, just opposite the Bangladeshi tea plantations in Sylhet, the authorities on Aug. 10 agreed to raise wages by about 34 cents to the equivalent of about $2.90, amid strikes and legal cases in upper courts. Last year, in India's Tamil Nadu, wages rose to equal about $5.35 a day, while Nepali and Sri Lankan tea pickers earn around $3 a day, according to local reports.

The tea pickers are not Bangladesh's only frustrated workers. Laborers in the vast garment industry took to the streets in June, clashing with police in some cases.

On June 6, Shajahan Khan, a government representative and former shipping minister, pledged to form a wage board as soon as possible to establish a new pay structure for the garment workers. He also said the government would arrange ration cards for workers so that they can buy some basic commodities at subsidized prices.

Neither the wage board nor the ration cards have materialized.

Now there are signs of an emerging united front among workers' groups.

Labor leaders are calling for immediate wage hikes in all trades. "There are no other options but to raise wages without delay to help workers survive," said Nazma Akter, a former child worker and executive director of the Awaj Foundation, a labor rights organization.

Noting the lack of follow-through on the wage board and rations, she said, "The wage hike issue is being discussed among the labor organizations separately, and we may sit together soon to devise a strategy to press home the demand."

Still, garment factory owners insist they cannot afford to increase pay due to a steep increase in production costs. "The government can provide workers commodities at a subsidized rate," argued Shahidullah Azim, vice president of the Bangladesh Garment Manufacturers and Exporters Association.

Sunday, July 24, 2022

China’s response to bank protests hints at a wider problem

Stephen Bartholomeusz
Senior business columnist
SMH.COM
July 12, 2022 — 

It’s a bit hard to have a run on a bank when the depositors can’t get access to their funds, are assaulted by what appear to be plainclothes police when they protest, and China’s strict COVID regulations and the technology that supports them are used to flag protestors as health risks, which prevents them from using public transport or entering buildings.

The protest and assaults occurred at the weekend when an estimated 1000 depositors in rural banks in central China’s Henan province tried to protest a freezing of their funds that dates back to April. During an earlier protest last month protestors found that the health codes on their phones had turned red, which designates them as health risks and limits their mobility.

Demonstrators outside the People’s Bank of China in Zhengzhou, Henan province. 
 CREDIT:AP

Initially depositors in the Henan banks were told they couldn’t access their funds because the banks were upgrading their systems, but it subsequently emerged that China’s authorities had started an investigation of allegations that a private investment company that had stakes in four small banks had colluded with bank employees to solicit funds via online finance platforms, which is illegal in China. Police in the province arrested a number of people associated with the private investment group, Henan Xincaifu Investment Group Holding Co.

Whether or not there was some sort of fraud involved in the Henan banks, the heavy-handed response of the authorities to the threat of a run on the banks and to the protests suggests something with wider significance. There have been reports of protests in other provinces.

Provincial banks historically marketed themselves to prospective depositors outside their regions using the big Chinese online platforms, but were banned from using third parties last year during the crackdown on the big tech companies, with the authorities citing potential financial risks. Since the ban, some smaller banks have created their own online marketing channels.

There is concern that the banks have attracted deposits by offering interest rates that are unsustainable in the current Chinese economic environment, with growth slowing quite dramatically because of the continuing lockdowns that result from China’s harsh “zero COVID” policy as well as soaring energy costs, droughts and floods.

Scenes like those at the weekend raise the risk of contagion within China’s banking system as depositors at other banks worry about losing access to their life savings.

When China’s second-quarter GDP data is released later this week, it is expected to have a “1” in front of it, which would have been unthinkable in pre-pandemic times.

In this environment, the potential for bank failures and bank runs, particularly among the smaller and less well-supervised banks, is real.

Scenes like those at the weekend – videos of the protests and the police response were circulated widely, and internationally, on social media – raise the risk of contagion within China’s banking system as depositors at other banks worry about losing access to their life savings.

Whether or not there is fraud involved in Henan, or if it is more a matter of the banks not being able to generate sufficient income to service the interest rates they offered to attract the deposits, it isn’t all that surprising that there are some stresses emerging within China’s banking system.

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The implosion of the country’s property sector (after a heavy-handed crackdown on leverage) has generated a string of major property developer defaults on their debts. It has also damaged local governments heavily reliant on income from property sales to developers as the developers’ sales to home buyers have more than halved over the past year, and had a wider impact on a Chinese economy where more than 30 per cent of GDP is exposed to the property sector.

Despite central government attempts to prop up the sector with rate cuts, relaxation of lending restrictions, incentives to take out mortgages and voucher programs for future home purchases, mortgage lending in the first quarter of this year was at its lowest level on record.

So dire is the plight of developers that some of them in rural China are now offering to accept garlic, wheat, barley and even watermelons as payment for deposits.

And the dominoes keep falling at the big end of the property sector. Last month, ratings agency Moody’s said it had downgraded 91 developers over the past nine months. In the decade to December 2020, it had only downgraded 56.

Analysts have estimated there have been 30 defaults by companies with more than $US1 trillion ($1.5 trillion) in debt since Beijing introduced its “three red lines” policy restricting developers’ leverage in late 2020.

Last week, Shimao Group defaulted on a $US1 billion bond and this week China Evergrande, which defaulted on its offshore bonds late last year, moved closer to a default on its domestic debt after creditors refused to extend a deadline for repayment of their debts.

A domestic default by Evergrande would have major ripple effects through the sector. Until now, it has been primarily foreign creditors and owners of uncompleted apartments bearing the brunt of the property sector’s losses.

There’s also another $US13 billion or so of foreign currency bond payments due before the end of this year, which could drive another wave of defaults.

China’s authorities are clearly concerned because they are creating a bailout fund with capital provided by the major financial institutions as a contingency against potential collapses of banks or insurers.


A domestic default by Evergrande would have major ripple effects through China’s property sector.CREDIT:GETTY IMAGES

They would have an eye not just on the stresses within China’s domestic financial system but the increased volatility within international markets and the divergence between China’s monetary policies and those of the US and Europe, which are tightening their policies even as China is loosening its monetary settings.

While the official data is yet to show any signs of a blow-out in non-performing loans within China’s banking system, that data is viewed with some cynicism by analysts outside China. It is almost inconceivable that the turmoil within the property sector hasn’t had a material impact on bank balance sheets.

The COVID lockdowns (there’s been another outbreak in Shanghai), the general slowdown in China’s economy, an exodus of foreign capital as interest rates in the US rise, and fear of being caught up in the West’s sanctions on those doing business (as China is doing) with Russia won’t help.

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According to Bloomberg, Beijing’s Ministry of Finance is considering allowing local governments to sell the equivalent of $US220 billion of special bonds in the second half of this year, which would presage an attempt to generate growth through another big burst of infrastructure spending.

That’s another sign that the authorities are concerned about the trajectory of the economy and the vulnerability that its weakness might expose even as Xi Jinping readies himself for the Communist Party’s endorsement of an unprecedented third term as the party’s chairman later this year.


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China’s weak June quarter data came in well below already-modest expectations.






















Stephen Bartholomeusz
Senior business columnist
SMH.COM
July 18, 2022

China’s economy is flatlining under the weight of its harsh response to COVID outbreaks. Without major fiscal and monetary stimulus, it will be near-impossible for the economy to meet Beijing’s growth target for this year.

The June quarter GDP data released on Friday showed an economy growing at a meagre 0.4 per cent, down from the 4.8 per cent recorded in the March quarter. For the first half of the year, the economy grew 2.5 per cent.

The 0.4 per cent growth was the second-worst quarterly outcome China has experienced in 30 years (the worst was the first quarter of 2020 when the economy shrank 6.8 per cent during the initial outbreak of COVID-19), rendering the achievement of the 5.5 per cent growth the authorities have set as the target for this year improbable.

China would need second-half growth of more than seven per cent to reach the full-year target, which would probably require large-scale stimulus; few COVID outbreaks; an end to the problems China’s property market is experiencing and a better outlook for the global economy than appears likely if it is to get close to that growth number.

The weak June quarter data came in well below already-modest expectations, which had ranged from about a one per cent to 1.5 per cent expansion in the economy.

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It was also posted despite Beijing having embarked on some stimulatory policies, using tax breaks and incentives to buy new cars and homes, along with a boost to infrastructure spending, to try to offset the impact of the interaction between significant outbreaks of COVID and its own “zero-COVID” policies and the severe lockdowns of major cities they have generated.

There was some evidence of the effects of that stimulus in the June quarter numbers. Retail spending recovered from a 6.7 per cent year-on-year decline in May to post 3.1 per cent growth in June, with the subsidies for new electric cars helping to double their production and underwrite retail spending levels. Infrastructure investment grew 6.1 per cent in June relative to June 2021 and 7.1 per cent year-to-date.

The data, however, also highlighted the continuing problems within a core sector of the economy, with real estate development investment down 5.4 per cent and home sales 29 per cent in the first half of the year.

Last year’s crackdown on property developers’ leverage has cut off developers’ access to funding and left a massive number of uncompleted apartments and, because China’s developers have operated on a pre-sales model, tens of thousands of very angry home buyers who have paid for homes that haven’t been completed.

There are protests in the streets and, increasingly, rising levels of mortgage delinquency and bank loan losses as those buyers refuse to service loans for properties they can’t inhabit. That will add to the existing intense pressure on developers and on a sector that historically has contributed more than 30 per cent of China’s growth.

PBOC governor Yi Gang, said the economy was facing “certain downward pressures” because of the pandemic and external factors and would move to provide stronger economic support.
CREDIT:BLOOMBERG

The recovery towards the end of the June quarter was helped by the re-opening of Shanghai, which had experienced lockdowns in April and May. Shanghai’s economy contracted 13.7 per cent in the quarter.

That underscores how vulnerable the wider economy is to COVID outbreaks. There are still new cases being reported in Shanghai and new outbreaks and lockdowns occurring within the Henan and Guandong provinces. The national daily infection numbers are at near two-month highs.

While the authorities have slightly softened their approach to COVID, Xi Jinping has made it clear that trying to keep control of the outbreaks is his priority, even if it impacts economic growth. That tension might become greater as Xi’s ambitions for an unprecedented third term as national leader reach their moment of truth at the Communist Party’s national congress later this year.

The zero-COVID policy has impacted domestic economic activity and, coming after last year’s sudden crackdowns on the property and technology sectors, which left investors nursing significant losses, has triggered a substantial outflow of foreign capital.

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Those funds are flowing into emerging markets and towards the safe haven of the US Treasury bond market where rising yields (as a result of the Federal Reserve Board’s response to the surge in inflation to 40-year highs and the consequent strengthening of the US dollar) have made US bonds a more attractive investment option.

So far, the authorities have refrained from the kind of massive stimulus programs China unleashed in response to the global financial crisis in 2008.

There has been some modest but targeted infrastructure investment but concerns about the degree of leverage within the economy, particularly at the local government level, have disciplined the response to the current downturn.

That may be changing. Beijing increased the amount of bonds that local governments can issue this year and had urged the local authorities to issue most of the new “special” bonds by mid-year. The central authorities are reportedly considering authorising another big bout of bond sales – several hundred billion dollars of new debt – for the second half of the year.

The already highly indebted local governments have been hit hard by the implosions within the property sector – land sales generate much of their revenue – and the initial bond sales were meant to help them stabilise and recapitalise smaller banks within their regions so that they could increase their lending while the new tranches now being considered would fund another round of infrastructure investment.

The People’s Bank of China has been running a relatively conservative approach to monetary policy and isn’t facing the inflationary pressures that confront other major central banks (which is an indication of the weakness of the economy).

Over the weekend, however, the PBOC, quoting its governor Yi Gang, said the economy was facing “certain downward pressures” because of the pandemic and external factors and would move to provide stronger economic support.

The external environment isn’t favourable for China. The strongest aspect of its economy has been the recovery in its exports but the high inflation rates and tightening financial conditions are slowing global economic growth and threatening a global recession.

Greater reliance on a domestic economy that is experiencing a property sector crisis that is sending ripples of distress through China’s financial system; which opens and shuts down in response to COVID cases and which is experiencing outflows of foreign capital at rates not seen for many years almost dictates that China will have to open the fiscal and monetary policy spigots if it is to generate a growth rate with a four in front of it this year, let alone the 5.5 per cent target the authorities nominated and still adhere to.


Stephen Bartholomeusz
Senior business columnist

Saturday, July 23, 2022

Transport Canada Invests in Saskatchewan

  • Written by David C. Lester, Managing Editor, Railway Track & Structures  
  • image description

    Canadian Pacific photo

    Canada’s supply chain is still feeling the impacts of the pandemic, and the Government of Canada says it “is committed to addressing this by strengthening Canada’s supply chains and trade corridors, which will grow the economy and mitigate global inflation.”

    Minister of Transport Omar Alghabra announced C$18.3 million in funding for four new projects under the National Trade Corridors Fund, “which will help to improve the efficiency of rail networks in Regina and southern Saskatchewan”:

    Regina, Sask. OpenRailwayMap.org
    • C$1 million to develop a preliminary design to relocate railroad crossings in Regina, Saskatchewan (above). The City of Regina is contributing the remaining amount for a total investment of C$2.4 million.
    • C$13.5 million for a railway grade stabilization project, where extensive railway work will be undertaken on the Canadian Pacific interchange near Eston, Saskatchewan. Last Mountain Railway will contribute an equal amount for a total investment of C$27 million.
    • C$1.6 million for a new pre-interchange yard on the Canadian Pacific interchange near the town of Assiniboia, Saskatchewan, which will increase operating interchange capacity, allowing increased traffic flow and improved fluidity. Great Western Railway will contribute an equal amount for a total investment of C$3.2 million.
    • C$2.2 million to build 12,000 feet of additional track to address congestion issues at the interchange between the Stewart Southern Railway (former CP Tyvan Subdivision) and Canadian Pacific in Lajord, Saskatchewan (below). Purely Canada Foods will contribute the remaining funding toward the project for a total investment of more than C$6.5 million.
    Lajord, Sask. OpenRailwayMap.org

    “Through the National Trade Corridors Fund, the Government of Canada is investing in well-functioning trade corridors to help Canadians compete in key global markets, trade more efficiently with international partners, and keep Canadian supply chains competitive,” Alghabra said. “This is part of the Government of Canada’s long-term commitment to work with stakeholders on strategic infrastructure projects to address transportation bottlenecks, vulnerabilities, and congestion along Canada’s trade corridors.

    “An efficient and reliable transportation network is key to Canada’s economic growth. The Government of Canada, through the National Trade Corridors Fund, is making investments that will support the flow of goods across Canada’s supply chains. The National Trade Corridors Fund is a competitive, merit-based program designed to help infrastructure owners and users invest in the critical transportation assets that support economic activity in Canada. Under this program, a total of C$4.6 billion over 11 years (2017-2028) has been announced. Budget 2022 provided C$450 million over five years, starting in 2022-23, to support supply chain projects through the National Trade Corridors Fund, which will help ease the movement of goods across Canada’s transportation networks.”

    Transport Canada administers the National Trade Corridors Fund, “which supports improvements to Canada’s roads, rail, air, and marine shipping routes to foster domestic and international trade.” Provincial, territorial, and municipal governments, Indigenous groups, not-for-profit and for-profit private-sector organizations, some federal Crown corporations, and academia are all eligible for funding under the National Trade Corridors Fund.

    Editor-in-Chief William C. Vantuono contributed to this story.

    CP, KCS to STB: CPKC ‘Compellingly in the Public Interest, Should Be Approved Without Conditions’

  • Written by William C. Vantuono, Editor-in-Chief July 14, 2022
    image description

    KCS and CP locomotives at the top of the westbound grade at the Continental Divide in Crowsnest Pass, Alberta. Photo by David Duffin

    The document exceeds 4,300 pages: Canadian Pacific’s and Kansas City Southern’s Surface Transportation Board filing on their merger: “Applicants’ Response to Comments and Requests for Conditions, Opposition to Responsive Applications, and Rebuttal in Support of the Application.”

    The entire filing can be accessed from the STB website. The Filing ID is 304973. Here’s a summary of the points that CP and KCS make in response to the numerous comments and condition requests various parties have thus far filed with the STB: 

    “As we demonstrate in the Application and the evidence and argument submitted herewith, the Application is compellingly in the public interest and should be approved without conditions beyond those embodying the commitments Applicants are making … to ensure that the public interest benefits of the combination of CP and KCS come to pass,” the merger partners say in their introduction. “The transaction is supported by hundreds of shippers, short lines, passenger rail interests, labor organizations, and others. No shipper or shipper association requests that the transaction be denied. The Federal Railroad Administration endorses Applicants’ Safety Implementation Plan. Amtrak and other passenger rail interests support the transaction. Amtrak stresses ‘CP’s excellent record as an Amtrak host railroad and CP’s commitments to Amtrak’s efforts with states and others as detailed in the agreement’ reached between Amtrak and CP, and believes that the CP/KCS transaction ‘promises significant public benefits for the U.S. rail network.’ What opposition there is comes principally from the five Class I railroads. The protection these Class I railroads seek is itself evidence that they see the CP/KCS transaction an injecting new competition into the North American rail network.” 

    Point By Point 

    • “The transaction will result in significant public benefits. There is no merit to claims by Class I rivals that CPKC will not provide valuable new competitive options. The Class I critique of CPKC traffic estimates misses the fundamental point that the stronger competition that comes with the transaction is what really matters. [Our] estimates of the traffic CPKC will attract are reasonable and sound [and] are validated by the transaction’s Extensive shipper support and real-world developments. The KCS Board’s highly conservative pre-agreement synergies Estimates do not Undermine applicants’ anticipated benefits. There is zero risk to CPKC’s financial viability and continued investment, regardless of how much new traffic is attracted to the CPKC system, or at what rates. The Class I critique of the operating efficiencies generated by the transaction is invalid. CN’s continuing criticisms of the operating plan lack merit and are irrelevant to the Board’s evaluation of the transaction’s impacts.

    • “There is no basis for concern about ‘vertical’ competition. The Board has extensive experience with end-to-end mergers and the net benefits they have brought. Commenters offer no new economic or other learning that calls into question the Board’s consistent precedents and factual conclusions. KCS has not used its control of Tex Mex and KCSM to foreclose UP or BNSF routings through the Laredo Gateway, and neither will CPKC. The same forces that ensured there was not foreclosure following KCS/Tex Mex and other cases will apply here. [Our] commitments—enforced as appropriate by shippers—are the tried-and-true way to address concerns about vertical foreclosure. The rate-setting mechanism proposed by UP and BNSF is both unnecessary and would be affirmatively anticompetitive. Shipper group desires for “open access” and other reregulatory remedies are not merger-related. Certain requests relating to “gateways” and “bottlenecks” represent an improper effort to revisit the Board’s bottleneck rate rules. Requests for “reciprocal switching access” are similarly unrelated to this transaction

    • “The transaction will not lead to service disruption.  Additional service-related conditions would unduly burden CPKC’s competition for no valid purpose.

    • “Basic features of the transaction will prevent CPKC traffic growth from overwhelming rail capacity. The transaction will not cause disruption on the Lines KCS shares with UP and BNSF in Texas. UP and BNSF proceed from the false premise that CPKC Needs their permission to Use shared trackage to compete against them. The facts show that CPKC’s potential new trains will not exceed capacity on UP/BNSF trackage rights segments in Texas. There will be no capacity shortfall in the Houston Terminal complex. There is adequate capacity on the UP-owned Lines between Houston and Beaumont. Concerns about the Neches River Bridge at Beaumont are unwarranted. There is adequate capacity on the UP-owned Lines between Victoria and Robstown. UP and BNSF demands that CPKC fund 100% of any new infrastructure is overreaching and inappropriate. There will be adequate capacity for the traffic that CPKC hopes to attract elsewhere on its network.

    • “The transaction will not adversely Impact Metra’s commuter services and will not meaningfully increase freight traffic on lines shared with Metra. Metra further misunderstands the transaction’s impacts because its expert’s RTC model is fundamentally flawed. The MD-W Line west of Bensenville Yard has ample capacity to accommodate eight additional daily freight trains. Developments independent of the transaction will further improve the performance of Metra’s trains on lines shared with CP, which values its partnership with Metra and regrets that Metra’s comments have mischaracterized Metra’s solid performance on lines shared with CP. Metra has consistently performed well on CP’s lines. CP leadership is committed to supporting Metra’s operations, consistent with its contractual obligations. None of Metra’s complaints about CP are related to the transaction; most of Metra’s pre-transaction dispatching concerns relate to operations that will be unaffected by the transaction. Dispatching Metra trains on the ‘wrong track’ is a pre-transaction concern without merit. Pre-transaction issues having no bearing on this proceeding. Metra’s complaints about PTC implementation issues are irrelevant and unfair. [We] are committed to reassure Metra and its ridership that the transaction will not impact Metra’s passenger service. Metra’s requests to force a shift of dispatching to Metra would override CP’s contractual rights and undermine rather than improve the handling of Metra trains. Metra has long sought control of dispatching on the MD-W and MD-N Lines; the Board’s precedents sharply disfavor forced shifts in dispatching. Transferring dispatching control to Metra would create more issues than it resolves. Metra’s request to alter the compensation terms of the CP/Metra agreement are overreaching. Demands for hundreds of millions in new infrastructure are either wildly overreaching or already in progress. Metra’s request for a binding standard and process for schedule changes and new trains improperly seeks to improve its contractual rights. Metra’s requested oversight conditions are inappropriate and unnecessary .

    • “The Board should Reject CN’s proposed ‘inconsistent’ purchase of CPKC’s Springfield/East St. Louis Line. CN’s gambit is yet another round in CN’s effort to disrupt or delay the CP/KCS transaction. There is no competitive harm to address. Any divestiture of the Springfield/East St. Louis Line would harm the public interest, not enhance it. If CN is right about the ‘truck diversion’ potential of joint investments in the Springfield Line, a divestiture would not be necessary to achieve it. Were the Board to conclude that a remedy is required, it should not order a sale of the line, much less specify CN as the buyer. 

    • “Norfolk Southern’s requested relief is based on a misreading of the operating plan and would inappropriately alter pre-existing contractual rights to NS’s commercial advantage. CPKC will be highly motivated to continue to reap the rewards of the successful Meridian Speedway LLC joint venture. The facts contradict NS’s concerns about service impacts. The Wylie Intermodal Terminal has ample capacity to support [our] projected traffic increases. NS’s proposed contingent trackage rights make no sense as a ‘remedy’ for potential service concerns. NS’s request for contingent trackage rights would improperly convey to NS commercial rights that NS did not negotiate or pay for in 2006. 

    • “The Board should reject the relief requested by CSX. CSX’s arguments about the Meridian Speedway are unrelated to the transaction and should be ignored. CPKC will be eager to maintain or explore efficient interline relationships with CSX via all available gateways, and there is no need for relief protecting CSX. 

    • “BNSF’s veiled threats to demand future trackage rights it chose not to seek in this proceeding should be rejected with prejudice. BNSF’s desire for Board intervention in support of its quest for a future Mexican concession is not merger- related and would improperly involve the Board in Mexican affairs. BNSF’s proposed rights between Dallas and Shreveport would grant commercial rights BNSF chose not to acquire. BNSF’s proposed rights between Savanna, Ill. and Clinton, Iowa would grant commercial rights BNSF has previously sought. 

    • “The Board should not grant Union Pacific’s demand for conditions granting compulsory access to KCS’s self-funded new bridge at Laredo.

    • “The Coalition [to Stop CPKC] communities demand mitigation measures disproportionate to the likely effects on the community. Hennepin County concerns fail for similar reasons. The Sierra Club’s requested conditions have no nexus to the transaction, which is expected to lower greenhouse gas emissions.

    • “Concerns about CP’s tariff provisions applicable to hazardous shipments are not competitive issues or transaction-related and should be rejected. Concerns of certain wheat growers’ associations about potential competition from Canadian grain suppliers reflect more competition, not less … The late-submitted concerns of certain Federal Maritime Commissioners about diversions to Canadian ports are meritless.”

    CPKC: CN, NS Seek Conditions

    Written by Marybeth Luczak, Executive Editor

    The Surface Transportation Board (STB) on July 1 accepted for consideration responsive applications by CN and Norfolk Southern (NS) regarding the Canadian Pacific-Kansas City Southern merger, which is under STB review and seeks to create North America’s first transnational freight railroad, Canadian Pacific Kansas City, or CPKC.

    CP and KCS in September 2021 agreed to combineSTB in November 2021 accepted their application to form CPKC.

    CP and KCS on May 13, 2022, submitted a revised operating plan as ordered by STB, and CN and NS on June 9 filed amended responses with each railroad requesting a number of conditions, including acquisition of the Springfield Line in Illinois and Missouri as well as certain trackage rights.

    CN and its U.S. subsidiary Illinois Central Railroad Company (ICRR) seek, as a condition to any approval of the CP-KCS merger, approval of the sale of KCS’s line between Kansas City, Mo., and Springfield and East St. Louis, Ill., to ICRR.

    “In connection with the line acquisition, ICRR also seeks acquisition of an 8.33% ownership share of Kansas City Terminal Railway Company (KCT), which would enable ICRR to operate over KCT-controlled trackage in Kansas City, and a 50% ownership interest in KCS’s International Freight Gateway terminal (IFG Terminal) south of Kansas City,” among other conditions, according to the STB decision (download below).

    STB reported that NS is pursuing “certain contingent trackage rights for overhead movement on KCS’s line, between the connection of KCS with the Meridian Speedway, at Shreveport, La., at or near milepost V-169.85, and the Wylie Intermodal Terminal, in Wylie, Tex., at or near milepost T-197,” as a condition to any approval of the CP-KCS merger. The contingent trackage rights would apply only to intermodal traffic originating or terminating at the Wylie Intermodal Terminal, according to STB.

    STB reported that it found “CN and NS’s responsive applications to be in substantial compliance with the regulations under which they were filed and finds no basis for rejecting them. The Board reserves the right to require supplemental information, if necessary. The Board also finds that it is not necessary to designate CN and NS’s proposed transactions as minor or significant.”

    Formal written comments regarding the responsive applications are due by July 12, 2022. They must include “the commenter’s position in support of or in opposition to the transaction proposed in the responsive filing; any and all evidence, including verified statements, in support of or in opposition to the proposed transaction; and specific reasons why approval of the proposed transaction would or would not be in the public interest,” according to STB, which provides more information on filing requirements on its website.  

    In related developments, Bob Knief, President of Bartlett Grain Co., LP, a leading U.S. exporter of grain to Mexico, submitted a statement on June 22 to STB to address comments and applications filed on the CP-KCS merger; specifically, Bartlett urged STB to approve the merger and reject CN’s request that KCS’s Springfield Line be divested to it.

    Canada Investing $4.4MM to Improve Hudson Bay Railway Corridor Safety

    Written by Marybeth Luczak, Executive Editor
    “Our new investment will not only improve the safety and efficiency of Canada’s railways, but also strengthen our supply chain and tackle inflation by addressing bottlenecks, vulnerabilities and congestion along Canada’s trade corridors,” reported Transport Canada Minister Omar Alghabra reported in a July 13 Twitter post. (Photograph Courtesy of Alghabra via Twitter)

    “Our new investment will not only improve the safety and efficiency of Canada’s railways, but also strengthen our supply chain and tackle inflation by addressing bottlenecks, vulnerabilities and congestion along Canada’s trade corridors,” reported Transport Canada Minister Omar Alghabra reported in a July 13 Twitter post. (Photograph Courtesy of Alghabra via Twitter)

    The government of Canada is committing C$4.4 million to identify potential mitigation strategies for permafrost hazards along the Hudson Bay Railway corridor in Manitoba, reported Minister of Transport Omar Alghabra on July 13.

    The University of Calgary will undertake the study, and the results will be used “to ensure the safety and resiliency” of the corridor, which includes 627 miles of former CN trackage, according to Transport Canada. The funding is being provided through the National Trade Corridors Fund, which is described as “a competitive, merit-based program designed to help infrastructure owners and users invest in the critical transportation assets that support economic activity in Canada.”

    Hudson Bay Railway (map above) is made up of 627 miles of former CN trackage. The network connects with CN in The Pas, running north through Manitoba to the Hudson Bay at the Port of Churchill. (Map Courtesy of Arctic Gateway Group)

    “The Hudson Bay Railway corridor is a critical transportation, supply and tourism link for communities along the route, connecting Manitoba from north to south,” said Daniel Vandal, Canada’s Minister of Northern Affairs, and the Minister responsible for Prairies Economic Development Canada and for the Canadian Northern Economic Development Agency. “It also strengthens local economies by connecting the Port of Churchill to producers across the Prairies, supplying the world with Canada’s agricultural products and other goods. This funding will help address the hazards and impacts of climate change along the railway, keeping Indigenous and northern communities in Manitoba connected and safe.”

    “Canada’s rail network is crucial to our supply chain,” said Minister Alghabra, who made the announcement at the CN Intermodal Terminal in Winnipeg. “Through the National Trade Corridors Fund and Rail Safety Improvement Program funding, we are addressing the impacts of climate change and improving the safety and resiliency of Manitoba’s rail network, thereby strengthening Canada’s trade corridors.”

    Transport Canada last month announced that the Rail Safety Improvement Program for 2022-23 would distribute C$24 million to 147 grade crossing, infrastructure and research projects; C$700,000 in funding will go toward 10 projects in Manitoba.

    In related developments, Transport Canada on July 5 announced new fire-mitigation rules and a research-funding program to help railroads improve safety and security and build “climate resiliency.”

    Pictured, right: Transport Canada Minister Omar Alghabra. (Photograph Courtesy of Alghabra via Twitter)

    NWT Unity Rail Port Under Way

    Written by William C. Vantuono, Editor-in-Chief JULY 6, 2022

    NWT photo

    North West Terminal Ltd. (NWT), an independent farmer/shareholder-owned company headquartered near Unity, Saskatchewan in the Northwest region of the province that owns and operates an inland grain terminal and fermentation facility, is developing Unity Rail Port, a processing and transportation hub.

    Phase 1 of Unity Rail Port is expected to encompass almost 75 acres of sublots for lease within the limits of the Town of Unity. Phase 2 is expected to include just over 210 acres of sublots for lease in the Rural Municipality of Round Valley. Phase 1 and 2 are located to the West and North, respectively, of a rail infrastructure expansion under way at NWT. The expansion is expected to include a dual loop track. 

    “Unity Rail Port will be unique as it is expected to offer prospective tenants access to: Canadian Pacific (Wilkie Subdivision)and CN; grain sourcing and procurement services through NWT’s elevator facilities; and other transloading resources.,” the company said. “As well, the hub is situated on the intersection of two major highways and currently boasts more than 200 railcar spots. 

    OpenRailway Map.com

    “The Board of Directors is pleased to be announcing this project,” said NWT President Brad Sperle. “We have a solid foundation here at Unity as we already produce plant-based protein and renewable energy at our fermentation facility, have a long list of local-farmer customers, and have an existing tenant that transloads lumber, among other things, from truck to rail. We want to continue expanding on these types of opportunities and attract tenants that have synergies with our existing infrastructure. We are also looking at the potential to make the hub green in the future by offering renewable power and carbon sequestration.”

    In addition to its inland-grain terminal and fermentation facility at Unity, NWT is also a minority owner of Alliance Seed Corp. (ASC) in Winnipeg, Manitoba, and Alliance Grain Terminal Ltd. (AGT) in Vancouver, British Columbia.

    For Canada, New Measures to Address Extreme Weather, Climate Change Impacts on Rail

    Written by Marybeth Luczak, Executive Editor 
  • “In a period where we are seeing the impacts of climate change and extreme weather in Canada, it’s important that we do everything we can to mitigate future risks,” Minister of Transport Omar Alghabra said on July 5.

    “In a period where we are seeing the impacts of climate change and extreme weather in Canada, it’s important that we do everything we can to mitigate future risks,” Minister of Transport Omar Alghabra said on July 5.

    Transport Canada on July 5 announced new fire-mitigation rules and a research-funding program to help railroads improve safety and security and build “climate resiliency.”

    Under the new rules for the fire season (April 1 to Oct. 31), Transport Canada is requiring rail companies to:

    • Reduce train speeds and conduct additional track inspections when temperatures are high to reduce the risk of a derailment caused by track conditions.
    • Inspect locomotive exhaust systems more frequently to ensure they are free of any deposits that could pose a fire risk.
    • Implement a fire risk reduction plan, which “requires companies to monitor fire risk levels, manage vegetation, reduce activities that could spark fires, and respond to detected fires.” Companies must also engage local governments and Indigenous communities on their plans.

    The new rules make permanent the measures contained in Ministerial Order 21–06, issued in July 2021, to reduce the risk of wildfires in the context of extreme weather, according to Transport Canada, which noted that they also complement recent revisions to the Rules Respecting Track Safety. “Rules and regulations have the same force of law, under the Railway Safety Act, and a railway company can be subject to monetary penalties or prosecution for non-compliance to a rule,” the government agency added.

    Additionally, the Rail Climate Change Adaptation Program has been launched “to support research, development and implementation of innovative technologies, tools and approaches to better understand and address the increasing risks and impacts of climate change on Canada’s rail sector,” according to Transport Canada.

    The program will provide up to C$2.2 million in contribution funding to “cost-share” research, according to the government agency. Federally or provincially regulated railway companies incorporated in Canada—including CN and Canadian Pacific as well as most short lines—have until Sept. 28, 2022, to submit projects for consideration.

    “In a period where we are seeing the impacts of climate change and extreme weather in Canada, it’s important that we do everything we can to mitigate future risks,” Minister of Transport Omar Alghabra said. “Our new rules will protect our railways against wildfires in the context of extreme weather. At the same time, the new Rail Climate Change Adaption Program will help railways assess and adopt next-generation tools to mitigate adverse issues caused by climate change.”

    ESG Briefs: CN/CP, CSX, OmniTRAX

  • Written by Marybeth Luczak, Executive Editor July 05, 2022

    CSX and subsidiary Quality Carriers employees recently assembled 5,000 care packages for U.S. troops stationed in Eastern Europe, who have been mobilized in response to the conflict in Ukraine. (Photograph Courtesy of CSX)

    CN and Canadian Pacific (CP) have earned spots on the Best 50 Corporate Citizens in Canada list for 2022. Also, care packages from CSX, in partnership with Operation Gratitude, are headed to U.S. active-duty service members in Eastern Europe; and Newburgh & South Shore Railroad (NSR), a managed affiliate of OmniTRAX, presented a community donation to a Cleveland, Ohio-area fire department in honor of Charter Steel.

    CN and CP have ranked on the Corporate Knights Best 50 Corporate Citizens list. They came in at No. 35 and No. 17, respectively. Both Class I railroads were part of the “Freight Transport, All Modes” category, one of 18 included. Other industry groups ranked were: WSP Global Inc., No. 6 (“Engineering Construction”); Societe de Transport de Montreal, No. 10 (“Transit and Ground Transportation”); and Aecon Group Inc., No. 46 (“Engineering Construction”).

    To determine the rankings, Corporate Knights magazine analyzed 332 large Canadian organizations against Canadian and global industry peers. It assessed companies’ performance using 24 quantitative key performance indicators (KPIs) related to resource management, employee management, financial management, clean revenue, clean investment and supplier performance. The magazine has produced the annual list since 2002.

    “Large Canadian companies now earn almost a quarter (24%, up from 18% in 2021) of their total revenues ($113.6 billion) from products and services that have a beneficial environmental or social impact, as determined by the Corporate Knights Clean Taxonomy, which is aligned with the United Nations Sustainable Development Goals (SDGs),” Corporate Knights reported. “Best 50 companies continue to lead the way, earning 37% of their revenues in line with the clean economy. That’s six times more than the 6.2% clean revenue earned by other big Canadian companies (excluding the Best 50).”

    “Almost no companies had net-zero commitments five years ago, but the tides are changing,” Corporate Knights noted. “Today, 40% of large companies around the world have net-zero commitments (by market capitalization). Even among Canada’s corporate sustainability leaders, just 13 of this year’s Best 50 companies have made net-zero commitments. However, 25 (50%) achieved year-over-year emissions-intensity reductions of at least 7.6%, the rough global benchmark to be aligned with a net-zero trajectory.” Additionally, the magazine found that among Best 50 companies, 9% of Board members are non-white.

    “We are pleased to have made the top 50 Best Corporate Citizens list,” said Tracy Robinson, President and CEO of CN, which has earned a place on the list for 14 consecutive years. “CN believes in ‘Delivering Responsibly.’ This means moving our customers’ goods safely and efficiently, ensuring we deliver in an environmentally responsible manner; attracting, developing, and retaining top diverse talent; helping to make the communities we serve safer and stronger; and adhering to the highest ethical standards. This is the way we approach our job.”

    “CP is proud to be recognized by Corporate Knights as one of Canada’s ‘Best 50 Corporate Citizens’ for 2022 as an industry leader in sustainability,” CP reported via Twitter.

    (Photograph Courtesy of CSX)

    More than 150 employees of CSX and its subsidiary Quality Carriers assembled 5,000 care packages for U.S. military service members, who have been mobilized to Eastern Europe in response to the Ukraine conflict.

    The effort was part of “Pride in Service,” CSX’s ongoing community investment initiative, which it says is “focused on delivering resources and support to military members and their families, when and where they need it.” Care packages are slated to arrive in time for “Christmas in July, a military tradition that started in 1944 as a way for Americans to support deployed service members outside of the crowded shipping timeframe surrounding year-end holidays,” the railroad reported.

    Care package assembly took place at the Tampa, Fla. headquarters of Quality Carriers, a provider of bulk liquid chemicals truck transportation. Employees and their family members filled packages with snacks, games, supplies, and handwritten letters from Americans across the country.

    Assembly days like this “are a big part of Operation Gratitude[’s] overarching mission to express deep appreciation for those who step forward to serve and sacrifice on behalf of the American people,” CSX said.

    The Cuyahoga Heights Fire Department in Ohio recently received a $1,000 donation from Newburgh & South Shore Railroad (NSR) in honor of Charter Steel, the railroad’s 2021 safe shipper award winner.

    NSR presented a $1,000 donation to the Cuyahoga Heights Fire Department at a recent ceremony honoring Charter Steel of Cleveland, Ohio, NSR’s recipient of the 2021 OmniTRAX Safe Shipper Award. The award recognizes “companies that model exemplary shipping safety by shipping or receiving loaded cars with no accidental releases during the previous year,” according to Denver, Colo.-based OmniTRAX, the transportation affiliate of The Broe Group. Charter Steel also received the award in 2020.

    “Community safety is a shared effort with our partners, and we applaud the shared commitment to safety modeled by OmniTRAX and Charter Steel,” Cuyahoga Heights Fire Department Fire Chief Michael Suhy said. “We are also grateful for this donation to help maintain community safety throughout Cuyahoga Heights.”

    “OmniTRAX network-wide safety milestones reflect a relentless team commitment and true collaboration with our shipping partners,” OmniTRAX Senior Vice President of Operations John Bradley said. “We are proud to recognize a two-time NSR award winner that models a consistent commitment to safety.”