That traffic would normally pass through the seaway. The 1988 free trade agreement launched an expansion of grain sales southward, making the U.S. one of Canada's largest customers. Thunder Bay is not an obvious export route to the U.S. Rail deregulation, initiated by the Progressive Conservatives and escalated by the Liberals, made it easier for railways to compete with Thunder Bay and the seaway for direct rail shipments east. Railway costs have fallen by more than 50 percent since 1988 and rates have dropped in that range. At the same time, the prairie grain industry has been consolidating, building large inland facilities and shipping more cleaned grain in unit trains that can bypass port terminals.
Thunder Bay loses the cleaning business and the handling.
Even the tense relations between the Canadian Wheat Board and grain companies have had an impact on grain traffic. The board, fighting to lower costs and return more to farmers, has been resisting winter grain storage and elevation costs that are charged by grain companies at their terminals. The board is shipping more winter grain directly to the lower St. Lawrence by rail rather than sending it to Thunder Bay for storage until the seaway opens in the spring. It will likely mean the Thunder Bay terminals are closed down for two or three months this winter as the board bypasses them. There is less work all the time.