The Western Canadian GHTS 2013-14 Update

March 2014

Overview 2

 GHTS Background  The Playing Field  Performance History y  GHTS This Year  Production  Performance  Challenges  Oth Other Issues I  Revenue Cap

Who is Quorum?  Transportation p and Logistics g consulting g firm with a focus on

North American surface modes – rail, truck, container, bulk commodity and grain  



Established 1999 Have developed a specialization in transportation data management with a strong IT back shop Three Subs – Quorum Corp Corp, QGI and QTMS

 Grain Monitor for the Federal Gov’t since 2001  QGI Consulting selected to provide services in the

preparation of stats and information for the Rail Freight Service Review

Grain Monitoring Program  Activity y and Performance Measures  Industry volumes, activity and performance metrics  Farm gate to ocean vessel departure  Sets the industry benchmark  Used by broad cross section of the industries stakeholders  Comprehensive, Comprehensive ongoing assessment and

analysis of the measures and industry events  The Grain Monitor strives to retain a neutral and balanced position on issues … but we call it like we see it

The Canadian “Playing Field” 5

•Exports 27-31 MMT/ annually •Worth $21 Billion Annually •Carry Canadian grain to over 1 1,000 000 destinations

3/12/2014

The Canadian “Playing Field”

30,000 Producers

392 Primary & process facilities

2 Major Railways with 17,000 miles of track

15 port bulk terminals at 4 Ports

1,500+ Ocean Vessels

8 Container terminals

3/12/2014

Licensed Elevators – August 1999

1,004 elevators in 685 communities

Licensed Elevators – 2014

392 elevators in 271 communities

Country Network - Ownership Changes 9

3/12/2014

GHTS Rail Network: 1980

CN CP Regional/ Shortlines

GHTS Rail Network: 2014

CN CP Regional/ Shortlines

Production – 1980 -2013 (Tonnes) 80,000.0

70,000.0

60,000.0

50 000 0 50,000.0

40,000.0

30,000.0

20,000.0

10,000.0

-

Cereals

Canola

Special Crops

Other

Total

Linear (Total)

West Coast Volumes 25,000.0

 Last four years averaged

21.3 MMT – up 58% from the average 12 years ago and about 30% the 25 year average

20,000.0

15 000 0 15,000.0

10,000.0

5,000.0

 Is this the new normal? -

 How much can it grow? VANCOUVER

PRINCE RUPERT

Total West Coast

Changing Markets 14 Africa 7%

Oceania 0 5% < 0.5%

Eastern E Europe < 0.1%

1990

Eastern Europe 19% %

Africa 8%

Oceania