CN, CP exceed Western grain revenue entitlements

The Canadian Transportation Agency ruled last week that the revenue of CN and Canadian Pacific exceeded their Western grain revenue entitlements for the 2015-2016 crop year.

CN's grain revenue of of 685,791,606 Canadian dollars was CA$1,041,913 above its entitlement of CA$684,749,693. CP's grain revenue of CA$681,266,322 was CA$3,386,483 above its entitlement of CA$677,879,839, agency officials said in a press release.

The Class Is have about a month to pay the amount by which they exceeded the entitlements, in addition to a 5 percent penalty of CA$52,096 for CN and CA$169,324 for CP. Federal regulations stipulate that such payments must be made to the Western Grains Research Foundation, a farmer-financed and directed organization set up to fund research that benefits Prairie farmers.

In the 2015-2016 crop year, 40,393,402 tonnes of Western grain were moved — 2.2 percent less than the volume moved during the previous crop year. The average length of haul of 951 miles was four miles, or 0.4 percent, higher than the previous crop year.

The Canada Transportation Act requires the agency to determine each railway company's annual maximum revenue entitlement and whether each entitlement has been exceeded. The maximum revenue entitlement is a form of economic regulation that enables CN and CP to set their own rates for services, provided the total amount of revenue collected from their shipments of Western grain remains below the ceiling set by the agency.