CN, CP under maximum grain revenue entitlements for 2018-19, agency rules

The Canadian Transportation Agency (CTA) ruled earlier this week that revenue of Canadian Pacific and CN were below their maximum grain revenue entitlements for crop year 2018-19.

CN's grain revenue of CA$933,357,710 was CA$371,116 below its entitlement; and CP’s grain revenue of CA$862,734,965 was CA$764,101 below its entitlement, agency officials said in a press release.

As both Class Is' revenue did not exceed their respective maximum entitlements, no overage-related payouts or penalties were assessed for this crop year, they said.

The Canada Transportation Act requires the CTA to determine each railroad'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 CTA.