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12/22/2023
The Canadian Transportation Agency (CTA) yesterday ruled that CN and Canadian Pacific Kansas City were above their respective maximum grain-revenue entitlements for the crop year 2022–2023.
CN's grain revenue of CA$1,079,522,039 was CA$3,457,939 above its entitlement, while CPKC's grain revenue of $943,886,400 was $3,369,407 above its entitlement, according to a CTA press release.
CN and CPKC now have 30 days to pay the amount they exceeded their revenue entitlements, in addition to a 5% penalty of CA$3,630,836 for CN and CA$3,537,877 for CPKC. Regulations require those payments to go to the Western Grains Research Foundation.
In the 2022–2023 crop year, 45,303,841 tons of Western grain were moved, a 60% increase in volume compared to the last crop year, CTA officials said.
The volume boost was attributed mainly to improved growing conditions following the drought experienced in Western Canada during the 2021-2022 growing season.
The Canada Transportation Act requires the CTA to determine each railroad's annual maximum revenue entitlement and whether each entitlement was exceeded. The revenue entitlement is a form of economic regulation that enables CN and CPKC to set their rates for services, provided the total amount of revenue collected from their shipments of Western grain remains below the ceiling set by the CTA.