Canadian Pacific, along with Canadian National, were both hit with penalties after going over their respective grain shipping revenue caps in the 2017-18 crop year. Image: Canadian Pacific

CN, CP take over $2.5 million more from grain farmers than allowed

Railways penalized millions for exceeding revenue cap for western grain transport

Canada’s two largest railway companies have gone over their grain revenue limits despite moving less volume.

With the end of 2018, the Canadian Transportation Agency (CTA) found that Canadian National Railway (CN) and Canadian Pacific Railway (CP) each exceeded their maximum grain revenue entitlement (MRE) for the 2017-18 crop year, which ended on June 30.

In a release from the CTA, CN’s revenue was slightly more than $1 million over its entitlement of about $787 million while CP went over its nearly $708 million entitlement by over $1.5 million. All of this while both companies transported six per cent less grain to port — about 40.6 metric tonnes — than in the previous crop year.

“The MRE’s purpose is to place a ceiling on the total amount of revenue that CN and CP can earn from the movement of regulated grain and should not have any impact on grain delivery,” explained Trinh Phan, CTA media relations officer in an email.

The revenue cap was legislated back in 2000 as way to balance giving the railways the opportunity to set their own shipping rates instead of imposing a ceiling on those rates. While CP has exceeded its cap for the last four crop years, CN has gone over the cap for the last five — including eclipsing the limit in three of those years by $5 million or more.

Both railway companies have until the end of January to forward those excess revenue amounts to the Western Grains Research Foundation (WGRF) — as per legislation — along with an additional five per cent penalty. For CP that amounts to an extra $75,000 while CN will add on another $52,000, all of which will help fund further research and development for the farmer-directed WGRF.

CP did respond to a request for comment, however, the company only provided a prepared statement from Murray Hamilton, assistant vice-president of grain sales and marketing, that was issued in early December and failed to address the revenue issue or the lack of volume delivery.

There was no response from CN by press time to a request to speak on the subject.

The Canadian Transportation Agency is an independent, quasi-judicial tribunal and regulator which has, with respect to all matters necessary for the exercise of its jurisdiction, all the powers of a superior court.



jordie.dwyer@ponokanews.com

Like us on Facebook and follow us on Twitter

Just Posted

AMBER ALERT: Alert cancelled after child located safe and unharmed

Alert cancelled after child located safe and unharmed

Fighting financial fraud against seniors

Alberta Securities Commission hoping to curb seniors being taken for granted

Dual credit benefiting WCPS students

School division working on expanding program into nursing, business studies

VIDEO: Acknowledging skeptics, finance minister vows to build Trans Mountain project

Bill Morneau said he recognizes ‘huge amount of anxiety’ in Calgary over future of oil and gas sector

Wildfires have forced more than 9,000 people from homes in northern Alberta

People in other communities remain on evacuation alert and could be told to leave quickly

Pride divided: Edmonton leadership under pressure as LGBTQ community looks to future

Most of the conflict can be traced back to 2016 Toronto Pride when Black Lives Matter staged a protest

Federal cabinet ministers visit Edmonton, Calgary, in wake of TMX approval

Natural Resources Minister Amarjeet Sohi is set to visit Trans Mountain Corp.’s terminal in Edmonton

Statistics Canada reports annual pace of inflation rises in May to 2.4%

Transportation prices gained 3.1 per cent as the cost of air transportation added 8.9 per cent

Demonstrators on either side of Trans Mountain debate clash in Vancouver

Crowd heard from member of Indigenous-led coalition that hopes to buy 51% of expansion project

Work on splash park close to completion

Work at the “mercy of the weather”

High Level on alert, as wildfires put more people on the run in northern Alberta

Thousands in High Level were just allowed back home, and now must get ready to leave again

VIDEO: Toronto Raptors announcer credited with calming crowds after shooting

Matt Devlin, the Raptors’ play-by-play announcer since 2008, was praised for preventing panic from spreading

Most Read