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12/20/2012


Rail News: Federal Legislation & Regulation
Canadian Transportation Agency: CN, CP slightly exceeded their grain revenue caps in latest crop year



The Canadian Transportation Agency (CTA) recently determined that CN and Canadian Pacific exceeded their revenue caps for moving western grain in crop year 2011-12 by less than 0.1 percent.

CN's grain revenue totaling $542,756,316 (in Canadian dollars) surpassed its cap by $240,185 and CP's grain revenue totaling $494,436,705 exceeded its cap by $400,132.

In the crop year, 33.1 million tons of western grain were transported, about 6.2 percent higher than the previous crop year, CTA officials said in a prepared statement. In addition, the average length of haul decreased 1.3 percent to 952 miles.

CN and CP now have 30 days to pay the amount by which they exceeded their 2011-12 revenue caps, in addition to a 5 percent penalty. Government regulations stipulate that the payments be made to the Western Grains Research Foundation, a farmer-financed and directed organization.

The Canadian Transportation Act requires the CTA to set each railroad's revenue cap annually and determine whether each cap was exceeded in a given crop year. Calculated via a formula containing numerous elements, the revenue cap is a form of economic regulation that enables CN and CP to set their own rates, provided the total amount of revenue they collect remains below the set ceiling, CTA officials said.

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