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3/5/2008



Rail News: Rail Industry Trends

CN seeks to appeal Canadian Transportation Agency’s grain rate caps


Canadian National Railway Co. officials are seeking permission from the Federal Court to appeal the Canadian Transportation Agency’s decision last month to reduce rail revenue entitlement for grain transportation under the Canada Transportation Act. The decision would cut rail grain rates by 8 percent under the revenue cap, which is retroactive to Aug. 1, 2007.

“The government of Canada is effectively transferring income from one sector of the economy — railways — to another — farmers — in what we believe is an unfair ruling on rate cap inputs,” said CN President and Chief Executive Officer E. Hunter Harrison in a prepared statement.

Rail rates for grain transportation in Canada are among the lowest in the world and “significantly less” than in the United States, Harrison said, adding that the ruling would “permanently damage CN’s grain business.”

“If unchecked, the continued erosion of grain profits by re-regulation will force CN to review investment decisions in grain transportation and to restructure its services for the sector,” he said.


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