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Rail News: Federal Legislation & Regulation

CP above, CN below government-set grain revenue caps


The Canadian Transportation Agency (CTA) recently determined that Canadian Pacific exceeded and CN remained below the government-set revenue caps for western grain movements in crop year 2010-11. CP’s grain revenue of $443.8 million surpassed its cap by $1.25 million and CN's grain revenue of $508.4 million fell $913,447 below its cap.

CP now has 30 days to pay the amount it exceeded the cap, plus a 5 percent penalty of $62,602, CTA officials said in a prepared statement. Government regulations stipulate that such payments must be made to the Western Grains Research Foundation, a farmer-financed and directed organization that funds crop research.

The Canada Transportation Act requires the CTA to set each railroad’s revenue cap annually and determine whether each cap was exceeded. The revenue cap enables CN and CP to set their own rates, provided their total revenue remains below the set ceiling. Revenue caps are calculated using a formula containing numerous elements established by the CTA.

In the 2010-11 crop year, 31.1 million tons of western grain were transported, down 2.5 percent compared with the previous crop year. The average length of haul of 965 miles was 12 miles, or 1.2 percent, less than the previous crop year’s average, CTA officials said.

Contact Progressive Railroading editorial staff.

More News from 12/29/2011