OTTAWA, Ont.--The Canadian Transportation Agency has issued a ruling that the revenues of the Canadian National Railway Company (CN) are under its maximum revenue entitlement and that the Canadian Pacific Railway Company (CP) has exceeded its revenue cap for crop year 2012-2013.
CN's grain revenue of $556,589,140 was $6,346,256 below its revenue cap of $562,935,396, while CP's grain revenue of $ 544,222,877 was $177,961 above its revenue cap of $544,044,916.
The Canada Transportation Act requires the Agency to determine each railway company's revenue cap annually and whether each cap has been exceeded. The revenue cap is a form of economic regulation that enables CN and CP to set their own rates for services, provided the total amount of revenue collected remains below the ceiling set by the Agency.
In the 2012-2013 crop year, just over 32.4 million tonnes of western grain were moved, which is 2.0 percent lower than the volume moved during the previous crop year. As well, the average length of haul of 944 miles was 8 miles, or 0.8 percent lower than the previous crop year, said the agency.
CP now has 30 days to pay the amount by which they exceeded their 2012-2013 revenue cap, in addition to a five percent penalty of $8,898. Government regulations stipulate that such payments must be made to the Western Grains Research Foundation, a farmer-financed and directed organization set up to fund research that benefits Prairie farmers.