CN and CP to pay $7 million combined for exceeding revenue entitlement for grain

The Canadian Transportation Agency says both CN Rail and CP Rail exceeded their maximum grain revenue entitlements during the 2016-17 crop year.

CN’s grain revenue of $808,213,784 was $5,773,741 above its volume-based entitlement of $802,440,043, while CP’s revenue from grain of $725,457,448 was $1,078, 947 above its entitlement of $724,378,501.

Both railways have 30 days to pay the amount by which they exceeded their cap, as well as a five percent penalty of $288,687 for CN and $53,947 for CP, to the Western Grains Research Foundation for farmer-led research.

The maximum revenue entitlement (MRE) is based on a formula that accounts for volume of grain hauled, the average length of haul, and an inflation index that includes price changes for railway labour, fuel and capital costs.

In total, 43,196,615 tonnes of Western grain were shipped by the two main railways last year — 6.9 percent more volume than the previous year. The average length of haul was 953 miles — two miles, or 0.2 percent, longer than the year before.

Related: CN cites derailments, frack sand demand as factors slowing grain movement

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