CN and CP railways exceed maximum revenue entitlement by over $5.3 million

The Canadian Transportation Agency (CTA) has ruled that Canadian National Railway (CN) and Canadian Pacific Railway (CP) were above their maximum grain revenue entitlements for the 2019-2020 crop year.

CN and CP will have 30 days to pay the amount by which they exceeded their revenue entitlements — $3.17 million and $2.17 million respectively — plus a 5 per cent fee.

Regulations require the payments go to the Western Grains Research Foundation, a non-profit, farmer- directed research organization.

Under the Canada Transportation Act, the CTA determines each railway company’s annual maximum revenue entitlement (MRE) and whether the entitlement is exceeded. The MRE is a form of economic regulation that enables CN and CP to set their rates for services, provided that the total amount of revenue collected from their shipments of western grain remains below a ceiling set by the CTA.

In the 2019-2020 crop year, CN and CP moved 4.3 per cent more grain — about 48 million tonnes —  than last corp year, with the average length of haul of 965 miles.

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