Railways to pay $7.1 million to Western Grains Research Foundation for exceeding revenue entitlement in 2022-23

Canada’s two railways — CN and CPKC — must pay a combined $7.1 million to the Western Grains Research Foundation (WGRF) for exceeding their maximum grain revenue entitlements for the 2022-23 crop year, according to a ruling issued Dec. 22 by the Canadian Transportation Agency (CTA).

CN’s grain revenue of $1,079.5 million was $3.46 million above its entitlement of $1,076.1 million, while CPKC’s grain revenue of $943.9 million was $3.37 million above its entitlement of $940.5 million.

Both railways now have 30 days to pay the amount by which they exceeded their entitlement, plus a five percent penalty to WGRF.

For CN, the amount due is $3,630,836, while CPKC owes $3,537,877  — around $7.17 million in total.

Under the Canada Transportation Act, the CTA uses a formula that accounts for railway costs and the volume of grain shipped to determine the maximum revenue entitlement (MRE) — how much revenue railways can collect from grain shipments — on an annual basis. Any overages must be paid, with a five per cent penalty, to the WGRF for farmer-directed research for the benefit of Prairie farmers.

The railways moved a total of 45.3 million tonnes of Western grain in 2022-23 — a 60 per cent increase versus the drought-reduced total of 28.4 million tonnes the prior year. The railways paid around $5.7 million to WGRF for exceeding their revenue entitlement on the small ’21 crop.

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