Canadian Railways exceed grain transport revenue caps

Dec 29, 2023

The Canadian Transportation Agency (CTA) has announced that two major rail companies, Canadian National Railway Company (CN) and Canadian Pacific Kansas City Limited (CPKC), have exceeded their revenue limits for transporting western grain in the 2022-2023 crop year. This overage triggers penalties under the Canada Transportation Act.

Each year, the CTA sets a Maximum Revenue Entitlement (MRE) for railways transporting grain in Western Canada. This regulation ensures fair pricing and efficient transportation services. For the 2022-2023 period, CN's revenue surpassed its MRE by $3,457,939, while CPKC exceeded by $3,369,407. Consequently, both companies are required to pay the excess amount plus a 5% penalty.

This decision comes after a thorough analysis of the companies' grain transportation data, including tonnage and average length of haul. The review revealed a 60% increase in grain volume transported compared to the previous year, influenced by improved growing conditions in Western Canada after a severe drought.

The penalty payments, amounting to $3,630,836 for CN and $3,537,877 for CPKC, are directed to the Western Grains Research Foundation, a farmer-financed organization supporting agricultural research. These measures underline the CTA's commitment to maintaining a balanced and fair grain transportation sector in Canada.

For farmers and stakeholders in the agricultural sector, this determination by the CTA serves as a reminder of the regulatory framework governing grain transportation and its impact on the agricultural economy.