CPKC Above Grain Revenue Entitlement in 2023-24; CN Below

One Canadian railway exceeded its maximum grain revenue limit in 2023-24, while another was below. 

Canadian Pacific Kansas City (CPKC) was $1.8 million above its annual grain revenue entitlement of $869.8 million, while Canadian National (CN) was $34.3 million below its entitlement of $1.23 billion, the Canadian Transportation Agency (CTA) ruled last month. 

CPKC now has 30 days to pay the amount by which it exceeded its 2023–2024 revenue entitlement, in addition to a 5% penalty of $91,204. Regulations require the payment to go to the Western Grains Research Foundation. 

The two railways exceeded their respective grain revenue limits in both 2022-23 and 2021-22. The last time at least one of the railways fell below its maximum entitlement was in 2020-21, when CPKC (then CP) was $20.2 million below. 

The Canada Transportation Act requires the CTA to determine each railway company’s annual maximum grain revenue entitlement and whether each entitlement has been exceeded. The revenue entitlement is a form of economic regulation that enables CN and CPKC to set their rates for services, provided the total amount of revenue collected from their shipments of Western grain remains below the ceiling set by the CTA. 

The two railways jointly hauled 43.7 million tonnes of Prairie grain in 2023-24, down 3.5% compared to a year earlier. The decrease in the volume of grain moved was attributed to a decline in exports compared to a year earlier.