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CN, CP face fines for summer grain handle

(Dave Bedard photo)

Both of Canada’s big two railways have been slapped with fines for missing the federal government’s mark this summer on weekly Prairie grain handling.

A Transport Canada spokesperson confirmed by email Thursday that Canadian National and Canadian Pacific Railway (CN, CP) have been served notices of violation including administrative monetary penalties (AMPs) of $100,000 and $50,000 respectively.

CN’s notice and two AMPs of $50,000 each are for having “failed to meet the minimum volume requirements” for the periods of July 28 to Aug. 3 and of Sept. 7-13, the spokesperson said.

CP’s notice and its $50,000 AMP cover the same week in September.

Transport Canada said it will continue to review remaining data on grain freight volumes from the fall of 2014, “to ensure CN and CP’s compliance with the volume requirements.”

The amounts of the AMPs are decided by a Transport Canada enforcement officer and determined “in a manner proportionate to the railway’s performance in relation to its obligation.”

That said, Transport Canada won’t specify by how much the railways fell short of the minimum during the two periods in question, noting the data on grain tonnage provided by CN and CP is kept confidential.

When first passed in May last year, the Fair Rail for Grain Farmers Act called for each railway to move 500,000 tonnes of grain per week until the end of the 2013-14 crop year on Aug. 1.

An order in council taking effect Aug. 1 raised the minimum grain handle per railway to 536,250 tonnes per week until Nov. 29 — which would include the Sept. 7-13 period.

Another order in council, announced at the end of November, resets the minimums five times between then and the end of March 2015. Each railway’s weekly minimum grain handle, right now, is 325,000 tonnes.

The federal Fair Rail legislation, as passed in May, set the “maximum amount payable for each violation” at $100,000 — meaning the fines are worth up to $100,000 per week.

CN last month was also told by the Canadian Transportation Agency it must hand over $5.2 million — the amount by which it exceeded its maximum Prairie grain revenue entitlement for 2013-14, plus a five per cent penalty. Under federal rail law any such overages in a given crop year must be paid to the Western Grains Research Foundation. — Network


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