CPR over, CN under grain revenue caps: CTA

Canadian Pacific Railway has set a new record for excess grain revenue, the Canadian Transportation Agency announced Friday.

The agency sets annual caps on the amount of revenue Canada’s railways can make from moving grain off the Prairies to port terminals at Thunder Bay, Vancouver, Prince Rupert, B.C. and Churchill, Man. CPR’s cap for the 2006-07 crop year was $433.35 million, but it took in $437.11 million in grain revenue, for an excess of $3.76 million.

That amount marks a new record for excess grain revenue by a single railway since the new cap system was set up in 2000, the CTA said.

Friday’s announcement by the CTA gives CPR 30 days to pay $3.95 million (the excess plus a five per cent penalty) to the Western Grains Research Foundation (WGRF), which receives excess revenue from both railways to fund grain research.

CPR has twice previously exceeded its revenue cap, as has Canadian National Railway (CN), in the seven years since the CTA moved to a total annual revenue cap for Prairie grain in lieu of setting maximum freight rates.

However, the CTA ruled Friday that CN has come in under its 2006-07 cap of $419.02 million by $2.11 million. CN posted 2006-07 grain handling revenue of $416.92 million, the agency said.

CPR hasn’t yet officially said whether it will appeal the CTA’s ruling for 2006-07.

“Based on past experience, we know that the decisions of the (CTA) can be appealed,” said WGRF communications manager Amanda Soulodre in a release Dec. 31. “We’ll be watching closely to see what happens this time.”

Both railways appealed against the CTA’s rulings at the end of the 2005-06 crop year, which resulted in a recalculation in CPR’s favour in October 2007. That, in turn, led to the WGRF having to repay about $871,000 from the $1.6 million CPR had paid into the fund.

CN, which claims the CTA overcharged it by over $522,000 for 2005-06, also appealed the $2.8 million ruling against it and now awaits a final decision, which the WGRF said is expected to come sometime in 2008.

The WGRF estimated its research fund would lose about $47,000 in annual interest from the amount it had to repay to CPR for 2005-06.