Canadian Transportation Agency Rules on CN and CP Western Grain Revenue Caps for Crop Year 2004-2005
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OTTAWA - January 4, 2006 - The Canadian Transportation Agency today announced that it has found that the Canadian National Railway Company (CN)'s revenues for the movement of Western grain exceeded its revenue cap for crop year 2004-2005. The Canadian Pacific Railway Company (CP)'s revenues from grain transportation were below its cap for the same period.
CN's grain revenue of $305,788,835 was $118,714 above its revenue cap of $305,670,121, while CP's grain revenue of $323,068,715 was $513,061 below its revenue cap of $323,581,776.
In accordance with the Canada Transportation Act and the Railway Company Pay Out of Excess Revenue for the Movement of Grain Regulations, CN now has 30 days to pay the above-noted excess amount, in addition to a five per cent penalty, to the Western Grains Research Foundation (WGRF). For more information about the WGRF, a farmer-funded and -directed organization set up to promote research that benefits Prairie farmers, visit www.westerngrains.com.
The revenue cap applies to the movement of grain from Prairie origins to terminals at Vancouver, Prince Rupert, Thunder Bay and Churchill. Crop year 2004-2005 is the Agency's fifth year for revenue cap determinations and marks the second consecutive year a railway has exceeded the maximum revenue entitlement. For the previous crop year (2003-2004), the Agency found that CP had exceeded its revenue cap by $321,912.
The current revenue cap regime for the movement of Western grain by a prescribed railway company (currently CN and CP) has been in effect since August 1, 2000; it replaced the former rate scale regime for such movements. Since that time, the Agency has been required to determine each railway company's revenue cap annually and whether each cap has been exceeded by the railway company. In the course of establishing Western grain revenue, the Agency examined detailed railway submissions of grain traffic and revenue information.
The Canadian Transportation Agency is a federal quasi-judicial tribunal. It deals with, among other things, rate and service complaints arising in the rail industry; disputes between railway companies and other parties; applications for certificates of fitness for the proposed construction and operation of railways; approvals for railway line construction; regulated railway interswitching rates; and revenue caps for the movement of Western grain by rail. The Agency also develops costing standards and regulations, and audits railway companies' accounting and publication/statistics-generating systems.
For more information, please contact:
Manager, Grain Division
Canadian Transportation Agency
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