CP exceeds rail revenue cap, CN comes in below

Canada’s major railways earned more than $1.1 billion moving western Canadian grain in 2012-13.


Documents provided by the Canadian Transportation Agency (CTA) show revenues of $556 million at Canadian National Railway and $544 million at Canadian Pacific Railway.


Those revenues were closely aligned with allowable railway earnings under the federal railway revenue caps.


CN revenues from grain movement came in $6.3 million below the company’s 2012-13 revenue cap. CP exceeded its cap by $178,000.


Railway revenue caps limit the amount of money that the major railway companies can earn from the movement of western Canadian grain.


The CTA determines the caps annually and announces each December if the railways exceeded their allowable earnings during the previous crop year.


Revenues above the allowable caps must be repaid by the rail companies and are used to support western Canadian grain research activities.


According to CTA numbers, the two railway companies moved 32.4 million tonnes of grain in 2012-13, including 18.6 million tonnes to Vancouver, 6.5 million tonnes to Thunder Bay, 5.1 million tonnes to Prince Rupert and 2.1 million tonnes to Eastern Canada. 


Total rail shipments in 2012-13 were down slightly from the previous crop year.


In 2011-12, the railways moved 33.1 million tonnes of western grain.


In April 2013, the CTA announced a 1.8 percent decrease in the volume-related composite price index or VRCPI, a key factor used to determine how much the railways can earn from moving western Canadian grain.


The 1.8 percent reduction came after a 9.5 percent VRCPI increase the previous year.


On average, the VRCPI has grown at an annual rate of two percent since 2000-2001.