Railways ordered to pay $2.7 million for exceeding MRE

Canadian National Railway and Canadian Pacific Railway have been ordered to pay nearly $2.7 million combined to the Western Grains Research Foundation after exceeding their maximum revenue entitlements for moving western Canadian grain.

In a Dec. 31 ruling, the Canadian Transportation Agency said CN generated grain-related revenues of $788 million in the 2017-18 crop year, roughly $1.05 million above its MRE of $787 million.

CP generated grain-related revenues of $709.5 million, or roughly $1.5 million above its MRE of $708 million.

After applicable penalties are applied, CN must pay approximately $1.1 million to the WGRF while CP must forfeit nearly $1.6 million.

They must submit their payments to the WGRF before the end of January, the CTA ruling says.

Money directed to the WGRF will be used to pay for agricultural research that benefits prairie farmers.

Each year, the CTA determines how much revenue CN and CP can legally earn from moving western Canadian grain along federally regulated transportation routes.

The MREs for each railway are calculated using a complex formula that takes into account the volume of grain moved, the distance that grain is transported and the cost of moving grain based on factors that include the price of labour, fuel, materials and capital.

The CTA ruling states that nearly 25 million tonnes of regulated prairie grain were moved to the Port of Vancouver last year, including 13.8 million tonnes that were moved by CP and 11.2 million tonnes that were moved by CN.

Grain shipments through the Port of Prince Rupert were listed at 5.5 million tonnes, while movements through Thunder Bay were just a hair less than seven million tonnes.

Canada’s two largest railway companies moved 40.6 million tonnes of western grain in 2017-18, down six percent from the previous year.

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