One of the two national railways is going to court to have its $2.7 million revenue cap overpayment reduced.
Canadian National Railway is asking the Federal Court of Canada for leave to appeal the Canadian Transportation Agency’s Dec. 29 ruling that the railway exceeded its allowable grain hauling revenue by that amount in 2005-06.
CN spokesperson Kevin Franchuk said the railway is disputing one aspect of the CTA’s calculation, relating to revenue from intermodal movements.
That represents about $500,000 of the $2.7 million overpayment calculated by the CTA.
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Under the terms of the federal revenue cap, the railways are required to pay excess revenue, plus a five percent penalty, to the Western Grains Research Foundation.
Franchuk said CN will send a cheque for $2.33 million to the WGRF and deposit the disputed $500,000 into a trust account, pending the outcome of the appeal.
Meanwhile, Canadian Pacific Railway has accepted the CTA’s calculations and has already sent a cheque for $1.57 million to the WGRF, representing $1.5 million overpayment plus penalty.
Each year, the CTA calculates the maximum allowable grain hauling revenue for each of the two national rail companies, based on costs, tonnage and distance hauled.
The agency calculated that in 2005-06, CN exceeded its $395.7 million cap by 0.68 percent, while CPR was 0.37 percent above its cap figure of $395 million, the first time both railways exceeded the cap in the same year.
Each railway had been over the cap once
before.
