Western Canada’s grain companies say the $59.8 million of excess revenue earned by the railways in 2007-08 should be returned directly to farmers.
While acknowledging it will be challenging and expensive to do so, a spokesperson for the Western Grain Elevator Association says it’s the right thing to do.
“There are various options on how this money can be returned to producers, some of which are straightforward and others which are higher in administration costs,” said executive director Wade Sobkowich.
“The point is this is a significant amount of money and it should properly flow back to farmers.”
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federal government proposed several months ago to increase the compensation rate from 80 to 90 per cent and double the maximum payment from $3 million to $6 million
The Canadian Transportation Agency announced Dec. 30 that the two national railways had exceeded their rail revenue caps by a combined $59.8 million.
The overpayment works out to about $2.23 per tonne of grain.
By law, that money is paid to the Western Grains Research Foundation, along with a 15 percent penalty.
The foundation would put the money into its endowment fund and use the annual interest earnings to finance research into a variety of crops. It would not touch the principal.
WGRF officials have said they recognize it is farmers’ money and would have no objection if it was paid back to farmers.
Sobkowich said the WGEA supports the work done by the foundation, but noted no one ever expected the payment would be as high as it was in 2007-08.
Since the cap was introduced in 2000, overpayments have totalled $8.9 million.
He suggested the penalty, about $9 million, be paid to the foundation while some way be found to pay the $59.8 million to producers.
