Canada’s largest railway company, Canadian National Railway, exceeded the federally imposed railway revenue cap by nearly $5 million in the 2013-14 crop year.
In a decision handed down today, the Canadian Transportation Agency determined that CN revenues generated by hauling western Canadian grain amounted to $672.1 million in the 2013-14 crop year.
That was $4.981 million above the railway’s maximum revenue entitlement (MRE) of $667.1 million.
CN now has until mid-January to repay that amount, plus a five percent penalty, to the Western Grains Research Foundation, a farmer-directed organization that provides financial support for varietal development and crop research activities.
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Canadian Pacific Railway made $623.6 million in 2013-14.
That was about $1.65 million below its maximum revenue entitlement.
The MRE, more commonly known as the railway revenue cap, dictates how much money a railway can make hauling western grain.
The caps are calculated using a complex formula that considers tonnes of grain moved, the distance grain is hauled and the railways’ operating costs.
In today’s decision, the CTA reported that CN and CP together moved nearly 38.5 million tonnes of western grain, an increase of nearly 19 percent from the previous crop year.
The average length of haul in 2013-14 was 945 miles, up one mile from 2012-13.
