Canadian Pacific Railway has successfully appealed a $50,000 penalty for failing to meet a government-imposed grain shipping target in 2014.
The fine was levied after a Transport Canada investigation determined that CP failed to meet a government imposed mandate requiring the railway to move at least 536,000 tonnes of western Canadian grain per week.
CP appealed the fine early last year, and the Transportation Appeal Tribunal upheld the appeal in a decision handed down earlier this month.
“The (transport) minister has not proven, on the balance of probabilities, that the applicant, Canadian Pacific Railway, contravened … the Canada Transportation Act,” said a March 9 ruling written by appeal tribunal member Gary Drouin.
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“Consequently, the monetary penalty of $50,000 imposed by the minister … is hereby dismissed.”
CP’s alleged infraction occurred in September 2014, during Week 6 of the 2014-15 shipping season.
At the time, CP and Canadian National Railway were required to move minimum weekly amounts of western Canadian grain or face monetary penalties.
The fine against CP was one of three that Transport Canada levied in 2014.
CN was also fined $100,000 for two similar infractions.
CP announced its intention to appeal its fine in early 2015, suggesting that conditions outside the company’s control impeded its ability to meet Ottawa’s targets.
The company said broader supply chain issues limited its ability to move grain, including a Labour Day shutdown that limited rail car unloads at the Port of Vancouver in September.
“These events outside of CP’s control in the supply chain contributed to delays in the movement, loading and shipping of rail cars,” CP spokesperson Jeremy Berry wrote in a January 2015 email.
“CP has stressed and will continue to stress that the Canadian supply chain must operate on a 24/7 basis to support balanced pipelines, reduce congestion and drive velocity.”
The appeal tribunal supported those arguments and suggested that Transport Canada failed to provide adequate proof that CP willfully failed to miss the government imposed targets.
It said the CP made reasonable efforts to mitigate the impact of the Port of Vancouver’s Labour Day shutdown.
Transport Canada’s method of calculating carloads also failed to account for the port’s reduced capacity during weekends and holiday closures.
“The minister did not take into account factors that were out of CP’s control that prevented the railway from moving grain at the Port of Vancouver,” the tribunal decision stated.
“CP did not reach their targets on Week 6 (of the 2014-15 crop year) for other reasons or situations beyond their control, such as port closure.”
Ottawa imposed the minimum grain hauling targets in early 2014 in response to delayed grain shipments that caused a massive backlog of prairie grain.
Among other things, unusually harsh winter conditions hampered train movements during late 2013 and early 2014, resulting in delayed grain sales, slow exports and restricted cash flows on many western Canadian farms.
Contact brian.cross@producer.com
