Questions over the accuracy of figures provided by Canadian Pacific Railway led the Canadian Transportation Agency to disallow some expenses claimed by the railway in the calculation of its 2003-04 revenue cap.
The agency disallowed 49.1 percent of the charges put forward by the railway for pick-up and delivery costs associated with intermodal, or containerized, movement of grain during the last crop year.
Those trucking costs can be deducted from a railway’s grain revenue as part of the agency’s annual calculation of each railway’s revenue cap.
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The agency decided to allow the remaining 50.9 percent, based on its analysis of a sample of 12 grain movements, even though documents provided by the railway failed to back up its claims.
“Our auditors had difficulty with CPR substantiating the numbers,” said Jim Riegle, manager of the transport agency’s grain division.
“For two-thirds of the movement they had invoices, but the amounts did not match the claims made in their submissions.”
He declined to say how much money was involved, other than to say it was insignificant in comparison to the railway’s total grain hauling revenue of $309 million.
“It was just a small portion of one percent of the total revenue,” he said.
The agency’s decision to allow 50.9 percent of the pick-up and delivery charges was reached in a 2-1 decision by the three-member panel that considered the issue.
In a dissenting opinion, agency member Mary-Jane Bennett said she would have not allowed any of CPR’s claims. She said CPR was aware of the problem for some time but repeatedly refused to address concerns raised by the agency’s auditors, even refusing to meet to discuss the agency’s concerns.
“By its actions, CP has put the agency in the position of estimating charges due to time constraints, rather than following proper accounting procedures,” she wrote, adding that the small number of actual movements used to arrive at the 50.9 percent estimate was inadequate.
A CPR spokesperson declined to comment on the ruling and said Jan. 10 the railway was considering whether to appeal to Federal Court or the federal cabinet.
