Canadian National Railway is challenging the calculation of the 2007-08 revenue cap in Federal Court of Appeal.
The company has been granted leave to appeal the Dec. 30, 2008, revenue cap decision released by the Canadian Transportation Agency.
A CN spokesperson said no date has been set for the appeal to be heard, adding railway lawyers are preparing the appeal documents.
A CTA official said the agency would have no comment because the case is now before the courts.
The agency’s Dec. 30 decision is best known for its reduction of the 2007-08 revenue cap by $72.2 million to reflect the costs of hopper car maintenance.
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The two national railways were recently denied leave to appeal that part of the decision to the Supreme Court.
CN’s appeal to the Federal Court of Appeal raises four issues in the CTA’s calculation of the company’s grain-hauling revenue:
- Whether revenue from U.S. grain hauled through Canada to Canadian export terminals, without entering the Canadian grain market, should be included in the cap calculation.
- Whether the agency had the right to defer for a year a decision on whether to allow deductions claimed by the railway for expenditures under its industrial development fund, which assists shippers in building sidings and other rail-related infrastructure.
- Whether certain costs incurred by CN in handling and maintaining containers for inter-modal movement should be deducted from the revenue calculation.
- Whether a payment to CN by the Canadian Wheat Board should count as revenue.
The CTA concluded that CN’s revenue from hauling grain in 2007-08 was $409,267,319. Its revenue cap was $383,305,439, putting it $25,961,880 over the cap.
The railway was required by law to pay that amount, plus a 15 percent penalty, to the Western Grains Research Foundation.
No information is available on how much impact the four issues under appeal could have on the agency’s calculations. If the excess revenue is reduced as a result of the appeal, the WGRF will have to return that amount to CN.
