The Western Grains Research Foundation is writing a cheque for $128,468.47 to Canadian National Railway.
The payment represents a portion of the $2.7 million paid by CN to the farmer-run WGRF as a penalty for exceeding the rail revenue cap in 2005-06, as determined by the Canadian Transportation Agency.
The railway appealed that decision in early 2007, saying the CTA overstated the amount by $522,383. After a review, the agency concluded CN was overcharged by $116,900.
The repayment includes that amount, plus a $5,845 reimbursement of a five percent penalty and $5,723.47 representing CN’s share of the interest earned on the disputed money.
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WGRF spokesperson Amanda Soulodre said the foundation is pleased the case has been settled and that it didn’t have to return the full amount.
“We are happy that a decision has been reached and that the balance of our funds can now be invested into research that benefits farmers across Western Canada,” she said.
A spokesperson for CN said the railway accepts the outcome of its appeal.
When informed by CN in early 2007 of the appeal, the WGRF deposited that amount into a trust account pending a resolution of the dispute, making repayment straightforward.
Soulodre said the foundation would like to see a change in the regulations to reduce the possibility of such situations arising again.
“First of all, we hope the railways don’t go over the cap, so that farmers aren’t overpaying to the rail companies,” she said.
If a railway does exceed the cap, she said, the WGRF would like new rules to reduce the uncertainty about the payments it receives.
That could include more clarity about what issues the railways can appeal, whether the appeals can be retroactive, whether the railways should be required to tell the WGRF the amount is under appeal and the method of repayment.
Soulodre said CTA has responded that as a matter of privacy, the railways are under no obligation to reveal the amount under appeal.
She added that lobbying for changes may be a greater workload than the three staff members of WGRF can undertake. Meanwhile, the foundation is facing a similar situation with Canadian Pacific Railway.
CP Rail is appealing the CTA ruling that the rail company exceeded the 2006-07 revenue cap by $3.76 million. With the five percent penalty, that works out to a payment to the foundation of $3.95 million.
That number was reduced to $3.1 million when the WGRF and CPR agreed to deduct $870,000, which is the amount the foundation had to repay CPR after the railway successfully appealed its 2005-06 revenue cap assessment of $1.5 million.
CPR sent the WGRF a cheque for $3.1 million, in late January but some of that may have to be returned pending the outcome of the appeal.
Money received from the railways goes into the WGRF’s endowment fund. That fund generates about $400,000 in interest annually, which is used to support research into such things as fingerprinting the DNA of spring and winter wheat, the genetics of early maturing spring wheat, wheat for the biofuel industry and early risk warning systems for insects.
