The railroad has 30 days to make a payment to the Western Grains Research Foundation
Canadian Pacific Kansas City Railway Company (CPKC) exceeded its grain revenue entitlements for 2024-2025, the Canadian Transportation Agency (CTA) said on Dec. 19.
“After each crop year, we calculate the railways' MREs (maximum revenue entitlements) for that year. We always start with the same base – the estimate of the railway's revenue per tonne of grain that was calculated when the MRE began in the year 2000-2001,” a CTA guide says. “Then, to arrive at the MRE for the crop year, we make calculations that take into account changes since 2000-2001.”
For the 2024-2025 crop year, CPKC’s MRE was $1,064,278,437.
But its revenue was $1,066,938,687.
This means CPKC is $2,660,250 above its MRE.
For being above its MRE, CPKC must pay that amount, plus a 5 per cent penalty.
In total, the railway must pay $2,793,262 to the Western Grains Research Foundation (WGRF) and has 30 days from Dec. 19 to do so.
The WGRF receives the surplus payments because the law dictates that.
Under the Railway Company Pay Out of Excess Revenue for the Movement of Grain Regulations of the Canada Transportation Act, says the organization must receive the railway payments to fund research activities.
Canada introduced the MRE for western grain rail movement in August 2000 in part to ensure growers received fair compensation for the volume and distance of grain moved.