Amid increased shipping volumes, Canada’s two national railways each exceeded their grain revenue caps by more than $3 million in the 2022-23 marketing year.
CN’s grain revenue of $1.07 billion topped its entitlement by $3.45 million, while CPKC’s revenue of $943.8 million exceeded its entitlement by $3.36 million, the Canadian Transportation Agency (CTA) said in a December ruling. Each railway will now have 30 days to pay the amount they exceeded their revenue cap, in addition to a 5% penalty on the overage, to the Western Grains Research Foundation.
The Canada Transportation Act requires the CTA to determine each railway company's annual maximum revenue entitlement and whether each entitlement has been exceeded. The revenue entitlement is a form of economic regulation that enables CN and CPKC to set their rates for services, provided the total amount of revenue collected from their shipments of Western grain remains below the ceiling set by the CTA.
According to the CTA, the two railways moved a combined 45.3 million tonnes of western Canadian grains in 2022-23, a 60% increase from the previous year which saw only 28.4 million tonnes moved. The increase in the volume of grain was due mainly to improved growing conditions following the drought experienced in Western Canada during the 2021–22 growing season.