The Canadian Transportation Agency (CTA) has identified that Canadian National Railway Company (CN) and Canadian Pacific Kansas City Limited (CPKC) exceeded their Maximum Revenue Entitlements (MREs) for the movement of western grain in the 2022-2023 crop year. This overstep of their revenue boundaries mandates penalties under established regulations.

Annually, the CTA sets MREs for railway companies to ensure a fair and efficient grain transport system. This year, CN’s revenue exceeded its MRE by approximately $3.46 million, while CPKC went over by about $3.37 million. These overages require them to pay back the excess plus a 5% penalty.

The CTA’s decision followed an in-depth review of the rail companies’ operations, including the volume of grain transported and the average haulage distance. This year saw a significant increase in grain transportation, attributed to better crop yields following a previous year’s drought in Western Canada.

CN and CPKC are now obligated to pay the Western Grains Research Foundation, totalling $3,630,836 for CN and $3,537,877 for CPKC. This organization, funded by farmers, focuses on agricultural research that benefits the grain industry in Canada.

This outcome emphasizes the role of the CTA in overseeing and regulating Canada’s grain transportation sector. It highlights the importance of adherence to regulatory limits and the financial implications of exceeding them. This is a significant development for the agricultural community, impacting both transporters and producers in the grain industry.

Photo credit: Canadian National Railway Company