The Western Grains Research Foundation (WGRF) will once again see a substantial cash injection from the railways as part of their maximum grain revenue entitlements overage.
The Canada Transportation Agency has determined that grain-related revenue for both CN Rail and CPKC exceeded their allowable entitlements.
CN’s grain revenue of $1,079,522,039 was $3,457,939 above its entitlement of $1,076,064,100.
CPKC’s grain revenue of $943,886,400 was $3,369,407 above its entitlement of $940,516,993.
Under the Canada Transportation Act, CN and CPKC now have 30 days to pay the WGRF the overage ( $7.1 million ) plus a five percent penalty.
Stats show that for the 2022-23 crop year the railways saw a 60 per cent increase in the volume of grain moved for a total of 45 million metric tonnes, that's mainly due to improved growing conditions as compared to the 28.4 million moved in 2021-22 when the Western Canadian grain crop was impacted by the drought.
The Canada Transportation Act requires the CTA to determine each railways annual MRE (maximum revenue entitlement) and whether each entitlement has been exceeded.
The revenue entitlement is described as 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.
The CTA’s guide on the Maximum Revenue Entitlement.