OTTAWA: The Canadian government said on Tuesday it planned to maintain a revenue cap on western grain that Canadian National Railway Co and Canadian Pacific Railway Ltd haul for export, a move farmers praised. The rail firms oppose the cap, formally known as the maximum revenue entitlement (MRE). It dates back to 2000 and aims to balance the market power of the rail industry with that of farmers and grain companies, which in many areas rely on one rail company. “We’re going to maintain the MRE … It’s a good thing,” Transport Minister Marc Garneau told a news conference.
Ottawa will tweak the system to give the railway companies more reasons to invest in rail cars to move grain, he said, an announcement that Canadian National welcomed. Reuters first reported on Monday that the cap would stay. Railways say it reduces their incentive to invest in grain hauling. Farmers say the cap controls costs when they deliver grain. Railways are critical to moving crops the vast distances from western grain elevators to ports in British Columbia and on the Great Lakes. The Western Canadian Wheat Growers said the measures outlined in the bill should boost competition and capacity. “We see all of this as positive and hope it ensures improved service of railways,” said Daryl Fransoo, the group’s director.
