OTTAWA: The Canadian Transportation Agency ruled that revenues of the Canadian National Railway Company (CN) and the Canadian Pacific Railway Company (CP) have exceeded their Western grain revenue entitlements for crop year 2014-2015.
CN and CP now have 30 days to pay the amount by which they exceeded their 2014-2015 revenue entitlements, in addition to a five percent penalty of $343,330 for CN and $106,858 for CP. Regulations stipulate that such payments must be made to the Western Grains Research Foundation.
In the 2014-2015 crop year, 41,306,191 tonnes of Western grain were moved—7.4 percent more than the volume moved during the previous crop year. The average length of haul of 947 miles was two miles, or 0.2 percent higher, than the previous crop year, the release said.
In submissions made this fall, CN asked the Agency to accept a total of six adjustments that it applied to the preliminary Grain Traffic Database (GTDB) CN had originally filed in June 2015. After examining the details of CN’s request, CN was informed that four of the six proposed adjustments were routine and would be accepted.
Two of the requested adjustments were more complex and constitute material changes that require more detailed examination. They are therefore not considered in this year’s determination.
Given the potential significance of the changes requested, the Agency intends to first consult with industry stakeholders, including railway companies, grain shippers, producer groups and associations, provincial governments, and municipal associations.
Entitlements are calculated using a formula containing numerous elements which are established by the Act. The Volume‑related Composite Price Index (VRCPI) is one of these elements and is determined by the Agency, no later than April 30 every year. The VRCPI is an inflation index which reflects forecasted price changes for railway labour, fuel, material and capital purchases by CN and CP, the two federally-regulated railways. The index, along with the actual tonnage of grain that was hauled and the average length of haul during the crop year for each railway, is used to determine the annual entitlements.
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