OTTAWA, Dec. 31 /CNW Telbec/ - The Canadian Transportation Agency today announced that the revenues of the Canadian National Railway Company (CN) for the movement of Western grain had exceeded its revenue cap for crop year 2008-2009. The Agency has also ruled that the Canadian Pacific Railway Company (CPR)'s revenues from grain transportation for the same period were below its cap.
CN's grain revenue of $479,788,412 was $683,269 above its revenue cap of $479,105,143. CPR's grain revenue of $484,806,288 was $1,149,665 below its cap of $485,955,953.
For 2008-2009, the total combined revenue cap entitlement for CN and CPR rose by $208 million over the previous crop year, of which over two-thirds was attributable to significant increases in the amount of grain moved by the railways.
The remainder of the increase stemmed from an 8% rise in the volume-related composite price index (VRCPI), an inflation factor that the Agency must determine for each crop year. The 2008-2009 VRCPI increase, announced in April 2008, was largely due to higher fuel prices and rising labour costs.
CN now has 30 days to pay the amount by which it exceeded its 2008-2009 revenue cap, in addition to a five-percent penalty of $34,163. Government regulations stipulate that such payments must be made to the Western Grains Research Foundation, a farmer-funded and directed organization set up to fund research that benefits Prairie farmers.
The Canada Transportation Act requires the Agency to determine each railway company's revenue cap annually and whether each cap has been exceeded by the railway companies. The caps apply to revenue the railways derive from the movement of grain from Prairie origins to terminals at Vancouver, Prince Rupert, Thunder Bay and Churchill. In the course of its determinations for 2008-2009, the Agency examined and verified detailed railway company submissions of grain traffic and revenue information.
The Canadian Transportation Agency is an independent quasi-judicial tribunal which operates like a court. It regulates various modes of transportation under Government of Canada jurisdiction, including air, marine and rail. The Agency deals with, among other things, rate and service complaints arising in the rail industry; disputes between railway companies and other parties; applications for certificates of fitness for the proposed construction and operation of railways; approvals for railway line construction; regulated railway interswitching rates; and revenue caps for the movement of Western grain by rail.
For more information on the revenue caps, please visit the Agency's Web site at www.cta.gc.ca.
SOURCE Canadian Transportation Agency
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