CN Exceeds Grain Revenue Entitlement; CP Below

Dec 27, 2021

In a year when both national railways moved record amounts of grain, CN Rail exceeded its revenue entitlement while CP fell below it.

In a determination issued Wednesday, the Canadian Transportation Agency (CTA) ruled CN’s 2021-22 grain revenue of $1.04 billion was $2.39 million above its entitlement, while CP’s revenue of $1.01 billion was $20.2 million below.

CN now has 30 days to pay the amount by which it exceeded its 2020–2021 revenue entitlement and a 5% penalty of $119,984. Regulations require these payments to go to the Western Grains Research Foundation, a farmer-financed and directed organization to fund research that benefits Prairie farmers.

In total, 52.33 million tonnes of Western grain were moved by the railways in 2020-21, 9% more than the volume moved during the previous crop year and the highest on the record.

The revenue entitlement is a form of economic regulation that enables CN and CP 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. Entitlements are calculated using a formula that reflects such things as forecasted price changes for railway labour, fuel, material and capital purchases.

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