Canadian Regulator Rules on Crop Year 2021–2022 Maximum Grain Revenue Entitlements
Written by William C. Vantuono, Editor-in-Chief
The Canadian Transportation Agency (CTA) on Dec. 23 ruled that revenues of both CN and Canadian Pacific (CP) were above their respective maximum grain revenue entitlements for crop year 2021–2022.
CN’s grain revenue of C$592,208,589 was C$3,068,088 above its entitlement of $589,140,501. CP’s grain revenue of C$515,508,638 was $2,363,775 above its entitlement of $513,144,863.
“CN and CP now have 30 days to pay the amount by which they exceeded their 2021–2022 revenue entitlements, in addition to a 5% penalty of C$153,404 for CN and C$118,189 for CP. 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.”
CTA noted that in the 2021-2022 crop year, CN and CP together moved 28,383,726 tons of Western grain. This represents a 46% decline in volumes as compared to the prior crop year, which saw a record 52.3 tons transported. “The notable drop in volume was due mainly to the drought conditions experienced in Western Canada during the 2021-2022 growing season,” the agency said.
The Canada Transportation Act requires the CTA to determine each railroad’s annual MRE (maximum revenue entitlement) and whether each entitlement has been exceeded. The revenue entitlement is described “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.”
See CTA guide on the Maximum Revenue Entitlement for further information. For more information on the CTA’s maximum revenue entitlement determinations since 2000–2001, see Statistics on the maximum revenue entitlement for western grain.
