Canadian Regulator Rules on Crop Year 2022-2023 Maximum Grain Revenue Entitlements
Written by Carolina Worrell, Senior Editor
CN unit grain train.
The Canadian Transportation Agency (CTA) on Dec. 21 ruled that revenues of both CN and Canadian Pacific Kansas City (CPKC) were above their respective maximum grain revenue entitlements for crop year 2022–2023.
CN’s grain revenue of C$1,079,522,039 was C$3,457,939 above its entitlement of $1,076,064,100. CPKC’s grain revenue of C$943,886,400 was $3,369,407 above its entitlement of $940,516,993.
“CN and CPKC now have 30 days to pay the amount by which they exceeded their 2022–2023 revenue entitlements, in addition to a 5% penalty of C$3,630,836 for CN and C$3,537,877 for CPKC. 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.”
According to CTA, in the 2022–2023 crop year, 45,303,841 metric tons of Western grain were moved. This represents a 60% increase in volumes compared to the last crop year, which saw 28.4 million metric tons transported. The increase in the volume of grain, CTA says, was due mainly to improved growing conditions following the drought experienced in Western Canada during the 2021–2022 growing season.
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 as “a form of economic regulation that enables CN and CPKC 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’s guide on the Maximum Revenue Entitlement for further information. For more information on CTA’s MRE determinations since 2000–2001, see Statistics on the maximum revenue entitlement for western grain.
