Railways Exceed Western Grain Revenue Caps for Crop Year 2011-2012

Railways Exceed Western Grain Revenue Caps for Crop Year 2011-2012 
OTTAWA, Dec. 19, 2012 /CNW/ - The Canadian Transportation Agency today issued 
its Decision No. 477-R-2012, ruling that the revenues of the Canadian National 
Railway Company (CN) and the Canadian Pacific Railway Company (CP) for the 
movement of western grain have exceeded their revenue caps for crop year 
2011-2012 by less than 0.1 percent. 
CN's grain revenue of $542,756,316 was $240,185 above its cap of $542,516,131. 
CP's grain revenue of $494,436,705 was $400,132 above its revenue cap of 
In the 2011-2012 crop year, 33.1 million tonnes of western grain were moved, 
which is 6.2 percent higher than the volume moved during the previous crop 
year. As well, the average length of haul of 952 miles was 13miles, or 1.3 
percent lower than the previous crop year. 
CN and CP now have 30 days to pay the amount by which they exceeded their 
2011-2012 revenue cap, in addition to a five percent penalty of $12,009 and 
$20,006, respectively. Government regulations stipulate that such payments 
must be made to the Western Grains Research Foundation, a farmer-financed and 
directed organization set up to fund research that benefits Prairie farmers. 
Determining the Revenue Cap 
The Canada Transportation Act requires the Agency to determine each railway 
company's revenue cap annually and whether each cap has been exceeded. The 
revenue cap is a form of economic regulation that enables CN and CP to set 
their own rates for services, provided the total amount of revenue collected 
remains below the ceiling set by the Agency. 
Revenue caps 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 revenue caps. 
The Canadian Transportation Agency is an independent administrative body of 
the Government of Canada. It performs two key functions within the federal 
transportation system: 

    --  As a quasi-judicial tribunal, the Agency, informally and
        through formal adjudication, resolves a range of commercial and
        consumer transportation-related disputes, including
        accessibility issues for persons with disabilities. It operates
        like a court when adjudicating disputes.
    --  As an economic regulator, the Agency makes determinations and
        issues authorities, licences and permits to transportation
        carriers under federal jurisdiction.

For more information on the Agency's revenue cap determinations since  
2000-2001, please see theWestern Grain Revenue Cap Statistics Backgrounder.

Media Enquiries:media@otc-cta.gc.ca or 819-934-3448

Public Enquiries:info@otc-cta.gc.ca or 1-888-222-2592

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SOURCE: Canadian Transportation Agency

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CO: Government of Canada
ST: Quebec

-0- Dec/19/2012 15:05 GMT

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