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
-- 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.
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SOURCE: Canadian Transportation Agency
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CO: Government of Canada
NI: TRN FIN
-0- Dec/19/2012 15:05 GMT
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