CN Rail and CP Rail exceed grain revenue max despite drop in grain shipping

CN Rail and CP Rail exceed grain revenue max despite drop in grain shipping

The country’s two major railways exceeded their grain cap in 2017-18, despite shipping less of the stuff than last year, according to the Canadian Transportation Agency.

Canadian National Railway Co. reaped $1.05 million more than its maximum revenue entitlement of $787.01 million for the crop year, which ended July 31, the CTA said. Canadian Pacific Railway Ltd. took in $1.5 million beyond its entitlement of $707.99 million.

CN and CP have 30 days to pay back the excess revenue, on top of a five per cent penalty of $52,000 for CN and $75,000 for CP, the regulator said. The payments — a drop in the bucket for companies with net earnings last year of $5.48 billion and $2.41 billion, respectively — will go to the Western Grains Research Foundation, which funds research for Prairie farmers.

Federal legislation that came into effect last May adjusted the maximum revenue entitlement system, which places a ceiling on total revenue to be earned from moving grain by rail in any crop year to protect farmers from gouging. CN has said that prior to the revised legislation the system was a disincentive to invest in grain cars.

CN and CP carried six per cent less grain over the past crop year than in 2016-17, moving 40,618,285 tonnes, according to the CTA.

The railways have both said they believe beefed-up inventories of locomotives, hopper cars and extra staff will help to prevent a repeat of last winter’s grain-shipping backlog, set in motion by frigid conditions that inhibited the hauling of crops to market.

Despite the lacklustre grain results earlier in the calendar year, both railways have roared back with record numbers.

Montreal-based CN reported the highest quarterly revenues in its 99-year history in October, spurred on by revenue growth of between 15 per cent and 25 per cent for grain and fertilizers as well as petroleum and chemicals, metals and minerals, forest products and coal.

Calgary-based CP moved 2.64 million tonnes of Canadian grain and grain products in October, a company record for monthly shipments that it nearly matched in November. It plans to have 1,000 new hopper cars in service by this spring.

CN ordered 1,000 new grain cars within 24 hours of the Transportation Modernization Act coming into force in May. The wide-ranging Bill C-49 allows railways to deduct the full cost of grain car purchases from their grain cap, encouraging investment in more hoppers, CN chief executive Jean-Jacques Ruest said at the time.

The legislation also includes financial penalties for railways that fail to deliver promised rail cars for grain shipments on time. It requires railways to publicly report each summer on their abilities to move that year’s grain crop, and to publish by Oct. 1 each year a winter contingency plan for keeping shipments moving regardless of bad weather.

The bill’s passage came after CN and CP blamed severe winter weather and a larger-than-expected grain crop for a backlog in grain shipments that hit their profits and left grain farmers complaining about their service.

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

.
Alberta confirmed more than 1,500 COVID-19 cases Sunday

Alberta confirmed 1,584 COVID-19 cases Sunday afternoon. The total active cases went… Continue reading

Hockey Canada logo at an event in Toronto on November 1, 2017. A “non-core member” of Hockey Canada’s National Junior Team staff has tested positive for COVID-19. THE CANADIAN PRESS/Frank Gunn
Hockey Canada staff member tests positive for COVID-19 in Red Deer

A “non-core member” of Hockey Canada’s National Junior Team staff has tested… Continue reading

A man makes his way across an office tower bridge during the COVID-19 pandemic in Toronto, Thursday, Oct. 22, 2020. At least two provinces are reporting new highs for daily COVID-19 infections on Saturday, after the federal government’s latest modelling data showed Canada could see 20,000 cases each day if people keep up their current number of contacts and interactions. THE CANADIAN PRESS/Nathan Denette
COVID-19 cases keep surging in Canada as four provinces report new one-day highs

OTTAWA — Four provinces reported new highs for daily COVID-19 infections on… Continue reading

Minister of International Trade Mary Ng watches pre-recorded footage from an earlier videoconference that she participated in with Canadian Prime Minister Justin Trudeau, UK Prime Minister Boris Johnson and International Trade Secretary Liz Truss, during a news conference on the Canada-United Kingdom Trade Continuity Agreement in Ottawa, on Saturday, Nov. 21, 2020. THE CANADIAN PRESS/Justin Tang
Canada, Britain ink new trade deal, beating Brexit, incorporating expiring EU pact

OTTAWA — Canada and Britain struck a new trade deal on Saturday,… Continue reading

Lynn Van Laar, Christmas Wish Breakfast organizing committee chair, said this year’s event was planned outdoors to minimize the risk of COVID. Photo by Mamta Lulla/Advocate staff
Outdoor Christmas Wish Breakfast helps central Alberta families this holiday season

The coronavirus pandemic isn’t going to stop children from having a merry… Continue reading

Prime Minister Justin Trudeau pauses after responding to a question about the holidays during a news conference outside Rideau Cottage in Ottawa, Friday, Nov. 20, 2020. THE CANADIAN PRESS/Adrian Wyld
Trudeau joins G20 in promising COVID-19 aid to poor nations, rejecting protectionism

OTTAWA — Prime Minister Justin Trudeau joined leaders from the world’s 20… Continue reading

Justice Minister David Lametti responds to a question during Question Period in the House of Commons, in Ottawa, Thursday, Nov. 19, 2020. The federal bill revising the rules on medically assisted death in Canada has raised the ire of the Canadian Psychiatric Association over the proposed law’s explicit rejection of mental illness as grounds for ending a patient’s life. THE CANADIAN PRESS/Adrian Wyld
Exclusion of mental illness in assisted dying-bill slammed by psychiatrists

OTTAWA — The federal bill revising the rules on medically assisted death… Continue reading

The Quebec flag is seen on the podium as Bloc leader Yves-François Blanchet responds to a question during a news conference Wednesday June 3, 2020 in Ottawa. Perennial anxieties around the state of the French language in Quebec have boiled over in the past week, with politicians seizing on a Liberal MP’s initial brush-off of the issue as evidence of indifference to a crisis. THE CANADIAN PRESS/Adrian Wyld
Angst around French language boils over in Quebec, as politicians warn of ‘decline’

MONTREAL — Perennial anxieties around the state of the French language in… Continue reading

Numuch Keitlah, left, and Jake Thomas, centre, participate in a Coastal Nations search and rescue exercise off the coast of Vancouver Island in this undated handout photo. The recently operational Coastal Nations Coast Guard Auxiliary has more than 50 members from five Indigenous territories who are trained in marine search and rescue. They are on call day and night to respond to emergencies along some of B.C.’s most rugged and remote coastal areas. THE CANADIAN PRESS/HO, Jordan Wilson *MANDATORY CREDIT*
Canada’s first Indigenous-led coast guard auxiliary patrols B.C.’s rugged coast

VICTORIA — The winds were gusting at 110 kilometres per hour and… Continue reading

Toronto Raptors guard Fred VanVleet has sponsored the VanVleet Court at the BMO Harris Bank Center in Rockford, Ill. (Photo by THE CANADIAN PRESS)
Fred VanVleet signs four-year, US$85-million deal with Toronto Raptors

TORONTO — Fred VanVleet, one of the most coveted players in free… Continue reading

This undated electron microscope image made available by the U.S. National Institutes of Health in February 2020 shows the Novel Coronavirus SARS-CoV-2, yellow, emerging from the surface of cells, blue/pink, cultured in the lab. Also known as 2019-nCoV, the virus causes COVID-19. THE CANADIAN PRESS/AP, NIAID-RML
‘Hardship is not a new thing:’ Nunavut fights COVID-19 as cases continue to rise

IQALUIT — It has been just over two weeks since Nunavut declared… Continue reading

Pedestrians walk past Pfizer world headquarters in New York on Monday Nov. 9, 2020. Despite recent optimism over reported results from COVID-19 vaccine trials,<br>Two companies, Pfizer and Moderna, have recently announced they're developed COVID-19 vaccines that are 95 per cent effective. THE CANADIAN PRESS/AP, Bebeto Matthews
A long way from lab bench to bedside: Virus experts urge COVID-19 vaccine caution

Despite recent optimism over reported results from COVID-19 vaccine trials, virologists say… Continue reading

Alberta has 1,910 active cases of COVID-19 as of Wednesday. Red Deer is reporting five active cases, with 108 recovered. (File photo)
After COVID-related transplant delays, 16-year-old N.S. girl gets lung transplant

‘This is the difficult time now of seeing Tahlia in ICU hooked up to 15 IVs and sedated’

Most Read