The Canadian Transportation Agency (CTA) on Dec. 24 ruled that Canadian Pacific Kansas City (CPKC) was above and CN was below their respective maximum grain revenue entitlements for the crop year 2023–24.
For CPKC, its volume comes at a price, as grain is a regulated commodity in Canada, with revenue caps or “entitlements” set by the CTA, Canada’s equivalent of the U.S. Surface Transportation Board.
The CTA ruled in Determination No. R-2024-190 that CPKC’s grain revenue of C$871,716,922 was C$1,824,083 above its entitlement of C$869,892,839. The railroad, it said, now has 30 days to pay the amount by which it exceeded its 2023–24 revenue entitlement, in addition to a 5% penalty of C$91,204. CTA regulations require that these payments to go to the Western Grains Research Foundation, described as “a farmer-financed and farmer-directed nonprofit organization investing in agricultural research that benefits western Canadian producers.”
CN’s grain revenue of C$1,213,732,435 was C$34,329,653 below its entitlement of C$1,248,062,088, meaning it earned less revenue than the amount to which it was entitled. No penalty is owed.
The CTA noted that in the 2023-24 crop year, CN and CPKC collectively moved 43,700,661 tons of Western grain, a 3.5% decrease compared with the last crop year, which saw 45.3 million tons transported. “The decrease in the volume of grain was due mainly to relatively lower crop exports for the year,” according to the agency.
The Canada Transportation Act requires the CTA to determine each railroad’s annual 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.”
For more details, see CTA’s Maximum Revenue Entitlement guide and Maximum revenue entitlement determinations since 2000–01.
