Appeal Court Reduces CP Revenue Cap Penalty

The Federal Court of Appeal has reduced the penalty levied against Canadian Pacific Rail Company for exceeding its 2006-2007 revenue cap. 

The decision released this week means the Western Grains Research Foundation (WGRF) is required to repay $415,550 to Canadian Pacific Rail Company (CP), the WGRF says in a release. 

Under the Canadian Transport Agency’s original determination, CP exceeded its revenue cap by  $3,760,353 for the crop year 2006-2007 and paid the WGRF the amount of excess plus a five per cent penalty.

But the appeal court ruled the amounts collected by CP from the failure of shippers to meet the 24-hour unloading condition under its Multi-Car Block (MCB) Incentive program are not to be included in CP’s revenue under the Revenue Cap Program for crop year 2006-2007 reducing the initial excess amount from $3,760,353 to $3,364,591.

Consequently, WGRF is required to return the amount of $415,550 to CP. This amount is broken down as $395,762 for the reduced revenue cap overage and $19,788 reimbursement from the five per cent penalty initially collected.

The news release on the ruling is available from the Canadian Transportation Agency website at www.cta-otc.gc.ca.

Under the Canada Transportation Act, when the railways exceed their grain revenue cap, the excess plus a five per cent penalty is paid to the Endowment Fund of the Western Grains Research Foundation. Since 1981, the Endowment Fund has provided over $19 million in funding for research projects across a number of different crop types. The amount available to invest depends on interest rates and has been between $400,000 and $700,000 annually.

The following four projects were funded this year through the Endowment Fund:

• Controlling the Cereal Leaf Beetle with Natural Enemies

• Enhancing Nitrogen Management through genetics in cereal-legume crop rotations

• FHB Resistant Oat for the FHB prone Eastern Prairie Region

• Meeting the challenges posed by virulent new forms of Wheat Diseases on the Prairies

Each of these projects are three years in duration. For more information on these projects or the over 200 projects that have been supported through WGRF’s Endowment Fund over the years please visit www.westerngrains.com.

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