CN and CP under their Maximum Grain Revenue Entitlements for Crop Year 2018-2019

GATINEAU, QC, Dec. 30, 2019 /CNW/ - In aA determination issued today, the Canadian Transportation Agency (CTA) ruled that revenues of the Canadian National Railway Company (CN) and the Canadian Pacific Railway Company (CP) were below their maximum grain revenue entitlements for crop year 2018a??2019.

CN's grain revenue of $933,357,710 was $371,116 below its entitlement of $933,728,826.

CP's grain revenue of $862,734,965 was $764,101 below its entitlement of $863,499,066.

As both railway companies' revenues did not exceed their respective maximum revenue entitlements, no overage-related payouts or penalties were assessed for this crop year. A Determining the Maximum Revenue EntitlementThe Canada Transportation Act (Act) requires the CTA to determine each railway company's annual maximum revenue entitlementA and whether each entitlement has been exceeded. The maximum revenue entitlement 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 from their shipments of Western grainA remains below the ceiling set by the CTA. Entitlements are calculated using a formula containing numerous elements which are established by the Act. The Volumea??related Composite Price Index (VRCPI) isA one of these elements and is determined by the CTA for each of CN and CP, no later than April 30 every year. The VRCPIA is an inflation index which reflects forecasted price changes for railway labour, fuel, material and capital purchases by CN and CP. 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 respective annual entitlements.
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