Saskatoon, Saskatchewan, Canada
October 22, 2007
The Western Grains
Research Foundation (WGRF) is being asked to repay $870,783
to Canadian Pacific Railway (CPR).
Back in January, WGRF received official notification that CPR
was approximately $1.5 million over its grain freight rate cap
for the 2005-06 crop year. Under provisions of the Canadian
Transportation Act, this amount plus a penalty of 5 per cent (a
total of nearly $1.6 million) was paid to WGRF to conduct
research for the benefit of all grain producers in Western
Canada.
CPR disagreed with aspects of the calculations done by the
Canadian Transportation Agency and appealed the agency’s
decision. The new calculation means that WGRF has been overpaid
by nearly $871,000 and the money must be returned.
The money is part of WGRF’s Endowment Fund. The principal is
invested and the interest earned is used to fund research
projects.
“While this will have an impact on our future research plans, we
shouldn’t have to cut any project commitments that have been
made,” says Lanette Kuchenski, WGRF Executive Director. “And
we’re pleased that CPR is working with us on the repayment
timing so we can reduce any penalties from pulling the money out
of long term investments.”
WGRF also received more than $2.8 million from Canadian National
(CN) due to grain freight revenue exceeding the legislated cap.
CN is arguing that the Canadian Transportation Agency’s
calculations are $522,383 too high. A final decision on that
issue is expected sometime in the new calendar year.
Most of the money in the WGRF Endowment Fund is from a
discontinued federal farm program that was the forerunner of
crop insurance. Interest from the fund generates about $400,000
a year that is invested in crop research projects. Losing
$871,000 from the fund will mean the loss of about $47,000 in
interest per year.
WGRF is also known for the check-off it collects through
Canadian Wheat Board final payments on wheat and barley. The
wheat check-off is typically over $3 million per year and the
barley check-off generates over $600,000 per year. This money,
plus royalties from new crop varieties, is invested in wheat and
barley breeding programs across Western Canada.
Producers representing a broad cross-section of farm
organizations serve on the 18 member Board that guides WGRF.
More information is available at
www.westerngrains.com.
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