Saskatoon, Saskatchewan, Canada
December 30, 2008
The Western Grains
Research Foundation (WGRF) is set to receive approximately
$68 million from the two major Canadian rail companies. The
Canadian Transportation Agency announced today that both the
Canadian National Railway Company (CN) and the Canadian Pacific
Railway Company (CPR) have exceeded their revenue caps for crop
year 2007-2008 for the movement of Western grain.
CN's grain revenue of $409,267,319 was $25,961,880 above its
revenue cap of $383,305,439 while CPR's grain revenue of
$407,440,160 was $33,806,200 above its cap of $373,633,960. The
railways now have 30 days to pay WGRF the amounts which were
over their respective caps plus a fifteen-percent penalty of
$3,894,282 for CN and $5,070,930 for CPR. This is the largest
amount that any railway has exceeded its revenue cap. These
large overages reflect the actual costs incurred by CN and CPR
for the maintenance of grain hopper cars and reduces the
historical maintenance costs that were "embedded" in the revenue
caps.
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, amounts received by the
railways for grain movement in excess of the revenue cap are
paid into the WGRF Endowment Fund. The interest earned on the
Endowment Fund is used to support all types of crop research.
When the act was passed, the WGRF Endowment Fund was deemed by
the federal government to be a logical place for these producer
dollars. Administrative costs would be high to return the money
directly to producers and it would be difficult to do this
equitably. By funding a variety of research projects on all
types of crops, the money benefits all crop producers in the
Prairie region.
"We realize these are farmer dollars," notes Lanette Kuchenski,
WGRF executive director. "We're often asked why the excess
railway funds can't be returned to individual producers. WGRF is
not in a position to change legislation and I don't believe it
was ever envisioned when this legislation was passed that the
excess revenue cap dollars would ever be this high." This is by
far the largest payment ever received from the railways.
"Until all of the court proceedings are final, the WGRF will
hold the money in trust, in previous years, some of the funds
awarded to WGRF have had to be returned to the railways.
Once the amount to be retained by WGRF is clear, it will be
added to the WGRF Endowment Fund, and like all Endowment fund
dollars the principal will never be spent."
WGRF is also known for the check-off it collects through
Canadian Wheat Board final payments on
wheat and barley. These funds are used to support wheat and
barley breeding projects.
Producers representing a broad cross-section of farm
organizations serve on the 16-member board that guides WGRF.
More information on the organization and its research projects
is available at
www.westerngrains.com. |
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