(Reuters circulated the following on April 23, 2009.)
SASKATOON, Sask. — A Canadian appeals court ordered a grain research foundation on Thursday to repay more than C$400,000 ($328,000) to Canadian Pacific Railway (CP.TO), after it ruled the carrier exceeded its grain revenue cap by less than first calculated.
The Canadian Transportation Agency caps how much grain revenue the country’s two major rail carriers, Canadian Pacific and Canadian National Railway (CNR.TO), can earn and forces them to pay the excess to the Western Grains Research Foundation.
The agency had ruled that CP exceeded its roughly C$400 million cap for the 2006-07 crop year, but on Thursday the Federal Court of Appeal lowered the amount by which the company was over the cap.
The court ruled that C$395,762 collected by CP Rail from shippers who failed to meet an unloading condition does not count against the revenue cap. The foundation must repay that amount, plus a C$19,788 penalty CP had paid.
The foundation, which has C$17 million in its account to fund research projects, has been ordered to repay the railways several times in the past, said Executive Director Lanette Kuchenski.
The federal government implemented the grain revenue cap in the 1990s after it eliminated a subsidy for grain movement by rail called the Crow Rate.