* Ottawa caps railways' grain revenue
* Railways exceed mandated caps by less than 0.1 pct
* More grain moved by rail in 2011/12
By Rod Nickel
WINNIPEG, Manitoba, Dec 19 Canada ruled on
Wednesday the country's two big railways, Canadian National
Railway Co and Canadian Pacific Railway Ltd,
earned too much money from hauling grain in the 2011/12 crop
year, and ordered them to pay close to C$700,000 ($707,000).
The railways exceeded their government-mandated caps on
revenue from moving western grain by less than 0.1 percent, the
Canadian Transportation Agency said.
The Canadian government implemented the grain revenue cap in
2000 after it eliminated a subsidy for grain movement by rail
called the Crow Rate. The cap applies to revenue the railways
earn by moving grain from the Western Canadian crop belt to
CN's grain revenue was C$240,185 higher than its cap of
nearly C$543 million, while CP's revenue came in $400,132 above
its cap of about C$494 million.
The companies have 30 days to repay the excess, plus five
percent penalties. The money goes to the Western Grains Research
Both railways said they are reviewing the agency's decision.
"It should be noted that CN met its grain customers'
expectations during the crop year (and) moved more grain last
year than in any other year since the inception of the revenue
cap," said CN spokeswoman Emily Hamer.
Structuring rates for moving western grain is complex, given
unpredictable factors like weather and market conditions, said
CP spokesman Ed Greenberg.
The railways moved 33.1 million tonnes of grain from Western
Canada in 2011/12, which was 6.2 percent higher than the
previous year's volume.
Canada introduced legislation last week to impose penalties
on the railways if they fail to meet their obligations to