The Western Canadian Wheat Growers Association has written to the federal government asking that the excess rail freight charged in the 2007/08 crop year be returned to farmers.
“This is money that belongs to farmers who delivered grain in the 2007/08 crop year,” says Mike Bast, Chair of the Wheat Growers. “The amount, plus interest, should be refunded to farmers.”
In the 2007/08 crop year, the Canadian Transportation Agency determined that CN and CP overcharged grain shippers by $59.8 million due to the failure of the railways to properly adjust their freight rates to reflect the decreased car maintenance allowance embedded in the revenue cap calculation.
The Wheat Growers have asked the federal Ministers of Transport and Agriculture to ensure the $59.8 million plus interest is returned to farmers and to review options with farmers and shippers as to how this might best be achieved.
The Wheat Growers also ask that the 15 percent penalty amount of $9.0 million assessed against the railways be allocated to the Western Grains Research Foundation (WGRF) and added to its endowment fund. The Wheat Growers note that this amount is approximately twice the amount the WGRF receives in check-off payments in a typical year.
The Wheat Growers also ask the federal government to consider increasing the 15 percent penalty, given that the existing level does not appear to be a deterrent to excess freight charges. CP has exceeded its revenue cap in four of the past five years and CN has exceeded its cap in three of the past five years.
The Wheat Growers also support a railway costing review, so that the revenue cap is set in such a manner that the railways are appropriately compensated for the service they provide and have sufficient incentive to invest in the rail system to meet future needs.
