The Western Grains Research Foundation is now in possession of $68,733,292 paid by the two major Canadian rail companies. This includes nearly $60 million by which the railways exceeded their 2007-08 revenue caps for movement of Western grain, plus a penalty of 15 percent.
The money is being held in trust, pending results of an appeal by Canadian National Railway and Canadian Pacific Railway. A small amount of interest is being earned on the funds. In the past, WGRF has sometimes had to pay part of the interest earned on the principal back to a railway if the railway successfully appealed.
“It will likely be a few months before it is known if the courts will hear the appeal,” says Lanette Kuchenski, WGRF executive director. “If the appeal proceeds, the money could be tied up for a few years.”
According to the Canada Transportation Act, money received by the railways in excess of the grain revenue cap, plus a penalty, is paid to the WGRF. The WGRF places that money into its Endowment Fund. The interest earned is used to support all types of crop research.
News that the railways had exceeded their revenue cap by such a large amount has sparked a debate among farmers and farm groups as to the appropriate use of the money. While some groups say crop research is the best use, others say a formula should be found to pay the money back to farmers who have been overcharged for their grain movement.
The WGRF has been challenged to explain how it would use the interest generated from the funds to benefit producers.
“A detailed research funding plan is tough for us to provide,” says Kuchenski. “At this point, we don’t know the fate of the appeals so we can’t be sure how much money will actually be available or when that decision will be final. Probably the best guide to future performance is how Endowment Fund money has been invested in the past.”
Since 1981, the Endowment Fund has provided over $19 million in funding for over 200 projects across a number of different crop types. The amount available to invest depends on interest rates, but in recent times, it has been about $700,000 a year. Recent projects can be found at www.westerngrains.com. Numerous studies have found multiple dollars of benefit to producers from each dollar invested in crop research.
Letters of intent for crop research projects are accepted from January until April 1 each year. Producers representing a broad cross-section of farm organizations serve on the 16-member board that allocates WGRF funding.
