WGRF Repays Some of CP Penalty

OTTAWA - Apr 23/09 - SNS -- The Western Grains Research Foundation (WGRF) must repay $415,550 to Canadian Pacific Rail Company (CP).

Under the Canadian Transport Agency's original determination, CP exceeded its revenue cap by $3,760,353 for the crop year 2006-2007 and paid the Western Grains Research Foundation the amount of excess plus a 5% penalty. Consequently, WGRF is required to return the amount of $415,550 to CP. This amount is broken down as $395,762 for the reduced revenue cap overage and $19,788 reimbursement from the 5% penalty initially collected.

The Federal Court of Appeal ruled the amounts collected by CP from the failure of shippers to meet the 24-hour unloading condition under its MCB Incentive program are not to be included in CP's revenue under the Revenue Cap Program for crop year 2006-2007 reducing the initial excess amount from $3,760,353 to $3,364,591.

Under the Canada Transportation Act, when the railways exceed their grain revenue cap, the excess plus a 5% penalty is paid to the Endowment Fund of the Western Grains Research Foundation. Since 1981, the Endowment Fund has provided over $19 million in funding for research projects across a number of different crop types. The amount available to invest depends on interest rates and has been between $400,000 and $700,000 annually.