http://www.winnipegfreepress.com/subscriber/business/story/3828402p-4429237c.html
Both RRs exceeded their caps on how much money they can earn for hauling Prairie grain to export ports. What I want to know is why are there caps in the first place? Why aren’t they allowed to haul a 100 trillion gadzillion of grain if they can? Who put these caps on them? The fed? A grain board?
Fortunately, this is a Canadian issue. The Canadian Transportation Agency is the Canadian equivalent of the Surface Transportation Board (STB) here in the states.
As I understand it, the revenue cap is to prevent the western farmers from getting price gouged as they ship grain for export.
Hmmm…
I couldn’t help but notice (in my Internet browsings) that grain growers in British Columbia complain that the revenue cap keeps the rates low for grain being exported, but grain headed for domestic consumption does not have the same protections.
Give them an inch, and they’ll want a mile. [:D]
From CN’s website-
Canadian government legislation that establishes the maximum revenue CN can earn for the transportation of Canadian grain came into effect August 1, 2000. The legislation covers western Canadian grain carried for export through the ports of Vancouver, Prince Rupert and Thunder Bay. The revenue cap that replaced the former distance-based maximum rate scale allows rate flexibility to encourage efficient handling and loading at elevators. The maximum revenue CN can earn is indexed annually for railroad input price increases. A 3.5% increase for the 2001-2002 crop year came into effect August 1, 2001.
[%-)] Is this a cap on the $ they can earn off grain in a particular year, or the rate they can charge?
The revenue cap replaced a fixed rate which dated back to the late 1800s “Crow Rate”. At least that is my understanding, I could be mistaken. In the broad scheme of things, the revenue cap is an agriculture subsidy to prevent the railways from gouging farmers (not that a private company would ever do something like that). Why does it exist in the first place? Canada is a much more liberal (small “L”) and socialist country than our neighbour to the south. We also exercise the honour of adding extra vowels to words. Cheers from the Soviet Socialist Republic of Canuckistan , and a happy new year! I think that’s enough Canada jokes for one post eh?