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Farmers will be paying more to move their grain. The Canadian Transportation Agency has approved a 9.5 percent increase in the rail revenue cap as of August 1st.
APAS President Norm Hall is frustrated by the move and is hoping to arrange meetings with Minister Ritz and the federal transportation minister to discuss their concerns on behalf of farmers, “This 9.5 percent increase works out to $2.92 per ton for freight. Now if you take an average of 1 ton per acre for every acre you produce whether it's 2500 acres or 5000 acres or 10,000 acres you make that determination on your own farm. 1 ton per acre times $83.00 a ton”
Hall adds that it's a significant increase, “Only 1.6 percent of that is actual inflationary increase. All the rest is added expense CTA is allowing and one of the components of that extra expense is what the railroads are calling the cost of capital or the risk of owning railroad shares.”
Changes to the way railways calculate their pension and capital costs are leading to that increase to the rail revenue cap for grain handling.