The Western Grains Research Foundation is being asked to hand over $870,783 in funding it collected from Canadian Pacific Railway (CPR) for the 2005-06 crop year.
The foundation said in a release Monday that CPR has successfully appealed the Canadian Transportation Agency’s decision on how much the railway owed to the foundation in excess grain freight revenue.
The CTA had, in January, informed the foundation it would get almost $1.6 million in payments and penalties from CPR, for the railway exceeding its 2005-06 freight rate cap on grain revenue. Canadian National, which falls under the same agreement with the CTA and the foundation, had been ordered to forfeit over $2.8 million to the WGRF.
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That was the first time both railways had exceeded their rate cap in the same year, the WGRF noted in January.
The WGRF also raises revenue through a checkoff collected on final payments on Canadian Wheat Board barley and wheat (over $3.6 million per year), as well as from royalties from new crop varieties and from interest earned on the WGRF Endowment Fund.
Both CN and CPR said they would appeal the size of the forfeits for 2005-06, and CPR won its appeal.
If successful, CN’s appeal, on which a final decision is expected in the new year, would cost the endowment fund another $522,383.
Interest earned by the endowment fund generally amounts to around $400,000 per year for crop research, but having to repay CPR $871,000 would spell the loss of about $47,000 in annual interest, the foundation said in a release.
WGRF executive director Lanette Kuchenski said in a release that the foundation shouldn’t have to cut any project commitments that have already been made.
CPR is working with the foundation on the timing of the repayment, “so we can reduce any penalties from pulling the money out of long-term investments,” Kuchenski said.
