Canada’s two national railways will have higher grain revenue caps in the upcoming 2025-26 marketing year.
In a release Wednesday, the Canadian Transportation Agency (CTA) said the Volume-Related Composite Price Index (VRCPI) for Canadian National and Canadian Pacific Kansas City would rise 1.72% and 3.11%, respectively, compared to the previous year.
An inflation factor, the VRCPI is set by the CTA and reflects a composite of the forecasted prices for railway labour, fuel, material and capital purchases for the year. The VRCPI is then used to establish each of the railways’ maximum revenue entitlements for movement of Western Canadian grain each year.
The revenue entitlement is a form of economic regulation that enables CN and CPKC to set their rates for services, provided the total amount of revenue collected from their shipments of Western grain remains below the ceiling set by the CTA. In 2024, CN’s grain revenue cap stood at $1.24 billion, with the CPKC cap at $871.7 million.
The Canada Transportation Act requires the CTA to determine each railway company’s annual maximum revenue entitlement and whether each entitlement has been exceeded. If the maximum entitlement has been exceeded, the railway must pay the overage plus a 5% penalty to the Western Grains Research Foundation.
