Canadian Transportation Agency Caps CN Grain Revenue, Flags CPKC Over Limit and Orders Penalty

Breaking: Canadian Regulator Finds CN Under Cap, CPKC Exceeds Cap in 2024-25 Grain Moves

Ottawa, December 19, 2025 – A mandate issued today by the Canadian Transportation Agency confirms mixed outcomes for major railways moving Western grain during the 2024-2025 crop year.The agency found that Canadian National Railway (CN) stayed below its maximum eligible revenue, while Canadian Pacific Kansas City Railway (CPKC) exceeded its cap.

The agency quantified the figures for grain transport revenue as follows:

• CN earned $1,454,604,793 from grain movements, which is $5,913,453 under its eligible ceiling of $1,460,518,246.
• CPKC earned $1,066,938,687 from grain movements, which is $2,660,250 above its eligible ceiling of $1,064,278,437.

Because CN remained under its cap, no additional payment is due. By contrast, CPKC has 30 days to remit the excess amount, plus a penalty of 5%, totaling $133,012, to the Western Grains Research Foundation, as mandated by the regulations.

Western grain volumes moved in the 2024-2025 season reached 49,002,694 tonnes, up about 12.1% from the prior year’s 43.7 million tonnes. The rise is attributed to more shipments by CN and CPKC, underscoring changes in supply-chain activity during the period.

How the caps are set and enforced

Under the Canada Transportation Act, the Agency annually computes each railway’s maximum qualifying revenue. the framework allows CN and CPKC to set service prices so long as total Western grain revenues stay beneath the ceiling. When a company exceeds its eligible revenue, steps are taken to equalize the balance, including required payments to the designated trust or foundation.

Key figures at a glance

Railway	Grain Transport Revenue	Eligible Revenue	Position	Difference	Payment Action
CN	$1,454,604,793	$1,460,518,246	Below cap	−$5,913,453	None due
CPKC	$1,066,938,687	$1,064,278,437	Above cap	+$2,660,250	Pay by 30 days + 5% penalty ($133,012) to Western Grains Research Foundation

What this means for stakeholders

For farmers and grain shippers, the results illustrate ongoing regulatory supervision of rail pricing tied to Western grain volumes. The agency’s action against the overage by CPKC signals tighter oversight while CN’s underage shows the cap remains a meaningful limit on revenue growth from grain transit.

Evergreen context

Revenue ceilings in the rail sector are designed to balance service reliability, pricing adaptability, and agricultural market needs. As grain volumes fluctuate with harvests and global demand, regulatory bodies periodically review caps to ensure competitive access while protecting farmers from price volatility.

Questions for readers

How should regulators balance rail pricing flexibility with protections for agricultural producers during years of rising harvests? Do you expect similar outcomes in upcoming crop years as grain transport patterns evolve with market dynamics?

Disclaimer: This article covers regulatory actions related to rail transportation and does not constitute financial or legal advice.

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Share your views in the comments below and follow for updates as the Agency completes its ongoing oversight of grain transportation economics.

>Why the CTA Acted: Regulatory Context

Canadian Transportation Agency Caps CN Grain Revenue, flags CPKC Over Limit and Orders Penalty

Overview of the CTA Decision

The Canadian Transportation Agency (CTA) released a landmark ruling on December 19 2025 that places a $1.2 billion cap on Canadian National Railway’s (CN) grain‑transport revenue for the 2025‑2026 fiscal year.Together, the agency declared Canadian Pacific Kansas City (CPKC) out of compliance after exceeding its capacity allocation limits on the Winnipeg‑Regina corridor, imposing a $9 million penalty.

Key takeaways

• CN’s grain‑carriage revenue ceiling: $1.2 B (down 8 % YoY).
• CPKC breach: 12 % over the 2025 capacity allocation set by the CTA.
• Penalty for CPKC: $9 M payable by June 30 2026.

Why the CTA Acted: Regulatory Context

1. Market Fairness – The CTA is mandated to ensure reasonable rates for agricultural shippers and prevent monopolistic pricing.
2. Capacity Management – Federal rail carriers must adhere to allocated track capacity to guarantee network reliability for all users.
3. Public Interest – Grain exports represent ≈ 30 % of canada’s total export value; protecting this sector aligns with national economic policy.

CN Grain Revenue Cap: Implications for Stakeholders

Stakeholder	Impact	Practical considerations
Farmers & grain Growers	Lower transportation costs, more predictable freight pricing.	re‑evaluate budgeting for the 2025‑26 marketing year; negotiate volume discounts with CN.
Logistics Providers	Potential shift toward multimodal solutions if CN pricing tightens.	Explore short‑haul trucking or interline agreements with smaller regional railways.
Investors	Short‑term hit to CN’s earnings; long‑term stability in grain‑carriage market.	Adjust earnings forecasts; monitor CN’s diversification into intermodal and container services.
Government & Policy Makers	Demonstrates regulatory enforcement; supports agricultural competitiveness.	Use the ruling as a benchmark for future rail‑capacity reviews.

CPKC Over‑Limit Flag: What Went Wrong

1. Capacity Allocation Breach – CPKC moved 12 % more grain cars than the 10 % tolerance allowed for the Winnipeg‑Regina line.
2. Insufficient Reporting – The carrier failed to file timely excess‑capacity notifications required under the National Transportation Regulation (NTR) 2024‑07.
3. Service reliability Concerns – Excess traffic triggered delays on mixed‑cargo trains, affecting wheat and canola shipments to the Port of Vancouver.

CTA Penalty Enforcement: Process and Timeline

• Notice of Violation issued on October 30 2025.
• Opportunity to Respond: CPKC submitted a compliance plan on November 15 2025.
• Final Order: December 19 2025, confirming the $9 M penalty and mandating corrective actions:

1. Capacity Management System Upgrade – Implement real‑time monitoring software by March 2026.
2. Quarterly Reporting – Submit detailed capacity utilization reports to the CTA every three months.
3. Staff Training – Complete a CTA‑approved compliance training program for all dispatch personnel by April 2026.

Practical Tips for Shippers Navigating the New Landscape

1. Lock in rates Early – Secure freight contracts with CN before the revenue cap forces rate adjustments.
2. Diversify Routing – Consider alternative corridors (e.g., CN - CPKC interline via Saskatoon) to mitigate capacity constraints.
3. Leverage Technology – Use transportation‑management systems (TMS) that integrate CTA compliance alerts for real‑time visibility.
4. Monitor CTA Bulletins – Subscribe to the agency’s monthly newsletter for updates on capacity allocations and potential future caps.

real‑World Example: Prairie Grain Cooperative’s Response

• Background: The saskatchewan Wheat Growers association (SWGA) processes ≈ 2 M tonnes of wheat annually through CN.
• Action Taken: After the CTA announcement, SWGA renegotiated a 5‑year volume‑based discount with CN, reducing its average haul cost by 3.4 %.
• Outcome: The cooperative reported a $1.1 M annual savings, reinforcing the benefit of early engagement with rail carriers under the new cap.

Future Outlook: Anticipated Regulatory Trends

• Annual Revenue Caps – The CTA is exploring a rolling cap model that adjusts each fiscal year based on inflation and grain price indices.
• Capacity Allocation Review – A complete audit of all Class I rail carriers is slated for 2026,focusing on intermodal balance and regional equity.
• digital reporting Mandate – By 2027, carriers must submit real‑time capacity data through the National Rail Data Exchange (NRDE) platform.

Quick Reference: Key Dates & Figures

• Revenue Cap Effective: january 1 2026 (CN)
• Penalty Payment Deadline: June 30 2026 (CPKC)
• Cap Amount: $1.2 B (CN grain revenue)
• Over‑Limit Percentage: 12 % (CPKC)
• penalty: $9 M (CPKC)

Stay informed, adjust logistics strategies early, and keep a close eye on CTA releases to safeguard your supply chain in Canada’s evolving rail environment.