CN faces $700,000 fine

Saw this in the local newspaper: http://www.theprovince.com/Rail+faces+f ... story.html

The federal government ruled on Thursday that Canadian National Railway Co. earned too much money from hauling grain in the 2008-09 crop year and ordered it to pay pack more than $700,000. CN's grain revenue of $479,788,412 was $683,269, or 0.1 per cent, above its revenue cap, according to the agency. CN now has 30 days to pay the amount of excess revenue, plus a five per cent penalty, the agency said.

So we're making half a billion dollars in revenue on GRAIN alone... Yet we can't afford to buy some floor soap to clean up our diesel shop.. gotta love this place.

Gee, it's stories like this that make you WISH CN was still a CROWN CORPORATION, don't it??

D/

They earned too much profit, from hauling grain. H mm.... how does a company earn "TOO" much profit? does the Canadian government really expect companies to earn a set amount each year... and "MAGICALLY" not go over that amount.
Sounds a little absurd to me.

Profit is earned by companies, of which no government can arbitrarily determine an appropriate amount.
Unless Canada is moving to communism, that fine is illegal.

Perhaps it's time for the folks at CN to consider moving out of Canada and gaining the freedoms that U.S. roads already have.

As long as we're on the subject of progressive economics, maybe the Canadian government should also fine the wheat producers for shipping too much grain, and allowing prices to become too competetive.

num1hendrickfan wrote:They earned too much profit, from hauling grain. H mm.... how does a company earn "TOO" much profit? does the Canadian government really expect companies to earn a set amount each year... and "MAGICALLY" not go over that amount.
Sounds a little absurd to me.

Them's the conditions CN carries grain under. Remember, it used to be a Crown Corporation -- the government never let up certain regulations.

Profit is earned by companies, of which no government can arbitrarily determine an appropriate amount.

In fact the US does much the same thing with regulated electric (gas, phone, etc.) utilities. Treating grain shipment as a regulated utility operation is probably a terrible idea, but that's where it is.

Unless Canada is moving to communism, that fine is illegal.

Grain shipment is controlled under an essentially not-free-market system in Canada. It has been for a very long time, and it's one of the things disclosed in CN's annual report as one of the costs of doing business. The fine is perfectly legal, and the law allowing is is perfectly constitutional -- in Canada. Remember that Parliament in Canada has pretty nearly unrestricted powers, restricted only by Canada's rather limited Charter of Rights and Freedoms.

CN chooses to operate under this system. They don't have to, but they think it's worth it.

At least all CN got was a fine. Prairie farmers are imprisoned for selling their grain outside of the Wheat Board's monopoly.

That fine is a drop in the bucket for CN, and if they really wanted too, they could just park all the hoppers once they reach the cap, but don't.

Wouldn't surprise me if they get fined for that, too.