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Canada Grain Farmers Sue Railways

A small group of Western Canada farmers is suing the country’s two big railways, alleging they have been charged at least $1 billion too much for grain shipments since 1983.

The five grain producers filed the class-action lawsuit against Canadian National Railway Co. and Canadian Pacific Railway Ltd. in a Saskatchewan court on Oct. 15, court documents show.

A CN spokeswoman said the matter is before the courts and the company had no further comment.

CP is reviewing the suit, a spokeswoman said, declining further comment.

Since 1983 Canadian grain farmers’ freight rates have been capped by the government, which allows CP and CN to charge rates that cover only their costs.

The suit alleges that both railroads claimed costs that were “ineligible or much higher than those incurred.” It cites a 2007-08 Canadian Transport Agency review that it says found the railways pocketed $72 million after charging three times too much for hopper car maintenance.

“As a result, CN and CP wrongfully overcharged farmers by more than a billion dollars for transporting their grain,” the suit says.

A similar class-action suit was filed against CN and CP last December by another Canadian farmer.

The court still needs to approve the case as a class action.

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