Ottawa Ontario - Canada's second largest railroad is refusing to pay $50,000 worth of federal fines issued after a Transport Canada official found the railway had failed to meet a week's worth of mandatory grain targets.
 
"Canadian Pacific Railway Ltd. is disputing the fine on the basis that the missed targets of 7-13 Sep 2014 were the result of broader supply chain issues, specifically the Labour Day holiday shutdown at the Port of Vancouver the week before," company spokesperson Jeremy Berry said in a email Thursday evening.
 
"These events outside of CP's control in the supply chain contributed to delays in the movement, loading, and shipping of rail cars on CP," the email notes.
 
CP's comments come after its sole competitor, Canadian National Railway Co., said Thursday afternoon it will pay the $100,000 in federal fines issued after Transport Canada determined the railroad had failed to meet two weeks worth of grain targets.
 
"CN is heartened that the Transport Canada enforcement officer's investigation appropriately took into account factors beyond CN's control and also reflected the important role that others play in the grain supply chain," Mark Hallman, communication and public affairs director for CN, said in an email.
 
"CN will pay the two fines totalling $100,000 and will move forward, continuing to focus on efficiently moving western Canadian grain to market," Hallman said, adding the company was notified of the fines 12 Dec 2014.
 
The railroads responses comes after Transport Minister Lisa Raitt's office revealed Thursday that Canada's two major railroads had been fined by the federal government for their failure to move grain.
 
A Transport Canada enforcement officer determined CN missed two weeks of federally-mandated grain volume targets, Lauren Armstrong, the minister's spokeswoman, said in an e-mail.
 
The officer, Armstrong said, found CN did not move enough grain the week of 28 Jul 2014 to 3 Aug 2014, nor did the railroad meet the minimum volumes the second week of September.
 
Canadian Pacific, the e-mail noted, also hadn't moved enough grain the week of 7-13 Sep 2014.
 
At the time, both railways were required to move 536,250 tonnes of grain each per week.
 
Failure to comply risked fines of up to $100,000 per violation, payable to the federal government.
 
A notice of violation was issued to both companies 12 Dec 2014, Armstrong said, with fines set at $50,000 per violation totalling $150,000.
 
Both railways have 30 days to pay the fines or "exercise their right to seek a review of the issuance of the Notices of Violation before the Transportation Appeal Tribunal of Canada," she wrote.
 
The federal fines come months after Transport Minister Lisa Raitt said last September CN had failed to move three weeks worth of federal grain volume targets, initially set last March after millions of tonnes of Prairie grain were left stranded in bins and grain elevators across Western Canada for months.
 
Canadian Pacific, she said at the time, continued to meet its targets.
 
The massive grain backlog has been blamed on major mis-communications across the supply chain, poor rail service, a record crop, and frigid temperatures across Western Canada last winter.
 
The crisis led to severe cash flow problems for some farmers and rattled international confidence in Canadian grain markets.
 
It was expected to cost the Canadian economy between $7.2 billion and $8.3 billion, according to federal estimates.
 
Both Raitt and Agriculture Minister Gerry Ritz came under heavy criticism in September after it was revealed the maximum penalties CN could face was $300,000.
 
While federal penalties had initially been set in March at $100,000 per day, the figure was quietly reduced in May under the Fair Rail for Grain Farmers Act to $100,000 per violation, which both ministers now interpret as per week.
 
Thursday's revelations show neither CN nor CP have been fined the maximum penalty.
 
When asked why the railways weren't fined the maximum amount, the minister's office said the Transport Canada enforcement officer considered the railways overall compliance to the order.
 
"The administrative monetary penalties (AMPs) are set by the Enforcement Officer and are established in a manner proportionate to the railway's performance in relation to its obligation," Armstrong said.
 
The Liberals disagree.
 
"They (the fines) are increasingly inconsequential," said Deputy Liberal Leader Ralph Goodale when reached by telephone, Thursday afternoon.
 
Goodale described the fines as "puny" compared to the amount of money the railways make and farmers lost last winter.
 
"This won't make a bit of difference," Goodale stressed.
 
"The railways got away with behaviour that was deficient and inadequate and the government's penalties are a joke."
 
While the federal government continues to insist they will hold the railways to account, controversy over the fine amounts has lingered for months.
 
With both CN and CP posting record third quarter profits ($853 million and $400 million respectively) industry, including several farm groups, and the Saskatchewan government, had been pushing for stiffer penalties since last March when the fines were $100,000 per day.
 
In a submission to the House agriculture committee, Premier Brad Wall's government urged the federal government to increase the fines to $250,000 per day, while the Western Canadian Wheat Growers Association demanded the fines be set at $1 million per week.
 
On Thursday, the Grain Growers of Canada thanked the government for "sticking to its guns" on the grain file.
 
The fines, Bryan Rogers the organization's executive director, said in an interview are "good news."
 
"Quite frankly, I think the amount of the fine is, it's not important here. I think, again, what's important is the message behind the fine, which is service failures won't be tolerated," Rogers said.
 
The fines also come on the heels of mounting tensions between the federal government and the railroads.
 
In a year-end interview with iPolitics in December, Ritz blasted the railways for their recent behaviour.
 
Both companies, the minister said, had "overplayed their hand."
 
Both railways remain under federal orders to move 325,000 metric tonnes of grain each per week.
 
Meanwhile, an in-depth review of the country's rail system, headed by former Trade minister David Emerson, continues.
 
A final report is expected sometime in 2015.

Kelsey Johnson.