Calgary Alberta - Canadian Pacific Railway Ltd. (CP) is spending more than $500 million on a fleet of grain cars and says it has plans to add thousands more railcars, spurred by financial incentives in new federal laws.
 
Calgary based CP said on Thursday more than 500 of the 1,000 higher-capacity cars built by Hamilton's National Steel Car will be hauling grain this year.
 
Canada's second-largest rail carrier said it will order another 5,900 hopper cars over the next four years as it replaces the decades old fleet that moves the company's largest line of business, Keith Creel, CP's chief executive officer, said in a statement.
 
The new cars can carry 10 percent more grain in a shorter and lighter car, allowing CP to haul 35 additional hopper cars in the same 8,500 foot train.
 
CP's announcement mirrors a move by rival Canadian National Railway Co. (CN) which in late May said it is buying 1,000 grain cars.
 
The grain car investments are driven by new transportation legislation passed two weeks ago.
 
The law governing western grain shipping eliminated a provision that required railways to share with each other any capital investment credits applied to the limit on total revenue collected.
 
About 44 percent of Canada's 23,000 grain cars are federally or provincially owned, and most are about 30-years-old.
 
The rest are owned by CN, CP, and smaller companies.
 
Grain companies say the old cars are slow to load and prone to failure, hampering operations.
 
Eric Atkins.