Final Adjusted Revenue Cap Inflation Factor for Western Grain Crop Year 2007-2008 to be Released February 2008
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OTTAWA - January 30, 2008 - The Canadian Transportation Agency today announced a short delay to setting an adjusted volume-related composite price index for railway revenue caps for the movement of Western grain for crop year 2007-2008. The Agency expects to release its decision as soon as possible in February 2008.
The adjustment removes the amount of hopper car maintenance costs that are "embedded" within the revenue caps and replaces it with current, actual hopper car maintenance costs. While the adjustment reflects a one-time process, the impact of the adjustment carries forward into future years.
The Agency was to release its decision on or before January 31, 2008, following consultations on hopper car maintenance with Canadian Pacific Railway (CPR), Canadian National Railway (CN) and 30 other organizations including the grain industry and provincial governments. However, very late in the process, CPR raised a legal issue which the Agency is addressing and as such has caused the delay. "The Agency remains committed to releasing this decision as quickly as possible while upholding the rules of due process which ensure that all parties are dealt with in a fair and equitable manner," said Geoffrey Hare, Chairman and CEO of the Canadian Transportation Agency.
This index is essentially an inflation factor to cover CN and CPR's price changes for railway labour, fuel, material and capital inputs. The revenue cap is a form of economic regulation that enables CN and CPR to set their own rates for services, provided the total amount collected remains below the revenue ceilings set by the Agency.
The Canadian Transportation Agency is a Government of Canada quasi-judicial tribunal with court-like powers and is responsible for helping achieve an accessible and efficient transportation system. The Agency deals with, among other things, rate and service complaints arising in the rail industry; disputes between railway companies and other parties; applications for certificates of fitness for the proposed construction and operation of railways; approvals for railway line construction; regulated railway interswitching rates; and revenue caps for the movement of Western grain by rail. The Agency also develops costing standards and regulations, and audits railway companies' accounting and publication/statistics-generating systems.
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