Canadian Transportation Agency announces increase to revenue cap inflation factor for crop year 2007-2008



    OTTAWA, April 27 /CNW Telbec/ - The Canadian Transportation Agency, in
Decision No. 211-R-2007, today announced a 3.2 percent increase in the
Volume-Related Composite Price Index to be used to establish railway-specific
revenue caps for the movement of Western grain for the upcoming 2007-2008 crop
year. This index is essentially an inflation factor to cover Canadian National
Railway (CN) and Canadian Pacific Railway (CPR)'s price changes for railway
labour, fuel, material and capital inputs.
    The revenue cap is a form of economic regulation that enables a
prescribed railway company (currently CN and CPR) to set its own rates for
services, provided the total amount collected remains below the ceiling set by
the Agency.
    Under the Canada Transportation Act, the Agency must determine each
railway company's annual revenue annually and whether or not each cap has been
exceeded by the railway company. The caps apply to the movement of grain by
prescribed railway companies from Prairie elevators to terminals at Vancouver,
Prince Rupert, Thunder Bay and Churchill. The Volume-Related Composite Price
Index is one of several inputs required in the determination of the revenue
caps by the Agency.
    In the course of establishing the index, the Agency consults with parties
in the grain handling and transportation industries including producer
representatives, the Canadian Wheat Board, shipper organizations, railway
companies, grain companies, other federal government departments, and
provincial and municipal governments.
    In its most recent revenue cap decision, the Agency ruled on December 29,
2006 that both CN and CPR had exceeded their caps for crop year 2005-2006.
This marked the first time since the inception of the caps in 2000 that both
railways were over their maximum revenue entitlements. Excess revenue cap
amounts, in addition to a five per cent penalty, are paid to the Western
Grains Research Foundation (WGRF), a farmer-funded and directed organization
set up to fund research that benefits Prairie farmers.

    The Canadian Transportation Agency is a Government of Canada
administrative tribunal with quasi-judicial powers that 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 statistics-generating systems.




For further information:

For further information: Marc Comeau, Senior Communications Adviser,
(819) 953-9961; The Canadian Transportation Agency is online at www.cta.gc.ca;
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