Canadian Transportation Agency Announces Revenue Cap Inflation Factor of 1.0638 for Crop Year 2009-2010



    OTTAWA, April 30 /CNW Telbec/ - The Canadian Transportation Agency today
announced a 7.4 percent decrease in the Volume-Related Composite Price Index
(VRCPI) to be used to establish Canadian National Railway (CN) and Canadian
Pacific Railway (CPR) revenue caps for the movement of Western grain. This
Decision No. 176-R-2009 sets the index at 1.0638 for the upcoming 2009-2010
crop year beginning August 1.
    The VRCPI is essentially an inflation factor that reflects forecasted
price changes for railway labour, fuel, material and capital purchases by CN
and CPR. Over the last few crop years the index has not followed the typical
pattern of an inflation index of relatively small increases. Instead it has
fluctuated significantly as a result of changing fuel prices and a
legislatively mandated adjustment:

    
    - The 2007-2008 VRCPI fell by 5.4% because it incorporated an 8.0%
      reduction to reflect lower hopper car maintenance costs.
    - The 2008-2009 VRCPI rose by 8.0% with most of the increase
      attributable to higher fuel prices.
    - The 2009-2010 VRCPI is forecasted to fall by 7.4% with most of the
      decrease attributable to lower fuel prices.
    

    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.
    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 ceiling set by the Agency. The caps are calculated using a
formula containing numerous factors which are established by the Canada
Transportation Act. The VRCPI, one of these factors, is determined annually by
the Agency no later than April 30.
    Under the Act, the Agency must determine annual revenue caps for CN and
CPR and whether or not each cap has been exceeded by the railway company. The
caps apply to the movement of grain from Prairie elevators or U.S. origins, to
terminals at Vancouver, Prince Rupert, Thunder Bay, Churchill, as well as
movements of grain up to Thunder Bay or Armstrong, Ontario destined to Eastern
Canada.

    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: News Media Enquiries: Natalie Hanson, (819)
934-9042; General Public Enquiries: 1-888-222-2592, info@otc-cta.gc.ca; For
more information on the February 19, 2008 VRCPI Decision, please visit the
February 19 News Release and Backgrounder on our Web site. The Canadian
Transportation Agency is online at www.cta.gc.ca. To keep up-to-date with our
latest news releases and other information, subscribe to our electronic mail
service.


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