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

    OTTAWA, Aug. 1 /CNW Telbec/ - The Canadian Transportation Agency, in
Decision No. 388-R-2007, set an interim volume-related composite price index
of 1.0884 for railway-specific revenue caps for the movement of Western grain
for the upcoming 2007-2008 crop year. This interim index, which takes effect
today, 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.
    On June 28, 2007, the Agency issued an Advisory to provide advance notice
to the railway companies on its intention to adjust the volume-related
composite price index. CN and CP indicated they are not satisfied that the
Advisory has any legal effect and maintain that the change to the statutory
index can only be changed by way of a formal order or decision. In light of
the railway companies' positions and the Agency's expectation that it would
have been used by the railway companies as guidance for the upcoming crop
year, the Agency considered other options such as setting an interim index.
    The Agency decided to set an interim price index, a preliminary estimate
based upon the best data currently available, to allow for greater certainty
for industry while also providing the early benefit of planning for the
commercial operations for railway companies, grain producers and grain
shippers.
    This Decision varies the April 27, 2007 Decision No. 211-R-2007, that
determined the volume-related composite price index for crop year 2007-2008 to
be 1.1611. That index was developed prior to the recent amendments to the
Canada Transportation Act. These amendments now call for an adjustment to
reflect the costs incurred by prescribed railway companies for the maintenance
of hopper cars used for the movement of Western grain.
    The interim index was determined based on a car maintenance adjustment of
$2.00 per tonne, an estimate based on extensive analysis by Agency staff and
released on May 4, 2006 by the Minister of Transport, Infrastructure and
Communities.
    Following industry and government consultations, a final index will be
determined by the Agency on or before Jan. 31, 2008 and will apply to the
entire 2007-2008 crop year.

    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. Its
decision-making process is governed by the rules of fairness and natural
justice. 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: Lyne Giroux, Senior Communications Adviser,
(819) 953-8926; The Canadian Transportation Agency is online at www.cta.gc.ca;
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