Canadian Transportation Agency to make one-time adjustment to grain revenue cap inflation index

    OTTAWA, June 28 /CNW Telbec/ - The Canadian Transportation Agency has
been asked by the Minister of Transport, Infrastructure and Communities to
make a one-time adjustment to the volume-related composite price index it uses
to establish the Canadian National Railway (CN) and the Canadian Pacific
Railway (CPR)'s revenue caps for the movement of Western grain. In response to
this request from the Minister, the Agency today issued an advisory that sets
out the process for making a final determination on the matter, in addition to
its preliminary estimate of the adjustment's impact on the revenue caps for
crop year 2007-2008.
    The adjustment, contained in An Act to amend the Canada Transportation
Act and the Railway Safety Act and to make consequential amendments to other
Acts (Bill C-11) that recently received Royal Assent, is meant to reflect the
actual costs incurred by CN and CPR for the maintenance of grain hopper cars.
    According to the Agency's preliminary analysis, the downward impact of
this adjustment on the revenue caps is estimated to be in the range of $60 to
$75 million.
    Although the Agency plans to make its final determination by January 31,
2008, the adjusted index will apply to the new crop year which begins on
August 1, 2007. The Agency has chosen to provide this advance notice to the
railway companies in order to assist them in planning their commercial
    The Agency, in its Decision No. 211-R-2007, had announced on April 27,
2007 that the volume-related composite price index for the 2007-2008 crop year
would be 1.1611. Based on the average of the preliminary estimated range
($67.5 million), the one-time adjustment would reduce the inflation index to
about 1.07 for the new 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. 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: please contact: Marc Comeau, Senior
Communications Adviser, (819) 953-9961; The Canadian Transportation Agency is
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