GATINEAU, QC, April 29, 2021 /CNW Telbec/ - The Canadian Transportation Agency (CTA) has announced its determination of the Volume-Related Composite Price Index (VRCPI) for the Canadian National Railway Company (CN) at 1.4505 and the Canadian Pacific Railway Company (CP) at 1.4787 for the 2021–2022 crop year beginning August 1st. This is an increase in the VRCPI over the last crop year of 0.50 percent for CN and a decrease of -1.78 percent for CP.
These indices will be used in determining CN's and CP's Maximum Revenue Entitlement (MRE) for the movement of western grain in the 2021–2022 crop year. The Maximum Revenue Entitlement is a limit on the overall revenue earned by CN and CP for shipping regulated grain.
For CN, higher projected increases in fuel prices were offset by moderate increases in labour and material prices and a projected decline in CN's cost of capital, an important element in the investment component of the VRCPI. For CP, expected declines in labour prices and cost of capital more than offset projected increases in fuel prices.
In light of the Federal Court of Appeal Decision 2021 FCA 69 dated April 9, 2021, the CTA will conduct further consultations with CN, CP and other interested stakeholders on the issue of whether to allocate general purpose debt to Canadian rail operations. The results of these consultations will inform the CTA's approach to setting cost of capital.
What is the VRCPI?
The VRCPI is an inflation factor. It reflects a composite of the forecasted prices for railway labour, fuel, material and capital purchases. As part of the process of determining the annual VRCPI, the CTA examines and verifies detailed railway submissions.
The VRCPI will be applied when the CTA makes its Maximum Revenue Entitlement determinations by December 31, 2022, for the 2021–2022 crop year.
For more information
For more information on the CTA's maximum revenue entitlement determinations since 2000, please see Western grain: Maximum Revenue Entitlement program.
About the CTA
The Canadian Transportation Agency is an independent, quasi-judicial tribunal and regulator that has, with respect to all matters necessary for the exercise of its jurisdiction, all the powers of a superior court. The CTA has three core mandates: helping to keep the national transportation system running efficiently and smoothly, protecting the fundamental right of persons with disabilities to accessible transportation services, and providing consumer protection for air passengers. To help advance these mandates, the CTA makes and enforces ground rules that establish the rights and responsibilities of transportation service providers and users and level the playing field among competitors, resolves disputes using a range of tools from facilitation and mediation to arbitration and adjudication, and ensures that transportation providers and users are aware of their rights and responsibilities and how the CTA can help them.
www.otc-cta.gc.ca
SOURCE Canadian Transportation Agency
Media Relations, Canadian Transportation Agency, [email protected], 819-934-3448
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