Gatineau, QC – Canadian Transportation Agency - 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 1.4373 and the Canadian Pacific Railway Company (CP) at 1.5148 for the 2019–2020 crop year beginning August 1st. This is an increase in the VRCPI over the last crop year of 1.84 percent for CN and 3.70 percent for CP.
This index is used in determining CN’s and CP’s Maximum Revenue Entitlement (MRE) for the movement of western grain. The Maximum Revenue Entitlement is a limit on the overall revenue that can be earned by CN and CP for shipping regulated grain.
The changes in the VRCPIs stem primarily from modest increases in the fuel and material components of the VRCPI and from the recognition of costs for the acquisition of hopper cars.
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, 2020, for the 2019–2020 crop year.
The determination of separate VRCPIs for CN and CP is a result of changes to the Maximum Revenue Entitlement program under the Canada Transportation Act as amended in 2018 by the Transportation Modernization Act.
Source : Government of Canada