Consultation on the CTA Approach to Setting Regulated Interswitching Rates

On June 20, 2019, the Canadian Transportation Agency (CTA) launched consultations on its approach to setting regulated interswitching rates. The CTA is inviting key stakeholders to share their views to ensure that its regulated interswitching rates: are compensatory, consider the long-term investment needs of railway companies, and are commercially fair and reasonable to all parties.

The CTA has prepared a discussion paper that focuses on the following key issues:

• Developing interswitching rates for federally regulated short-line railway companies;
• Regional and commodity specific interswitching rates;
• Interswitching zones up to 30 km;
• Volume discount rate categories;
• Long-term investment needs of the railway companies (cost of capital methodology);
• Contribution to fixed costs;
• Productivity factors;
• Collecting interswitching service units; and
• Transparency of the regulated interswitching rates and methodology.

To support and help guide the discussion of Issue 5 (contribution to fixed costs), a draft preliminary technical discussion paper on Ramsey pricing (one potential option for integrating a contribution to fixed costs within the calculation of interswitching rates) has been prepared by CTA staff and is available upon request. This paper is not an endorsement of any given approach by the CTA.

Consultation and Submission Filing Process

As part of the consultation process, the CTA will be holding bilateral consultation sessions from July 12, 2019 to August 20, 2019.

Please contact Ryan.Dallaway@otc-cta.gc.ca as soon as possible, to schedule a bilateral consultation meeting.

Please advise as to whether you wish to meet in person at the CTA or via teleconference, and provide a list of individuals from your organization that will be taking part in each discussion.

As meeting time is limited, we also encourage you to provide a written submission that addresses the question(s) of interest to your organization. All written submissions should be sent to ferroviaire-rail@otc-cta.gc.ca.

Submissions for Issues 5 and 6 due on January 20, 2020. Comments on all other issues are now closed

If your submission contains information that you believe should be treated as confidential, two versions of your documents must be filed:

• a confidential version of the document in which:
  • each page is marked “contains confidential information” at the top, and
  • on each page, you identify, by highlighting or other means, the confidential information that was redacted from the public version.
• a public version of the document from which the confidential information has been redacted.

All submissions are subject to the Access to Information Act and Privacy Act, whose provisions may or may not allow for the information claimed as confidential to be kept out of the public domain if a request for their release is filed.

Reference materials

• 2019-08-01: Letter - extending the deadline for written submissions related to Issue 5 and Issue 6
• 2019-11-29: Determination No. R-2019-229 - Review of the methodology used by the Canadian Transportation Agency to determine the cost rate of common equity for federally-regulated railway companies.
• 2019-11-29: Determination No. R-2019-230 - Determination by the Canadian Transportation Agency of the 2020 regulated interswitching rates pursuant to Part III, Division IV of the Canada Transportation Act, S.C., 1996, c. 10, as amended.