CTA announces Volume-Related Composite Price Indices for Crop Year 2023–2024 for CN and CP
April 27, 2023 – 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 1.8295 and the Canadian Pacific Railway Company (CP) at 1.7616 for the 2023–2024 crop year beginning August 1st. This is an increase in the VRCPI over the last crop year of 12.11% for CN and 5.43% for CP.
These indices will be used in determining CN’s and CP’s Maximum Revenue Entitlement for the movement of western grain in the 2023–2024 crop year. The Maximum Revenue Entitlement limits the overall revenue earned by CN and CP for shipping regulated grain.
Much of this year's price differential (the difference between the forecasted and actual price increases) is directly linked to unexpectedly high fuel and related material costs in 2022. Last year, the Agency's fuel model projected just over 30%increases in railway fuel costs using third-party forecasts available at that time. However, railway fuel costs in 2022 rose by more than 63% in the wake of a notable shortage in the supply of diesel fuel in North America and increased global demand. The net difference of 63% (actual) versus 30% (forecast) has been incorporated into this year's calculations and contributes to the overall net increase. Adjustments were also made for other components, including the material component for CN and CP.
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, 2024, for the 2023–2024 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.