Extension of submission date for comments

January 21, 2011

File No. T 6275-17

With regards to the Railway Cost of Capital Methodology Review, requests were received January 14, 2011 from the Coalition of Rail Shippers (CRS) and January 17, 2011 from the Western Canadian Shippers Coalition (WCSC) for extensions to submit initial comments on the publication/methodology that should be used by the Canadian Transportation Agency (Agency) for determining the cost of capital rate for federally-regulated railway companies in Canada. Both organizations have requested that the date for initial submissions be adjusted from January 31, 2011 to April 30, 2011.

The CRS states that the expert it wishes to engage is unavailable until the end of February and the other regulatory matters in which CRS is participating continue to require its time, attention and resources and those of its member associations and individual shippers. CRS cites an Agency request for comments on Limited Distribution Tariffs, the judicial review of the Cabinet decision on the Canadian Industrial Transportation Association submission to the Governor-in-Council and the Rail Service Review Final report as some of the other initiatives that the shipper community will have to address in the coming weeks.

The reasons cited by WCSC are that until quite recently it had been unsuccessful in obtaining the requisite expert experience. WCSC indicates that the services of an expert have now been secured however the experts now need time to become conversant with the issues of its divergent client base and the members of the WCSC need time, with the help of these experts, to gain a thorough understanding of the subject to enable them to make informed comments.

In considering these requests, the Agency notes that the parties to this consultation have had a considerable and reasonable amount of time to prepare for their participation. Advance notice of a tentative timeline was communicated in September 2010, and a firm timeline for submissions, which took the other regulatory demands on participant resources into account, was set out in Decision LET-R-185-2010, issued November 4, 2010.

The Agency further notes that CRS and WCSC did not notify the Agency of any problems or issues they may have had complying with the submission timelines as set out in that decision letter until the deadline was imminent.

The complexity of the issues under review may require the stakeholders to seek expert advice and potentially will involve an oral hearing. All parties must be mindful that late-filed requests for time extensions have an impact on future timelines, which can be disruptive and frustrating to other participants.

That being said, the objective of the review process is to allow all participants a fair and full opportunity to provide their views and comments.

Therefore, the Agency will extend the deadline for participants to submit initial comments on the cost of capital publication/methodology from January 31, 2011, as previously set out, to March 31, 2011. In turn, the date on which submissions will be made available to other parties is April 5, 2011 and the deadline for responses by participants to initial submissions is April 29, 2011. A decision as to whether an oral hearing is required will be made and communicated to participants before May 31, 2011. If a decision is made to hold an oral hearing, it is anticipated that it would be convened in Ottawa in September, 2011.

It is the Agency's goal to implement the results of this process in the 2012-2013 volume-related composite price index determination, a process that will begin in late 2011. With that in mind, it is expected that all parties will strictly adhere to the timelines set out by the Agency.

For more information, you may contact Dale McKeague at 819-997-4914.