Vol. 147, No. 25 — December 4, 2013

Registration

SOR/2013-207 November 22, 2013

CANADA TRANSPORTATION ACT

Regulations Amending the Railway Interswitching Regulations

P.C. 2013-1254 November 21, 2013

Whereas, pursuant to subsection 36(2) of the Canada Transportation Act (see footnote a), the Canadian Transportation Agency has given the Minister of Transport notice of the annexed Regulations;

Therefore, the Canadian Transportation Agency, pursuant to paragraph 128(1)(b) of the Canada Transportation Act (see footnote b), makes the annexed Regulations Amending the Railway Interswitching Regulations.

Gatineau, October 28, 2013

GEOFFREY C. HARE
Chairperson
Canadian Transportation Agency

Whereas, pursuant to subsection 128(1) of the Canada Transportation Act (see footnote c), the Canadian Transportation Agency may make regulations determining the rate per car to be charged for interswitching traffic and establishing distance zones for that purpose;

Whereas, pursuant to subsection 128(2) of that Act, in determining the interswitching rate the Agency has taken into consideration those reductions in costs that, in the opinion of the Agency, result from moving a greater number of cars or from transferring several cars at the same time;

Whereas, pursuant to subsection 128(3) of that Act, in determining the interswitching rate the Agency has considered the average variable costs of all movements of traffic that are subject to interswitching rates and has determined that the rates set out in the annexed Regulations are not less than the variable costs of moving the traffic;

Whereas, pursuant to section 112 of that Act, the rates set out in the annexed Regulations are commercially fair and reasonable to all parties;

And whereas, based on the evidence available to the Agency, the Agency has determined that the interswitching rates are to be revised at the levels set out in the annexed Regulations;

Therefore, His Excellency the Governor General in Council, on the recommendation of the Minister of Transport, pursuant to subsection 36(1) of the Canada Transportation Act (see footnote d), approves the annexed Regulations Amending the Railway Interswitching Regulations, made by the Canadian Transportation Agency.

REGULATIONS AMENDING THE RAILWAY INTERSWITCHING REGULATIONS

AMENDMENT

1. The schedule to the Railway Interswitching Regulations (see footnote 1) is replaced by the schedule set out in the schedule to these Regulations.

COMING INTO FORCE

2. These Regulations come into force 30 days after the day on which they are registered.

SCHEDULE
(Section 1)

SCHEDULE
(Sections 8 to 10)
INTERSWITCHING RATES

Item

Column I





Interswitching distance zone

Column II


Rate per car for interswitching traffic to or from a siding
($)

Column III


Rate per car for interswitching a car block
($)

Column IV

Additional rate per kilometre for interswitching a car
($)

Column V


Additional rate per kilometre for interswitching a car in a car block
($)

1.

Zone 1

229

46

N/A

N/A

2.

Zone 2

248

55

N/A

N/A

3.

Zone 3

284

65

N/A

N/A

4.

Zone 4

251

74

3.38

1.20

REGULATORY IMPACT ANALYSIS STATEMENT

(This statement is not part of the Regulations.)

Issue

On February 28, 2013, the Governor in Council approved the Regulations Amending the Railway Interswitching Regulations (SOR/2013-28). Due to an omission in procedure, new regulations must be made by the Canadian Transportation Agency (Agency) and approved by the Governor in Council. The content and effect of this regulatory amendment are exactly the same as in SOR/2013-28.

Background

Interswitching is an operation performed by railway companies (carriers) where one carrier performs the pickup of cars from a customer (shipper) and hands off these cars to another carrier that performs the “line haul” (the majority of the linear distance of the overall railway movement). The interswitching arrangement is made in cases where a shipper has immediate access to a single carrier, but is within a reasonably close proximity to one or more of the competing carriers.

Under section 128 of the Canada Transportation Act (CTA), the Agency may make regulations prescribing terms and conditions for the interswitching of traffic, as well as determine the rate per car to be charged for performing this operation and to establish distance zones for that purpose. The interswitching provisions of the CTA are considered to be competitive access provisions, allowing the shipper to choose their “line haul” carrier while having direct access to only one carrier.

To ensure fair and reasonable access to the entire railway system, interswitching has been regulated in Canada since 1904. The Railway Interswitching Regulations (Regulations) set the rates to be charged for interswitching services provided by the terminal carrier, thereby establishing a predictable and fair pricing regime that is applied equally to all terminal carriers providing interswitching services. Interswitching allows shippers to negotiate, through normal commercial processes, suitable terms and conditions of carriage with competing carriers from the interchange point onward, for the line haul portion of the overall car movement.

The Regulations have not been amended since 2004. During that time, there have been significant changes observed in railway companies’ operating practices. The Agency has determined that its methodology for the development of interswitching service costs required review to ensure that the resulting rates accurately reflect current interswitching costs incurred by the railway companies.

Objectives

The regulatory changes are part of the five-year statutory review of the interswitching rates and practices required under subsection 128(5) of the CTA which provides that the Agency shall review the Regulations when warranted and at least once every five years.

The specific objective of the regulatory review was to determine whether the Regulations accurately and effectively reflect current railway company operating practices. Pursuant to section 128 of the CTA, the Agency shall, in determining the interswitching rate, take into consideration any costs that, in the opinion of the Agency, result from moving a greater number of cars or from transferring several cars at the same time. The Agency shall also consider the average variable costs of all movements of traffic that are subject to the rate, and the rate must not be less than the variable costs of moving the traffic.Further, the interswitching rates must comply with section 112 of the CTA, which states that interswitching rates must be commercially fair and reasonable to all parties.

Description

The Agency, pursuant to subsection 128(1) of the CTA, is amending the Regulations. The amendment will affect new rates on a per-car basis that more accurately reflect current interswitching costs. No other amendments to the Regulations have been made.

In determining the new interswitching rates, the Agency has considered 2007 traffic distribution patterns and 2009 costs, as those were the data available to the Agency at the time the new rates were developed. The rate for interswitching car blocks of fewer than 60 cars is increased by 4.2% on average, while a reduction of 16.7% on average will apply to blocks of 60 cars or more. Table 1 below identifies the previous rates as well as the rates being established at this time.

Table 1

Interswitching distance zones

Rates Per Car for Interswitching Fewer than 60 Cars

Rates Per Car for Interswitching a Block of 60 or More Cars

Previous Rates ($)

New Rates ($)

Variation (%)

Previous Rates ($)

New Rates ($)

Variation (%)

Zone 1

185

229

23.8

50

46

-8.0

Zone 2

200

248

24.0

60

55

-8.3

Zone 3

240

284

18.3

75

65

-13.3

Zone 4

315

251

-20.3

90

74

-17.8

Rate per kilometre

3.75

3.38

-9.9

1.45

1.20

-17.2

The Agency reviews key costing factors affecting the rates on an annual basis and makes adjustments as necessary to adequately represent the costs of interswitching operations and ensure that the rates are commercially reasonable.

Regulatory and non-regulatory options considered

The review of the Regulations is required by subsection 128(5) of the CTA. As regulated interswitching is a legislative requirement, non-regulatory options were not considered.

Benefits and costs

The Agency, through its mandate as an economic regulator, performs various economic determinations, including the establishment of interswitching rates. In establishing interswitching rates and in other economic determinations, the Agency uses system-wide, average railway company costs, which incorporate a contribution towards constant costs. The system-wide average contribution to constant costs is derived from the empirical data provided by the railway companies and verified by Agency staff.

Benefits

Interswitching represents an important part of the competitive access provisions that are available under the CTA. Regulated interswitching rates benefit shippers by extending their access to the lines of competing railway companies at rates that cover the cost of moving the traffic to or from the interchange point. Regulated rates thus ensure that rail shippers derive, where available, the benefits of price competition, improved service levels and varying routing options. The railway companies receive, in turn, compensation for the costs in providing interswitching services.

The current Regulations have been in force in a similar format since 1988. The economic impact of these Regulations on shippers is generally positive because it allows more competitive shipping options. Moreover, the regulated interswitching rates, which reflect the total costs but not the commercial profits, are below the unregulated market rates. The savings, however, are difficult to quantify because the Agency does not have complete information on various market rates being used across the country.

Costs

The anticipated annual decrease in railway company revenue arising from the interswitching rate proposal is about $800,000, which is the difference between the current $49.8 million per year being earned by the railway companies under the current Regulations and an anticipated $49 million per year under the amended Regulations, nationally. Table 2 provides a full breakdown of the numbers by zone; these numbers are derived by multiplying the car count and the specific rate for each zone.

Table 2

1-59 Cars Interswitching Distance Zone Car Count Previous Rates ($) Revenue ($) New Rates ($) Revenue ($) Revenue Change ($)
1 58 252 185 10,776,620 229 13,339,708 2,563,088
2 20 880 200 4,176,000 248 5,178,240 1,002,240
3 25 528 240 6,126,720 284 7,249,952 1,123,232
4 60 274 315 18,986,310 251 15,128,774 -3,857,536
Blocks of 60 or More Cars Car Count Previous Rates ($) Revenue ($) New Rates ($) Revenue ($) Revenue Change ($)
1 74 50 3,700 46 3,404 -296
2 17 323 60 1,039,380 55 952,765 -86,615
3 2 437 75 182,775 65 158,405 -24,370
4 95 132 90 8,561,880 74 7,039,768 -1,522,112
Total revenue 49,853,385   49,051,016  
Total change -802,369

Methodology

The method for determining railway companies’ variable costs is set out in the Railway Costing Regulations (SOR/80-310) and stipulates that variable costs shall include the increases and decreases in rail operating expenses resulting from changes in the volume of traffic. In addition, certain costs are incurred by railway companies independent of traffic. These costs are called fixed or constant costs. For example, the cost of maintaining a tunnel or removing snow must be incurred regardless of the amount of traffic carried.

While the Railway Costing Regulations set out various factors considered in making costing determinations, including the cost of capital and depreciation, the Uniform Classification of Accounts (UCA), which is prescribed by the Agency under section 156 of the CTA, is used by railway companies under federal jurisdiction to report their operating expenses, revenues and other statistics to the Agency, as well as to Transport Canada and Statistics Canada. This serves as a principal source of financial and operating data used in railway costing. Financial and accounting data on capital and operating expenditures come from over 40 property accounts and 160 expense accounts identified in the UCA manual.

The Agency, through its review of the interswitching regulations, made changes to its methodology for calculating interswitching rates to better reflect costs associated with interswitching operations. Specifically, Agency staff eliminated the use of linear regression as it forces a relationship which the current data does not support. Linear regression was previously used in the development of interswitching rates to smooth out the results so that the rates increased proportionately with an increase in distance from the interchange. Agency staff found that rates do not necessarily increase proportionately with increases in distance from the interchange. The reasons for this include the fact that the rail network is composed of different grades of track and that customers and their sidings are not identical.

Also, in previous determinations, the Agency had based its assessment of the interswitching variable costs, in respect of trains of 1 to 59 cars, on a three-year moving average of the traffic counts to minimize the effect of the variations in the traffic distribution patterns and ultimately reduce the variability of the results. In the present proposal, the process was modified to use only data relating to the actual traffic interswitched from the most recent year available. This change will allow the analysis to more closely capture the evolving operational environment and respond to observed material changes in the work activities, and reflect more accurately the cost of interswitching.

Consistent with the interswitching rate structure, interswitching costs were developed for trains of fewer than 60 cars and for block trains of 60 cars or more in each of the four interswitching zones. In addition, the costs per each additional kilometre beyond Zone 4 were computed for these two categories of interswitching movements.

A contribution towards constant costs of 20.3% of variable costs was then added to the variable costs to establish the new interswitching rates. The resulting rates were rounded down to the nearest dollar to ensure that the effective contribution does not exceed the proposed level of 20.3%.

During this review, the Agency adopted a more robust methodology that captures the operating data of the railway companies more effectively. The 20.3% contribution reflects what the Agency considers to be “required” contribution. It is based entirely on railway costs and reflects the difference between the variable costs as calculated by the Agency’s Regulatory Costing Model and the total costs incurred by the railway companies as supplied to the Minister of Transport and used in the Agency’s variable cost calculations.

Table 3 again illustrates the rate changes for each interswitching zone for interswitching less than 60 cars as well as for interswitching a block of 60 or more cars. The table presents for comparative purposes the previous regulated rates — which became effective November 5, 2004, and are based on the interswitching variable cost estimates for the year 2002 and a contribution towards constant costs of 7.5% — as well as the new rates which have been developed on the basis of the 2009 interswitching variable cost estimates and the increase in the level of the contribution to railway constant costs to 20.3%.

Table 3

Interswitching distance zones

Rates Per Car for Interswitching Fewer than 60 Cars

Rates Per Car for Interswitching a Block of 60 or More Cars

Previous Rates ($)

New Rates ($)

Variation (%)

Previous Rates ($)

New Rates ($)

Variation (%)

Zone 1

185

229

23.8

50

46

-8.0

Zone 2

200

248

24.0

60

55

-8.3

Zone 3

240

284

18.3

75

65

-13.3

Zone 4

315

251

-20.3

90

74

-17.8

Rate per kilometre

3.75

3.38

-9.9

1.45

1.20

-17.2

The assessment of the variable costs associated with trains of fewer than 60 cars produced diverging results. The variable costs associated with zones 1 to 3 increased from their level in 2002, contributing to an increase in the proposed rates ranging from 18.3% to 24%.

Conversely, the variable costs for Zone 4 declined, resulting in a reduction in the new rate of 20.3%. Coincidentally, this figure is the same as, but unrelated to, the figure for the level of contribution to constant cost. The change in the new rate for Zone 4 is the result of several contributing factors. It should be noted that, in respect of trains of less than 60 cars, Zone 4 constitutes a major part of the total traffic, with approximately one third of the total number of interswitched carloads for this category of traffic. The traffic originating or terminating in Zone 4 is highly concentrated in a limited number of interchanges located in the Vancouver and Edmonton areas. The geography and the operational conditions prevailing at these interchanges and their associated rail yards are such that their inherent work activities and costs are either similar or lower than the system-weighted average cost for Zone 3 traffic. But even more significant in the explanation of this disparity is the fact that some major components of Zone 4 traffic are substantially lower than their comparative counterparts in zones 2 and 3 traffic. (See attached Appendix A for a graphic representation of the interswitching zones.)

Overall, five of the eight rate zones will see a reduction, and thus benefit shippers in general, while ensuring railway companies are fairly compensated for the imposed service they provide.

Rationale

Based on the Agency’s review of its previous methodology, a number of fine-tuning modifications were made to improve its accuracy in reflecting the actual costs of providing interswitching services by the railway companies. These modifications include the use of actual data recently collected by the Agency for railway operations, which allows for greater accuracy in setting rates as well as the use of a revised contribution to constant costs.

The regulated rates are based on actual system-wide costs incurred by the railway industry. The amount of time, effort and equipment required in performing interswitching activities, such as the number of cars handled, the distance travelled to and from the interchange point and the amount of sorting and classification of cars required in each interswitching operation is also part of the interswitching rate determination. The work activities vary from one interchange to another, based mainly on the configuration of the rail yard and the location of customers.

In the course of the current review, the Agency calculated the average variable costs of all movements of traffic that are subject to interswitching rates, using the work activities information, and determined that these rates are not less than the variable costs of the movement of traffic as per subsection 128(3) of the CTA. In addition to variable costs associated with the movement, the Agency calculates a contribution to constant costs. These costs are added to variable costs to produce an interswitching rate that covers the railways costs.

In consideration of all of the above, the Agency has determined that a contribution of 20.3% of variable costs represents, at this time, an appropriate compensation for railway constant costs. The Agency is satisfied that the resulting rate levels represent the right balance, a balance which ensures the maintenance of effective competitive access through interswitching while providing rail carriers with fair and reasonable compensation for services provided as an imposed public duty. The Agency considers that the rates established under the new methodology are commercially fair and reasonable to all parties.

“One-for-One” Rule

The “One-for-One” Rule does not apply to this proposal, as there is no change in administrative costs to business.

Small business lens

The small business lens does not apply to this proposal, as the Regulations do not directly regulate small businesses.

Consultation

Starting in December 2007, the Agency began soliciting comments as part of its ongoing review of the Regulations. Over the course of the next two years, the Agency engaged with various stakeholders on a variety of questions related to interswitching. The responses received were grouped and integrated into a consultation paper. On April 21, 2010, the Agency released its consultation paper back to the stakeholders, requesting comments in regards to the interswitching rate changes. The Agency received 10 responses through this round of consultations from interested shippers, shipper groups, railway companies and provincial governments.

Stakeholders were asked to comment on the following eight topics: (1) contribution toward railway companies’ constant costs, (2) the methodology for the determination of the interswitching variable costs, (3) the use of linear regression, (4) the use of single-year results versus multi-year average, (5) cost methodology for interswitching block trains, (6) co-production agreements and non-conventional handling arrangements, (7) the interswitching rate proposal, and (8) the impact of the rate proposal. The comments received focused primarily on the following three topics: (1) contribution toward railway companies, constant costs, (2) methodology for the determination of the interswitching variable costs, and (3) cost methodology for interswitching block trains.

(1) Contribution toward railway companies’ constant costs

The comments received indicated that most shippers and shipper groups were not supportive of the increase in the contribution to constant costs and, consequently, the interswitching rate increases. They felt this would impact single-car shippers by increasing the overall rail freight rates.

Conversely, the railway community welcomes the increase, claiming that the current interswitching rates are artificially low and are thus being subsidized by other rail traffic. The railway community argues that the proposed rate increases are insufficient and still result in rates that are lower than the total cost of operations, including a reasonable return.

The Agency is of the opinion that the proposed contribution to constant costs is fair and reasonable, as supported by evidence and actual data collected. Since the last review in 2004, the Agency adjusted its methodology to be more robust in calculating the contribution to constant costs based on actual railway data to better reflect the difference between variable costs calculated pursuant to the Agency’s Regulatory Costing Model and the total costs incurred by the railway companies as part of information supplied to the Minister of Transport. The Agency finds that using contribution to constant costs based on actual empirical data is a valid practice and the proposed contribution of 20.3% is fair and reasonable to all parties.

(2) Methodology for the determination of the interswitching variable costs

The Agency received comments concerning the above, in which some groups were in support of the change to the methodology for determination of interswitching variable costs as it reflects the changes to railway companies operational practices, while others were concerned that the changes would have an adverse affect on single-car shippers because the increase in single-car interswitching rates would cause increases in rail freight rates and would limit the shippers’ competitive access. It should be noted, however, that the interswitching rates for block trains would decline as a result of the proposed changes in the methodology.

A review of the empirical data, which pointed to some significant operational changes since 2003, suggested the need for three changes to the methodology used to calculate interswitching rates: discontinuing the use of linear regression; using single-year results in place of multi-year averages; and using a more accurate cost methodology for interswitching block trains.

In particular, some stakeholders voiced their concerns in regard to the removal of the use of linear regression and the switch from multi-year averages to single-year results in the methodology for the determination of interswitching variable costs, and, therefore, the interswitching rates.

The Agency made the change to remove the use of linear regression as it forces a relationship between the variables that the current data does not support. The Agency found that rates do not necessarily increase with increases in distance from the interchange (Zone 4) for various reasons, including variations in the rail network that is a combination of different grades of track, and different customers’ sidings. Handling of freight is also different based on transit speed, complexity and geographic orientation. All of these factors cause the variable costs and workloads to vary in a way that has no linear relationship to the distance from an historic interchange.

In regard to multi-year averages, the Agency has moved towards the use of single-year results as it allows for the analysis to more closely capture the evolving railway operational environment and respond to observed material changes in the work activities, and ultimately reflect more accurately the costs of interswitching.

(3) Cost methodology for interswitching block trains

Some comments received with regard to the cost methodology for interswitching block trains were in favour and some were not in favour of the increase in rates for the interswitching of single cars (fewer than 60 cars), this increase being potentially detrimental to the “small shippers.” However, the contention that shipping a small number of cars means the shipper is small is not necessarily correct. Many large companies ship single cars based on their own operational requirements, which take into consideration rail network and siding capacities, as well as the type of product shipped. In fact, the Agency is aware of several large shippers who prefer to ship their freight in single cars rather than block car formations to respond to the demands of their customers for just-in-time products. Block customers of 60 cars or more are a group of shippers whose position in the network, operating capacity and commodities interact to make them much more efficient for the railway companies to handle than other single car customers. Reflecting this operational reality, the rates for shipping car blocks of 60 cars or more are proposed to decline.

As per subsection 128(2) of the CTA, in determining an interswitching rate, the Agency shall take into consideration any reduction in costs that, in its opinion, results from moving a greater number of cars or from transferring several cars at the same time. As per the CTA, the Agency has taken into consideration the reduction in costs that result from moving a greater number of cars.

There are no provisions within the CTA or the Regulations that would allow the Agency to shift costs from one group of shippers to another, based on their size.

To lower costs for “small” or single-car shippers, either the railway company would have to be under-compensated or the cost shifted to shippers of large blocks. In both cases, these actions would be in direct contravention of the CTA.

The Agency carefully reviewed and considered all the comments received from various stakeholders and finds it appropriate to move forward with the rate changes. The Agency finds that the revised interswitching rates are commercially fair and reasonable to all parties.

Canada Gazette, Part I, consultation process

The proposed amendments were published in the Canada Gazette, Part I, on June 30, 2012, followed by a 30-day comment period. The Agency received one submission from CN.

Comments from CN and Agency response

In its submission to the Agency, CN contends that the Agency has erred in moving away from multi-year carload data, as an averaging method would more accurately forecast future carloads which would be the subject of the Regulations.

This contention is based on two assertions:

CN states that “using a one-year data point is counter-intuitive as the interchanged traffic pattern for that year could be a single-year aberration or outlier; it is this situation that was minimized by using the Agency’s previous three-year moving average.”

First, it should be noted that at the time the Agency calculated interswitching costs and rates for consultation, carload data for 2011 were not available. Had the Agency retained the previous approach of using multi-year average, it would have used average of carload data for 2005, 2006 and 2007. In order to assess the validity of CN’s claim, Agency staff compared carload data for 2007 to the three-year average of carload data for 2005, 2006 and 2007. The review has shown that 2007 single-year carload data is not an outlier because it is not meaningfully different from the three-year average. For example, CN notes that

If this was caused by single-year outliers, it would be expected that the share of three-year average carloads for Vancouver in Zone 3 would be significantly higher than the single-year share. In fact, Vancouver’s share of CN carloads in Zone 3 is 27% with single-year (2007) carloads and 28% with three-year (2005–2007) average carloads. That is, using three-year averages would have had no impact on the costs and rates CN is noting for Zone 3. Similarly, the 2007 carloads for Vancouver in Zone 4 made up 59% of all Zone 4 carloads, while the three-year average would have been 60%. Thus, the conclusion is the same for Zone 4 as for Zone 3.

Furthermore, from a review of the data, changes in the carloads do not appear to be highly susceptible to “single-year aberrations or outliers.”

Odd results for Zone 4

CN reiterates its concerns with the odd results flowing from the Agency’s single-year approach where the single-car Zone 4 rate proposed is lower than for the Zone 3 rate and almost identical to a Zone 2 rate. Compared to Zone 2, the Zone 4 distance is 200% longer, but the rate is only 1% higher. For Zone 3, the Zone 4 distance is 50% longer, but the rate is 12% lower.

While train costs generally increase with distance, interswitching comprises numerous operations, the majority of whose costs are not related to the distance between the interchange and the customer, which is the basis of the zonal classification. The location of the yard relative to the interchange, the yard layout and the efficiency of classifying and marshalling operations, the locations and distribution patterns of customers relative to the yard, the number of at-grade intersections and traffic delays encountered between the yard and the customers, and most importantly the volume of cars interswitched — each has a profound influence on the interswitching cost per car at a location. In some cases, as happened in Zone 4, these other factors are large enough to outweigh the simplistic view that costs must increase with zonal distance increases.

In light of the above, the Agency sees no reason to modify the interswitching rates following the consultative process.

Implementation plan

As no modifications to the Regulations are proposed after this consultation, the implementation plan will remain the same. The interswitching of railway traffic has been regulated for over 100 years and is a commercial agreement between railway companies whereby one railway company will carry traffic for the other railway company and vice versa to ensure that shippers have access to the rail system at a rate that is below market rates. Railway companies are fully responsible for reimbursing each other on a yearly basis in regards to this line of business. When rates are revised, the railway companies will then apply the new rate or rates for billing purposes to one another. If railway companies interswitched a similar amount of traffic with each other, the net effect on revenue would be neutral.

To fully implement the new rates, the Agency would produce an order which would direct the stakeholders involved to incorporate the amended rates. The stakeholders would then be responsible for ensuring the use of the amended rates in their day-to-day interswitching operations.

Implementation, enforcement and service standards

There are no enforcement provisions contained within the CTA for interswitching. With that said and as mentioned above, railway companies reimburse each other in regard to providing interswitching services and, as a result, police each other in relation to the application of the prescribed rates.

Compliance mechanisms are contained within the CTA which may include administrative sanctions, in particular subsection 120.1(1) of the CTA which allows shippers to file a complaint with the Agency for unreasonable charges and/or terms and conditions for the movement of traffic, as well as various appeal provisions that are available to affected parties. Also, subsection 161(1) of the CTA allows for final offer arbitration (FOA). This allows a shipper who is dissatisfied with a rate or rates charged or proposed to be charged to file an application with the Agency for FOA, at which time the Agency will refer the matter to an independent arbitrator for a final judgment. This judgment is binding on all parties for a period of one year.

The Agency reviews the railway interswitching costs annually and revises the rates as required or as part of the five-year statutory review of the Railway Interswitching Regulations.

Contact

Stephan Coqueux
Canadian Transportation Agency
15 Eddy Street
Gatineau, Quebec
K1A 0N9
Telephone: 819-997-7702
Email: Stephan.coqueux@otc-cta.gc.ca

Appendix A — Interswitching Zones Graphic Representation

Detailed information can be found in the surrounding text.

The following interswitching distance zones are established:

Where a siding is located wholly or partly within the interswitching distance zone 4 and the point of connection with the siding is more than 40 km from an interchange along the line of track of a terminal carrier, the interswitching rate for each car is increased for each kilometre over 40 km by an amount equal to the rate per kilometre set out in column IV or V.