Adjustment of the maximum amount of freight charges - Section 164.1 of the CTA

June 20, 2024

Determination by the Canadian Transportation Agency (Agency) of the adjusted maximum amount of freight charges for the purpose of section 164.1 of the Canada Transportation Act, SC 1996, c 10 (CTA), as required by section 164.2 of the CTA

Summary

This is the Agency's determination of the triennial adjustment of the maximum amount of freight charges for the Final Offer Arbitration (FOA) summary process pursuant to Part IV, Division I of the CTA.

The Agency determines that the adjusted maximum amount of freight charges for the purpose of section 164.1 of the CTA is $2,410,000 for the three-year period beginning April 1, 2024.

Background

The CTA contains several provisions designed to facilitate the resolution of rate and service disputes between carriers and shippers or transit authorities. FOA, described in Part IV of the CTA, provides one means of resolving certain of these disputes through the use of an arbitrator or a panel of three arbitrators.

If a shipper's final offer submitted under subsection 161.1(1) of the CTA involves freight charges below the maximum amount specified in section 164.1, the arbitration may proceed by way of the summary process.

The law

Pursuant to section 164.2 of the CTA, the maximum amount of freight charges for the purpose of section 164.1 shall be adjusted every three years in accordance with the formula:

[A/B] × C

where

A is the Consumer Price Index for the calendar year before the year in which the adjustment is made;

B is the Consumer Price Index for 2017; and

C is $2,000,000.

Subsection 164.2(3) requires that the Agency adjust the maximum amount in accordance with that formula and cause it to be published in the Canada Gazette, and that published amount is conclusive proof of the maximum amount for that three-year period.

Analysis and Determination

The Agency has calculated the adjusted maximum amount according to the prescribed formula set out in subsection 164.2(1) of the CTA. The Consumer Price Index for the calendar year before the year in which this adjustment is made was determined in accordance with subsection 164.2(2) of the CTA using the annual average of the Consumer Price Index published by Statistics Canada in Table 18-10-0005-01.

Accordingly, the adjusted maximum amount is = (157.1 / 130.4) x $2,000,000
= 1.205 x $2,000,000
= $2,410,000

Conclusion

The Agency determines that the adjusted maximum amount of freight charges for the purpose of section 164.1 of the CTA is $2,410,000 for the three-year period beginning April 1, 2024.

Legislation or Tariff cited	Numeric identifier (section, subsection, rule, etc.)
Canada Transportation Act, SC 1996, c 10	164.1; 164.2

Back to rulings