Rail Contribution Levels

The railway contribution markup in the revenue cap can be calculated in two parts. The 27% set for 1998 included in the legislation and the accumulated railway productivity growth achieved since then. Productivity growth is estimated below at 2.7% a year so the cumulative contribution in July 2007 amounted to 61.5%.

For August 2007 the Canadian Transportation Agency has reduced the cap by $2.59 a tonne for car maintenance and increased it by $0.58 for inflation making the revised contribution 50.6%. These adjustments result in a cap of $27.83 a tonne. This is still $5.66 higher than it would be if the contribution were 20%. To achieve a contribution of 20% requires a further reduction in the cap of $157.6 million, assuming an average year with shipments of 27.85 million tonnes.

For a complete copy of the current rail contribution levels paper, please download the .pdf file.