Railway Costing Regulations (SOR/80-310)

Regulations are current to 2014-03-16

VARIABLE COSTS OF THE CARRIAGE OF GOODS

 For the purposes of these Regulations, the variable cost of the carriage of goods referred to in section 278 of the Act shall

  • (a) be calculated on the basis of carloads of 30 000 pounds in the standard railway equipment for such goods and such other weights as are required for purposes of determining a rate; and

  • (b) if the goods concerned may move between points in Canada by alternative routes of two or more railway companies, be computed on the basis of the costs of the lowest cost rail route.

ACTUAL LOSS UNDER SECTIONS 252 TO 258, 260 AND 261 OF THE ACT

  •  (1) For the purposes of the calculation of actual loss under sections 252 to 258 and 260 and 261 of the Act, costs in relation to a branch line or in relation to a passenger-train service shall, subject to subsections (2) to (5), be based on expense accounts maintained under the Uniform Classification of Accounts and accounts reconcilable therewith or on such special studies of items and factors of costs as the Committee may order pursuant to section 46 of the National Transportation Act.

  • (2) In computing the costs of a company for the purposes of section 256, 258 or 261, there shall be included an allowance for depreciation on a periodic basis

    • (a) that will reflect the annual decline in the net value that could be realized from the salvage of depreciable road property that the Committee is satisfied could or would be retired if the line were abandoned or the service discontinued, and that is required for continued operation; and

    • (b) at rates approved under the Uniform Classification of Accounts applied to the book value of such other depreciable assets and of such new assets as the Committee is satisfied are required for continued operation of the line or service.

  • (3) In computing the costs of a company for the purposes of section 256, 258 or 261, there shall be included in the costs, for the last year of operation prior to abandonment of a line or discontinuance of a service that had previously been ordered retained, an allowance for depreciation on such new assets as the Committee is satisfied are required to comply with the order for retention, which allowance for depreciation shall be equal to the undepreciated cost of such new assets calculated by deducting from the actual cost of the assets their salvage value and the accumulated depreciation allowed on them for subsidy purposes in previous years.

  • (4) In computing costs of a company for the purposes of section 253 or 260, there shall be included an allowance for cost of capital as follows:

    • (a) either

      • (i) the rate of return on capital, including an allowance for income tax, that, in the opinion of the Committee, is appropriate for the company at the time the application is made, applied to the salvage value of the road property that the company proposes to retire if the line is abandoned or the service discontinued, to an amount not exceeding the net book investment, computed on the basis of the group plan of accruing depreciation, or

      • (ii) the rate of return on capital, including an allowance for income tax, that, in the opinion of the Committee, is appropriate for the company at the time the application is made, applied to the net book investment of the road property that the company proposes to retire if the line is abandoned or the service discontinued, on condition that the company can develop depreciation charges and net investment calculations acceptable to the Committee as reflecting the specific aging characteristics of the road property; and

    • (b) the rate of return on capital, including an allowance for income tax, that, in the opinion of the Committee, is appropriate for the company at the time the application is made, applied to the net book value of all other property that the Committee is satisfied is required in the operation of the line or service.

  • (5) In computing the costs of a company for the purposes of section 256, 258 or 261, there shall be included an allowance for cost of capital as follows:

    • (a) the rate of return on capital, including an allowance for income tax, that, in the opinion of the Committee, is appropriate for the company at the time the computation is made, applied to the salvage value of the road property that the Committee is satisfied could or would be retired if the line were abandoned or the service discontinued and that the Committee is satisfied is required for purposes of continued operation of the line or service, to an amount not exceeding the net book investment computed on the basis of the group plan of accruing depreciation;

    • (b) where the Committee is satisfied that investments in new assets are necessary for the continued operation of the line or service, there shall be applied to the net book value of such investments the rate of return on capital, including an allowance for income tax, that, in the opinion of the Committee, is appropriate for the company at the time the investments in new assets are made; and

    • (c) the rate of return on capital, including an allowance for income tax, that, in the opinion of the Committee, is appropriate for the company at the time the computation is made, applied to the net book value of all other property that the Committee is satisfied is necessary for continued operation of the line or service.

  • SOR/80-940, s. 1;
  • SOR/86-26, s. 1;
  • SOR/87-149, s. 1(E).