Federal regulator issues helpful new cost guide for railway crossing projects

Clearer guidance for communities, landowners, and railway companies

The Canadian Transportation Agency, a federal regulatory body, has issued a new cost guide to help railway companies, municipalities, landowners and others reach agreements and resolve disputes on the construction, upgrading and maintenance of railway crossings.

The Agency’s Guide to Railway Charges for Crossing Maintenance and Construction 2014 sets out consistent, nationwide guidelines on what railway companies can charge for all aspects of work on railway crossing projects.

Clearer guidance for communities, landowners, railway companies

Updated on an annual basis, the newest edition of the Guide features reduced overhead rates for work on railway crossings as a result of an exhaustive Agency review of overhead calculations that major railway companies apply to labour, material and other charges.

“Overhead” refers to the costs incurred to enable or support the direct construction or maintenance of the crossing and the crossing warning system, and includes such expenses as planning and supervision of the work, general administration of the railway company, employee benefits, office buildings expenses, taxes, and insurance.

New rates based on careful research, analysis:

The Agency’s indepth examination of overhead costs concludes a major review, started in 2013, of the methods and data used to calculate charges for crossing construction and maintenance projects.

The review was initiated to ensure costs continue to be accurately reflected in charges, and it conforms to the Agency’s practice of regularly reviewing and modernizing its non-regulatory instruments to ensure they are relevant and up-to-date.

The Agency’s review relied on extensive research. Indepth interviews were conducted with railway company personnel engaged in the planning and implementation of crossing maintenance and construction projects. The Agency received and analyzed descriptions of all activities involved in crossing construction and maintenance from start to finish, as well as comments from road authorities and Transport Canada.

How crossing agreements work:

Under the Canada Transportation Act, federally-regulated railway companies, municipal, provincial and territorial road authorities, utility companies and landowners may negotiate agreements for any aspect of a crossing.

An agreement usually specifies rates railway companies will charge for work and sets out which parties are responsible for paying for what portion of the work. Where agreements cannot be reached, the parties can apply to the Agency to resolve or help resolve issues related to construction, maintenance and apportionment of costs of road or utility crossings.

The Agency is a quasi-judicial tribunal and economic regulator for federally-regulated transportation industries. In the event of a dispute, the Agency assesses the merits of the case and determines whether the rates in the Guide apply.

There are about 14,000 public and 9,000 private grade crossings along 42,650 kilometres of federally-regulated railway tracks in Canada. Maintenance involves 1,460 municipal and provincial road authorities, 95 aboriginal bands, 32 railway companies and many individual private authorities. Clear guidance – such as that set out in the Agency’s new Guide – is essential to the effectiveness and efficiency of Canada’s vast transportation system.

To view the Guide and find out more about the Agency’s role in rail transportation, go to the Agency’s website at http://www.otc-cta.gc.ca/.