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Rate Control on Canadian Public Utilities
Published online by Cambridge University Press: 07 November 2014
Extract
In comparison with either Great Britain or the United States relatively little attention has been given to the problems of public utilities by Canadian economists, business men, and governments. In part, this is due to the outstanding success of some of the publicly owned utilities like Ontario Hydro, Toronto Transportation Commission, and Winnipeg Municipal Electric and, at the same time, to the doubtful value of such public enterprises as the Canadian National. Our experience with these concerns has tended to focus attention on individual cases rather than on public utilities as a group.
Another explanation of the comparative neglect of this field of study is the constitutional framework. In the United States, it has been necessary to prove to conservatively minded courts, first, that the business in question comes within the vaguely defined category of public utilities, and then that the rates set by the regulatory commission have not infringed the Fourteenth Amendment that no person shall be deprived of property without due process of law. Under the British system of government, legislation bringing business under government control and the decisions of commissions regarding rates are, within broad limits, accepted by the courts as valid. Thus the virtually continuous litigation over public utility rates in the United States has been absent in Canada.
Despite this relative neglect, Canadian governments have not by any means entirely disregarded the control of public utilities. The federal government has set up the Board of Transport Commissioners which, since 1904, has supervised the rates, fares, and charges of railways under Dominion jurisdiction. For the most part the Board has dealt with relation of rates inter se. Nevertheless, it has occasionally considered the general level and in the main has accepted the revenue needs of the Canadian Pacific as a basis for rates. In effect it uses the prudent investment of the low cost line for rate-making purposes, but it has not attempted to arrive at either an accurate valuation or a precise figure for a reasonable rate of return. It has almost completely avoided the theoretical and practical difficulties of original cost, cost of reproduction new, and other valuation problems.
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- Information
- Canadian Journal of Economics and Political Science/Revue canadienne de economiques et science politique , Volume 12 , Issue 2 , May 1946 , pp. 148 - 158
- Copyright
- Copyright © Canadian Political Science Association 1946
References
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4 In a federal state like Canada the question often arises as to whether the provincial or the Dominion government has control but this situation must be distinguished from the American difficulty that no government may have jurisdiction.
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13 Neither this Commission nor the Canadian Broadcasting Corporation has any legal control over the amount which individual broadcasting stations or chains may charge for advertising but the former may have some influence on them nevertheless. The aggregate amount payable, under the Commission's orders, by commercial users of copyright music to the Canadian “ASCAP” must be high enough to cover the expenses of the latter including royalties to composers. The amount payable by each individual station is based on an estimate of its potential listeners. The number of radio licences within the ordinary broadcasting radius of a city is divided up among the various stations in rough proportion to the “listener appeal” of the programmes offered. The size of the normal listening audience has an obvious bearing on what each station can charge advertisers.
14 Standard tariffs which apply in the relatively few instances where special tariffs and general orders are not applicable, are published in the Gazette, and other tariffs may be published in order to obtain judicial notice thereof. The Transport Commission is a semi-judicial body and its decisions do not need approval by the Cabinet.
15 Gas Inspection Act, R.S.C. (1927), c. 82; Electricity Inspection Act, Statutes of Canada, 1928, c. 22.
16 During the war the Dominion controlled public utilities in numerous ways. For brief summaries see Canada Year Book, 1945, pp. 336–7, 648–51, 669 Google Scholar but few of the controls related specifically to rates. The Dominion sets the rates for electrical and water service to town-sites in national parks.
17 The Ontario Act virtually duplicates the federal law. R.S.O. (1937), c. 259.
18 Public Utility Act, 7 Geo. VI (1944), c. 2.
19 Public Utility Commission, Ann. Rpts., passim.
20 The Gasoline Licensing Act, 24 Geo. V (1934), c. 2.
21 Motor Carrier Act. 1 Geo. VI (1937), c. 29.
22 Public Utilities Act, 4 Geo. VI (1941), c. 53.
23 Public Utilities Act, R.S.N.B. (1927), c. 127.
24 Statutes of Quebec, 4Geo. VI (1940), c. 11; also 25-6 Geo. V (1935), c. 24; 3 Geo. VI (1939), c. 16.
25 Ibid., 7 Geo. VI (1944), c. 22.
26 Created in 1910 by 1 Geo. V, c. 5 and given additional powers by 3 Geo. V, c. 6; 20 Geo. V, c. 34; 4 Geo. VI, c. 22.
27 Railways Act, R.S.O. (1937), c. 259; Telephones Act, ibid., c. 261; Public Utilities Act, ibid., c. 286; Municipal Board Act, ibid., c. 60.
28 Power Commission Act, ibid., c. 62.
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34 The study published in 1935 by the Federal Power Commission created widespread price cutting throughout the United States but similar studies by the Dominion Bureau of Statistics have apparently had no practical results. Incidentally, figures of average cost per kilowatt-hour without considering average monthly consumption and other factors are almost valueless as the Report of the Ontario Hydro-Electric Power Commission for 1942 emphasizes.
35 Ontario, Report of the Royal Commission on Transportation, 1937.
36 Public Vehicles Act, R.S.O. (1937), c. 289; Commercial Vehicles Act, R.S.O. (1937), c. 290.
37 R.S.M. (1940), c. 142.
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