CALGARY, Alta. — Canadian Pacific Railway is facing a challenge on its rates for movement of coal in British Columbia.

Elk Valley Coal Corporation has issued notice that it will submit the rates charged by CPR for the movement of coal by rail from one of its five coal mines in Sparwood, BC to the Port of Vancouver to the Canadian Transportation Agency for final offer arbitration.

CPR, however, responded in a company release that it maintains these rates are not eligible for arbitration.

"These rates are governed by the transportation contract that is currently the subject matter of the action filed by CPR on July 21, thus not eligible for final offer arbitration," CPR said.

The railway added it will continue with its statement of claim as filed against Elk Valley Coal Corporation regarding its "failure to pay the full amount of rail freight charges, which are applicable pursuant to the transportation contract between CPR and Elk Valley Coal Corporation."

CPR’s 14,000-mile rail network serves the principal centres of Canada, from Montreal to Vancouver, and the U.S. Northeast and Midwestregions. Alliances with other carriers extend its market reach throughout the U.S. and into Mexico.