The applicable rates for profit determination table
This table includes the current rates to be applied in the Capital Employed (Section 5.2.1) factors of the profit principles for negotiated pricing. Specifically, it includes the rates to be used in the profit determination for contracts starting September 2023 and onwards. Updated calculated rates will be posted one week after the end of each month.
| Profit factor | Pricing Guide section reference | Type of rate | Calculated monthly rate October 2024 |
Source |
|---|---|---|---|---|
| Working Capital Tier 1 | Section 5.2.1.1 | Monthly 1-Year GIC Rate (3-year Rolling Average) | 3.02% | Bank of Canada (V80691339) |
| Working Capital Tier 2 | Section 5.2.1.1 | Monthly Bank Prime Rate (3-year Rolling Average) | 5.74% | Bank of Canada (V80691311) |
| Fixed Capital Tier 1 | Section 5.2.1.2 | Fixed Percentage | 1.00% | PSPC |
| Fixed Capital Tier 2 | Section 5.2.1.2 | Low Capital Intensity Rate | 5.00% | PSPC |
| Fixed Capital Tier 2 & Tier 3 | Section 5.2.1.2 | Monthly Marketable Bond Over 10-Year Rate + Consumer Price Index (CPI) Inflation Rate Forecast 6-10 Years Ahead (3-year Rolling Average) |
5.32%* |
Bank of Canada (V122487) |
*Starting from May 2024, fixed capital – Tiers 2 & 3 will incorporate the Canada marketable bond over 10-year yield combined with the CPI inflation rate forecast into the monthly profit rate calculation.
In the case that profit determination is related to previous periods, applicable rates for that time period must be used. For example, if the negotiation is for January 2021, use the applicable rates for January 2021.
Contact us
If you have any questions about the rates, please contact the Price Advisory Group at: TPSGC.PASoutiendesprix-APPriceSupport.PWGSC@tpsgc-pwgsc.gc.ca
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