Bill S-4 (Historical)

Safer Railways Act

An Act to amend the Railway Safety Act and to make consequential amendments to the Canada Transportation Act

The amendments amend the Railway Safety Act to, among other things,
(a) improve the oversight capacity of the Department of Transport by, for example, requiring companies to obtain a safety-based railway operating certificate indicating compliance with regulatory requirements;
(b) strengthen that Department’s enforcement powers by introducing administrative monetary penalties and increasing fines;
(c) enhance the role of safety management systems by including a provision for a railway executive who is accountable for safety and a non-punitive reporting system for employees of railway companies;
(d) clarify the authority and responsibilities of the Minister of Transport with respect to railway matters; and
(e) expand regulation-making powers, including in respect of environmental management, and clarify the process for rule making by railway companies.

Safer Railways Act

[Carol Hughes, NDP, Algoma—Manitoulin—Kapuskasing, ON]

Mr. Speaker, I appreciate the debate we are having on this very important bill.

The original version of the bill left many recommendations for an in-depth inquiry into railway accidents unaddressed. I want to thank the member for Western Arctic for having tabled amendments to former Bill C-33. I congratulate the other place in tabling Bill S-4 with those NDP amendments.

The bill is about safety. The Conservative government ignored repeated calls by the Transportation Safety Board for safety measures such as voice recorders and positive train control. In 2001 and 2003, the Liberal government ignored calls from the Transportation Safety Board for additional rail safety measures. I am wondering if my colleague could elaborate on the need not only to pass this legislation quickly but also to implement it.

[Pierre Poilievre, Conservative, Parliamentary Secretary to the Minister of Transport]

Mr. Speaker, I think it is best to start our remarks in the House of Commons on this or any subject by addressing first principles.

I believe the first principle is the government should only do what only government can do. Public safety is one of those areas that the citizen or the enterprise cannot simply manage all by themselves. As a result, protecting the security and the safety of the individual is a primary responsibility of government. Thus, we have Bill S-4, which deals in particular with railway safety and the statute assigned to that goal.

I will go into the history of this statute and the framework of legislation that has existed and continues to do so. Before I do that though, I will state my full support for the bill. It is a bill to amend the Railway Safety Act. It furthers our government's agenda to ensure a safe, reliable and economically viable freight and passenger railway system.

The amendments proposed in the bill will increase the public safety of Canadians, enhance the safety of our communities, and contribute to a stronger economy, a modern infrastructure and a cleaner environment.

The Railway Safety Act came into force in 1989 during a period of significant transformation in the Canadian rail industry. It was a time of privatization and restructuring, supported by a new federal policy that separated economic and safety legislation to provide the railway companies with flexibility so that they could grow and prosper.

I should mention in passing that Conservative and Liberal governments in the last two and a half decades have moved toward greater privatization and less government control in all areas of transportation, including ports, railways, airports, airlines and a whole series of other specific areas within the country's transportation system. That decision by both Liberals and Conservatives to move toward privatization has been a resounding and unmitigated success for Canada and for Canadians.

Today, economic regulation of the rail industry is guided by the Canada Transportation Act, which provides an overall framework to ensure a national transportation system that is competitive, economic and efficient. The act, which came into effect in 1996, also established the Canadian Transportation Agency, which is responsible for dispute resolution and economic regulation of all modes of transportation under federal jurisdiction, including rail.

Rail safety regulation on the other hand is governed by the Railway Safety Act, which was developed in the spirit of co-operation between industry and government. This act moved away from a fully prescriptive regulatory approach to one that recognized the responsibility of railway companies for the safety of their own operations.

At the same time, the federal government through Transport Canada retained the responsibility and the power to protect people, property and the environment by ensuring that the railway companies operate safely within that national framework. Once again, we liberated the market to find the best ways to achieve safety, but we created a legal framework to ensure that people and property and the environment are protected as the industry does its work.

Transport Canada undertakes its responsibility to maintain a safe national rail system through a policy and regulatory development, through outreach and education, through oversight and enforcement of the rules and regulations it implements under the Railway Safety Act.

Applied in tandem, the Railway Safety Act and the Canada Transportation Act have successfully guided the growth of Canada's rail sector since the 1990s, but there are issues and challenges. As it stands today, the interrelationship of these two acts has created a notable gap in railway safety oversight that must be addressed if we are to ensure the continuing safety of our national railway system.

Currently under the Canada Transportation Act a new railway company is allowed to begin operations immediately upon receiving a certificate of fitness from the Canadian Transportation Agency. This certificate indicates that the railway is under federal jurisdiction, has sufficient financial capacity to operate, and has obtained appropriate third party liability insurance coverage. This is in keeping with the economic mandate of the Canadian Transportation Agency. It is not, however, fully in keeping with the national safety mandate of the Railway Safety Act.

In accordance with the Railway Safety Act, a new railway must comply with all safety regulations in force at the time it begins operations. It is important to recognize that there are no regulated requirements in the Canada Transportation Act to verify the safety capacity of the company before a certificate of fitness is issued and the company's operations begin.

As the Railway Safety Act does not currently specify minimum baseline safety requirements for a new railway company either, a gap in oversight is created and a new railway could theoretically operate for a year or more before the effectiveness of its safety systems was formally verified. This is an important safety issue which the government is striving to correct through these amendments.

The introduction of a railway operating certificate is a key component of this bill, and will continue to resolve this long-standing safety issue in our railway system. The amendment represents an important step in the right direction to strengthen the safety of our vital rail industry. Anyone who likes to eat food, consume retail goods, drive a car, basically perform any function as part of a modern society requires the use of goods that are brought by rail. We cannot underestimate the importance of this industry to the operation of the Canadian economy.

When the Minister of Transport appointed the independent advisory panel to lead the Railway Safety Act review in 2007, he provided them with a clear mandate to identify steps in the Railway Safety Act and make recommendations to strengthen the regulatory regime to ensure the changing nature of the railway industry and its operations were protected.

Following extensive consultation with stakeholders and careful consideration of these consultations during the year-long course of review, the advisory panel specifically recommended in its final report in 2008:

A railway should be required to obtain a Rail Operating Certificate (ROC ) as a precondition to obtaining a Certificate of Fitness (from the Canadian Transportation Agency) and to commencing or continuing operations.

The intent of this recommendation is clear. This government emphatically agrees that the implementation of railway operating certificates is an optimal solution to improve regulatory oversight and ensure that new railways have met clearly defined baseline safety requirements before they begin operations anywhere in the country.

Bill S-4, the safer railways act which we are discussing today, will give the Governor in Council, that is the cabinet, the authority to require railway companies to apply for and receive a railway operating certificate. Bill S-4 will also give Transport Canada the power to establish the baseline safety requirements for the certificate by regulation. Establishing these requirements by regulation will provide Transport Canada with the authority to undertake a comprehensive safety review for every new railway to determine whether it complies with the regulatory framework proposed.

Once the regulator is satisfied that all baseline safety requirements have been met, an operating certificate will be issued. It is important to note that this requirement for railway operating certificates will apply to all railways under federal jurisdiction, including those already in operation, such as CN, CP, VIA Rail and numerous other short lines. It is obviously impractical and economically unviable for these companies to cease operations until a certificate can be issued. As such, existing railways will have a grace period of two years from the coming into force of the new regulations to meet the requirement for the certificate.

Should there be instances where the railway operating certificate is refused, suspended or cancelled, the applicant will have the right to appeal by requesting a review by the Transportation Appeal Tribunal of Canada. That being said, it is critical to add that this government is committed to ensuring that the introduction of railway operating certificates will be developed and implemented in the same spirit of co-operation between government and all stakeholders which guided the creation of the Railway Safety Act nearly two decades ago. Once this bill is passed, Transport Canada will consult stakeholders on the development of regulations that relate to this important new initiative to improve railway safety in this country.

In summary, I will say that the safety benefits of this proposal for the introduction of a railway operating certificate are clearly evident. An important regulatory gap will be effectively and efficiently addressed. Transport Canada's railway safety oversight powers will be enhanced to meet the changing nature of the industry over the long term. Canadians from coast to coast will reap the personal and economic advantages of a safer and more secure Canadian rail system.

When the Minister of Transport launched the Railway Safety Act review, Canada had recently suffered a series of devastating train derailments. These derailments caused the death of loved ones, the disruption of businesses and the serious pollution of trackside lakes, rivers and communities. During the course of extensive inspections and audits undertaken by Transport Canada following these incidents, the regulator identified numerous deficiencies that contributed to the decreased safety levels, including non-compliance by the railway companies with various safety requirements.

There was a general concern with the level of the railways' compliance with the regulations. Accordingly, the terms of reference for the Railway Safety Act review specifically directed the independent panel to examine the adequacy of Transport Canada's enforcement powers and to consider whether administrative monetary penalties should be added to the range of enforcement powers available to the department. Upon examination, it became clear that Transport Canada's enforcement powers under the Railway Safety Act needed to be strengthened to encourage better regulatory compliance, increased safety and help to prevent further incidents like those that originally triggered the review.

The independent panel's final recommendation on the issue, as detailed in its report of March 2008, plainly stated that an administrative monetary penalty scheme should be included in the Railway Safety Act as an additional compliance tool to enhance safety in the rail industry. This government fully agrees with the panel's assessment, and the introduction of a scheme for administrative penalties has been included as an important and integral part of this plan.

Administrative monetary penalties are certainly not new in the transportation sector. They were successfully introduced in the air industry back in 1986 and were subsequently introduced in the marine sector in 1991.

Penalties of this nature have been introduced in the transportation industry because they work. In the simplest terms, administrative monetary penalties are similar to traffic tickets for car drivers. When a company or individuals break the rules or do not comply with the regulations, the department can impose a pre-established administrative monetary penalty or fine to help encourage compliance in the future.

Administrative monetary penalties have other safety benefits as well. With these penalties in place, there is a perception of fairness because the operator knows in advance the cost of non-compliance and it is applied uniformly. Penalties can also be applied more uniformly as there is less discretion for giving warnings and therefore less opportunity for inconsistency.

Under the current Railway Safety Act, Transport Canada's options for enforcing non-compliance are very limited. When a violation is found during the course of an inspection or audit, an inspector will normally issue a letter of non-compliance and follow-up in a given time frame to confirm that corrective action has been taken. If the situation has not been corrected, the regulator has only one option, prosecution, which is both costly and time consuming. Therefore, it is ineffective for a large number of violations. This is a significant weakness in the current enforcement scheme of the act.

We believe administrative penalties should be implemented as an additional enforcement tool under the act to provide an efficient, effective and less costly alternative to prosecution, particularly in the cases of persistent non-compliance with the act and its safety requirements. This is consistent with the principle of minimizing the regulatory burden for Canadians, while at the same time promoting regulatory certainty and compliance.

In the interest of fairness for all parties, the proposed administrative penalty scheme will allow for a review of the regulator's penalty decisions by the Transportation Appeal Tribunal of Canada. This scheme will also include provisions related to the minister's decision to impose a penalty, the due process to be followed, the review of the decisions by the appeal tribunal and the level of fines to be paid for non-compliance and infractions. Maximum levels for administrative monetary penalties will be $50,000 for an individual and $250,000 for a corporation.

In addition to the implementation of an administrative penalty to improve railway safety, we propose, through these amendments, to raise existing judicial penalty levels, which were established 20 years ago and are no longer consistent with other modes of transportation. Maximum judicial fines for convictions on indictment for a contravention of the act would increase from $200,000 to $1 million for corporations and $10,000 to $50,000 for individuals. Maximum fines on summary conviction for a contravention will increase from $100,000 to $250,000 for corporations and $5,000 to $25,000 for an individual.

Implementing these penalties, as proposed in the bill, is clearly an important step in the development of an effective railway safety regime with sufficient scope and strength to ensure that our railways are safe and that they remain safe for the long term as the rail industry continues to evolve and to grow.

I began today with basic principles: that government should only do what only government can do. Public safety is an example of one of the things that only government can enforce. That is why we are creating a legislative framework in which free enterprise can operate in a manner that is safe, efficient and fair for the Canadian people.

[Denis Coderre, Liberal, Bourassa, QC]

Mr. Speaker, as the member for Bourassa and on behalf of my party, I would like to start by commending the work that was done in the other chamber. Obviously, we all remember that this bill is a revival of former Bill C-33 and that a good job was done with the amendments. People did a great job.

At the time, the hon. member for Markham—Unionville was on the Standing Committee on Transport, Infrastructure and Communities and the work done there was quite outstanding. Since the work was well done and everyone decided to work together to ensure everyone's safety, the bill deserves our support today. We most definitely have to send it to committee as soon as possible in order to look into certain aspects and see if we have to make some improvements.

In the other chamber, Senator Mercer, together with the other hon. senators—from both the government side and our side—have already done a thorough job. All players had a chance to speak their minds. We realize that there is already a lot of support and a series of amendments has been moved as a result of the work accomplished on the former bill.

It is only fair to say that we must support this bill and find the proper way to do so. Obviously, pulling on a flower does not make it grow faster. However, we certainly want to make sure that things will be done as quickly as possible. The bill has to be sent to the Standing Committee on Transport, Infrastructure and Communities so that we can do a proper job and quickly address the issue to determine whether adjustments have to be made. The Parliamentary Secretary to the Minister of Transport, Infrastructure and Communities and for the Federal Economic Development Agency for Southern Ontario will agree with me in saying that Bill S-4 is a good bill and that, as a result, we should support it, given the significant work that was done in the other chamber.

I want to explain to the thousands of television viewers watching us today what Bill S-4 is all about. It is intended, of course, to amend the Railway Safety Act, specifically to improve the oversight capacity of the Department of Transport, to strengthen that department’s enforcement powers by introducing administrative monetary penalties and increasing fines, to enhance the role of safety management systems by including a provision for a railway executive who is accountable for safety—and the word accountable is important here—and to implement a confidential non-punitive reporting system for employees of railway companies. It also seeks to clarify the authority and responsibilities of the Minister of Transport, Infrastructure and Communities with respect to railway matters.

It is important that, as the representative of the people, the minister have those powers and, clearly, the regulation-making powers must be expanded, including those dealing with environmental management. The process for rule making by railway companies must also be clarified.

What I find interesting about this approach is that, for the most part, all partners support this bill. The unions, as well as the Railway Association of Canada, are generally in favour of this legislation. Naturally, the RAC is not in a position to say at this time if the industry will support the bill without reservation because, after appearing twice before the parliamentary committee that studied Bill S-4 and Bill S-33—the predecessor to the bill we are studying today—the RAC had proposed seven amendments to improve safety, all of which were rejected.

It is fair to say that our system is quite safe, but we need to make the necessary changes to make it safer. Naturally, I acknowledge my colleague from Burlington, who had that tragic accident in his riding. We will let the investigation take its course, but we must ensure that we develop the necessary tools to guarantee safety.

I truly believe in rail transportation. We all know that this country has been built on that vision. It is a great way to bridge rural and urban Canada. However, I think we need to provide better tools to make sure that citizens from coast to coast to coast feel that they are first-class citizens with that mode of transportation. Bill S-4 would provide that and some problems would be prevented.

Let us take a look at infrastructure. Certain areas may have some situations, such as the one my colleague for Trinity—Spadina spoke about in eastern Quebec. Of course, we would promote specific programs on infrastructure to make sure that we have the capacity for the track to be accurate. We must make sure we are providing the service which, in certain areas, is an essential service. It is important that we take a look at that.

We would not play with security. At times it might be used in partisan ways, such as on Bill C-10, but for the railway I think it is a non-partisan issue. I think that all sides believe in security.

However, this bill needs to be quickly sent to committee. I think that we need to look further at the bill. My colleague suggested that the Canadian Urban Transit Association, in approaching the committee, was concerned about how the provisions of the bill would affect the operation of light rail transit that operates on federally regulated rail lines. There are only a few examples of this in the country. For example, the Lakeshore line of GO Transit moves an incredibly large number of people each day. Therefore, the committee concerns must be twofold.

First, overly large increases to the administrative burden on authorities like GO Transit would negatively impact ridership and fares. However, considering the volume of riders and the number of level crossings on the Lakeshore line, it is also important that the Government of Canada ensure that these trains operate with the highest level of safety possible.

Second, the Railway Association of Canada made a request that the bill be amended by adding to subclause 24(1) the following:

Respecting notices to be given to railways regarding any proposed local plan of subdivision or zoning by-law or proposed amendment thereof in respect of land that is located within 300 meters of a line of railway or railway yard.

This amendment would require municipalities to notify and consult the railway if they made any zoning amendments on land within 300 metres of a railway or railway yard. The Federation of Canadian Municipalities was understandably concerned about this measure. At the heart of its concern was this requirement for communities to inform railways of changes from adjacent land to proximate land. As it was explained to the committee, municipalities across Canada already inform railways when their zoning plans affect land adjacent to the railway's right of way.

The FCM's objection to this change was twofold. Primarily there is a concern that the 300 metre limit is overly burdensome on municipalities that already inform railways of land use changes on property adjacent to the rail line. There is also a concern about the federal government mandating a provision that directly interferes with how provinces legislate municipal power and zoning laws. As these laws and powers vary drastically across the provinces, it would be inappropriate for the federal government to simply override them all. It could also create needless red tape for the local transit association.

These are just some of the issues that the transport committee could consider taking up at its hearings. However, I think everyone has done a great job in the other chamber.

I believe it is a good idea to pass this bill very quickly in order to provide the minister and the department with the necessary authority to enact regulations, and to ensure better safety and greater consistency of the regulations. Partners must be heard quickly one last time by the Standing Committee on Transport to ensure, as we all wish, better safety for all Canadians.

[Bruce Hyer, NDP, Thunder Bay—Superior North, ON]

Mr. Speaker, I congratulate the hon. member for Trinity—Spadina. She has been a strong and relentless voice for building safety and infrastructure in the rail industry. I also congratulate the Minister of Transport on Bill S-4. It is a good effort. It is good to see parties working together to build this good legislation.

Previous Conservative and Liberal governments have allowed or even caused the decline and degradation of Canadian freight and passenger rail. For example, in my riding we have lost passenger rail on the north shore of Lake Superior through Thunder Bay.

I have a provocative question for the member for Trinity—Spadina. How can we work effectively with the Conservatives to build rail infrastructure across Canada, or will we have to wait until we form government in four years?

[Olivia Chow, NDP, Trinity—Spadina, ON]

Mr. Speaker, railways can be competitive and highly successful commercially. CN, for example, made billions of dollars last year. It takes the right government mindset and political will.

Countries in Europe and Asia, and lately even the United States, are showing us how efficient, fast and profitable railway passenger services can be. Instead of high-speed trains that run on their tracks, Canadians are stuck with slow diesel trains that roll on bumpy tracks that are owned by the monopolized CN and CP Rail. It is their tracks, their train-controlled centres and their trains that take precedence over any passenger train, a situation unheard of in countries like France or China.

Via Rail is forced to lease essentially all its tracks, as it owns close to none of them. By allowing the big private rail companies to abandon Canadian rail lines, both the passenger and freight customers, they are freer than ever to expand elsewhere, which means the lucrative U.S. market. CN has gobbled up various railway companies with its network stretching all the way to the Gulf of Mexico. CPR has made similar moves, purchasing thousands of kilometres of tracks in the United States to the tune of several billion dollars. No wonder Canadians are left behind.

The lack of attention from both large rail companies results in underserved rural areas with farmers who cannot ship their agricultural products, logging and mining companies that become uncompetitive as they cannot ship on time and car manufacturers whose sophisticated supply systems are upended by dismal rail services.

I have met many of the farm lobbying groups, whether it is Pulse Canada, Canadian Soybean or the wheat farmers. They have all said that they are losing millions of dollars because of unreliable rail service. Unfortunately the Conservative government has only made token efforts so far to address these issues.

To make the situation worse, passengers in Canada are left out in the cold as well. The government is slashing funding to VIA Rail by $200 million this year, according to its estimates. Crucial investment in overhauling aging cars and engines, as well as safety upgrades, cannot be made. The combined neglect of railway companies and the federal government has reached an unprecedented level of under-investment across the country.

A crucial link from Vancouver Island, and my colleagues know this very well, was recently shut down as it had become unsafe after years of pent-up maintenance. Likewise, the rail connection between Montreal and the Gaspé has been severed, leaving passengers stranded and a whole region cut off after 150 years of rail history.

The overall service levels have decreased so much that various train connections in 2012 are slower than they were in the early 1990s. The connecting Winnipeg-Churchill train has seen its schedule lengthened by about five hours since 2008. The Halifax-Montreal train is now almost three hours slower than it was in 1993. Not surprisingly, ridership has gone down from 279,000 in 1996 to 127,000 in 2010, which is more than half.

Even the service on the connection between Canada's two largest cities, Montreal and Toronto, is slower than it was in 1992. Back then the train ride was just below four hours. Now it takes close to five hours.

The current state of Canada's railways is made even harder because of government policies that favour air and road travel over trail. For the financial year of 2009-10, all levels of government, taken together, spent $1.2 billion on subsidizing air travel. This number is more than twice the amount that was spent in 2001-02. Likewise, government support for marine transportation increased by 90% over the same time span, now reaching $1.8 billion.

What about roads? They are our government's pet projects. All levels of government spend close to $30 billion a year on highways and roads. Again, this amount has more than doubled since 2001.

Judging by the public discourse, transit is the ugly duckling when it comes to government support, but not quite. With almost $6 billion in government support, that is still light years away from passenger rail services. The rail service is treated as an afterthought. This is evidenced by the dismal amount of $430 million in government spending in 2009 and 2010. That is only a small increase of 12% over the 2001 levels, barely enough to keep up with inflation.

The new federal budget will put an X through that number, making it even lower, and more than a third of VIA Rail support is expected to be chopped, along with cuts to overall rail safety programs. Without a doubt, rail transport needs to be put on the national agenda again, not just for economic reasons but also to improve the safety and give Canadians the confidence they need when they make their travel arrangements.

As the transport critic, I welcome Bill S-4 and the step forward that it represents for Canada's rail safety. I am joined in my appreciation of the safer railways act by my New Democrat colleagues. However, it can be argued that it has taken far too long to get this bill to the current stage. By the time the bill receives royal assent, it will be over five years since an independent panel made 56 recommendations to Transport Canada on how to make our railways safer. It is in the interest of all Canadians to make the bill a reality as soon as possible.

The tragic VIA Rail collision in Burlington last month shows that we need to do more to prevent future derailments, fatalities and injuries. It is time for the Conservative government to take action and satisfy long-standing demands from the independent experts on the Transportation Safety Board. The agency has been calling for voice recorders on locomotives since 2003 and they are still not in place. More talk is not what we need; it is action that we want. Likewise, the Transportation Safety Board has been calling for automatic safety back-up measures, in the case of equipment failure or human error, to prevent tragic accidents.

In 2008 the United States acted after a horrendous crash in California. By making positive train control mandatory, the U.S. is ensuring that an automatic safety system is in place, just like the one the Transportation Safety Board has been requesting for more than 10 years. Seeing the life-saving value of this technology, the experts on the board have refined the cause and have specifically demanded the introduction of mandatory positive train control in Canada since 2010.

The New Democrats urge the Conservative government to heed the Transportation Safety Board's request to make our railways safer for passengers and rail workers alike. To enable VIA Rail to make its operations safer and to improve service levels, we also call on the federal government to reverse its funding cuts. Only by giving VIA Rail the financial resources that it needs, can we increase safety levels and restore confidence of Canadian confidence in rail travel.

Our demands are clear. We need Bill S-4 to pass. We want to ensure the Transportation Safety Board's recommendation for voice recorders and positive train controls are implemented as soon as possible. We have to make passenger rail services safe and reliable again by restoring VIA Rail's funding. The time to act is now. By taking those measures, we continue to build on the legacy that was accomplished by our predecessors. Without the vision of this honourable House, that famous last spike would not have been driven into the transcontinental railway in 1885. Let us have similar foresight in making railways a national priority again.

[Elizabeth May, Green, Saanich—Gulf Islands, BC]

Mr. Speaker, I thank the minister for his speech and for the improvements in railway safety represented in Bill S-4.

I would like to ask him if we could take it further. I certainly agree with my colleague, the hon. member for Esquimalt—Juan de Fuca, about how tragic it is when rail lines are not making their way to city centres the way they should and we are losing service across the country.

As a frequent VIA passenger myself, I have noticed that there are often rail delays, which then lead to the crews trying to make up with speed later on, and we know that can have tragic consequences.

A lot of this is due to the fact that the railway sidings are shorter now than the average length of a freight train, and since passenger rail must lease space and rely on freight for its signalling and safety, we have conflicts.

Is there anything the minister thinks can be done to invest in longer sidings and better transit connections so there is better sharing of the rails between passenger and freight in the interests of safety?

[Denis Lebel, Conservative, Minister of Transport]

moved that Bill S-4, An Act to amend the Railway Safety Act and to make consequential amendments to the Canada Transportation Act, be read the second time and referred to a committee.

Mr. Speaker, I am very pleased to present to you today for second reading Bill S-4, An Act to amend the Railway Safety Act and to make consequential amendments to the Canada Transportation Act.

I believe this is the first time I have ever had the honour of presenting a bill that is as finely crafted, broadly applauded and widely supported as Bill S-4.

This legislation has been in development for more than three years, with constant consultation and input from all levels of government, industry and labour stakeholders. It has also been commented on by witnesses, dissected clause by clause by standing committees on two separate occasions, and approved unanimously by all parties both times.

Clearly, the debate is over. It is now time to pass this important bill as quickly as possible to ensure the safety of Canadians.

Bill S-4 is clearly a progressive and forward-looking bill, and the amendments it contains will mean better safety for Canadians and Canadian communities, better protection for our fragile environment, and a stronger Canadian rail industry in a stronger national economy.

All of these things are priorities for our government, and I believe that they are priorities for all members in the House.

There is nothing more important than the safety and prosperity of Canadians.

As many members may know, the bill has quite a bit of history. For many years, the safety of Canada's federal railways was regulated under the Railway Act, which originated at the turn of the century when Canada's railway system was rapidly expanding. The Railway Act was designed for an older era. At that time, much of the national rail system was under construction to open up new territories to encourage settlement.

In 1989, the Railway Act was replaced by the Railway Safety Act, which was designed to achieve the objectives of the national transportation policy relating to the safety of railway operations and to address the many changes that had taken place in the rail transportation industry in recent years. The Railway Safety Act gave direct jurisdiction over safety matters to the Minister of Transport, to be administered by Transport Canada where the responsibility for other federally regulated modes of transportation resides.

Following a review of the Railway Safety Act in 1994, the act was amended in 1999 to further improve the legislation and to make the railway system even safer. Those amendments were designed to fully modernize the legislative and regulatory framework of Canada's rail transportation system. They were also designed to make railway companies more responsible for managing their operations safely and to give the general public and interested parties a greater say on issues of railway safety.

These changes were commendable, but there was a problem. A number of high-profile train derailments in 2005 and 2006 across the country—in Alberta, British Columbia, Quebec and in other provinces—resulted in fatalities, serious injuries, significant environmental damage and negative economic impacts for railways and communities.

These tragic accidents caused concern for the public and the government and focused national attention on rail safety. They also provided the impetus, in part, for the Minister of Transport to launch a full review of the Railway Safety Act in 2007. The objective of the review was to identify possible gaps in the act and to make recommendations to further strengthen the regulatory regime.

The seriousness of those derailments also provided the incentive for the Standing Committee on Transport, Infrastructure and Communities to begin its own railway safety study. The Railway Safety Act review was led by an independent panel of experts who commissioned research and held extensive public consultations across the country. Interest in the consultations was high and all key stakeholders participated, including railway companies and associations, labour organizations, national associations, other levels of government, municipalities and the public.

The panel's final report, “Stronger Ties: A Shared Commitment to Railway Safety”, was tabled in the House by the Minister of Transport in March 2008. In the report, the panellists noted that although the Railway Safety Act and its principles are fundamentally sound, more work is needed and a number of legislative improvements are required. The report contained 56 recommendations to improve railway safety in Canada.

The standing committee, which also conducted extensive stakeholder consultations, accepted the panel's recommendations and tabled its own report in the House in May 2008. The committee's report also made 14 recommendations, many of which built on those that came from the Railway Safety Act review.

The authors of both reports identified the main areas that required improvement and recommended increasing Transport Canada's resources in order to increase its ability to monitor compliance and enforce the legislation and take new rail safety initiatives.

Transport Canada agrees with the recommendations made in both reports and has taken steps to implement them through a variety of government-industry-union initiatives and through these proposed legislative amendments to the Railway Safety Act, which are required to address key recommendations and enable many safety initiatives.

In fact, Transport Canada took action to address these concerns almost immediately after receiving them.

In March 2008, following the publication of the report on the review of the Railway Safety Act, we established the Advisory Council on Railway Safety in order to get the process of consultation started again and to consider future directions in railway safety, the development of rules, regulation, policies and other matters of concern. The advisory council is made up of representatives of the main stakeholder groups, including Transport Canada, railway companies such as CN, CP and VIA, short line and commuter rail companies, the Railway Association of Canada, shippers, suppliers, other levels of government, and unions. The council has met three or four times per year since it was established, in order to work collaboratively on the strategic matters of railway safety that were raised in the report.

Additionally, working with the railways and the major unions, Transport Canada has established a steering committee, made up of representatives of Transport Canada, the industry and the unions, to oversee the development of action plans for implementing the recommendations in the report on the Railway Safety Act review and the report on the study conducted by the Standing Committee on Transport, Infrastructure and Communities. The committee has been supported by six technical working groups in addressing ways in which to implement the recommendations of concern not only to the regulatory body, but also to the industry and the unions, and in keeping the ACRS informed of their progress.

These joint technical working groups included teams devoted to the rule making process, safety management systems, information collection and analysis, proximity and operations, environment and new safety technologies. Together, those groups were assigned 24 recommendations by the steering committee. All of them have completed their work. Their recommendations have been, or are being, implemented. In addition to the work of these groups, Transport Canada implemented eight internal recommendations. Industry implemented three recommendations that pertained to the companies. The final 21 recommendations are related to legislative changes which we are discussing today. In short, these amendments to the Railway Safety Act are the final component of a well-orchestrated and well-funded drive to make our railways safer.

In budget 2009, the government affirmed its commitment to a safe, reliable transportation system by earmarking $72 million over five years to implement important rail safety measures and legislative initiatives. These amendments to the Railway Safety Act that we see before us today are the fruit of that commitment. This initiative also shows how important these amendments are to the government, and it reflects the government's commitment to seeing these amendments implemented as soon as possible so that Canada can reap the benefits from them immediately.

In March 2010, the government introduced Bill C-33, An Act to amend the Railway Safety Act. It contained essentially the same range of changes as the bill before us today does. Bill C-33, which all the parties in the House supported, was considered in detail by the Standing Committee on Transport, Infrastructure and Communities and then approved unanimously by all hon. members after some minor changes were made.

Unfortunately, Bill C-33 died on the order paper after many consultations, analyses and a very favourable reception, because the opposition chose an unnecessary election over the safety of Canadians. Knowing how important these essential amendments are with regard to safety, we reintroduced the same bill in the Senate, with the changes that everyone had agreed on.

Since then, a number of witnesses representing stakeholders have expressed their views and the bill has been reviewed and discussed at length in the standing committee of the other place. I am very pleased to say that the Senate committee, like ours, unanimously approved the bill with a slight change that was essentially administrative in nature.

There is clearly a lot of support for this bill from all parties. There have been thorough consultations over several years. The bill has been agreed upon in its various formats by all key industry stakeholders, as well as members of both the House and the other place. It is our responsibility to end this long debate and expedite the passage of this important legislation for the benefit of all Canadians. The safer railways act is acknowledged as the blueprint for the future of rail safety in this country. It would directly address the safety challenges that have been identified by two national reviews with innovative legislative solutions that would help make our railways and communities safer for years to come.

Mr. Speaker, allow me to highlight some of the key amendments included in Bill S-4. Each one is an important part of a comprehensive safety package.

In accordance with the recommendations arising from the Railway Safety Act review and the study by the Standing Committee on Transport, Infrastructure and Communities, the amendments under review will improve Transport Canada's oversight capacity by conferring on the Governor in Council the authority to require railway companies to obtain a railway operating certificate, attesting that they have met basic safety requirements, before commencing their activities.

The operating certificate, which will demonstrate that the company complies with baseline safety requirements, will apply to all railways under federal jurisdiction. Existing companies will have a two-year period from the coming into force of the amendments under review in which to meet the requirements for the certificate.

The amendments in Bill S-4 will also strengthen Transport Canada’s enforcement capacity in order to ensure better railway company compliance with safety rules and regulations. To that end, the department will apply monetary penalties to improve rail safety. The maximum amount of the penalties will be $50,000 for an individual and $250,000 for a corporation.

The new act will also strengthen Transport Canada’s enforcement powers by increasing fines to levels consistent with those for other modes of transportation. Maximum fines for convictions on indictment for a contravention of the act would be $1 million for a corporation and $50,000 for an individual. Maximum fines on summary conviction for contravention of the act would be $500,000 for a corporation and $25,000 for an individual.

One of the most important benefits of Bill S-4 is the increased focus on the importance of safety management systems. As members may know, a safety management system is a formal framework for integrating safety into day-to-day railway operations. During the Railway Safety Act review, stakeholders were supportive of the SMS approach to safety, but some felt that improvements were required before SMS could be considered fully implemented.

The amendments we are discussing today address those concerns. For example, under Bill S-4 all railway companies would be required to appoint an accountable executive responsible for all matters of safety. The legislation would also require all railway companies to implement whistleblower protection so that employees felt encouraged to report safety violations without fear of reprimand.

Railway companies would also be required, through the auditing process, to demonstrate that they continuously manage risks related to safety matters through the use of safety management systems. Changes like these would encourage the growth of a true culture of safety at both the corporate and operating levels of railway companies.

I noted earlier that the Senate committee had unanimously approved this bill with one minor change related to safety reporting. Although this bill originally called for the development of a new safety reporting process with the Transportation Safety Board and Transport Canada, all parties agreed that a reporting system already exists—the Transportation Safety Board—so that clause was struck. The rest, as mentioned, was agreed on unchanged.

The Safer Railways Act is clearly a step forward in terms of oversight, enforcement and the implementation of a safety system in the industry. It also advances safety in the administrative area by clarifying the authority and responsibilities of the minister in respect of railway matters. For example, these amendments will clarify that the legislation applies to all companies operating on federal track and will ensure that those companies are subject to the same high safety standards.

Bill S-4 is about safety. It is also about protecting our environment. By expanding regulation-making authorities, this legislation will allow Transport Canada to request an environmental management plan from all railways for federal review.

It will also allow a requirement for increased environmental information collection and railway equipment labelling related to emissions. These amendments plus an additional amendment to provide regulatory authority to control and prevent fires on railway rights-of-way are critical to strengthening environmental protection in the industry.

And that is what the amendments to Bill S-4 are basically all about: better oversight tools to ensure safety; enhanced safety management systems to build a stronger rail safety culture; and additional authority to help protect our environment from unnecessary degradation.

It is hard to argue with the importance of these amendments. Railways are an integral part of our infrastructure now, and they will be so in the future. We need them to be strong. We need them to be dependable. And we need them to be safe. All Canadians can benefit from that.

We believe that these amendments to the Railway Safety Act are essential and timely. Bill S-4 modernizes the Railway Safety Act to reflect the requirements of a growing and increasingly complex rail industry, and I believe that we can all agree to the important safety amendments contained in this bill both quickly and unanimously.

The bill is a step forward for Canadians, for safety and for the rail industry. With the agreement of the members today, we can take these steps together today, for a safe, reliable and economically viable freight and passenger railway system in Canada. The bill has been extensively debated over several years and has received wide support. I recommend that it be submitted to the Standing Committee on Transport, Infrastructure and Communities for further discussion.

I urge all hon. members to give this important bill their unanimous support.

Business of the House

[Peter Van Loan, Conservative, Leader of the Government in the House of Commons]

Mr. Speaker, with the encouragement and support of the opposition House leader, I will continue to try to engage all the House leaders and other parties in an effort to work on consensus approaches as to scheduling matters. I will make the observation that for a dance to work everyone has to be dancing. Therefore, I will continue to make my best efforts.

This afternoon, we will continue debating the opposition day motion from the hon. member for Hamilton Centre.

Tomorrow we will conclude debate on the amendments coming from the other place, on Bill C-10, the safe streets and communities act. We will have our final vote on this important legislation on Monday night. Bill C-10 will pass a number of important proposals that our government has put forward over the last five years that stand up for victims and for making our communities safer. I might add that Monday will be the 94th sitting day of the House, which means our government will have easily met our election commitment to make this bill law.

Also on Monday, the House will resume debate on Bill C-31, the Protecting Canada's Immigration System Act. We will return to this debate on Thursday and Friday.

Tuesday will begin with Bill S-4, the Safer Railways Act. This is an important bill that was nearly passed before the opposition forced an election last year. I hope we will see the debate conclude sometime Tuesday.

If we have extra time on Tuesday, the House will take up a second piece of legislation, Bill C-15, the Strengthening Military Justice in the Defence of Canada Act.

Wednesday shall be the seventh and final allotted day of the supply cycle. I might correct my friend that I do not think this has ever been designated in the House. We will debate a motion from the New Democratic Party and end the afternoon with two appropriations bills from the President of the Treasury Board.

Transportation Safety

[Denis Lebel, Conservative, Minister of Transport]

Mr. Speaker, our thoughts and prayers remain with the families of the victims of the tragic accident that happened some days ago.

Rail security is very important to our government, which is why we have taken strong action and delivered results.

Once Bill S-4 is adopted, we will have implemented 83% of the recommendations from the Rail Safety Act review panel, and our actions helped to decrease the numbers of rail accidents in 2007.

[Denis Lebel, Conservative, Minister of Transport]

Mr. Speaker, this has been discussed in the past, but as the member knows, that involves many partners, including unions and managers of rail companies, who will continue these discussions because it was tasked to have further discussions. We are very close to an agreement and to adopting a piece of legislation.

I would like to remind my colleague that for her party an opportunistic election was more important than ensuring the safety of hard-working Canadians. The previous version of Bill S-4, Bill C-33, died on the order paper on March 21, 2011. It went through first reading, second reading, committee stage and was reported to the House. We were so close.

[Denis Lebel, Conservative, Minister of Transport]

Mr. Speaker, we followed the implementation of this matter in the U.S.A., but have tasked the Advisory Council on Rail Safety on an urgent basis to look again into the matter of installing voice recorders in locomotive cabs.

Once Bill S-4, which will be very well supported, is adopted, we will have implemented 83% of the recommendations made by the review panel on the Railway Safety Act and 100% of the recommendations of the committee of which the member is part.

Canada-Panama Economic Growth and Prosperity Act

[Olivia Chow, NDP, Trinity—Spadina, ON]

Mr. Speaker, I wonder why today we are debating a free trade agreement between Panama and Canada. I wish I were standing here debating Bill S-4, the safer railways act, for example. That is a high priority for me.

The bill we are discussing would allow the Conservatives to be soft on crime and on criminals. How would the bill allow the Conservatives to do that? It would allow criminals to hide money obtained through illegal means in the tax haven of Panama. In fact, the Conservatives do not really want to track this money from illegal activities. They have no problem doing a trade deal with Panama even though Panama refused to sign the tax information exchange agreement which would disallow criminals from hiding their money in that country.

Right now there is absolutely no transparency. In a small country like Panama, there are 400,000 corporations, many of which are there just to hide their illegal funds. One might ask what kind of illegal activities those corporations in Panama are involved in. The country is used to launder drug money. It is used to divert aid. It is used to bribe the government. It is used to fund paramilitary groups. It is used to defraud shareholders. It is used to embezzle public funds. It is used for human trafficking. It is used to trade in illegal arms. Those criminal activities are intolerable and the people involved in them should be punished.

However, this trade deal would allow criminals not only to avoid taxes, but to also launder money and hide their funds. In fact, Panama is known as a major financial conduit for Mexican and Colombian traffickers' money laundering activities according to the U.S. Department of Justice and other entities. Let me read a memo from the U.S. Embassy in Panama that was revealed by WikiLeaks:

Along with its sophisticated banking services, Panama remains an environment conducive to laundering the proceeds from criminal activity and creates a vulnerability to terrorist financing.

These are the words of the U.S. Embassy, not of the NDP. The memo indicates:

The money laundering process of: placement (putting money into a legitimate financial institution), layering (distancing the money from its origin) and integration (causing the money to re-enter the economy in legitimate-looking form) is perfectly replicated in Panama.

My gosh. Placement, layering and integration; this is how criminals hide their money in Panama. Not just in that memo from 2006, but in 2009 a U.S. Embassy cable on Panama reported Panama's failure to report Colombian kingpin David Murcia Guzman's laundering of drug money. It is incredible. These criminals are using the drug money they have made from selling drugs and wrecking people's lives. They are able to take the money made from doing drug deals and hide it in Panama.

The Conservatives have said that is okay. They are going to turn a blind eye to it and will not even ask about who is behind the corporations. They do not want to know what kind of people are hiding money. They do not want to know about the illegal activities. They do not think it is up to them. They will see no evil and speak no evil, because it is another country. They are going to wash their hands of it and allow the criminals to continue their activities. That is inexcusable.

How would the trade deal make it even worse? The Canada-Panama trade deal would worsen the tax haven problems. As the OECD has noted, having a trade agreement without first tackling Panama's financial secrecy practices would encourage this secrecy and allow even more offshore tax dodging.

There is reason to believe that the trade deal would not only increase tax haven abuses, but it would also make fighting them that much harder. How would that happen? For example, even if we could persuade the government to put in place legislation giving Panama a deadline to clean up its act or face sanctions, and we tell the Canadian banks that they are restricted from transferring money to their affiliates, article 9.10 of this trade deal says that each party shall permit transfers relating to a covered investment to be made freely and without delay into and out of its territory.

What does that mean? It means speeding up the transfer of illegal funds. It means giving criminals more freedom to cheat. It means making sure that they can hide their funds without any barriers. Moreover, chapter 9 and chapter 12 of the FTA have non-discriminatory clauses that protect Panama's registered investors. That means protecting criminals from Canadians or anyone going after them.

Article 12.06 states that Canada will always allow Canadians to purchase financial services from banks operating in Panama.

This is the kind of deal that we are debating.

What is a tax haven? It means people do not have to pay any tax or very little tax on relevant income. They do not have to provide information about their income. There is a lack of transparency. There is no substantial activity by the taxpayers in that jurisdiction. That is the OECD's definition of a tax haven. Panama fits the criteria of this definition to a t. That is what it is known for.

Why are we doing a trade deal with that country? I looked at how much trade Panama is doing with Canada. I noticed that it is less than 1%. It is not a major trading partner for Canada.

Two-way merchandising trade between the two countries reached only $149 million in 2008 and is less than 1%. Therefore, why this rush for trade with Panama? I would understand if we wanted to discuss trade with China. There is a big market there. It is not as if Panama is a big country. It is well known as a tax haven.

This trade deal is being negotiated in record time without any consultations. Perhaps one of the reasons is that the government does not want people to rise up and say that to shelter criminals and be soft on crime is not the way to go. Perhaps that is why we are debating this bill.

Panama is well known for allowing people who are close to bankruptcy to take their cash and assets to an anonymous offshore company so that they do not have to pay their creditors. They rack up a big bill and owe a lot of people a lot of money, so they take their assets and hide it in a corporation in Panama. No wonder they have tens of thousands of these corporations functioning very well.

Panama is also known for allowing people to transfer profit to these offshore centres. In fact, in 2008, Goldman Sachs paid a federal tax rate of 1%. This was before it collapsed. It would have paid 35% in the U.S., but it only ended up paying 1% because it was able to move a lot of its money to Panama.

Global Financial Integrity estimates that there is $1.2 trillion in tax havens in secret jurisdictions around the world. One-third of that money, 33%, is money that comes from the proceeds of crime. As well, 3% of that money comes from corruption. That is $335 billion of criminal funds hiding in tax havens around the world. Because of these tax havens, one might ask how much tax is not being paid to governments such as the Canadian government. In total, governments around the world are losing $165 billion worth of taxes, which could go to AIDS, helping people in poverty, providing drugs for kids in Africa, providing education for women, creating jobs or building infrastructure around the world, but is not because of many tax havens, such as the ones in Panama.

Panama is also famous for the registration of ships. It is number one for flags of convenience. They could be Canadian ships. Some of us may recall that we have a famous person who has these ships that do not fly Canadian flags. Rather, they fly flags of convenience.

Do members know how many ships are registered in Panama? Eight thousand ships are registered there so they do not have to pay much tax. I would rather see some of these ships, those that are owned by Canadians and registered in Canada, pay Canadian taxes so we could take some of that money and provide health care for seniors, for example. There are lots of ways one could use the funds from tax avoiders.

Some of the 8,000 ships that are registered there, just registered but not really there, just fly the flag of convenience. Some of these ships do have crew members from Panama. What kind of people are they? Forty per cent of them are migrant Chinese workers who earn less than $3,000 per year. As a result of registration in Panama, illegal fishing vessels can avoid fisheries regulations and controls. Some of these fishing vessels can fish illegally using methods that are prohibited by international laws. Since they hide in Panama and fly flags of convenience, they do not have to be regulated. I focus mostly on these illegal activities.

French president Nicolas Sarkozy, in a speech made at the end of the G20 conference in Switzerland in November of last year, named Panama as one of the countries with serious problems. He said that countries that remain tax havens would be shunned by the international community.

Shunned by the international community, except Canada perhaps, because the Canadian Conservative government wants to be good friends with Panama. It does not want to curb these illegal activities. It does not want to understand or learn about the illegal arms groups that use Panama for drug trafficking. The government does not want to learn about the funds generated from illegal activities that are being laundered through banks, real estate developments and various corporations.

Panama is a country of extremes. It is a country of about 3.4 million people and yet 40% of the people living in Panama are poor and 27% of those folks, close to three out of ten, are extremely poor. The rate of extreme poverty is particularly acute in the indigenous population. Even though the country has endured extensive structural adjustments, liberalization and privatization in recent years, this has not translated into economic benefits for the population. I have no doubt that when this trade deal passes through the House of Commons it will not help four out of ten people in Panama and lift them out of poverty. It will help criminals, drug dealers, arms traders, people involved in extreme illegal activities and fraudsters.

Safer Railways Act

[Gordon O'Connor, Conservative, Carleton—Mississippi Mills, ON]

moved that Bill S-4, An Act to amend the Railway Safety Act and to make consequential amendments to the Canada Transportation Act, be read the first time.

(Motion deemed adopted and bill read the first time)

Message from the Senate

[The Speaker, Conservative, Andrew Scheer]

I have the honour to inform the House that a message has been received from the Senate informing this House that the Senate has passed the following bill: S-4, An Act to amend the Railway Safety Act and to make consequential amendments to the Canada Transportation Act.