Transport Committee on April 1st, 2014

[Mike Sullivan, NDP, York South—Weston, ON]

Thank you, Mr. Jeanes and Mr. Gardner.

Mr. Gardner, I'm going to let my colleague ask questions of you, and I'm going to focus on Mr. Jeanes.

The reason we're here, I guess, is Lac-Mégantic, but in general the transportation of dangerous goods. You mentioned the abandonment by the railroads of a couple of what I would have thought to be key routes which didn't go through the city of Toronto but up the Ottawa Valley. These were done after the beginning of the wave of the transportation of crude oil. I wonder if you know—you probably don't— whether the railway companies actually used profit as the only driving method for determining whether or not to abandon those lines, or whether they took safety into account in analyzing the risk of whether or not to transport more dangerous goods through Toronto as a result of abandoning those lines.

[David Jeanes]

Well, the Canadian Pacific line up the Ottawa Valley avoided major population centres because it passed south of Ottawa through Smiths Falls. Of course many towns are on the railway lines. Many of the towns owe their existence to the railways, as did the town of Lac-Mégantic. So one cannot avoid population centres altogether.

The concern we have is there is such a concentration in such very narrow corridors. If you go east of Toronto, the only railway lines connecting east and west within Canada pass a few hundred yards apart through the city of Port Hope, and there are no other east-west routes connecting eastern and western Canada.

The derailment I mentioned, a very serious one that destroyed a bridge over the rivière du Sud in Montmagny, completely severed the only container route available to Canadian National between the port of Halifax and the rest of Canada.

This is partly to do with the effectiveness of our system as well as the safety of the communities. We've known about the dangers of transporting dangerous goods since the Mississauga derailment in the 1980s, and as was discussed earlier, there have been measures, mainly lower speeds and more automation in monitoring the correct performance of wheels, axle, etc., on the trains.

We just think that the abandonment of railway tracks in Canada for economic reasons should be counterbalanced with a government concern for the integrity of our national rail network so that we do have the kind of options the Transportation Safety Board is looking for.

[Mike Sullivan, NDP, York South—Weston, ON]

Thus far, this government and the government before it have been relatively silent on the whole notion of maintaining an integral structure.

[David Jeanes]

Also, the New Brunswick and federal governments are being almost completely silent right now on the abandonment of the Intercolonial Railway between Bathurst and Newcastle, New Brunswick, which is severing VIA Rail's passenger route from Montreal to Halifax and is taking away an alternate freight route into New Brunswick, should the main freight line through Edmundston become unavailable, as it did during the recent major CN derailment on that line.

[Mike Sullivan, NDP, York South—Weston, ON]

In terms of the Transportation Safety Board's recommendations in the past, and we expect there will be some in the future—there were some on January 23—with regard to the Burlington crash, which is the most recent on VIA Rail, there were three very specific and very detailed recommendations: one, positive train control; two, that video recorders be installed on trains; and three, that the cab of the train be structurally sound enough to protect its occupants in the event of a derailment.

To date, this government has not yet adopted any of those measures in any forceful way. VIA Rail has said that they will voluntarily comply.

Ought there be some kind of force by the Transportation Safety Board on this government to actually impose these new regulations?

[David Jeanes]

We think there should be. The example of the United States is that Congress took that responsibility by enacting legislation that there would be positive train control. Now there are some logistical problems in when it will actually be completely rolled out, but the railways are already investing heavily there because they have to.

In the rest of the world, those kinds of investments have already been made. Positive train control in the United States actually goes back to the 1920s, when it was first introduced. Yet in Canada, with the single exception I mentioned of the O-Train in Ottawa, a passenger railway, we don't have it on any of our federally regulated rail lines that carry passenger traffic.

So yes, federal government action is required there. We're moving much too slowly in the wait-and-see attitude to see how it works in the United States after the railways there have made these investments, including Canadian-owned railways. CN and CP are making those investments in the U.S. portions of their network.

I think that's something the government must do.

[Mike Sullivan, NDP, York South—Weston, ON]

Those investments will cross the border. As those locomotives cross the border, so will the positive train control—

[David Jeanes]

No, unfortunately—

[Mike Sullivan, NDP, York South—Weston, ON]

—on the locomotive itself—

[David Jeanes]

On the locomotive, but it's—

[Mike Sullivan, NDP, York South—Weston, ON]

—but not on the—

[David Jeanes]

But it has no value if it isn't also implemented by the wayside systems along the track—

[Mike Sullivan, NDP, York South—Weston, ON]

Exactly.

[David Jeanes]

—and that is an expensive component that must be addressed, whether it has to be addressed with private money solely.

The railways are the only mode that has to pay for all its own infrastructure. To solve this problem it may not be something that can just be left to the railways and their own investment programs. I think the government must be involved, particularly because of how far we lag behind the progress in the rest of the world.

[Mike Sullivan, NDP, York South—Weston, ON]

One of the things from the Transportation Safety Board in the analysis of the Burlington crash was that it was a missed signal, so it's human error. A missed signal is missed hundreds of times each day in Canada; it's only a handful of them that result in a collision.

[David Jeanes]

I don't think it's hundreds of times a day, because—

[Mike Sullivan, NDP, York South—Weston, ON]

Hundreds of times a year—sorry. It's hundreds of times a year.

[David Jeanes]

Hundreds of times a year, but I think perhaps once a day.

Now, many of those incidents are occurring at very low speeds in rail yards and so on, but it's not only driver inattention; the interpretation of those signals is extremely complex. There are many, many different colours of light indications. The colour and position of the lights are all you have to go on. There is no readout in the locomotive cab that tells you what the signal means, unlike railways in most other parts of the world, and there's no backup should the crew, for whatever reason.... And we will never know the reason for the Burlington crash, because we don't know exactly what was happening in that cab, hence the recommendation for cameras and audio recording.

On the third recommendation on protection of the actual driver's cab, that was a tragic way that accident unfolded, with the way the locomotive collided with a concrete building beside the track. That particular thing, while important, we don't view as being nearly as important as addressing the need for positive train control.

[The Chair, Conservative, Larry Miller]

Thank you.

Mr. McGuinty, you have seven minutes.

[David McGuinty, Liberal, Ottawa South, ON]

Thank you, Mr. Chairman.

Professor Gardner, I would like to discuss your proposal. You mentioned the importance of placing people above all else and, in that perspective, you are proposing a new compensation regime for people who are victims of accidents. However, in today's study, we are mostly discussing railway safety to avoid having accidents. I understand what you are proposing quite well in terms of compensation, but I would prefer the issue not be addressed after the fact, but rather avoided altogether, so that a tragedy such as the one in Lac-Mégantic does not reoccur.

In Canada, railway companies have to transport all the products they are presented with, including dangerous goods. It is therefore understandable that Canadian National and Canadian Pacific each carry liability insurance of over $1 billion. What do you think of the idea that owners of dangerous goods should also have to share the liability?

In the case of Lac-Mégantic, the Irving company owned the goods being transported. From what I understand, that company had absolutely no responsibility. In other words, it was not up to Irving to pay for the clean up in Lac-Mégantic. It was not responsible for compensating local residents. Finally, it did not have to pay for the environmental remediation.

Is it your opinion that the time has come for the owners of such goods to assume some responsibility? What do you think about this issue?

[Daniel Gardner]

This may surprise you, but that already exists in Quebec, and has been there since 1978. That is not recent. Since 1978, the Environment Quality Act stipulates that all owners of contaminants — and of course the act lists contaminants, including the oil that was being transported through Lac-Mégantic —, even if they are not in their control at the time of the accident, are responsible for the clean-up costs. Furthermore, the order was issued by the Minister of the Environment.

You say that Irving owned the oil, on July 6, the day of the tragedy. However, according to certain statements made in the context of the current class action suit , it would seem that that issue is in dispute. Did World Fuel Services, the company who initially owned the oil, remain its owner until the oil arrived in the port of Saint John, New Brunswick? Or did Irving own it? To my knowledge, the notice was sent to both presumed owners.

As you can see, such measures already exist, but unfortunately, the Department of the Environment is the only beneficiary. This only has a bearing on environmental damages. That provision cannot be invoked for anything to do with victims' compensation, including under a class action suit.

Would it be feasible? Certainly. Will this provision, which triggered an order, be challenged by the owner, probably all the way to the Supreme Court, so it can be deemed unconstitutional? Most probably. Will these people succeed? In my opinion, no, as was the case for tobacco companies who lost before the courts when legislation specifically allowing them to be sued was enacted.

The fact remains that for this particular issue, things will drag on for 10 years. That is how long it would take for a constitutional challenge of this provision. I do not know if such a provision already exists in other provinces, but this particular one has existed in Quebec since 1978.

[David McGuinty, Liberal, Ottawa South, ON]

Given the Lac-Mégantic events, is Quebec rethinking the fact that liability begins and ends with issues that are strictly ecological and environmental?

[Daniel Gardner]

As you know, railway transportation is mostly under federal jurisdiction. Therefore, even if Quebec wanted to intervene in an accident such as Lac-Mégantic's, it would be unable to do so. It would have happened a long time ago were it possible. For example, the Automobile Insurance Act, which provides for automatic compensation, excludes trains simply because of jurisdictional issues, whereas in other states like Australia—I am choosing Australia as an example because its federal regime is similar to ours—not only are car accidents covered by automatic compensation, but train accidents are as well.

This really is about shared jurisdiction. The Quebec government could in fact go that way for its internal railway tracks over which it has jurisdiction. The problem or advantage is that internal railway tracks, which fall under Quebec's jurisdiction, go through very sparsely inhabited areas, whereas tracks that are under federal jurisdiction go through Quebec's cities and villages. Those tracks present the greatest risk of incidents in which there would be victims suffering bodily harm and victims of property damage.

[David McGuinty, Liberal, Ottawa South, ON]

According to your testimony today, it would be possible for the federal government to completely review the issue of civil liability and that that liability be shared with the deemed owner, meaning the company which would eventually be affected.

[Daniel Gardner]

There are two ways of approaching this. The first would be to make only the carrier liable but the freight rates would vary according to the dangerous nature of the product and everyone would have that mandatory insurance.

The second would be to make the carrier directly liable—ultimately it is their insurer who will have to pay compensation—and to give them a special subrogatory recourse right against the owner who would have shared liability for the goods in question. Regardless of the approach, I think that it would be logical to make the owner of a dangerous good more responsible than the owner of chickens or grains, which is how it used to be in rail transportation.

The point is to share the risk, whether that is done directly with a regime by which the owner pays a share of the insurance premium, or a liability regime for the owner who will have to subsequently respond.

What is important is that it not be the victims who have to figure out who to prosecute and who to ask compensation of. The carrier or the insurer must provide automatic payment.