Transport Committee on May 15th, 2014

[Stéphane Émard-Chabot]

On the insurance issue, the only dialogue that has taken place is the same that occurred, in fact, with CTA, which was an initial fact-finding meeting so that we understood what each part of the government did and where they were going. Then we simply filed submissions as part of that process. That's where things stand on the insurance issue.

[David McGuinty, Liberal, Ottawa South, ON]

That’s fair enough.

On the FCM proposal and on the CTA description, what strikes me is that all of this, whether we're going to move to a two-tier regime, whether the CTA is going to strengthen liability coverage—all of these proposals, all of this good work presupposes that Transport Canada is doing its job. Is that not right? This is a study about rail safety and safety management systems. We were clear in the CTA testimony that CTA is not responsible for rail safety. That's a Transport Canada matter, right? FCM's not responsible, nor municipalities, for railway safety or SMS.

Doesn't all your good work, your mandated work at CTA, which is defined by the statute under which you operate, and the proposal from FCM—doesn't that all presuppose that there is a proper functioning of Transport Canada's job as a regulator and as an enforcer of standards? Isn't that the floor on which you're all building?

[Pauline Quinlan]

Mr. McGuinty, I would like to add something. A working group was created by the Federation of Canadian Municipalities in order to look at the issue of rail transportation. The group represents municipalities from across Canada. We have done a lot of work since last summer. On three occasions, Minister Raitt participated in our work.

[David McGuinty, Liberal, Ottawa South, ON]

I am sorry, but I must cut you off, because that was not really my question.

I'm going to repeat the question for my colleagues across the way who want to hear it again, The question is, doesn't the proposal you're putting forth from FCM presuppose that Transport Canada is doing its job with respect to enforcement, auditing, inspections, and that the safety management systems are working, that they're being enforced?

[Daniel Rubinstein]

From our perspective, I'm not sure it's a question of presupposition. There are separate issues here. When we identified our rail safety priority areas last summer, we talked about: if you have an emergency, how do you deal with it? If you have an emergency, how do you pay for it? Then separately, and really most importantly, how do you prevent emergencies? They are separate questions. We're not pretending to conflate them.

[David McGuinty, Liberal, Ottawa South, ON]

Have the CTA and the FCM read the report of the Auditor General of Canada from last fall on rail safety?

[Daniel Rubinstein]

Yes.

[David McGuinty, Liberal, Ottawa South, ON]

Okay. What does the FCM have to say about the conclusions of the Auditor General with respect to Transport Canada? The Auditor General says, for example, he cannot determine whether there's a functioning safety management system in place. The Auditor General's concluded that on inspections and audits, 25% of the audits that had to be completed were completed. The Auditor General told us that even though Transport Canada and this government say they need 20 inspectors, they've only got 10 to enforce, inspect, audit, and regulate 31 railways, plus another 37 railways that are now on stream.

This document tells the Canadian people in black and white that enforcement is not happening, and this is the most credible voice I would argue, not the CTA, not the FCM, certainly not Transport Canada, the minister. The capacity we need to do the job to maintain SMS is not in place. Surely the FCM and the CTA have something to say about that. If you're going to propose a two-tier regime for new insurance, if you're going to propose a polluter pay principle, if you're going to talk about a massive exculpatory clause called the economics of shippers and the economics of railways, as you put it in your last couple of points, surely you're presupposing that Transport Canada is doing its job. Am I wrong here? Are Canadians wrong to conclude that they expect Transport Canada to be doing its job?

[Daniel Rubinstein]

From our perspective, obviously a robust audit function is critical. I'm sure anybody in the transportation regime would agree with that. The minister has said that the statistics that came out of the AG report will be improved, and we would expect that to be the case.

[David McGuinty, Liberal, Ottawa South, ON]

I would expect that too. That's why I wrote to the Auditor General after getting numbers from Transport Canada about qualified inspectors. The Auditor General wrote back to me after the audit, and here's what he said:

...we cannot provide any level of assurance on the information recently provided by Transport Canada officials.

If I'm at the FCM and I'm representing hundreds if not thousands of municipalities and small towns and villages, don't I have a responsibility to make sure that Transport Canada, as the national regulator, enforcer, inspector, and auditor is doing its job before I come forward with liability changes? Don't I want to see evidence up front for my municipalities, given what's happened in Lac-Mégantic?

[The Chair, Conservative, Larry Miller]

You're out of time, but we'll allow the answer.

[Daniel Rubinstein]

Obviously, all these issues have to happen in concert, and we've been asking for more prescriptive regulations across the industry. Yes, inspection is important, but you also have to start with the regulatory regime. We're not experts in SMS. I read all the transcripts from this committee, and I know any witness here says they've never seen an SMS. This is why it's important that we understand the regulations will be more prescriptive. In addition, we've been asking for things like the new risk assessment order that will improve safety in our communities. Not to diminish what you're saying, but all these things have to happen at the same time.

[The Chair, Conservative, Larry Miller]

Thank you.

Mr. Watson, you have seven minutes.

[Jeff Watson, Conservative, Essex, ON]

Thank you, Mr. Chair, and thank you to our witnesses for appearing.

For the benefit of the public watching, it was Mr. McGuinty who was begging for a meeting on liability, and has now wasted seven minutes on the Auditor General's report, and not a single question on liability....

To clarify the record, the Auditor General did appear before Public Accounts and said he wouldn't be able to provide information on the progress of Transport Canada until he does a follow-up audit, so perhaps Mr. McGuinty should have read the rest of the quote that was likely in the letter.

To our witnesses today, let's start with protective direction 32, which FCM has been participating in, along with the Canadian Association of Fire Chiefs, in the discussions with the federal railway companies. Do you support protective direction 32, which effectively calls on three things, as I understand it? One, it effectively establishes a registry of emergency planning officials in the communities; two, it establishes the obligation to provide historical data to these communities on dangerous goods through their communities; three, a means of engaging with those particular communities under confidential disclosure.

[Daniel Rubinstein]

Absolutely. Just to be clear for members of the committee, we asked for the content of protective direction 32. This was our request, developed in conjunction with the fire chiefs, and we're pleased that the government has implemented it.

There is one piece that you haven't mentioned, that I think gets to a concern that some of our members have raised, and it's certainly been raised here at the committee, that there is a need for real-time information. If you will give me a moment here I'll explain it the way I have to our board of directors.

We have an emergency planning concern and we know from the fire chiefs that before Lac-Mégantic, they did not have access to specific detailed technical information, so not a roll-up to say, “We ship chemical products on this line”, but detailed product name, UN number, and volumes. That's what PD 32 provides.

We do understand, though, that for short lines as in Lac-Mégantic with MMA, these companies do sometimes ship products for the first time during a year and we didn't feel it was appropriate to wait, which is why PD 32 obliges those companies to offer that information immediately.

[Jeff Watson, Conservative, Essex, ON]

When there is a significant change....

[Daniel Rubinstein]

That's right.

[Jeff Watson, Conservative, Essex, ON]

That's correct, okay.

Now it hasn't been argued yet today by the members opposite, but at meetings they have been consistently suggesting that there needs to be advance notification. The Canadian Association of Fire Chiefs disagree. They said that, for the purposes of emergency planning, for them such information is effectively futile and useless, in their words.

Does FCM suggest that there should be advance notification?

[Daniel Rubinstein]

Our position remains that PD 32 meets the planning need. We have a separate issue when an emergency happens.

I know CAFC went through this. Firefighters call CANUTEC. CANUTEC has been provided with the “consist” and MSDS from the railway, and that does need to happen in real time and effectively.

[Jeff Watson, Conservative, Essex, ON]

Right, now the suggestion, though, that PD 32 is somehow deficient, you would rebut that?

[Daniel Rubinstein]

We feel it meets the planning need that we identified when we made the request for this order.

That being said, this is a three-year temporary order. We'll see how it rolls out and if there are systemic issues there that we need to address, obviously we'll lobby for them, but we're just starting in the process and we do have confidence that it will meet the need that we identified together.

[Jeff Watson, Conservative, Essex, ON]

Before I move on to the issue of liability, how would you characterize the relationship with Transport Canada and Minister Raitt?

[Pauline Quinlan]

Immediately after the incident there was immediate concern and answer from the minister, assuring us that the government would cooperate with the FCM committee on railway safety.

As I mentioned before, we have had the chance to have the minister come to our meetings, listen to our concerns, and also listen to the degree of satisfaction following some of the steps that have been taken. We hope to continue that relationship. We know that Minister Raitt is probably going to come to Niagara for the FCM annual conference, and for us it is very important that we can express our concerns and satisfaction also.

It's a work in progress. It's going to take a long time before we make things perfect, but we should all follow that direction that has been set by FCM.

[Jeff Watson, Conservative, Essex, ON]

I look forward to the ongoing relationship for continuous improvement of our safety regime.

On to the question of liability, you've made some comparisons with respect to the marine sector in terms of how you would like to see the liability regime look for rail.

Once we ratify Bill C-3 for hazardous and noxious substances the marine sector will have access to an international fund, one will be created that way.

Under crude oil they have access to an international fund, and in addition, a domestic fund, the ship-source oil pollution fund.

Rail, though, is not a globalized mode of transport in the same way, so when you're making a comparison to marine I presume it's to the ship-source oil pollution fund and not access to an international fund. Is that fair to clarify FCM's position?

[Stéphane Émard-Chabot]

That is correct. We understand there are differences in the way these modes of transportation are structured globally. There is no worldwide organization to govern this, so it is a rough comparison. But the notion is a catastrophic fund that was set up for those big emergencies in the marine mode, and the need for that in a rail mode.