Evidence of meeting #27 for Transport, Infrastructure and Communities in the 41st Parliament, 2nd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was agency.
A video is available from Parliament.
10:30 a.m.
Director General, Dispute Resolution Branch, Canadian Transportation Agency
No, we have no authority to discuss the methodology, because we don't have the competence in this area.
10:30 a.m.
Liberal
David McGuinty Liberal Ottawa South, ON
Okay.
Did they tell you that Transport Canada doesn't even know whether its current staff of inspectors have the required skills and competencies to do their jobs?
Neither....
Did they tell you that their inspectors and managers were not trained on a timely basis?
Neither....
Did they tell you that they can't even warrant that their inspectors are objective and independent, because most of them come from the private federal railways? Did they tell you that?
10:30 a.m.
Conservative
10:30 a.m.
Director General, Dispute Resolution Branch, Canadian Transportation Agency
No, we just looked for the facts, that's all.
10:30 a.m.
Director General, Dispute Resolution Branch, Canadian Transportation Agency
Yes, I mean the facts related to a specific railway, that is kind of a very narrow interest that we have in assessing each obligation.
10:30 a.m.
Conservative
Jeff Watson Conservative Essex, ON
Thank you, Mr. Chair.
Mr. McGuinty has now used 11 minutes to not talk about liability today, when he asked for a meeting on liability.
That's okay, Mr. McGuinty, you can talk about information that's two years old if you wish, but I'm going to ask the witnesses different questions.
So here's a question on liability. Returning to the question of liability, how do we handle the short lines?
For the creation of a fund where there is joint liability among shippers and the railway companies, as you've suggested, perhaps even brokers or others who may be part of that supply chain, there's concern about whether short lines can manage the cost. Should they be levied in the same way that a class I railway should be? Should everybody be proportionally in at the same amount, or should they be structured differently according to their risk profile? What would you recommend, or what kind of guidance would you give us with respect to developing that?
10:30 a.m.
Senior Policy Advisor, Federation of Canadian Municipalities
Obviously, the risk profile is a key component to begin with. I think we all agree on that. In terms of balancing short lines and class I railways, we've said very clearly in our submission that they can't be the same level, that the economics of short lines are very different.
10:30 a.m.
Conservative
Jeff Watson Conservative Essex, ON
But in fairness to those in class I, they weren't involved in Lac-Mégantic and the scale of a disaster with respect to Lac-Mégantic, so how do we address this? If it's true that the insurance is all taken up, we also have a fund, we have to look at how people are assessed in the fund.
Second, if we look at the ship-source oil pollution fund itself, which is at about $400 million, there hasn't been a levy paid into that since about the time I was born. It's gone through periods of 22% interest rates, where obviously that's been allowed to accelerate to a level of about $400 million.
We have to be able to consider what would be sufficient if they carry less insurance for a short line, how sufficient a size should a fund be structured, what would the levy look like for them, and is it fair in light of the scale of Lac-Mégantic that they pay less than others who are in that?
10:30 a.m.
Senior Policy Advisor, Federation of Canadian Municipalities
We know that short lines are key components of the entire transportation system, and if you listen to CN, they'll say “our short line partners,” so there is a shared responsibility across the transportation network. The class I railways need the short lines to deliver some products.
There is a mechanism here that's going to have to be figured out on how to share that risk. We know from our members, especially in Quebec, the sensitivities of adding financial burdens onto short lines that are key economic drivers. We have to find a way to do it. You've used the example of the ship-source oil pollution fund, small levies across the full continuum for a short period of time—
10:30 a.m.
Conservative
Jeff Watson Conservative Essex, ON
If you have $50 million in insurance and you have a very significant occurrence that would exceed a $400-million fund potentially in terms of cleanup, and all of the compensation to victims, and environmental damages, and everything else, is $400 million sufficient? Should it be higher?
10:35 a.m.
Senior Policy Advisor, Federation of Canadian Municipalities
That will be a decision for the government to decide.
10:35 a.m.
A voice
Do your job.
10:35 a.m.
Conservative
10:35 a.m.
Senior Policy Advisor, Federation of Canadian Municipalities
Just to finish the thought, the announcement that Minister Raitt made on the oil tankers sets up a potential model, where you have access and above that cap it's available. Consolidated revenue fund pays for it and then a levy is charged afterwards. There are options here on how to deal with that.
10:35 a.m.
Conservative
10:35 a.m.
Conservative
Jeff Watson Conservative Essex, ON
The fund would still have to be contributed to in order to build the fund. The other levy would be a charge back to the general revenue, if we have to cover the potential liability up front.
10:35 a.m.
Senior Policy Advisor, Federation of Canadian Municipalities
That's right.
10:35 a.m.
Conservative
The Chair Conservative Larry Miller
No further comments.
Mr. Komarnicki, you have the last four minutes.
10:35 a.m.
Conservative
Ed Komarnicki Conservative Souris—Moose Mountain, SK
Thank you.
Just back on that short line issue, our mayor in my town of Estevan has said that one of his concerns was whether the various short lines operating in the province have enough insurance for operating and if there was a major disaster. Would you agree that the issue with the short lines is quite different from the issue of those in class I?
If I heard you correctly, Mr. Rubinstein, you're suggesting a broadening of the coverage for class I and sort of a gradual building of a fund. The issue relating to that is quite different from the short lines that are operating on a more immediate basis and having difficulty reaching what you might consider a reasonable amount of insurance. How do you consider that and what are you taking into account for issuing these certificates of fitness for short lines?
10:35 a.m.
Director General, Dispute Resolution Branch, Canadian Transportation Agency
You're absolutely right, and I agree with my colleagues from FCM. Short lines are absolutely vital and they're not only vital for the transportation system, they're vital for the shippers as well, especially in the prairies and out west. There are a number of short lines that help deliver commodities, the goods that are produced, and that support economic activity overall.
What we are seeing is that the short lines currently—and I'm only speaking about federal ones, I cannot comment on the provincial railways—are holding amounts of insurance that are commensurate with the scope of their operation. In the prairies, there are very few dangerous commodities that are carried, but where they are carried is where we need the particular fund that would cover catastrophic events, should they happen. On a day-to-day basis, they mostly carry just regular bulk goods, forest products, grain, pulses, and so on.