Transport Committee on May 15th, 2014

[Lawrence Toet, Conservative, Elmwood—Transcona, MB]

Thank you, Mr. Chair.

I would like to pick up on that a little bit. It has become pretty obvious from the conversation here that there is a sense that there should be a sharing of responsibility on behalf of the shipper. As Mr. Komarnicki mentioned, a lot of the shippers, especially of dangerous goods, have already indicated they have a premium placed on the shipping of their goods, higher than any other particular good would be, moving down the exact same line at the exact same speed with the exact same train assemblage.

The question is, if that's a shared responsibility, should that premium be going into a separate entity, a separate fund, that really is a third party liability fund?

[Daniel Rubinstein]

That's what our proposal has been. We're not the economic regulator and we don't deal with these kinds of issues either, but it makes sense that these are happening in the absence of that fund. It doesn't exist today.

[Lawrence Toet, Conservative, Elmwood—Transcona, MB]

Based on having that perception, how do you propose a breakdown of this liability? What percentage of liability is going to be taken by the shipper? What percentage by the rail line? On what basis do you come up with those breakdowns?

It's good to have these conversations and to say we need to do this, but we need to have an understanding of where the breakdown comes in and on what basis you come up with that.

[Stéphane Émard-Chabot]

We've said this in our documents and our presentation. Obviously, that is subject to a lot of modelling, to see if what we think is a good idea can actually work on the ground. It's not only the shipper and the carrier, it's also the end industrial user. You can include in there the brokers who import and export, which is big business. That's how the marine model was developed. How you do the breakdown, obviously we're no experts on that front. We would like to participate in a process to explore further the feasibility of this and the economic impacts on the different industries.

Let's not forget that this is very different from buying insurance for operations for a one-year contract with your insurance company. This is not insurance on your home. This is a very long-term proposal. The fund doesn't have to be capitalized in the first three years. You can take a much longer window on that and it becomes, at that point, something that becomes manageable.

[Lawrence Toet, Conservative, Elmwood—Transcona, MB]

I would like to get back to Mr. Sullivan's line of questioning, with regard to the train tracks being moved closer to development. That may happen the rare time. Essentially, I think we all know and will acknowledge that the reality of what's happening is development is moving toward the train tracks; it's not happening the other way around for the most part.

I was hoping you would actually build a table with the committee, through the Chair, of the exact wording of the proposals you've been bringing forward to members of the FCM as to setbacks and urban planning, because it's more than only setbacks, it's also urban planning. It's not building a high school on one side and allowing them to put a Tim Hortons on the other side of a railway track. These are things that are happening and they need to be looked at.

At what point do municipalities take on a liability if they're not following some kind of reasonable structure in this urban planning?

[Pauline Quinlan]

I believe that the work that we are doing with proximity issues will bring us to these discussions. We realize that the provinces are, to start with, making sure that in each municipality we have what we call

a city plan, a development plan.

I believe it has to start at that level, and municipalities definitely have to have better regulations.

To your question, yes, I think FCM is very aware. We have been working for the last couple of years on those proximity issues with the Railway Association of Canada. I think your point is very well taken that it's not only the responsibility of the railway system, it's also a great responsibility of municipalities. Lac-Mégantic has brought us all, I think, to realize that we all have a role to play and the objective is the safety of our population and of our economy.

[Lawrence Toet, Conservative, Elmwood—Transcona, MB]

We've talked a lot about the railways consulting with municipalities as to what comes through. I think we all agree that's appropriate and should be done and we're happy to see that. We've heard today that this is a much better and more robust conversation than it ever has been before.

But I hope that the municipalities are also looking at it and, as they're doing development, especially when they know they're going to be developing around railway tracks, they're actually having consultations with the rail lines and talking to them. What's going down this line? What particular things do you see going down this line in the next five to ten years? I think that would also be a helpful conversation to try to avoid some of these situations.

We're talking about alternate routes, but sometimes we can end up taking away an alternate route if we're not really thinking about that in the development stage.

[The Chair, Conservative, Larry Miller]

Mr. Rubinstein, do you want to comment on that?

[Daniel Rubinstein]

This is exactly what the guidelines are about and communities that are doing it properly are having those conversations. When we first produced the guidelines in 2003, it assumed that all the development was happening in a greenfield setting. Where you can do a setback and a berm, then it's great, but the challenge is really in an urban core. What do you do when Montreal or Toronto or somewhere else wants to develop their urban core? That's reasonable, but you have to mitigate it, and the cost has to be on the developer and you have to have that conversation at the front end.

The challenge we have at FCM is we don't have jurisdiction over land use. I know it's very frustrating for the federal railways and it's a constant thing. These are provincial decisions, but we certainly are providing as much guidance as we can.

[The Chair, Conservative, Larry Miller]

Thank you very much.

We're going to have about four minutes for Mr. Mai, Mr. McGuinty, and two here.

Mr. Mai.

[Hoang Mai, NDP, Brossard—La Prairie, QC]

Thank you, Mr. Chair.

My question is for the people from the FCM.

You talked about the government's throne speech. We are also outraged by the fact that the taxpayers will ultimately have to pay for the damage caused by railway companies. The objective is not to demonize railway companies, but it must be said that it is not fair that taxpayers have to pay.

What promises have been made but not yet delivered on? What else do you expect from insurance companies? What should the government do from a legislative point of view?

[Daniel Rubinstein]

There are two processes that have been happening. We have the CTA process to refine the day to day, which I think we all agree generally works, but could be tweaked. Then we have a challenging concept here of how to build a catastrophic regime and the kinds of questions we've had today about how to share the costs. We're not the ones to arbitrate that and that's the difficulty. How do you build that, what's the full continuum, what are the rates, do you do it as a fee, do you do it as a cost-recovery levy after the fact? Obviously, there are precedents in other modes.

What we've said is the government's recognized the principle. That was big step and, obviously, that will have to be followed by a proposal that all stakeholders can comment on.

[Hoang Mai, NDP, Brossard—La Prairie, QC]

Since you're more involved with the government than we as the opposition are—you're able to get information from the government—do you have any idea of when such regulations will be put forward in terms of your legislation?

[Daniel Rubinstein]

No, we don't have a firm timeline. Obviously, the CTA has a process it's going through and I'd imagine it would make sense to have the CTA conclusion and at least Transport's initial thinking happen at the same time. Otherwise, the CTA is going to be faced with some very uncomfortable questions about why they're not addressing an issue that's outside their jurisdiction. I think these timelines will influence each other.

[Hoang Mai, NDP, Brossard—La Prairie, QC]

But ideally the timeline would be to have regulations as soon as possible, I assume.

[Daniel Rubinstein]

Of course, yes.

[Hoang Mai, NDP, Brossard—La Prairie, QC]

I have a question for the CTA. Basically, you don't have the authority to ask for either shared liability or the shippers' liability because there was no legislation that was brought forth by the government. So, at the end of the day, you have to work within the regulatory framework that you have.

Can you make the recommendation that we want, for instance, to make sure that taxpayers don't have to pay, so we have to have more shared liability or...? You can't do that, I guess.

[Nina Frid]

No, I'm sorry.

[Hoang Mai, NDP, Brossard—La Prairie, QC]

But I guess we understand that at the end of the day, if we really want to make sure....

I'll come back to the MMA issue. If I understand correctly, MMA, or for all other companies...that's what we've been saying in terms of self-regulation or auto-regulation. Is it the company that has to tell you, well, for instance, we've increased our shipping, or we have more dangerous goods, so you have to ask us to increase our insurance? Is that how it works?

[Nina Frid]

How it works is very close to what you described except for the last part. So let's take MMA, for example. If a railway decides to acquire additional lines, so expand the network, or abandon some of the lines, which was the case with MMA, they have to apply to the agency for the amendment of their certificate of fitness. That's all they ask. The agency will investigate what kind of impact the change in their network will have on the insurance, and so whether it is still adequate or not.

[The Chair, Conservative, Larry Miller]

Thank you very much.

Mr. McGuinty, four minutes.

[David McGuinty, Liberal, Ottawa South, ON]

Thanks, Mr. Chair.

Ms. Frid, can you tell us how many qualified auditors there are right now auditing for rail safety? Do you have any idea?

[Nina Frid]

No, unfortunately, I can't say that because we don't have any role in safety and we don't have inspectors on this.

[David McGuinty, Liberal, Ottawa South, ON]

In your criteria that you listed for the providing of a certificate of fitness, do you demand the written copy of the safety management system for the federally regulated railways?

[Nina Frid]

No, we don't. To assess the safety record of a railway, we talk to our colleagues at Transport Canada, and we ask them to give us information specifically about that railway and what they know.