Safe and Accountable Rail Act

An Act to amend the Canada Transportation Act and the Railway Safety Act

This bill was last introduced in the 41st Parliament, 2nd Session, which ended in August 2015.

Sponsor

Lisa Raitt  Conservative

Status

This bill has received Royal Assent and is now law.

Summary

This is from the published bill. The Library of Parliament often publishes better independent summaries.

This enactment amends the Canada Transportation Act to strengthen the liability and compensation regime for federally regulated railway companies by establishing minimum insurance levels for railway companies and a supplementary, shipper-financed compensation fund to cover damages resulting from railway accidents involving the transportation of certain dangerous goods.

Among other things, the amendments

(a) establish minimum insurance levels for freight railway operations based on the type and volume of goods that are transported;

(b) require the holder of a certificate of fitness to maintain the liability insurance coverage required by that Act, and to notify the Canadian Transportation Agency without delay if its insurance coverage is affected;

(c) establish that a railway company is liable, without proof of fault or negligence, subject to certain defences, for losses, damages, costs and expenses resulting from a railway accident involving crude oil or other designated goods, up to the level of the company’s minimum liability insurance coverage; and

(d) establish a compensation fund in the Accounts of Canada, financed by levies on shippers, to cover the losses, damages, costs and expenses resulting from a railway accident involving crude oil or other designated goods that exceed the minimum liability insurance coverage.

The enactment also amends the Railway Safety Act to, among other things,

(a) allow a province or municipality that incurs costs in responding to a fire that it is of the opinion was the result of a railway company’s railway operations to apply to the Canada Transportation Agency to have those costs reimbursed by the railway company;

(b) clarify the Governor in Council’s power to make regulations respecting the restriction and prevention of access to land on which a line of railway is situated, including by means of fences or signs on that land or on land adjoining it;

(c) authorize a railway safety inspector who is satisfied that there is an immediate threat to the safety or security of railway operations to order a person or company to take any measure that the inspector specifies to mitigate the threat;

(d) authorize the Minister to require, by order, a company, road authority or municipality to follow the procedures or take the corrective measures that the Minister specifies if the Minister considers it necessary in the interests of safe railway operations;

(e) provide the Governor in Council with a regulation-making power regarding the submission of information that is relevant to the safety of railway operations by any person, other than the Minister to any person;

(f) authorize the Minister to order a company that is implementing its safety management system in a manner that risks compromising railway safety to take the necessary corrective measures; and

(g) declare that certain regulations and orders that were made under the Railway Act are deemed to have had effect from the day on which they were made under that Act and that those regulations and orders continue to have effect from that day as if they were made under the Railway Safety Act.

Elsewhere

All sorts of information on this bill is available at LEGISinfo, provided by the Library of Parliament. You can also read the full text of the bill.

Safe and Accountable Rail ActGovernment Orders

March 30th, 2015 / 1:40 p.m.
See context

Conservative

Larry Maguire Conservative Brandon—Souris, MB

Mr. Speaker, my colleague's question is an important one because it refers to a situation I had the opportunity to deal with in my farm leadership life on the Prairies before I came to Parliament or the Manitoba legislature.

We have been dealing with train sizes and speeds for many decades. It is the reason why I was so firm with respect to ensuring that the emergency response task force include stakeholder input throughout the whole process as it was developed. That is over and above the insurance liability. Compensation is only one aspect of covering the costs of cleanup.

We would like to see measures put in place to prevent these accidents from happening. I believe Bill C-52, the safe and accountable rail act, would create a situation where there would be more planning on the table with respect to the emergency response task force and the emergency response plan, which would inevitably reduce some of these accidents. However, as I said earlier, one of the answers is to move more oil the tracks and into pipelines.

Safe and Accountable Rail ActGovernment Orders

March 30th, 2015 / 1:40 p.m.
See context

Liberal

Adam Vaughan Liberal Trinity—Spadina, ON

Mr. Speaker, it is interesting to hear that because during the by-election the NDP candidate who I ran against said that the New Democrats would never support any pipelines. Which is it? Is it no pipelines or is all of this to go by rail? What is the position of the NDP? I am trying to get an answer on that one.

Safe and Accountable Rail ActGovernment Orders

March 30th, 2015 / 1:40 p.m.
See context

Conservative

Larry Maguire Conservative Brandon—Souris, MB

Mr. Speaker, I have also heard the New Democrats say in the House that do not want it to move oil by pipeline but they also do not want it to move by rail. I do not think the answer is to try to move it all by truck either. Although I thank my colleague for that question, there is a bit of a setup there. However, it looks like neither party is in favour of moving oil by pipeline.

Safe and Accountable Rail ActGovernment Orders

March 30th, 2015 / 1:40 p.m.
See context

NDP

Matthew Kellway NDP Beaches—East York, ON

Mr. Speaker, I am pleased to rise today to speak to Bill C-52, an act to amend the Canada Transportation Act and the Railway Safety Act.

Railway safety has been a very important issue to the New Democratic Party. We have watched multiple derailments across this country over recent years. This topic has gained a lot of attention and is of tremendous concern to the Canadian public. That concern was most certainly heightened by the terrible tragedy of the derailment in Lac-Mégantic, where 47 lives were lost. It is important to keep at the front of our minds as we discuss railway safety in the House that when accidents like this happen, there are losses that are irrecoverable. Those losses include the loss of life and they include damage to our environment which in many cases we cannot recover.

Since that terrible tragedy in Lac-Mégantic, the Conservatives have promised time and time again to rectify the shortcomings of the railway safety system in Canada with increased safety inspections and rail safety compliance measures. They have yet to honour that commitment and this bill does very little to move us closer to that commitment.

With three train derailments occurring in the span of a month recently, this is a pressing issue, top of mind for many Canadians, not just for those who live where the derailments occurred, but right across this country, for those who live or have loved ones who live close to railway lines. This is an issue which the government has been scrambling to catch up with for the duration of its time in government, which is coming on 10 years now.

So far, these derailments have occurred mainly in rural areas, the terrible tragedy in Lac-Mégantic notwithstanding. As the critic for urban affairs, I am hoping to draw the attention of the House to the potential economic, human, and environmental costs that would arise if something like this were to happen to a train passing through one of our big cities. It should be noted that this bill would do little to alleviate the costs associated with a derailment in urban areas, where in many cases there are tens of thousands of people living quite literally within a stone's throw of a potential derailment site.

There are some principles that we in the NDP adhere to, stand by, and put forward that inform our comments on Bill C-52 through this debate. These core principles include implementing the principle of polluter pay while also improving rail liability and accountability measures for rail companies. The latter, rail liability and accountability measures, are long overdue. In the case of Lac-Mégantic, taxpayers are still on the hook for hundreds of millions of dollars in cleanup costs and rebuilding costs, and of course, as I have mentioned, one cannot put a price on the cost of the lives lost there.

The second principle is that the very fundamental, core responsibility of government is to protect the public. The NDP believes we must do everything in our power to ensure that tragedies such as the one that occurred in Lac-Mégantic, Quebec, never happen again. Fixing the liability for that is part of a necessary response to that incident, but it does not deal with the issue of prevention, which of course is the most important principle here.

The third is that we not only need stronger laws, but we need stronger enforcement of those laws and regulations. We need penalties on those who break them. It is clear to us and to the experts, such as the Transportation Safety Board, that the government has a very serious problem in terms of oversight, inspections and audits.

These are the three principles that will inform my comments on the bill itself.

Since 1999, successive Liberal and Conservative governments have let companies self-regulate and self-inspect their equipment and railway lines. This approach is clearly not working to protect the safety of Canadians.

Since 2013 and after the Lac-Mégantic tragedy, Transport Canada has only hired one additional railway safety inspector. The number has gone from 116 in 2013 to 117 in 2015. What we need most of all is for the government to provide the necessary resources to Transport Canada so that it has the needed number of inspectors and auditors to fulfill its oversight function. Rather than cutting the rail safety director's budget by almost 20% as the government has done, the government needs to invest in that directorate's budget in order to protect the safety of Canadians.

The bill put forward by the minister is an effort to address some of the liability and accountability issues associated with railway safety, and its tragic and unfortunate history of derailments. It proposes several necessary fixes, but the fixes that it does propose are simply a start. As I have mentioned, it fails to address the most pressing issue, that of preventing these incidents in the first place.

We not only need stronger laws, but we need stronger enforcement of laws and regulations. We need penalties on those who break those laws and regulations. It is clear to us and to the experts that the government has not put in place the necessary penalties, oversight, inspections and audits to amend the record that we have of railway safety disasters in this country.

Bill C-52 sets out to do three main things. It requires minimum insurance levels for railways transporting dangerous goods. It establishes a disaster relief fund paid for by crude oil shippers to compensate victims of derailments, provinces and municipalities. It provides more authority to the minister, cabinet and railway safety inspectors.

It appears to me that these are measures put forward by a government playing catch-up on this issue of rail safety and have more to do with covering the costs of train derailments than with public safety itself. The bill sets out to provide compensation for victims of derailments after the fact, as if accidents and train derailments are inevitable.

These concerns of ours which we put forward today in this debate in the House are also shared by Safe Rail Communities, a community-based initiative started by people in Toronto. They have raised concerns about the liability amount, and that most of the amendments in this bill are retrospective and retroactive. They are after-the-fact measures. The Safe Rail Communities organization wants to see more preventative action by the government.

Nevertheless, the proposed changes remain necessary, and they do receive the support of this caucus.

When it comes to insurance, there is currently no minimum insurance level for federally regulated railways. However, the Canadian Transportation Agency is mandated to review the insurance coverage of railway companies on a case-by-case basis to make sure that it is adequate.

Bill C-52 would provide for a legislated minimum insurance coverage from $25 million for railway companies transporting minimal quantities of dangerous goods, up to a maximum of $1 billion for railways transporting more substantial quantities. Railway companies would be liable for losses, damages, costs and expenses resulting from a railway accident involving crude oil or other designated goods up to the level of the company's minimum liability insurance coverage. Based on the cost of train derailments, these measures appear to be justified, at a minimum.

After the Lac-Mégantic disaster, for example, the Montreal, Maine and Atlantic Railway exhausted its insurance coverage of $25 million and went bankrupt, yet damages paid by taxpayers have amounted to hundreds of millions of dollars. The Quebec government has estimated that the total cost of that accident will be over $400 million.

The second thing the bill sets out to do is to establish a pooled disaster relief fund that would be made available if the minimum insurance levels are insufficient. Railway companies shipping crude oil would pay a fee, starting at the rate of $1.65 per tonne shipped as of March 31, 2016. That amounts to 23¢ per barrel of oil. The fund would be capped at a total of $250 million to cover costs above the company's insurance coverage if it is involved in an accident.

For the 200,000 barrels of oil transported daily, Transport Canada estimates oil levies under the fund would contribute about $17 million annually to general revenues. While this is a step forward, there are outstanding concerns that this may not be sufficient in the event of another major disaster, particularly in an urban area. This levy would need to be in place for almost 15 years before that $250 million cap was actually generated. With the Lac-Mégantic disaster totalling about $400 million, it is very easy to see that a derailment in an urban area could almost inevitably exceed that $250 million generated through the disaster relief fund.

With respect to more authority given to the minister, cabinet and railway safety inspectors, we say that finally the bill would implement a number of changes to do this. For example, under the bill, railway safety inspectors would be authorized to order a person or company to take any measure they deemed necessary to mitigate a threat to the safety or security of railway operations. These amendments would also authorize the minister to order a company that is implementing its safety management system in a manner that risks compromising railway safety to take necessary corrective measures. These are clearly important measures to put in place.

While the government has a responsibility to ensure that tragedies like Lac-Mégantic never happen again, we also want to ensure that railways have enough insurance to cover all the costs in the event of a disaster, and as mentioned, particularly in the context of a disaster in an urban area. With that said, the amounts are clearly insufficient. The government should do more, and we believe the government can do more.

The government has a responsibility to ensure that no disasters like this take place again, that all of the costs are covered, and to put in place a polluter pay system to be applied to total environmental and cleanup costs of railway accidents. These must and should be borne by the industry, as is consistent with the polluter pay principle, and not downloaded on to taxpayers as they have been in the Quebec context. Once companies are fully liable for their actions, the safety of the public, and the safe transportation of their goods, we believe they will begin to take safety more seriously.

However, we are concerned that the insurance levels established in this bill are not sufficient. Insurance levels should be based on the threat to the public, not just on the type and volume of goods that are transported. Although the bill would establish a pooled disaster relief fund that would be made available if minimum insurance levels are insufficient, we also want to ensure that the fund is sufficient to cover all costs of disasters, including the unlimited liability for railway negligence.

To adequately protect the public from future risk, we want the government to pass the bill before the next election. We are concerned that the government will not make this a priority. It has been playing catch-up, and a bill like this is long overdue in light of the very sorry safety record that the government has with respect to rail safety in this country. That means that we continue to experience uncertainty and a lack of accountability, and communities along railway lines in this country continue to be exposed to terrible and potentially tragic risks.

If the Conservatives are serious about this bill and about these measures, they will take quick action. We in the New Democratic Party are prepared to work with the government—