Bill C-52 (Historical)

Safe and Accountable Rail Act

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

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.

Safe and Accountable Rail Act

[Adam Vaughan, Liberal, Trinity—Spadina, ON]

Mr. Speaker, I listened to the member with great interest. However, I am also aware that the policy of the member's party is to put a priority on passenger rail over that of freight, particularly in southern Ontario. In other words, freight trains would be pushed to the side as VIA Rail passenger trains pass through and then the cargo trains would be allowed to continue.

With the high volatility of the cargo and the switching of tracks being one of the prime drivers behind derailments, is the NDP considering re-evaluating its policy of putting VIA Rail on a priority basis and cargo trains having to shunt back and forth between side rails as they move through dense urban areas?

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

Mr. Speaker, yes, the NDP believes in passenger rail. We have to be proud of VIA Rail, although a lot of things need to be improved.

I am not sure if the member understands when we talk about switching because there already is switching. One of the problems is that passenger trains use the same lines as other railway companies. When we talk about giving priority, it does not change the fact that there is still switching. There are still issues with respect to how cargo goes through our cities.

The New Democrats believe in passenger rail, and that it is important. However, we need to find other options of not having cargo, especially dangerous goods, going through our cities, and this is the case right now. Giving priority does not change the fact that dangerous goods will continue to travel through densely populated areas.

[Charlie Angus, NDP, Timmins—James Bay, ON]

Mr. Speaker, when I was first elected here 11 years ago, the then Liberal government had a big plan for rail safety with self-regulation. Certainly the New Democratic Party warned against the danger of allowing very large corporate interests to self-regulate, but that seemed to be the Liberal mantra at the time in all manner of public safety issues, that we should allow companies to do it, that they would do it more efficiently, and it would save money. Yet, in all manner of areas, whether it was food safety in the listeriosis crisis, the beef industry or Lac-Mégantic, there is a fundamental need for the public good to have clear regulations and inspections from outside by public servants to ensure the public interest is protected.

I would like to ask my hon. colleague, from his time in his transport critic portfolio, what he thinks of this long-standing policy that the Liberals and the Conservatives have had of allowing corporations like CN and CP self-regulate.

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

Mr. Speaker, it is a concern. My colleague is right when he says that is the Liberal and Conservative philosophy of allowing self-regulation, but also, let us not forget, self-inspection.

A big study was done on the transportation of dangerous goods and the NDP came out with recommendations, whereas the Liberals had no recommendations. Basically, the Liberals were saying that everything that was in place was fine. When we talk about self-regulation and self-inspection, if companies are asked if their regulations are safer or stronger than the government has put forward, most of the companies that are respectable and have a culture of safety will say yes, their regulations are stronger and they have to do inspections. After that, the government does not look into it.

We have heard from the minister and the Liberals. They believe companies have to self-inspect and self-regulate. SMS is one step, but the way it is being enforced or applied is not sufficient or satisfactory to us.

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Mr. Speaker, could the member provide some clarification on the question from my colleague from Toronto?

One could comment on the NDP position on pipelines, which is almost for no pipeline expansion and, as a direct result, we would no doubt see thousands more tankers on our railway system. However, I will put that one to the side for now.

The question I have for him, following on the question by the member for Toronto Centre, is this. When we talk about VIA Rail going down the tracks versus a freight train going down the tracks, what happens currently is that VIA Rail pulls over to the side and the freight train continues on. The NDP is saying that it should be reversed. If it is reversed, there is an element of danger whenever a train pulls over.

Would the NDP consider looking at changing its position so we would not put communities in danger by VIA Rail being given the first priority over some of the long freight trains that are carrying a considerable amount of dangerous goods, as he has pointed out?

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

Mr. Speaker, this is the second time I have been asked that question.

The problem is that rail cars transporting dangerous goods continue to run on the same tracks. The issue of priority will not necessarily make the problem any worse, because right now, there is already switching to allow passenger cars to go through.

The real question we need to ask, however, is this: why do the Liberal members continue to believe that the companies themselves will be the ones to come up with the best solutions, to self-regulate and self-inspect? Why is it that, despite what happened in Lac-Mégantic and in Gogama, the Liberals are being so supportive of the Conservative government's approach, even though it has not added any recommendations to any of the studies done on transporting dangerous goods? They are content with the status quo, with what happened in Lac-Mégantic and in Gogama, and have no additional recommendations to make.

I repeat, I am proud to be a member of a party that supports passenger rail. That is very important to us, considering our view of the environment and the future of transportation. We need to find the safest options. Unfortunately, the Liberal Party does not want to even look at that aspect.

[Sadia Groguhé, NDP, Saint-Lambert, QC]

Mr. Speaker, I want to begin by thanking my colleague for his speech and I commend him on all his hard work on this file. Obviously, he raised all our constituents' concerns over rail safety.

We can see that the government is being very inconsistent. It is great that Bill C-52 would increase the companies' insurance premiums, but that measure is not enough.

Another thing we have to be proactive about is assessing safety in the first place. There was talk of deregulation, but the number of inspectors is quite small, since only one inspector is being added.

Could my colleague elaborate on that?

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

Mr. Speaker, I thank my colleague from Saint-Lambert for her question.

I worked with her on rail safety in the south shore and I know that this is an issue she follows very closely and is very important to her constituents.

Her question is very important in the context of today's debate. The government is putting rules in place, but they address certain financial issues that come up after the fact, once tragedy strikes.

However, what the NDP wants is preventive measures to ensure that tragedy like the one in Lac-Mégantic never strikes again. For that we need prevention. We need to make sure that the rules are not only tougher, but also enforced.

For that we need people. Unfortunately, the government is taking a wrong turn when it cuts the budget of those who are there to enforce the rules. What is more, since 2013, it has added only one more rail inspector, which does not bode well.

[Adam Vaughan, Liberal, Trinity—Spadina, ON]

Mr. Speaker, the issue of rail safety is paramount to the riding I represent. Both the southern boundary and northern boundary of the riding are defined by some of the busiest track in Canada.

The south end, which used to be an industrial zone, is now lived in by thousands of people, and thousands more within the next few years. It has a largely commuter rail system. VIA Rail and the regional GO Transit move through the corridor of downtown Toronto. In the north, a single pairing of rail lines moves along Dupont Street through central downtown Toronto. This is the same line that the Lac-Mégantic trains travelled through Toronto on. They are also the same lines on which, 30 or 40 years ago, the Mississauga trains that derailed and caused one of the largest civilian evacuations in the history of this country passed through this section of downtown Toronto.

As a former city councillor, we were always dealing with the challenges of these rail lines in terms of the zoning that they created, but also in terms of trying to moderate speeds and get a handle on the dangerous goods that are travelling on these rail lines.

The half dozen derailments in Ontario, two in Gogama and others, would also have travelled through some of the most densely populated parts of Canada. We know from one of the derailments that it was just a matter of time before the fractured wheel would crack, splinter and cause a derailment. As I said, that could have happened in the heart of downtown Toronto. That is not to say that wherever it happened would not have been a tragedy, but the cost, population and scope of the damage could have been phenomenal.

We have been tracking this issue very closely in the local neighbourhoods and there are a few things that come to mind. One of them is this notion of the zoning.

We heard at committee last week a Conservative member talk about trying to sterilize 300 metres on either side of the tracks right across the country as a way of protecting populations. This is absurd, as 300 metres would have meant the SkyDome could not have been built, the CN Tower would not have been built and even the Royal York would have been barred from redevelopment. Also, the cost of sterilizing that land would be in the trillions of dollars. However, this is what happens when one thinks off the back of an envelope in a committee. It scares one to think what might be happening in cabinet right now as we speak.

The zoning that has been put in place is about crash barriers. However, the zoning was put in place years ago when there were smaller trains with far less volatile chemicals travelling through this part of the country.

It is one thing, with those speed limits and size of trains, to build a 30-metre crash wall, reinforce it with engineering, push residential zoning away from the area and zone it as industrial. However, when we triple and quadruple the size of the trains, increase the speed of those trains and reclassify volatile goods so that we can increase those speeds, a crash barrier will simply become a containment for a blast, and that blast would be extraordinary, especially in a dense urban area, especially with 30-metre blast walls containing the explosion. We know about volatile chemicals when they explode in that circumstance: the containment actually increases the volatility and the damage would be extraordinary. Therefore, getting it right is fundamentally important.

My question to the Minister of Transport is germane to this, because that same line travels through downtown Toronto with level crossings. In one particular spot near the Dupont junction area, there is a public school right next to the level crossing. If a school bus, God forbid, stalled on the track or a traffic jam backed traffic up, and it happens, a freight train and a school bus could come into contact.

My question to the Minister of Transport is: What kind of money is there from the federal government to start changing these level crossings?

The answer to that is $10 million a year. However, $10 million a year does not pay one-eighth of the cost of changing those level crossings to underground bypasses, which is the norm across downtown Toronto. This means that there is not any money there, because there are about 5,000 of these level crossings identified as being dangerous across the country. Yet, we put $10 million a year on the table, as a country, to try and modify and modernize our rail capacity as we load more and more and longer and longer trains into these areas. Something has to happen.

At the same time, the rail companies are not securing the corridor. We heard from one of the presidents in Montreal at the board of trade a few weeks past saying that terrorism is now a concern. If those volatile chemicals that are travelling through Lac-Mégantic and Mississauga are travelling through Toronto, one would think the rail corridor would be secure.

I can show, next to a liquor store in downtown Toronto, where the fence has been pulled apart so many times they do not even bother putting it back up. We can see the path that has been beaten in the snow and in the soil, across the train tracks. It is extraordinarily dangerous.

When we try to get information as a city on what the actual speeds of these trains are, what the speed limits should be in a dense urban area, when we try to re-calibrate that for the volatility, size and weight of the trains passing through, when we try to get that information, we are told we cannot have it.

We can get the information after the fact now. We can get disclosure after the fact. However, when an emergency is under way, they have to call while the trucks are on the way. Trying to build a rail corridor in advance for the volatility, that information is seen as proprietary and as a result cities do not have it.

The transport minister is mistaken when she says the FCM is satisfied with this bill and these steps, because the FCM is looking for more information. One of the reasons is not because of fire departments like the one we have in Toronto, it is that all along the rail corridors across this country most of the fire departments are made up of volunteer firefighters. They have neither the training nor the equipment, nor the advance knowledge nor the capacity to get the advance knowledge as they race to some of these areas.

Advance notification and co-operation with FCM is missing from this bill and it needs to be in it.

We also know that there is virtually no monitoring. When we try to find out what the speeds of the trains are, and we ask, we are met with a blank stare. It has gotten to the point where we are almost putting police officers with radar guns by the tracks to try to figure out if they are in compliance with their own rules and regulations. That has to change. Posted speed limits and community knowledge about this have to become the norm. Instead, it is still hidden behind this veil of railway secrecy which predates the arrival of many of the municipal codes that govern the exact issue we are talking about here.

We also know that the real safety solution for this is one that pushes the issue into another realm of debate. Solutions include shorter trains, more highly regulated chemicals on those trains, perhaps transporting the diesel and the highly volatile chemicals only in the new and improved rail cars, and until that happens much lower speed limits being imposed. There are all sorts of solutions waiting to be put into place.

Every time a solution is layered on the rail companies, what is built is pressure for a new pipeline. During the by-election that I was elected in, the NDP was claiming it did not support any pipelines in Canada, including Canada east. It said it wanted everything moved by rail. It became very apparent to the voters in the riding that I represent that if everything is not put on rail, it ends up in pipelines; if it is not in pipelines, it is on rail.

There has to be a decision one way or the other, but to be against both is not a solution. The chemicals and oil are going to get to market, and we have to manage them better. There has to be a decision based on evidence and safety, with proper enforcement and standards that make a solution possible.

Pumping it all through Toronto on rail cars, then not enforcing rail safety, then not maintaining the lines, then not monitoring the speeds, and then not doing proper safety inspections, and then not giving municipalities the money they need to build the infrastructure to make this happen is a recipe for disaster. We have seen tragic disasters in smaller communities. It is a matter of time, unfortunately, and if we do not take action that we are going to see it in a larger community. That has to change. We have to get on that issue right away.

While this bill takes some small steps forward, and we will be supporting those small steps forward, there is much more that needs to be done. That is the campaign that residents in the riding I represent are starting to lead.

The other issue is this: the notion of shunting cargo and freight trains to the side tracks while passenger trains whip through at high speed appears to be good transportation policy vis-à-vis getting commuters from one city to the next or from one part of the region to the next. The trouble with that is that these large trains do not move very quickly when they do move and have to take the side tracks.

The act of zipping across lines and moving to side tracks creates the volatility and the risk. If there is constant moving of volatile freight from line to line to line to allow passenger trains to go through straight and fast, that actually accelerates and amplifies the possibility of a risk. I think that is the question we are trying to get at when we are talking to our NDP colleagues about their priority of passenger rail over freight rail.

We have to do what is right for freight. The real solution is not prioritizing one over the other. The real solution is building more track. That is what Unifor has been asking for. That is what this Liberal Party has been asking for. That is the actual solution, to invest in the infrastructure, not trying to make do with the existing circumstance and just hoping that the decision made does not end up in a disaster.

It is about taking the tough steps to understand that these chemicals and materials that are cargo have to get through some dense urban areas. The choice is pipeline versus rail, in some cases. The other choice is freight over passenger to maintain safety. If we do all of that correctly, engage communities and municipalities, and fund municipalities properly, we can end up with a transportation system that works, that is safe, that is modern, and that does not require monitoring the fear as much as monitoring the freight.

[Philip Toone, NDP, Gaspésie—Îles-de-la-Madeleine, QC]

Mr. Speaker, I would like to thank my colleague for his speech. There are certainly aspects that we should examine.

I think my colleague is dreaming about the era of Pierre Elliott Trudeau, who said that he wanted to double the number of railway tracks in western Canada in order to improve the transportation network.

Has my colleague calculated how much it would cost to double the tracks in Canada? How much time would that take? I think he is living in a dream world, especially since the Liberal Party has not introduced any plans in that regard. I hope that they will introduce a plan and not just criticize the other parties' plans, which have been tabled and costed.

If he does not support increased oversight by the Transportation Safety Board of Canada, then what exactly is the member proposing to do? If the Liberals are instead proposing to spend billions on other railway lines, have they found the means to pay for that dream?

[Adam Vaughan, Liberal, Trinity—Spadina, ON]

Mr. Speaker, I appreciate that there are many people dreaming of Trudeau these days, and that is clearly reflected in the polls. Some people's dream is another party's nightmare, quite clearly.

The area I am talking about where there has been investment in rail and a multiplying of the number of tracks—doubling was the phrase the member used—is the Quebec-Toronto-Windsor corridor. In that area, Unifor has identified and clearly shown that adding additional rail capacity would create safety and better commute times for both regional and national companies. That is one of the areas I think we need to explore. You are asking for particular policies. You will get those.

In terms of oversight, we want more oversight and more effective oversight. We certainly want the money that is currently budgeted to be spent.

[The Acting Speaker, Barry Devolin]

Before we go to questions and comments, I remind all hon. members to direct their comments to the Chair rather than directly to their colleagues.

The hon. member for Winnipeg North.

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Mr. Speaker, I want to know if my colleague could expand on the area of infrastructure spending. If we are prepared to spend infrastructure dollars, not only will it create valuable jobs, which Canadians are in great need of, but it will expand economic horizons and provide wonderful social benefits.

Can the member expand on the feasibility of having new tracks put in place and on how all sides could benefit if only we had a government that understood basic economics and how the country would benefit from investing more in infrastructure.

[Adam Vaughan, Liberal, Trinity—Spadina, ON]

Mr. Speaker, the current fund for rail underpasses is $10 million a year, which is an eighth of the cost of a typical underpass. The reason municipalities are not subscribing is that they do not have the other $70 million to build.

Under questioning, the minister answered that the municipalities could use the new build Canada infrastructure fund, which, as we know, has been cut down to $200 million this year. It is back-end loaded to ten years from now, which means that we have to wait ten years for rail safety. That is not appropriate.

The provinces quite often see this as a federal responsibility, and they do not see a role for partnering. If the government was serious about rail safety, municipal infrastructure, and building an economy right across the country, those dollars would not be so small, the payout times would not be so staggered, and the commitment to municipalities would not be just a moral commitment; it would be a real commitment that delivered real dollars for infrastructure.

One of the reasons it is so critical that we change the government is that we need to change those policies.

[Larry Maguire, Conservative, Brandon—Souris, MB]

Mr. Speaker, it is my privilege to speak today in support of Bill C-52, the safe and accountable rail act, which would further strengthen our rail safety regime and ensure that adequate compensation is available. Our government takes the safety and security of Canadians very seriously.

In my constituency of Brandon—Souris, rail safety is an important issue, as most communities have a rail line going directly through town. In addition to rail lines going through communities, many farmers and landowners have a rail line on their property. Only a couple of weeks ago, there was a train derailment northeast of Brandon. We were fortunate that the damage was minimal and no one was hurt, but this incident is just another reminder of why we need to implement the measures contained in Bill C-52.

Let me first highlight how the government works with communities to ensure proper emergency response regimes and then how the measures in Bill C-52 would ensure liability and compensation for any community.

I would like to take the opportunity to salute our first responders, who play a critical role in the event of an accident. We all value the work of Canada's first responders, and our government works with them on matters pertaining to the transport of dangerous goods and emergency response. Transport Canada works to ensure that measures are in place to quickly respond in the event of an accident involving dangerous goods. This work includes ensuring that municipalities and first responders have the tools and information they need in a timely manner. The department provides emergency planners and first responders with information to assess risks in their communities and to plan and train for emergencies.

On November 20, 2013, the Minister of Transport issued protective direction no. 32, under the Transportation of Dangerous Goods Act. The intent of the protective direction was to help ensure that municipalities would have access to better information for emergency response and planning purposes. According to the protective direction, railway operators must share yearly aggregate information on the nature and volume of dangerous goods transported by railway through a municipality to the municipality's designated emergency planning officer. As well, all operators must report any significant change in the information provided to municipalities, meaning a change in the types and volumes of goods transiting through a municipality, as soon as is practical after the change occurs. This information provides emergency planners and first responders with the information they need to improve risk assessment, emergency planning, and training. Municipal leaders and emergency planners are already using this information to prepare for incidents involving dangerous goods.

Emergency response has been an important issue that has been raised by municipalities and the public. It is important to note that the vast majority of dangerous goods shipments arrive at their final destination without incident. However, unfortunately, accidents can still happen. To help avoid the potentially serious consequences of such events, as well as to speed up recovery efforts, our government is actively involved in supporting municipalities and first responders in emergency situations.

On April 23, 2014, our government announced the creation of an emergency response task force to bring together stakeholders, including municipalities, first responders, railways, shippers, and response organizations, to strengthen emergency response capacity. The emergency response task force will conduct further research and will assess, evaluate, and make recommendations to advise on improvements we can make to the emergency response assistance plan program. In fact, such recommendations from the task force have already been implemented. The task force members include railway representatives, chemical producers, and the Aboriginal Firefighters Association of Canada, just to name a few. The Canadian Association of Fire Chiefs is also an active member of this task force.

These members have been meeting monthly since July 2014, and sub-group meetings have been held for targeted discussions on specific topics, one of them being first responder training. Our government is facilitating these discussions, where railways and shippers can join forces with the first responders community to identify readily available training materials, to identify gaps, and to find solutions that will increase support to first responders during large-scale rail incidents involving flammable liquids.

The emergency response task force continues its work of reviewing and making recommendations on the transportation of flammable liquids by rail in Canada, and our government looks forward to receiving its final report and recommendations this summer.

Emergency response assistance plans are required for certain dangerous goods that call for special expertise and response equipment. These plans stipulate what industry must do to support first responders during an accident involving dangerous goods.

Our government has worked to strengthen the emergency response assistance plan regime. We are now requiring rail shippers to develop such plans for higher-risk flammable liquids, such as crude oil, gasoline, diesel, aviation fuel, and ethanol, when a single-tank car contains one of these designated liquids. These plans are now in place to help provide expert assistance to first responders.

Before a shipment can be made, any person who imports or offers for transport dangerous goods must submit a plan to Transport Canada. The department then reviews the plan and approves it if it is satisfied that there is a capability to respond to emergency situations for those dangerous goods listed in the plan. The emergency response assistance plan assists municipalities and local emergency responders by providing them with around-the-clock technical experts and specially trained and equipped emergency response personnel at the scene of an accident.

Members of the House may be aware that Transport Canada operates the Canadian Transport Emergency Centre, a national advisory service that assists emergency response personnel in handling dangerous goods emergencies on a 24-7 basis. This centre is staffed by bilingual professional scientists who specialize in emergency response. They are experienced in interpreting technical information and in providing assistance to first responders. The centre handles over 25,000 phone calls per year related to safety, and scientists are available to take emergency calls immediately.

Transport Canada, through CANUTEC, also publishes an emergency response guidebook to help firefighters that is available at no charge to the first responder community. In addition to being available online, almost 100,000 paperback copies of the most recent version of the ERG 2012 guidebook were distributed for all vehicles used by Canadian fire departments, police departments, and ambulance services across Canada.

The next publication of the emergency response guidebook, scheduled for 2016, will include information on the Canadian emergency response assistance plan program and its applications. The inclusion of this information was recommended by the same task force that is investigating the need for future changes to the emergency response assistance plan program.

The Lac-Mégantic tragedy highlighted the need to strengthen Canada's liability and compensation regime for rail. In this case, Montreal, Maine and Atlantic Railway only carried $25 million in insurance, far too little to cover the scope of damages from this catastrophic accident. That is why in the 2013 Speech from the Throne, our government committed to requiring shippers and railways to carry additional insurance so that they will be held accountable.

In January 2014, the Minister of Transport launched a review of the liability and compensation regime for the railways. The primary goal of this review was to strengthen the rail liability and compensation regime and to ensure that sufficient funds would be available to compensate potential victims and clean up the environment after any future incident.

Bill C-52 goes beyond simply increasing insurance requirements. The bill would also provide an additional source of funds for catastrophic accidents, clarify railway liability and implement stronger enforcement measures.

The first step Bill C-52 takes to ensure that accident costs would be covered is to implement mandatory railway insurance requirements that correspond to the risks associated with railway operations. The Canadian Transportation Agency would assign railways to one of four levels of insurance based on the type and volume of dangerous goods they carry. Railways carrying little or no dangerous goods would be required to hold a minimum of $25 million in insurance, while class 1 railways, which carry substantial amounts of dangerous goods, would be required to hold at least $1 million in insurance. Short line railways carrying moderate amounts of dangerous goods would initially be required to hold $50 million or $125 million in insurance, again depending on the type and volumes of dangerous goods being carried. The levels would increase to $100 million and $250 million respectively one year later. Railways would be required to inform the agency of any change in their operations that could impact their insurance.

Importantly, the agency would be empowered to ensure that railways complied with the new requirements. The agency could make inquires as it deemed necessary in order to make certain that railways continued to hold the required amount of insurance. If it found otherwise, the agency would have to revoke or suspend the railway's certificate of fitness.

On top of this, Bill C-52 would provide the agency with the ability to apply administrative monetary penalties to any railway failing to comply with insurance level requirements or failing to report a change in its operations that could affect its insurance. These penalties would go up to $100,000 per violation.

With these risk-based mandatory minimum levels of insurance and strengthened enforcement mechanisms, Bill C-52 would hold railways accountable and would ensure there would be sufficient resources to cover the vast majority of potential railway accidents.

What would occur in the rare event of a catastrophic rail incident, like the one experienced in Lac-Mégantic? The transportation of crude oil by rail is rapidly growing and as we know, accidents involving crude oil can have dangerous consequences. It is important that a strengthened liability and compensation regime be prepared to address the costs of such an accident.

For catastrophic accidents involving crude oil, Bill C-52 would implement a two-tier regime, similar to the one we currently have for marine tankers. The regime would clearly establish and share liability between railways and shippers and provide an additional source of compensation. In this two-tier regime, railway companies would be held automatically liable up to their mandatory minimum level of insurance. This means they would be liable without the need to prove fault or negligence.

In cases where a crude oil accident results in damages that surpass the railway's minimum mandatory insurance levels, a supplementary compensation fund would cover the costs. The fund would be financed by the shippers of crude oil through a levy of $1.65 per tonne. Railways would collect the levy and remit it to the government and the funds would be kept in a special account on the consolidated revenue fund. Once the fund reaches the targeted capitalization of $250 million, the minister of transport could stop the levy and then reinstate it again when and if ever necessary. The fund would be managed by an administrator appointed by the Governor-in-Council. The administrator would be responsible for establishing and paying out claims.

In the unlikely event that damages from an accident exceed the amount held in the shipper financed fund, the consolidated revenue fund would act as a backup to ensure that all costs were covered. Any amount charged to the consolidated revenue fund would be reimbursed using the shipper levy. The Minister of Transport could also institute a special and temporary levy on federally regulated railways to expedite the repayment of the public purse.

This new regime for crude oil accidents would cover all actual losses, including damages to people, property and the environment. It would also cover costs incurred by the Crown in responding to the accident and compensation for damage to the non-use value of public resources. Although at the outset, the fund would only cover incidents involving crude oil, the bill provides the flexibility to add other dangerous goods by regulation in the future.

Of course, the new shipper-financed fund could not function without a means of ensuring compliance. Administrative monetary penalties of up to $100,000 per violation could be applied to ensure the railways adhered to their obligation to collect the levy and remit funds to the government, as well as the requirement to keep records regarding the levy.

Railways common carrier obligation to provide service will be dependent on the payment of the levy. This means that a crude oil shipper would be required to pay the levy in order to obtain rail service.

By creating mandatory insurance levels for railways, providing additional layers of compensation and instituting robust mechanisms to ensure compliance, Bill C-52 would make certain that in the event of a rail accident, no matter the magnitude, there would be sufficient resources to compensate victims and remediate the environment.

I encourage all members to vote in favour of the bill and refer it to the committee without further delay.