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

May 7th, 2015 / 4 p.m.
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NDP

Hoang Mai NDP Brossard—La Prairie, QC

Mr. Speaker, I thank the Parliamentary Secretary to the Minister of Foreign Affairs and for La Francophonie for his question.

I would like to start by correcting the statements he made in his preamble. He said that I said the government had reduced the number of inspectors and that that was false. That is not what I said. I said that the budget for inspectors had been cut. If the Parliamentary Secretary to the Minister of Foreign Affairs and for La Francophonie were to look at the budget, he would see that it shrank by nearly 20% from 2010 to 2015.

As to the number of inspectors, I said that had gone up. That is true. In 2013, before Lac-Mégantic, there were 116 inspectors. After Lac-Mégantic, after all of the debates we had, after all of the inspection problems and all of the people's concerns, how many more inspectors are there? Just one. So yes, that is an increase, but when the number of inspectors goes up by just one, I think that is a bit of a problem.

In answer to his question, I am not the one who controls the House. Personally, I feel that this bill is important. I supported it. Still, it is important to have a debate. I know that the government is in the habit of imposing time allocation, and has done so 95 or 96 times now because it does not like hearing what we have to say. If my colleague had listened to my speeches, he would know that I talked about the amendments and the topics we discussed in committee. This is the first time I am doing this because this is the first time we have seen the committee's report. I think it is important to have dialogue and debate.

Safe and Accountable Rail ActGovernment Orders

May 7th, 2015 / 4:05 p.m.
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Liberal

David McGuinty Liberal Ottawa South, ON

Mr. Speaker, I am a little astounded hearing the comments of the Parliamentary Secretary to the Minister of Foreign Affairs. Clearly, he does not know what is happening with this bill and he has not been present in committee.

One of the big problems with this bill, 57 pages and counting, is what the Conservative majority in committee did. It circumscribed all of the expert witnesses to two meetings. That is two meetings of two hours each. In the most important single meeting that was held on this question of liability insurance, the four principal witnesses who testified, a large railroad, a short-haul railroad, the number one insurance company in the railway insurance business and the Teamsters union, all said there is a series of unintended consequences in the bill, a series of shortfalls, misgivings and changes in the statute that are going to lead to serious litigation. No legal opinions were rendered.

What we really have is a situation where the government is rushing this legislation through pursuant to the Lac-Mégantic tragedy, but, more importantly, with the deadline of the election in the fall very much in its window.

Maybe my colleague from the NDP can comment and try to help us divine why it is the government, instead of doing its homework with proper stakeholder outreach and negotiation to improve this bill, is so incredibly pigheaded about rushing this through in a form that is not complete.

Safe and Accountable Rail ActGovernment Orders

May 7th, 2015 / 4:05 p.m.
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NDP

Hoang Mai NDP Brossard—La Prairie, QC

Mr. Speaker, it is always a pleasure to sit with the member on the transport committee. Yes, as he knows we did not have a lot of meetings on this bill at committee.

It is true that consultation is important, but what was mostly of concern to me is the lack of information. Again, when I asked about the liability issue, especially how much the class 1 railways were paying, we did not get the answer. It is hard for us as legislators to be able to say whether this bill is the best one in terms of how it was drafted, why it was drafted or why those provisions are there. Some of the comments we made were not acceptable for the other side.

There could have been more consultation and discussion, but at the end of the day I do agree that this bill is a step in the right direction. It talked about polluter pay and we have always said that Canadians should not have to pay for this, but there will be unintended consequences. What I was saying in my speech is that we will have to follow up. We will have to ensure that this legislation and the regulations that come with it are correct.

Safe and Accountable Rail ActGovernment Orders

May 7th, 2015 / 4:05 p.m.
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NDP

Raymond Côté NDP Beauport—Limoilou, QC

Mr. Speaker, I thank my colleague from Brossard—La Prairie for his speech.

One of the troubling aspects of this bill—because the devil is often in the details—is the removal of the definition of “fatigue science” that already appears in the Railway Safety Act. People need to be aware of the fact that in all areas of transportation, managing fatigue is an ongoing challenge. For instance, when it comes to highway transportation, the provinces have legislated the issue. Truck drivers have to keep log books.

On the rail side, obviously, given that trains operate day and night and cover very long distances, this is a very serious problem, and the NDP brought forward an amendment in committee that, unfortunately, was ruled out of order by the chair.

I wonder if my colleague could talk about the problem of fatigue and what the witnesses reported regarding the risks associated with removing that definition.

Safe and Accountable Rail ActGovernment Orders

May 7th, 2015 / 4:05 p.m.
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NDP

Hoang Mai NDP Brossard—La Prairie, QC

Mr. Speaker, I want to thank my colleague from Beauport—Limoilou for his question, because that is indeed a very important issue. Unfortunately, we did not talk about it enough, but the fact that this bill removes the definition of fatigue management is important.

A definition already existed. Essentially, it said that fatigue management must be based on science. It is rather perplexing that the Conservatives removed it. We were told that it was a little too complicated and resulted in criteria that were too strict. However, that science exists in other industries and other sectors, such as aviation safety and road safety. This science exists. We do not find it overly complicated. On the contrary, when we talk about managing fatigue, it is about safety, not just the safety of employees, but also that of the public. It is therefore appalling that the government decided to do this.

Safe and Accountable Rail ActGovernment Orders

May 7th, 2015 / 4:10 p.m.
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Liberal

David McGuinty Liberal Ottawa South, ON

Mr. Speaker, it is a pleasure to be here this afternoon to join this debate. This is a profoundly important issue for Canadians. It has been lingering now for almost a decade under the Conservatives and has been brought to the fore as a result of the tragedy at Lac-Mégantic, where so many vulnerable and innocent people either lost their lives or their families were touched. In fact, the entire community was destroyed.

As a result of that wake-up call, the government has been reacting. What we are here to debate today is frankly how it has been reacting. What we have seen is a series of dribs and drabs and slow release of technical and regulatory amendments and bills. This is part of that process.

First, it is important to step back for a second and remind Canadians what this bill is really all about, which is changing the way we establish minimum insurance levels for railway companies that are regulated by the federal government. Second, it intends to create a new compensation fund that would cover damages that arise from railway accidents involving the transportation of not all but certain kinds of dangerous goods. That is what this bill is really all about.

When the Parliamentary Secretary to the Minister of Transport spoke a moment ago he mentioned that the government knows without a doubt that the amount of money that it is calling upon the industrial sector to make available in insurance and in this compensation fund is a sufficient amount of money. I would ask how he would know that. We asked the minister, the parliamentary secretary, the officials from Transport Canada, the Canadian Association of Petroleum Producers, the Railway Association of Canada, the Canadian Association of Fire Chiefs and beyond how much the tragedy at Lac-Mégantic has cost thus far. No answer is forthcoming.

The mayor of Lac-Mégantic told us that at minimum it was somewhere in the neighbourhood of $500 million. That is half a billion for an accident in a smaller town. We were also told by the ecological experts that that amount of money would have been considerably higher had there not been a layer of natural clay in the subsoil in that area that prevented the seepage of fossil fuels into the aquifers below, which would have produced almost unquantifiable damages to the natural ecosystem in the region. Therefore, when the government states that it has the truth and the answer, that it knows that $1 billion or $1.5 billion is sufficient, I would ask this. What if, heaven forbid, an accident like the one that occurred at Lac-Mégantic occurred in downtown Toronto, Montreal, Edmonton, Ottawa or Vancouver? I think the government would be singing a very different tune.

I raise this straight up at the beginning of my remarks to illustrate the kind of obfuscation, subterfuge and unwillingness to come clean with Canadians that we have seen from the government on rail safety over the last several years. It is no surprise. The first fact for Canadians to remember is that this is the fifth Minister of Transport in eight years. That tells us that the current government's ministers of transport have been transiting through the department, whether upward, downward or out of cabinet. That indicates that the government has been putting in a number of individuals, not taking this portfolio seriously, not until of course this horrible tragedy at Lac-Mégantic happened upon all of us. That is important for us to remember.

The second fact that the government does not want made public but would rather deny, bob and weave, or create fictitious responses for, is that it is categorically and undeniable slashing funding. It is killing funding when it comes to rail safety. In fact, rail safety funding financing is down 20% over the last five years, year by year.

This year, for Canadians who follow these things, we are all being bombarded with obscene, unwarranted, unjustifiable advertising. Most recently it is the Prime Minister's own 24/7 channel, the vanity video channel he has that records him every week and broadcasts at considerable taxpayer expense. As they say in French, “c'est du jamais-vu au Canada ”. It has never been seen before. We know this year alone the government is spending $42 million on economic action plan advertising. That is a number Canadians have a hard time getting their heads around, so let us juxtapose it in a meaningful way. There is $42 million for economic action plan advertising and $34 million for rail safety. There is $42 million for advertising and $34 million for rail safety. That is the priority of the Conservative regime.

What the Conservatives are doing by subterfuge, by stealth, by miscommunicating, by misleading Canadians, frankly, is they are trying to create an impression that they are on top of this profoundly important public safety issue called rail safety. They are not.

The Conservatives have been consistently and repeatedly warned, first by the Auditor General several years ago who came out and said in practical terms, that we agree with the notion of a safety management system, unlike the NDP, but as Ronald Reagan might have said, trust but verify.

It is the verification where the government as the regulator of a regulated sector is falling short, mostly falling short. The Conservatives cannot stand up and look constituents in the eyes and say that they have enough inspectors, because they do not. They cannot stand up and say that they have enough qualified inspectors, because they do not. They cannot stand up and tell us that they are properly trained and not coming primarily from the private sector that is regulated, because that is not true either. That is in fact where they are coming from.

There is a capacity problem inside Transport Canada. A department that is filled with good people, passionate, dedicated public servants, is being cash starved by a government spending $42 million on economic action plan advertising. As a result, it is our view that the government is putting Canadians at risk. Do not take our word for it; take the word of the Auditor General.

VIA Rail in a three-year or four-year audit period was not audited once by Transport Canada. VIA Rail carries over four million passengers a year, and it was not audited once. The systems safety audit that ought to have been accomplished was not done once. In fact, the government's own numbers indicate it is only completing 25% of the audits they themselves say are necessary to keep rails safe.

It is absurd to hear senior members of the government claim that things are getting better and that they have made so much progress in these dribs and drabs releases. It is not true.

We have a problem; we have a cultural problem in the government. I hate to go back to this, but it is important because past behaviour often indicates a propensity for future behaviour.

There are at least five remaining front-line ministers in the government who were in Ontario when the Walkerton water crisis hit the province. When that crisis hit the province, they all stood up in Ontario and used the same language we heard here today. “We can adjust based on the estimates with supplementary estimates.” “It is the officials who tell us that is enough money to conduct rail safely in the country.” These are the same buzzwords and the same sloganeering that we heard right after the Walkerton crisis, where people died and lots of people got sick.

In fact, in the report by Mr. Justice Dennis O'Connor, five or six of these front-line ministers were singled out as contributing to the Walkerton crisis. Why? They slashed the funding. There was not a sufficient number of water inspectors, just as there is not a sufficient number of qualified rail inspectors today. This is the same story.

One would think that the government would have learned from the terrible tragedy at Lac-Mégantic, but it has not. That is the context within which this bill has been brought to the House for third reading.

When the minister came to committee, I asked her not once, not twice, and I did this on purpose, I asked her ten consecutive times why she had cut the budget by 11% for Transport Canada, for a total of $202 million cut from the budget. She denied it. I asked her again and again. Finally, she turned to her officials and said that they gave her the numbers, that it was their responsibility, and they said that is all the money they need. Nobody believes this. That is not how governments work. Budgets are allocated. The Treasury Board sits down with finance. The PMO overrules, agrees or disagrees, and the money is allocated.

We have a situation where these choices have been made at the highest levels of government. I asked her ten times, and ten times she denied it.

It is funny because the Parliamentary Budget Officer says that those are the numbers. The Library of Parliament's research says that those are numbers. We are hard-pressed to understand why the government will not come clean. Why will the government not just simply say that it is making a choice, that it is cutting the funding for Transport Canada and cutting rail safety by 20%?

When it comes to the testimony of the experts that we rely on in this place and who bring a perspective that is invaluable to improving legislation, not necessarily perfecting it, but certainly improving it, the Conservative majority on the committee brought the hammer down and said that there shall be no more than two meetings of two hours each. It is serious. We are talking about billions and billions of dollars of insurance coverage. My prediction is we are talking about billions of dollars in litigation that will follow this bill, because it was not thought through legally. The government said that there shall be two two-hour meetings.

When I pushed the four top witnesses on this very issue, they all admitted that, in fact, they had not been properly consulted at all. They had never had a chance to dialogue properly with the department. They had serious, profound questions about the insurance implications, the distributive effects, employment implications, trade competitiveness implications, and beyond. That is what has happened here.

As I said earlier, in my view, there is no greater responsibility of a government than to keep its citizens safe. Canadians today are rightly concerned about rail safety. They are very worried about rail safety, and it is not just the terrible Lac-Mégantic tragedy. We have had three major derailments in the province of Ontario in the last three months. There have been many more in the United States.

The Transportation Safety Board warned the government about the DOT-111 cars. The Transportation Safety Board looked at the northern Ontario accident and confirmed that the new standard brought by the government was not satisfactory. The government came out and said that it has a three-year phase-out and retrofit schedule for DOT-111s, which it knew was false, but it had to put something in the window, instead of slowing down, taking a bit of time and coming up with a better projection and a better plan for the phase-out of the cars that are dangerous.

That is just not the way it operates. The Conservatives had to say something to Canadians. They were really frightened of this file, so as a result they had to make an announcement, even though they know and were told by the number one company in the country that retrofits to these cars are technically impossible to do. The minister was told by her own advisory committee that it is technically impossible to do. The Conservatives announced it.

People are concerned. Recently, many of my caucus colleagues held a very public, large town hall in Toronto on rail safety. They have since written to the minister herself. They said that they are “worried about the massive increase in shipments of crude oil by train, up from 500 tank cars in 2009 to an estimated 110,000 tank cars in 2014”. We are reminded that the minister's spending on rail safety, as I said, is down 20% since 2009-10. She cannot deny it. The numbers are there. “Northern Ontario”, they go on to say, “saw three derailments in less than a month between February and March”. They raised concerns about the accuracy of the current speed limits on trains routed through Toronto and for that matter, all urban centres in the country, whether trains with dangerous materials should be routed through highly populated neighbourhoods at all. Is that a discussion we are having here? Never.

Band-aid after band-aid after band-aid, image after image after image, rolled out of technical dribs and drabs has been the response to the wake-up call of Lac-Mégantic. It does not cut it. It is not good enough.

We have tried to work collaboratively with the government. I think there are many MPs on the government side themselves who are dissatisfied with this response, because they are feeling the heat from their own constituents, as they should, as we all should, because we have an obligation to get this better for Canadians.

It is hard for us to square a number of other technical parts of the bill which I want to turn to. One is that the parliamentary secretary got up and said, in fact quoting the minister, that they have been assured that there are no financial implications for the bill, no additional costs in bringing in a 59-page bill. Really?

I asked the director general of the Canadian Transportation Agency whether that was true, and she could not answer, because now one of the things the bill does is it actually takes away litigation and gives a new responsibility to the Canadian Transportation Agency to adjudicate, to decide on how much compensation should be paid if there is an accident if a claim is made by a municipality or province. They admitted in testimony that they are not qualified to do it. The director general of the Canadian Transportation Agency said that they will think it through later. They have to get it done. There is an election coming October 19. They have to get it done.

There is one technical gap. Another is related to a really important legal liability issue where the test as to who is responsible if there is a railway accident has been changed by one stroke of a pen. I want to finish with this, because I predict this is going to cause all kinds of problems. Now a railway company that operates a railway which is involved in a railway accident, simply involved, the problem with that is railways often pass goods on from one railway to another, so who is involved? Who will pay the compensation? Whose insurance company will indemnify for the cost? This is completely unclear.

The Conservatives were warned. They had legal opinions that told them this was a real problem going forward. They were told it would lead to difficulty getting insurance coverage and difficulty later on with litigation, but they ignored it. It was brought to them in committee by me, by others, by their technical experts.

It is unfortunate that we missed the opportunity to take the time we need to improve things for Canadians when it comes to rail safety, because we need our railways. They are a big part of the engine of the economy. I think right now we have an obligation to go back and build on this bill and get it better.

Safe and Accountable Rail ActGovernment Orders

May 7th, 2015 / 4:30 p.m.
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NDP

Robert Chisholm NDP Dartmouth—Cole Harbour, NS

Mr. Speaker, I listened intently to the member for Ottawa South, the critic for transportation for the Liberal Party. I did not once hear him explain why it is that the Liberal Party, when it was the government starting back in the 1990s initiated the deregulation, not only in the transportation industry, but in food inspection and other important areas where regulation is needed. I think we have come to learn that self-regulation by industries does not work.

I was hoping he might acknowledge that. The points he made about the flaws in the system, the weaknesses, the lack of action by the current government to actually respond to some of the serious problems that are being created on our railways, are absolutely true. However, I wonder if he would not acknowledge the fact that a lot of this originated with the decision by the previous Liberal government to deregulate and not actually respond to the transportation board's claims that the DOT-111 rail cars were a problem.

Safe and Accountable Rail ActGovernment Orders

May 7th, 2015 / 4:30 p.m.
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Liberal

David McGuinty Liberal Ottawa South, ON

Mr. Speaker, this is a good opportunity for me to perhaps help the member understand a bit better how it works.

The safety management systems are supported by the Transportation Safety Board and by the Auditor General. The approach in a safety management system admits that there are at least two parties involved: there is a regulated sector and there is a regulator. The regulator is government. The regulated sector is the federally regulated railways.

There is a legitimate difference of view between the Liberal Party and the NDP. I admit it freely. We believe there is a role in the private sector to assume a certain amount of responsibility to achieve the highest level of safety possible. We believe, concomitantly, that there is a role for the regulator to ensure that regulated sector is in fact operating at the highest levels.

The NDP does not subscribe to this view. It believes, wrongly, in my view, that it should be hammering the private sector to a point where I think it would have a great bearing on its ability to operate and to remain competitive.

Safe and Accountable Rail ActGovernment Orders

May 7th, 2015 / 4:30 p.m.
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Green

Elizabeth May Green Saanich—Gulf Islands, BC

Mr. Speaker, as a regular train passenger, one becomes acquainted with what is on the freight, because freight takes precedence over passenger rail in this country. I tried to make a trip across Canada this past summer, only to find that the volume of fossil fuel travelling by freight delayed passenger rail by as much as six to seven hours a ride with different stations. It is a real shame because VIA Rail is an important part of our economy and we should be treating it a lot better.

In the bill we had a chance to put in something that is in the U.S. rail safety improvement act, which is called “positive train control”. It is the use of high-tech computer monitoring. We would be able to, through positive train control, if we installed it on trains, know if they were going too fast. We would know if their gears were not working. We would know if the brakes had come unhinged. There would be alarm bells ringing. Of course, we also have dangerously slashed the working crews on board freight. However, positive train control would give us much safer railways. I would ask my friend for his comments on this.

Safe and Accountable Rail ActGovernment Orders

May 7th, 2015 / 4:35 p.m.
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Liberal

David McGuinty Liberal Ottawa South, ON

Mr. Speaker, my good friend is correct. This is an obvious omission, not necessarily in this bill, but it was an obvious omission in the government's dribs-and-drabs response to the rail safety challenges we are facing.

I would say that she is actually right, as well, when it comes to the question of an adult conversation about the use of our tracks, who gets precedence, who does not get precedence, in terms of use of those railway tracks. Is it passengers? Is it merchandise? Is it goods?

In fact, I commend one of my colleagues from the NDP from Gaspé who brought a bill that at least is beginning the debate about what role VIA Rail should be playing, what role passengers should have versus merchandise and other goods being transported. That is an intelligent debate to have.

Unfortunately, we are not having that under the leadership of the government. It did not want to open it up and do the right thing. We are not talking about improving the system for five years or by the next election. We really should be talking about improving the system for the next century.

Safe and Accountable Rail ActGovernment Orders

May 7th, 2015 / 4:35 p.m.
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Etobicoke—Lakeshore Ontario

Conservative

Bernard Trottier ConservativeParliamentary Secretary to the Minister of Foreign Affairs and for La Francophonie

Mr. Speaker, the hon. member commented about dribs and drabs. There is something to be said for incrementalism. Incremental improvements are better than no improvements. My colleague on the opposite side, with the NDP, pointed out that there were certain things that government did not do over 13 long years. We are actually achieving some success with some of these regulatory changes.

The focus of this bill is liability and compensation. I know the member wanted to take us down the primrose path. He was talking about food safety and other unrelated items. However, let us talk about compensation and liability in the railroad industry, specifically for the smaller railroads that might not have enough insurance. That is important, so let us focus on that. Can the member admit that these are good, positive changes, and will he support that aspect of the bill?

Last week the Minister of Transport was in Washington and announced with Secretary Foxx important changes to the tank car standards, important changes that are achievable and realistic and that will bring about safety, because of the enormous increase in volume with respect to petrochemicals and petroleum products across the border.

Can the member comment on those two things we are doing to address rail safety?

Safe and Accountable Rail ActGovernment Orders

May 7th, 2015 / 4:35 p.m.
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Liberal

David McGuinty Liberal Ottawa South, ON

Mr. Speaker, I never said that this bill should be thrown out in its entirety. I have an obligation to point out for Canadians where its shortcomings are. There are some elements of this bill that are very positive indeed and that we support. In fact, we can take some credit collectively. That is how we work here, collectively, particularly at committee. There are some elements of the bill that are very strong.

However, it is important to remind Canadians that there are other shortfalls, and the chief one for us is the undeniable fact that the government is not properly resourcing its own department. The government cannot ask simply for liability to be increased on the railways if it is not doing its job with its regulatory responsibilities through inspections and audits. The government cannot do that. The system will collapse.

With respect to the minister being in Washington last week, I do not know why she went. She re-announced something from a year ago. It is going to be a 10-year phase-out for most of these cars. It is too bad she made the first announcement on the DOT-111 phase-out. Had she not done that and had she listened to the experts who actually manufacture these cars, we could have saved a considerable amount of time and made a quantum leap to the new cars that can be manufactured right now in the United States, and soon in Canada.

Safe and Accountable Rail ActGovernment Orders

May 7th, 2015 / 4:35 p.m.
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Liberal

Kevin Lamoureux Liberal Winnipeg North, MB

Mr. Speaker, our rail-line industry is of critical importance. Winnipeg is one of the hub centres with massive CP and CN yards. A phenomenal amount of cargo of all natures goes through it.

This is one of the driving forces of our economy, and that is one reason it is important that when we bring in legislation, we get it right. Given the importance to the economy of getting it right, could the member provide some thoughts on how he sees legislation or regulation in the future playing a critical role in ensuring that our rail lines are safe, and as much as possible, efficient and worthy of travel?

Safe and Accountable Rail ActGovernment Orders

May 7th, 2015 / 4:40 p.m.
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Liberal

David McGuinty Liberal Ottawa South, ON

Mr. Speaker, it is easy. If they are prepared to exercise national leadership, and they are prepared to pull together all the parties that are involved that have a stake in improving the system, they can make some progress, and very quickly. It is not easy to actually convene them and find a way forward and get agreement, but it is easy to start the process. That did not happen here. They missed this opportunity.

We have to examine a few things.

Number one, the railway system in this country is as foundational as our electrical grid. We need it. We rely on it to move our goods. It is very much involved in success in wealth creation and particularly jobs in Canada.

Second, we have to have an adult conversation about the use of railways and our energy future. If the oil sands continue to expand the way they are, and we will see, based on oil prices, we will have a million barrels a day of excess capacity in nine years. That is if all the contemplated pipelines are built. There is going to be dramatic pressure on our railways to carry more oil. How are we going to deal with this? What are the consequences? What are the risks? The government does not want to have that conversation.

Those are the kinds of elements we should be bringing together to make sure, as we project outwards, which is our obligation here, that we get a better system that is safer and in which Canadians have more confidence.

Last, if the member thinks there is a disconnect between the water approach in Ontario and what has been happening here, he should go back and read Mr. Justice Dennis O'Connor's report on Walkerton. He will see very familiar language.

Safe and Accountable Rail ActGovernment Orders

May 7th, 2015 / 4:40 p.m.
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Conservative

Blaine Calkins Conservative Wetaskiwin, AB

Mr. Speaker, I am truly honoured to rise in this place today to speak to this very important piece of legislation. I represent the great riding of Wetaskiwin, which has major rail lines in it, both CP and CN. Constituents in that large rural riding know the value railways have, and I take very seriously the importance of the safety of the operation of the railways in that riding.

Before I go on, I would like to advise that I will be sharing my time with the dapperly dressed member for Elgin—Middlesex—London, who will, I am sure, enlighten the chamber with his thoughts as well.

I rise today to speak in support of Bill C-52. It is a good bill. It is the safe and accountable rail act, which would reinforce the government's polluter pays principle for the rail sector.

The polluter pays principle holds industry accountable to Canadians and supports responsible resource development. It also reflects Canadians' expectations about making responsible parties pay the costs of the accidents they are responsible for.

The polluter pays principle is a key part of the modernization of the liability and compensation regime in other sectors, including the marine sector, the nuclear sector, pipelines, and offshore oil and gas. A number of those bills have already been brought before the House, where we have made exactly the same kinds of legislative changes when it comes to the polluter pays principle in dealing with absolute liability and so on.

In voting for this bill, parliamentarians will be supporting this important principle. This is our government's objective: to ensure that sufficient funds are available to compensate victims of railway accidents and to pay for cleanup costs in the event that those things may happen.

The polluter pays principle means, first, that railways pay the cost of accidents for which they are responsible. Therefore, we are proposing that each railway be required to hold a minimum amount of third-party liability insurance to cover the cost of an accident. This is a good thing. This would give a level of assurance to Canadians that their tax dollars would not be used when it comes to an accident, cleanup, or spill or any of the other damages that might be associated with a minimum level of liability. These minimum insurance levels would be established in the legislation so that they were clear and transparent and so that Canadians would know what they could expect.

With this approach, Canadians would be reassured in the wake of something like the Lac-Mégantic tragedy that railways would have enough insurance to cover these costs when accidents, unfortunately, may happen in the future.

These insurance levels are based on risk. It is an insurance program, and it will be based on risk, as any other real insurance program is. They were developed based on an analysis of rail accident cost data and the potential severity of incidents involving certain types of dangerous goods. The levels range from $25 million to $1 billion, based on the type and volume of dangerous goods the railway may carry. When the new regime comes into force one year after the bill's royal assent, railways that carry little or no dangerous goods will be required to carry $25 million minimum in insurance.

Requirements for railways carrying higher amounts of specified dangerous goods, including crude oil, would be phased in over time. Initially, the railways would be required to carry either $50 million or $125 million of insurance coverage. One year later, those requirements would increase to $100 million or $250 million of coverage.

Railways moving substantial amounts of specified dangerous goods, such as our major national railways, CN and CP, would be required to carry a minimum of $1 billion in liability insurance.

We have heard that some short lines may have difficulty adjusting to the enhanced insurance requirements or that the increased costs may affect their viability. However, as the Lac-Mégantic incident has shown us, accidents involving smaller railways carrying dangerous goods can result in catastrophic damages. It is for this reason that the government committed to hold railways more accountable through enhanced insurance requirements.

Phasing in the highest levels of insurance for short lines at $100 million and $250 million would help mitigate concerns and provide the railways required to hold these amounts with sufficient time to adjust. We do not expect that railways required to hold either $25 million or $1 billion in insurance would need additional time to adjust, so those levels would take effect immediately after the legislation comes into force. This is only fair.

Railways would have to notify the Canadian Transportation Agency of any changes affecting their insurance coverage. The agency could make inquiries to ensure compliance, and the insurance requirements would be enforceable through penalties of up to $100,000 per violation. These measures would ensure that railways were properly insured for their operations.

Another important component of the bill is the polluter pays principle and its clearly established liability in this legislation for railways.

Under the bill, railways would be liable up to their minimum insurance level, without the need to prove fault or negligence—and I have to stress that, without the need to prove fault or negligence—for a railway accident involving crude oil or any other designated good.

As our 2013 Speech from the Throne commitment implied, the railway is not the only responsible party in a railway accident that involves goods such as crude oil. Our government committed to requiring both shippers and railways to carry additional insurance, so that they are also held accountable.

Shippers of dangerous goods like crude oil are a part of the polluter pays concept for the railway sector. This is because such goods have inherent characteristics that contribute to the severity of an accident.

Accordingly, the bill would provide for a mechanism to share liability for accidents more broadly between shippers of crude oil and railways. This would be done through a shipper-financed fund that would supplement a railway's insurance if and when necessary. The fund would be triggered once the cost of a crude oil-related railway accident exceeds a railway's insurance level.

The fund, combined with the insurance levels, would protect potential victims and pay for environmental cleanup and restoration. It would also reimburse governments for the cost of responding to a railway accident.

This two-tiered approach—the insurance and then the fund for any accidents that go over the insured amount—would provide a broad range of coverage for damages in the case of a crude oil railway accident. Higher insurance levels would ensure that railways have more resources available to pay for their liabilities. For accidents involving crude oil, the fund would insure that all other damages and losses were compensated.

This regime would equally cover all actual loss or damage incurred, including damage to people, property, and the environment. The costs incurred in responding to the accident might also be claimed. In addition, the federal or provincial Crown may seek compensation for the impairment of non-use value of public resources.

We are focusing on crude oil because this is a dangerous product that is moved in large quantities by rail over long distances and is a particular concern for Canadians following the Lac-Mégantic tragedy. However, recognizing that other goods have characteristics that could also contribute to the severity of an accident, we have provided the option of adding other goods to the fund in the future by regulation.

Shippers of crude oil would contribute to the fund through a levy of $1.65 per tonne shipped. This levy would apply to any shipment of crude oil carried by a federally regulated railway including a shipment originating from the United States or on a provincially regulated short line.

Capitalizing the fund to $250 million initially would provide substantial additional coverage for crude oil accidents, but this is a notional amount and certainly not a cap on the fund. The bill would allow the minister to discontinue and reimpose a levy as necessary.

Based on a reasonable projection of oil-by-rail traffic growth in the coming years, we determined that a $1.65 per tonne levy on rail shipments of crude oil would likely generate $250 million for the fund in approximately five years. However, the bill provides flexibility for the levy to continue longer than five years should oil-by-rail traffic grow at lower than expected rates.

It is important to emphasis that. Regardless of the capitalization target, the fund would cover all rail accident costs above railway insurance. In the unlikely event that damages exceed the amount being held in the fund, the consolidated revenue fund would provide a loan to cover the shortfall and pay the remaining claims. Any loans from the consolidated revenue fund would be recouped from the industry through levies. These measures are also to reinforce the polluter pays principle.

As I conclude, I want to urge all members to think carefully about how they are going to vote on this piece of legislation. Canadians are counting on us to make a good decision on their behalf.

As we have seen, the accidents have happened in Lac-Mégantic and in my riding of Wetaskiwin, where there are so many communities right on the CP and CN lines. We start out in places like Millet and Wetaskiwin and go down through the Maskwacis area, through Ponoka, Lacombe, and Blackfalds, through Red Deer, and so on; and the CN line goes out in the eastern part through communities like Mirror, Gwynne, and so on. These are communities that are near railway crossings.

The railway traffic in Alberta has increased tremendously over the last number of years with the expansion of oil sands projects and the inability of some pipeline companies to get their projects approved. We have seen an increased dependency on rail for the movement of these items, so it is very important to reassure my constituents, and reassure not only Albertans but any people who have a rail line going through their community, that there will be the coverage available and it will not be at taxpayers' expense as it was with the absence of this legislation, unfortunately, as we saw at Lac-Mégantic.

This is very important legislation, and I encourage all colleagues to vote for it. While they may have criticisms of the bill, or they may want to play politics with this bill, in essence, it would be a sad commentary if we could not come to an agreement in the House that the bill, while it would never be perfect for 308 members, certainly is good enough to be passed into law before we rise for the summer.