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

[Peter Braid, Conservative, Kitchener—Waterloo, ON]

Mr. Speaker, I thank my colleague for his support of this important legislation, Bill C-52, and for his interest in the importance of infrastructure across the country.

As the hon. member may be aware, VIA Rail receives a significant taxpayer-supported subsidy to help with its operations. With respect to large railway operations in the country, we certainly expect them to invest in their own operations. That said, under the new building Canada plan, the largest and longest infrastructure investment in the country's history, there are eligible categories for certain short-line rail systems to support, in particular, small communities.

I hope my hon. colleague will help to raise awareness about all the various supports that the federal government provides for the railway system and for infrastructure in our country.

[Peter Braid, Conservative, Kitchener—Waterloo, ON]

Mr. Speaker, it is absolutely crystal clear that Bill C-52 would improve the safety of railways in our country and improve the safety of communities as well. That is our ultimate goal and intention. Should an accident occur, we would ensure that industry is held accountable where that is appropriate and that there is shared responsibility between the railway and the shipper.

Furthermore, with this bill we would ensure that there would be adequate levels of insurance in place, and in addition to that insurance fund, a supplementary fund for any costs over and above those insurance levels.

Clearly, these are measures which would significantly improve the safety of communities and of railways across the country.

[Mike Sullivan, NDP, York South—Weston, ON]

Mr. Speaker, with Bill C-52, the federal government appears to be suggesting that as it is the regulator it is also the responsible party when it comes to paying for or assuming the responsibility to regulate those who should pay for the result of a disaster or derailment. However, with Lac-Mégantic, the federal government has only paid a small portion of the actual cleanup costs. We are wondering whether this bill will cause the government to rethink its decision not to compensate fully the Government of Quebec for the costs related to the Lac-Mégantic disaster, part of which is because the railroad involved was under-insured.

[Peter Braid, Conservative, Parliamentary Secretary for Infrastructure and Communities]

Mr. Speaker, I am very pleased to have the opportunity to rise today to speak at second reading of Bill C-52, the safe and accountable rail act. As we know, this bill would amend two pieces of legislation that are important to the protection of our communities, the Railway Safety Act and the Canada Transportation Act.

Canada's economy and the livelihood of people in communities across the country depend on the transportation of goods, including dangerous goods, of course, at times. As the economy grows, so too does the transportation of these dangerous goods.

The bill before us takes important steps to improve the overall safety of the rail system by increasing regulatory oversight, but the reality remains: no matter what actions we take to reduce risks—and we want to take every action we can—we must also be prepared to respond to a catastrophic accident, and this includes being able to pay the costs and compensate for the liabilities that result. This bill would address this element by strengthening accountability.

Municipalities across Canada bear much of the brunt of rail accidents. The bill before us would help respond to those risks. The amendments to the Railway Safety Act contained in this bill would enable municipalities to obtain information to help prepare for effective emergency response. Where there is a serious incident that results in costs for cleanup and repair, the amendments to the Canada Transportation Act contained in this bill would ensure that communities would not bear financial responsibility for such disasters.

Let me first address the matter of emergency response and then move on to the subject of liability and compensation.

Our government has undertaken important measures to improve the ability of first responders and communities to deal with rail emergencies. We need to keep this important dialogue going among shippers, railways, communities, and first responders. Together they can improve planning and operational communications. They can identify best practices for accident protocols in both urban and rural situations.

I commend Transport Canada for establishing an emergency response task force that brings together industry and community stakeholders to examine national needs for emergency response to accidents involving dangerous goods. In this way, we will strengthen the links between communities and industry and identify ways to improve emergency response.

In the consultations on the need for more co-operation and coordination in emergency response, Transport Canada heard from, among others, the Federation of Canadian Municipalities, the Canadian Association of Fire Chiefs, and the Aboriginal Firefighters Association of Canada. Each of these organizations expressed concerns about the capacity of our communities to deal with rail incidents involving dangerous goods. Each has called for more effective sharing of information to support first responders.

This bill contains provisions to make that happen. It would authorize regulations to require a railway to provide information to municipalities when significant railway operational changes are occurring at that particular location. The bill would also amend the Railway Safety Act to provide new regulation-making powers with respect to a railway safety management system, or SMS. An SMS includes a risk assessment, a list of mitigation measures, and a plan to monitor the effectiveness of these measures. Regulations under the bill before us can require railways to share summaries of these risk assessments with municipalities. These two measures would help establish better communication between railways and the municipalities and would provide first responders with information they require to be fully prepared for emergencies.

I have been talking about the impact on communities of large catastrophic events, but I would also like to observe that the bill before us would remove from provincial and municipal taxpayers the cost of fighting smaller fires that may result from a company's railway operations.

These incidents sometimes happen as a result of railway activities, but because a train moves on before the fire is apparent, it can be difficult to ascribe cause and effect, and hence liability. As a result, the province or the municipality and their taxpayers are sometimes on the hook for the cost of putting out the fire.

This bill would amend the Railway Safety Act to give the Canadian Transportation Agency authority to determine whether a fire was caused by rail operations. If so, the agency could then determine the costs and require the railway to reimburse the province or municipality for these costs. However, despite all these best efforts, railways will never be able to prevent all accidents.

This brings me to a second component of this bill, changes in the liability and compensation regime for rail. Under the current system, a railway company must insure against accidents, but as we have seen with the tragedy at Lac-Mégantic, that insurance coverage was insufficient to cover the resulting liabilities.

In response, the bill before us would legislate the minimum amount of insurance that a railway would be required to hold, depending on the type and volume of dangerous goods the railway carries annually. This approach is objective and would provide greater certainty that there will be sufficient insurance coverage in the event of a railway accident.

Requiring federally regulated railways to carry minimum levels of insurance is a necessary first step for the government to fulfill its promise in the 2013 Speech from the Throne.

The second step is to put in place a regime that shares responsibility between shippers and railways, so that industry is held accountable. Common carrier obligations of the Canada Transportation Act require railways to ship any products offered for transport. This obligation benefits shippers, who can rely on getting their goods to market.

Given this, the bill would clearly establish the roles and responsibilities of shippers and railways in the event of an accident involving crude oil. Railways would be liable without proof of fault or negligence, up to their insurance level, for a crude oil accident.

However, to pay for liabilities that could be in excess of a railway company's mandated insurance level, the bill would require shippers of crude oil to pay into a supplementary compensation fund through a levy. This fund is called the fund for railway accidents involving designated goods. This fund would be used to cover the same liabilities for which railways are held accountable. The fund could later be expanded through regulation to include other dangerous goods.

To finance the fund, these amounts would be collected from shippers for the movement of crude oil and held in a special account in the consolidated revenue fund. Together these measures would ensure adequate resources were available to cover the liabilities associated with a disaster of the magnitude of Lac-Mégantic.

Through this, the bill before us would establish the polluter pays principle for rail transportation. The overall approach is similar to the regime now in place in marine transportation and is in line with actions the government is tabling for the pipeline, offshore drilling, and marine sectors as well.

In this way, we would ensure that victims and taxpayers are not on the hook to pay for the costs of emergency response or other liabilities associated with a tragic accident involving dangerous goods carried by rail. We would be balancing the common carrier obligations with shipper accountability.

These measures would allow liability for potential catastrophic rail accidents to be shared between railways and shippers, and it would result in transportation choices that better reflect true costs and risks.

The bill before us would protect our communities by helping to prevent accidents and by sharing information that improves emergency response, and if there were an incident, this bill would ensure that communities and taxpayers were not the ones who pay for the response, cleanup, and compensation. I truly hope that all members in this House will join me in supporting this bill.

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

Mr. Speaker, as always it is a great honour to rise and speak for the people of Timmins—James Bay. I am very proud to be speaking to Bill C-52, a piece of legislation that is very important for this House. I would like to put in editorial parentheses that it is nice for a change to be debating legislation that has something of value to the Canadian public, as opposed to the so many bizarre hot-button sideshows we have been dealing with. The issue of rail safety is a serious concern. The government needs to respond.

We saw the horrific disaster in Lac-Mégantic, where so many lives were needlessly lost. However, we are also dealing with a huge increase in the transport traffic coming out of Alberta and Saskatchewan in terms of the carrying of unprocessed oil, crude, bitumen. We saw in the Lac-Mégantic spill the oil that was coming out of the Bakken fields that is very combustible. These are issues that have to be taken seriously.

As I say that, it is not just the oil industry that is involved. Many of our industrial sectors have an important role to play in their connections with the railways. I live literally across the street from the Ontario Northland and every day the huge sulphuric acid tanker cars come down from the smelter in Rouyn-Noranda, Quebec. We have had spills, and those are catastrophic spills.

However, the kinds of spills that we have been seeing with increasing regularity as the increase of traffic is coming, particularly in the oil sector, have raised many issues about safety. In my own region, we have had in the last few months three derailments: one at Hornepayne and two at Gogama. One spilled heavy crude into the Mattagami River right at the site that I have been led to understand is fish-spawning grounds. There has been so much work done on that section of Mattagami River to build a better ecosystem for fisheries. To see heavy crude burning in the Mattagami River is a travesty, and it is an economic and environmental tragedy for the people who live along the river and in fact for all the people who live in my part of northern Ontario because the Mattagami is such a large river system.

There is not a lot of comfort from the promises of CN or Transport Canada that they will suddenly make this all better again. The minister said they will restore it 99.99%. I find that rather hard to fathom, how crude spilling into fish-spawning grounds can be remediated that easily. We look at what happened in Kalamazoo, Michigan when the Enbridge pipeline burst. For 18 hours after the alarm started sounding in Edmonton that there was a problem, no action had been taken. That blowout destroyed a large section of the Kalamazoo River. Five years later, the water is still damaged and it has cost over $1 billion in repairing the environment. These are serious issues.

We have to go back a bit to give people some historical explanation. Before we had this huge increase in tanker traffic, there was a belief, pushed by the Liberal government of the day, that if we allow self-regulation everything will be better. It is a blind belief that capital suddenly somehow had a sense of public duty, that if we pulled out the inspectors, if we pulled out the inspectors from the meat industry, if we pulled out the inspectors assuring health and safety, if we pulled out the inspectors of the railway lines and allowed the companies to self-regulate, people would make more money and somehow that would be a social good.

The Transportation Safety Board has talked about the weak safety culture that has existed both at Transport Canada and within the companies. Serious issues have been raised to the point where, after the latest Gogama spill, the Centre for Biological Diversity said, and I do not think it is that unfair to say, that the oil and railway industries are playing Russian roulette with people's lives and our environment given the fact that the transport of these goods cut through the centre of so many communities in our country.

That being said, we have to ask ourselves what the long-term solution is here. One of the arguments we always hear from the Conservatives is this. If there is a rail derailment, some kind of accident or any issue about the transport of oil, the Conservatives will immediately jump up and say that we need pipelines, that the New Democrats need to stand up and support pipelines. That is a bizarre, false argument but I am not surprised that the Conservatives say it because they are so much the puppets of the large oil interests.

I have been noticing that more and more my colleagues in the Liberal Party use that argument time and time again. I was actually shocked that yesterday when we were talking about rail safety, my colleague from Trinity—Spadina was talking about pipelines. I do not think he understands that we do not have to have either-or, what we have to have is public safety. We are a nation of transporting of resources. However one chooses to transport goods, it has to be done where safety is put ahead of expediency.

For my colleague in Trinity—Spadina who believes that the NDP is wrong on our concern about pipelines, we are saying that the issue of pipelines is the same as the issue with rail transport. What are the public protections that are in place if we are going to be moving raw bitumen through 40-year-old pipelines? That is a question that the public needs to have answered.

Whether they are concerned about Line 9 in the city of Toronto, whether they are concerned about the pipeline planned through the mountains of B.C., the issue is safety. Where are the shut-off valves? What kind of oversight is there going to be? What kinds of remediation measures could be put in place to stop a blowout? If there is a blowout in the B.C. mountain ranges, how are we going to remediate that? We know that would be impossible. If Line 9 blows out in Toronto, how could we assure the safety of the community?

It is a false argument to say the New Democrats have to choose between pipelines or rail. We say that whatever method is going to be used to move the nation's natural resources, the issue of safety to the public has to be part of the discussion from day one. There is a larger long-term issue in terms of safety with Canada's oil industry that needs to be looked at. What kind of nation has a vision for economic development that takes raw resources and ships them thousands of kilometres to put them on ships in the St. Lawrence to ship them to China to be processed? That is a bizarre, short-sighted view of economic development.

We have enormous resources in this country and we have to look at value added because when we do value added we are not only creating jobs, but we are also ensuring that the transport would be safer because we are not dealing with the unstable, unprocessed Bakken oil being transported. We would process it in Alberta or Saskatchewan and then move it.

The issue of transporting bitumen as we have seen from the Kalamazoo River catastrophe is that bitumen is very different for cleaning up than oil. This needs to be balanced and the best way to deal with that would be to have the upgrading and the processing at source. This is a long-term vision issue that needs to be addressed.

With regard to my colleagues in the Conservative Party and the Prime Minister who is going to create this energy superpower, we have seen after eight years of this hyperbolic talk that it has not come to pass because there has not been the necessary equal commitment to environment. We have become more and more of an international outlier on these issues. If we are going to develop non-renewable resources, we have to show that we do actually care about the environment.

President Obama turned down Keystone XL, much to the chagrin of the leader of the Liberal Party and the Prime Minister. We look at what the EPA said about Keystone XL, that it was not in America's interests and that the effect of Keystone XL would be to add another 1.37 billion metric tonnes of greenhouse gases into the atmosphere. The United States was looking at the Canadian government and saying for all its blunder and bluff on its energy economy, what has it done to ensure that it is balanced with the long-term environmental vision. The government had nothing to offer except more blunder and bluff and that it is not taking no for an answer from Mr. Obama. Well, President Obama and the Democrats' response is “talk to the hand”. If we are not going to balance environment and long-term security, they are not going to partner with us.

In our transport of oil and our natural resources, which we have been abundantly blessed with, what we are saying is that we have to balance environment, sustainability and public safety, that we cannot shortchange public safety because we simply cannot tolerate it and the Canadian public will not tolerate another tragedy like Lac-Mégantic.

Therefore, I support the bill. I think it is a first step, but we have a long way to go in addressing this issue.

[Linda Duncan, NDP, Edmonton Strathcona, AB]

Mr. Speaker, I am pleased to say that I will be sharing my time with the member of Parliament for Timmins—James Bay.

I rise today to speak to Bill C-52, an act to amend the Canada Transportation Act and the Railway Safety Act. I would like to say at the outset that I, along with my colleagues, am pleased to see that the government, at least incrementally, is coming forward with some reforms addressing the concerns of the Canadian public. A good number of the measures in this bill are welcomed, although there may be some significant changes and additions we might want to add at committee.

I recommend that, top of mind, we recognize that the federal government has almost sole responsibility and power to regulate the rail sector, in particular the major lines. This is a mandate, based on my own experience too often in the past, not delivered effectively, both in preventing and responding to rail-related disasters.

Deep and widespread concern continues to be expressed about the risks that exponentially increasing dangerous rail traffic poses to Canadian communities, a concern shared by my constituents, and frankly, by all Albertans. Why the concern? A major percentage of hazardous rail cargo either originates in Alberta, is shipped into the province, or is shipped out of the province to markets. Each time I commute from my home to the airport to head to Ottawa, parallel to me along the highway I witness continuous lines of tanker cars. In summer months, my cottage shakes from the heavy-loaded railcars, and I whisper a silent prayer, “Please, no derailment today”. I will explain my reaction and my fear momentarily.

I regularly hear complaints from constituents who are distressed that their daily commute is delayed by tanker cars blocking their route to work or school. Massive rail terminals constructed on the eastern edge of my constituency store and shunt loaded tanker cars close by businesses, a university, and commuter traffic. Residents of my riding of Edmonton—Strathcona loudly cheered the decision recently by Canadian Pacific to finally remove some of the rails that, until a few weeks back, shunted tanker cars, unsecured, right into the heart of Edmonton's historic Old Strathcona district into housing, businesses, and significant commuter traffic, mere feet away.

A few years back, the Hardisty town council expressed concern about the construction of a massive American co-owned crude-by-rail terminal that would load 120 tankers per day. In Bruderheim, the largest constructed crude-oil-to-rail terminal automatically loads 180 tanker cars, or 700 barrels, with 13-unit trains of diluted bitumen per day to be shipped south to the United States.

I met with Albertans protesting that a CN Rail siding, once used to load grain for now abandoned grain elevators, located 30 metres from two wildlife conservation areas, less than 200 metres from two homes, and 700 metres from a golf course, was being converted to shunt Imperial Oil tankers. Strathcona County councillor Alan Dunn dubbed the decision to store tankers in the middle of country, residential, and agricultural areas “an abomination”, in his words.

Albertans have experienced 3,421 rail incidents in the past decade, 1,700 of which were derailments, with 122 fatalities and 13 evacuations. This monumentally increased dangerous railcar cargo, coupled with the Lac-Mégantic tragedy and the continuing derailments of similarly dangerous cargo, have caused heightened public concern and increased calls for government action, including by municipal councillors.

To fully understand Albertans' concerns about hazardous rail traffic and their lost confidence in a government response, I wish to share highlights of just three major rail accidents that happened in Alberta over the past three decades.

First, the 1986 Hinton train collision between a CN freight train and a VIA Rail passenger train killed 23 people and seriously injured 95 others. Until the Lac-Mégantic disaster, it was the most lethal Canadian rail disaster since the Dugald accident of 1947. The resulting investigation revealed serious flaws in CN's employee practices. A commission of inquiry investigated the crash. Justice René Foisy, from the Court of Queen's Bench in Alberta, following 26 days of public hearings, condemned what he described as a “railroader culture” that prized loyalty and productivity at the expense of safety.

In August 2005, a derailment dumped over 700,000 litres of bunker C fuel and 88,000 litres of carcinogenic pole oil on the north shore of Lake Wabamun, essentially on top of the summer village of Whitewood Sands. More than 500,000 litres of the chemical entered the lake, with half remaining unrecovered.

Thousands of volunteers walked the shoreline picking up tar balls or rescuing oil-coated birds and wildlife. The shores of the Paul First Nation sacred lands were coated in oil. In the words of the provincial environmental commission struck to assess the government response, the event was a catastrophe for the community and a disaster for the environment. This important recreational lake was closed to swimming, boating, and fishing for a full year.

Who would have thought that in the oil capital of Canada, timely access to either the equipment or expertise to adequately respond to an environmental disaster of this scale, and so close to Edmonton, was completely absent? It was a major wake-up call, but are we fully awakened or ready still?

While the province at least formed a special commission to critique the failed response and recommended improved emergency response efforts, no similar effort was made by the rail regulator, the federal government. The commission identified a complete failed response and a lack of emergency preparedness and made significant calls for reform, including advance resolution of interjurisdictional responsibilities, including over first nation lands and people, and better management of rail transport risk prevention and response.

According the Transportation Safety Board, the cause of the derailment was rails replaced with faulty second-hand equipment. Despite these findings and recommendations, a decade later, another derailment of petroleum crude oil and liquified petroleum gas happened at Gainford, mere kilometres from Lake Wabamun. According to the report by the Transportation Safety Board, the heat from the explosion and fire was so extreme that flames shot across the highway, damaging a home on the other side. The Trans-Canada Highway had to be closed and around 100 residents evacuated. Similar to the findings by the Transportation Safety Board for Wabamun, the cause was attributed to faulty rail, unidentified by transport inspectors or CN inspections. It must be noted that another derailment occurred just two weeks earlier near this same location.

The Conservatives have promised time and again to rectify shortcomings with safety inspections and rail safety compliance measures. They have yet to fully honour that commitment. As my colleague pointed out, successive Liberal and Conservative governments have, in the majority, let companies self-regulate and self-inspect their equipment and rail lines. This approach is just not adequate. Rail traffic is now a major industrial operation.

Despite the growing volume of dangerous rail traffic and despite the related serious derailments, Transport Canada has apparently hired only one additional rail safety inspector, and the Rail Safety Directorate's budget has been cut by almost 20%. We need stronger regulation of this dangerous rail traffic, and we need intensified inspection and enforcement.

Bill C-52 does offer some important reforms to address compensation after a rail disaster occurs, including minimum insurance levels for railways transporting dangerous goods, a disaster relief fund, and greatly expanded authority by the minister, cabinet, and rail safety inspectors. However, these have more to do with the costs and cleanup after the fact. They do nothing to prevent further accidents. What we need is federal action to prevent rail disasters, including full, open, and public review and assessment of all proposals by the rail sector and its clients to construct new facilities or to substantially increase the volume of hazardous goods shipped.

The rail industry is the only major industrial sector almost totally exempted from the application of federal environmental assessment laws. Currently, federal laws bizarrely also completely exempt the rail sector from advance public scrutiny. Regulations under the federal environmental assessment act currently only narrowly confine the rail industry operations to be reviewed to where certain migratory bird sanctuaries are impacted.

The Minister of Environment is empowered to order that rail traffic that could cause adverse environmental effects or public concerns undergo and EIA. To date, she has failed to exercise that power, despite the growing potential threats to life and environment.

The government could also expand the powers of the National Energy Board to ensure that all exports of hazardous petroleum products by pipeline and rail combined, not just exports by pipeline, are reviewed.

An Alberta first nation, the Athabasca Chipewyan First Nation, has actually called for the National Energy Board to expand its mandate.

I look forward to questions on my speech and action by the government.

[Jeff Watson, Conservative, Essex, ON]

Mr. Speaker, I am not sure that the member has read the provisions of Bill C-52, in which the short-line railways would be expected to carry more liability insurance based on the type and volume of the dangerous goods they are carrying. That is one of the very first ways to ensure that railway companies are bearing increased responsibility for the safe operation and transportation of dangerous goods, specifically crude, by rail.

Beyond those increased levels of insurance, there is the supplementary fund. As I have said, we are targeting that fund at $250 million, but there is obviously flexibility in the way the mechanism of the fund and the implementation of the levy are put to place. That would be done for repayment.

With a review at least every five years, if the risks change, there is flexibility built into the law such that the fund itself and the amounts in the fund could be re-examined and, if necessary, adjusted.

[Jeff Watson, Conservative, Parliamentary Secretary to the Minister of Transport]

Mr. Speaker, I am pleased to join the debate here today on Bill C-52, the safe and accountable rail act. The tragic July 2013 derailment in Lac-Mégantic was an unprecedented event that I know none of us will forget.

Our government's response to the tragedy has three fundamental components: accident prevention, preparedness and response, and accountability. Under the first two pillars, our government has introduced a number of measures to address issues related to rail safety and the transportation of dangerous goods. Bill C-52 goes further to address these issues.

Today I would like to speak to the third pillar, accountability, and specifically the liability and compensation regime for rail. The Lac-Mégantic tragedy highlighted the need to further strengthen the rail regime to make sure that if an accident does occur, there are sufficient resources to compensate victims, pay for cleanup and protect Canadian taxpayers.

To do this, our government undertook a comprehensive review of the liability and compensation regime for rail. As part of this review, Transport Canada did in-depth research and analysis and consulted subject matter experts. The department also undertook a two-phase consultation process in which a wide range of stakeholders, including railways, shippers, provinces and communities, shared their views and technical information. All of the input and analysis generated during the review has informed the regime changes put forward in the bill.

Today, I would like to outline how Bill C-52 improves upon the current liability and compensation regime for rail and how these changes would benefit Canadians. Liability and compensation for railway accidents is determined through the courts based on fault or negligence. Under the current regime, the Canada Transportation Act and the Railway Third Party Liability Insurance Coverage Regulations require that a railway company carry adequate third party liability insurance coverage as a condition of receiving a certificate of fitness allowing it to operate.

The Canadian Transportation Agency determines what constitutes adequate insurance on a case-by-case basis. This is based on an assessment of risks associated with the railway's operation. It also makes a comparison with insurance held by railways with similar operations and with industry practices.

Under the Canada Transportation Act, it is up to the railway company to notify the agency in writing whenever it cancels or alters its third party liability insurance coverage, or whenever a change in operations may mean that its coverage is no longer adequate. If the agency determines that a railway's third party liability insurance is no longer adequate, it may suspend or cancel the railway's certificate of fitness.

The Transportation Safety Board's report on the Lac-Mégantic derailment indicated that the Montreal, Maine and Atlantic Railway did not notify the agency of certain significant operational changes, namely its increased transportation of crude oil.

Following the Lac-Mégantic tragedy, it also became clear that the $25 million in insurance held by the Montreal, Maine and Atlantic Railway would be insufficient to cover the scope or damage from this unprecedented and catastrophic accident.

In the 2013 Speech from the Throne, our government committed to ensuring that railways carry more insurance. Bill C-52 will implement four levels of mandatory minimum insurance requirements for railways. Under this new regime, the Canadian Transportation Agency will assign railways to a minimum insurance level based on specific criteria focused on the type and volume of dangerous goods hauled.

Railways that carry little or no dangerous goods will be required to hold $25 million in insurance. For railways carrying higher amounts of dangerous goods, there will be an initial requirement to hold either $50 million or $125 million in insurance, depending on the type and volume of dangerous goods carried. One year later, those requirements will double to $100 million and $250 million respectively. This phase-in will provide short line railways with sufficient time to adapt to these new requirements.

Finally, railways that carry substantial amounts of specified dangerous goods, namely class 1 railways, CN and CP, will be required to hold $1 billion in insurance. A railway's third party insurance will have to cover specific risks, including bodily injury or death, property damage and risks associated with pollution.

These new insurance requirements will ensure that the risk associated with a railway's operation is assessed objectively using specific criteria and that a railway's third party liability insurance is aligned with that risk. These requirements will also ensure that there will be sufficient insurance to cover the full cost of the vast majority of potential accidents.

As it stands in the current regime, there are no additional sources of funds to turn to in the event of a catastrophic incident other than the public purse. Often the process for addressing claims in such cases can be lengthy and costly, with delayed and uncertain outcomes for victims.

Bill C-52 ensures that the liability and compensation regime for rail will be able to address a catastrophic incident without burdening the taxpayers. It does so by creating a modernized two-tier regime to cover the cost of accidents involving crude oil, like the one experienced in Lac-Mégantic. This new regime will extend responsibility for compensation beyond railways to include shippers as well. It will also define the liability of railways in order to provide claimants with greater certainty of compensation.

In the case of a rail accident involving crude oil, a federally regulated railway will automatically be held liable without the need to prove fault or negligence. Railways' liability would be capped at their minimum mandatory insurance level and they will have the ability to seek financial redress from at-fault parties through the courts.

Federally regulated railways will also be held liable for crude oil accidents involving any provincially regulated railways operating on their tracks. This will ensure that all railway accidents involving crude oil that occur on federal track are covered through the new regime.

To ensure that liability is shared as designed in the new regime, the bill makes changes to section 137 of the Canada Transportation Act to clarify that railways will not be able to impose their third party liabilities on shippers, for example, through a tariff. Railway insurance will be the payer of first resort, and as I mentioned, would be sufficient to cover the cost of most rail accidents. However, should the damage from a rail accident involving crude oil exceed the railway's insurance level, the new shipper-financed compensation fund would cover remaining costs.

Shippers are part of the polluter pays equation, requiring them to share in the liabilities associated with the transport of their goods, and reflects the fact that the qualities of their product contribute to the risks and costs associated with an accident.

The proposed fund will be financed through a levy on shippers of crude oil. This levy will be set at $1.65 per tonne of oil in the first year. Following this, it will be adjusted annually for inflation based on the consumer price index.

The levy will be collected by federally regulated railways, remitted to the government and deposited in a special account in the consolidated revenue fund. Railways will be required to keep records on the collection of levies.

The Minister of Transport will have the authority to turn the levy off once it has been capitalized sufficiently. We are targeting an amount of $250 million, which we expect will be collected in approximately five years. This estimate is based on a reasonable projection of oil-by-rail traffic growth in the coming years. The minister may then turn the levy on again as necessary.

The shipper-financed fund will be managed by an administrator appointed by the Governor in Council. The administrator will be responsible for establishing and paying out claims once the railway's liability limit is reached.

To ensure transparency, the administrator will report to Parliament, through the Minister of Transport, on the fund's management. There must also be a special examination of the fund at least once every five years.

In the unlikely event of damages from a rail accident exceeding both the railway's insurance and the amount being held in the supplementary compensation fund, the federal government's consolidated revenue fund will cover the remaining costs. The government will then be reimbursed through the levy. A special levy could even be imposed on federally regulated railways in order to accelerate repayment of the amount charged to the consolidated revenue fund.

The two-tier regime for crude oil accidents will provide broad coverage of the cost of crude oil accidents. It will cover all actual loss or damage incurred as well as costs incurred by the federal or provincial crown in responding to the accident. The crown may also seek compensation for the impairment of the non-use value of public resources.

Oil is being transported in growing volumes over long distances across our country and we know that accidents involving crude oil can cause significant harm to people, property and the environment. Creating this second tier of compensation for large-scale accidents involving crude oil is another way that we are adapting to this phenomenon, recognizing the valid concerns of Canadians about the movement of oil by rail.

Enhancing compensation for rail accidents involving crude oil will complement efforts we have taken recently to strengthen rail safety and the transportation of dangerous goods, for example, by improving tank car standards. However, recognizing that crude is not the only product that could cause significant damage if involved in a rail accident, there is flexibility in this regime to include by regulation other dangerous goods in the future. The two-tier approach brought forward in Bill C-52 will ensure that enough resources will be available to cover all damages stemming from a rail accident. The increased insurance requirements will hold railways accountable and provide sufficient compensation for the majority of potential accidents. The supplementary fund will provide an additional source of compensation for crude oil accidents and share liability more broadly with shippers.

Robust oversight and enforcement mechanisms are key to ensuring that the strengthened liability and compensation regime functions as intended. The Transportation Safety Board found that the regulatory requirements in place at the time of the Lac-Mégantic derailment did not ensure that an increase in operational risk was reflected in railways' insurance coverage. Therefore, this bill also establishes more robust oversight and enforcement mechanisms to ensure that railways comply with the requirements of the new regime. Railways will continue to be obligated to notify the agency of any changes to their operation that may affect their insurance coverage. Under the new regime, however, the agency is empowered to make inquiries to determine compliance and must suspend or cancel the certificate of fitness of a railway that fails to maintain the minimum mandatory level of insurance.

We have also introduced administrative monetary penalties, AMPs, as an additional means of ensuring compliance. The agency may apply AMPs up to $100,000 to a railway that fails to maintain the correct amount of insurance, or fails to notify the agency of a change affecting its insurance coverage. An AMP of up to $100,000 per violation would also ensure the compliance of railways for collecting and remitting the shipper levies and for keeping records concerning the levies. The Minister of Transport may designate a person to be responsible for assessing compliance and applying these penalties.

Finally, the agency will have clear authority to make regulations concerning the information it needs to verify compliance.

These strong enforcement mechanisms support greater accountability and are critical to ensuring the benefits of the strengthened liability and compensation regime are realized.

Another advantage of the changes brought forward under Bill C-52 is that they bring the liability and compensation regime for rail into step with regimes in other modes and sectors. The polluter pays principle, which is the concept that those responsible for causing damage as a result of their operations should pay for their liabilities, guides the proposed changes to the regime for rail. It is also at the heart of the regimes for marine tankers, the nuclear sector, pipelines, and offshore oil and gas.

There are particularly strong links between the proposed regime for rail and the marine tanker regime, both of which have two tiers: an insurance tier and an industry-financed fund. They share responsibility between different participants in the supply chain. The administration of the rail regime's shipper-financed fund is also modelled on that of the marine regime's ship-source oil pollution fund.

More important, the regime for accidents involving crude oil, including a shipper-financed fund, reflects our government's responsible resource development agenda.

I cannot emphasize enough the importance of the measures put forward in Bill C-52. In addition to further improving rail safety and the transportation of dangerous goods in Canada, this legislation addresses gaps in the liability and compensation regime for rail that were brought to light following the Lac-Mégantic tragedy.

The primary goal of the bill's strengthened liability and compensation regime for rail is to make sure that in the future, should a rail accident occur, victims will be fully compensated and the environment will be remediated. It does this by holding railways and shippers accountable, not by burdening the taxpayer.

I therefore hope that all of my colleagues will join me in supporting the safe and accountable rail act, and help pass it quickly.

[Jeff Watson, Conservative, Parliamentary Secretary to the Minister of Transport]

Mr. Speaker, I listened with intent to the member opposite's expressed support on behalf of the New Democrats, the official opposition, for the swift passage of Bill C-52, and I welcome that.

I know the opposition House leader is close at hand. Will the member ask his House leader to let this bill pass as quickly as possible rather than talk the clock out on it? I know it is in the interest of everyone that we move this swiftly, at least to committee for the next stage.

Will the member help secure a swift passage of the bill so we can move on to studying it at committee?

The House resumed from March 30 consideration of the motion that Bill C-52, An Act to amend the Canada Transportation Act and the Railway Safety Act, be read the second time and referred to a committee.

[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—

[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.

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

Mr. Speaker, the pretext of the member's question is wrong. The building Canada plan is the largest single investment in Canadian infrastructure in Canadian history, at $7 billion over the next 10 years. Therefore, the premise of his question is false.

However, I agree that taxpayers should not have to be on the hook for these kinds of accidents. We brought forward Bill C-52, the safe and accountable rail act, to ensure there are insurance levels that are commensurate with today's costs of doing business and the actions of cleanup, not only for our environment but also for the tragedies that have happened in communities such as Lac-Mégantic, which hopefully will never happen again.

I believe the levels of compensation with respect to insurance are responsible. There have been public discussions with industry as well. There is a compensation package put in place of $1.65 a metric tonne to help compensate for disasters that may be over and above the regular insurance limits allowed by the insurance packages we have asked to have put in place. The levy would still be in place to help collect any back amounts, which would be at the cost of the government as well.

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

Mr. Speaker, we want to do everything we can to ensure the safety of our railroad transportation and all mechanisms of transportation. We need to be accountable wherever we can.

There certainly has been more crude oil carried on rail in the last number of years with the expansions and what we would have anticipated had there been more pipelines. I would encourage the opposition to come on side with some of the favourable pipeline developments we have put forward and recommended.

Everyone knows that pipelines are the safest way to move oil, interprovincially and internationally on our continent, as well as trying to expand some of our export commitments and customer opportunities as well.

However, we have certainly taken the bull by the horns, so to speak, in regard to Bill C-52, safe and accountable rail act and have responded to the tragedy that happened at Lac-Mégantic. We can never underestimate the devastation that took place in that community. This is just a start in regard to the programming that we can put in place, and the compensation and importance that we put on rail responsibility.

[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.