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.

[Jenelle Saskiw, As an Individual]

Thank you.

My name is Jenelle Saskiw and I've been actively involved in politics and municipal government for over 20 years. Politics has always been in my blood. A fond memory for me was when I was 16 years old, attending the Forum for Young Albertans, sitting in the legislature, and pondering whether I had the ability to run for office and influence change.

The desire was always within me. I was encouraged to run for municipal office in 2004, and at the age of 29, I successfully ran and was elected in my hometown of Marwayne, Alberta. I held my position for 14 years, five as a councillor and nine as the mayor. I must admit, political barriers were all around me, but I never let them define me. I had a commitment to my constituents, who had placed their trust in me, and I had a desire to make a difference in my community. It took time, and as the years passed, my confidence grew, my knowledge base expanded, and I enjoyed new challenges and opportunities.

I continued my political path and held positions with the Alberta Urban Municipalities Association for seven years, and with the Federation of Canadian Municipalities for four. I chaired many committees at the local, provincial, and national levels, including the national municipal rail safety working group, where I was able to work with many members of Parliament to develop, and eventually pass, Bill C-52, the Safe and Accountable Rail Act.

I found myself becoming even more engaged and partaking in many events, such as campaign schools for women, attending Equal Voice's events, and helping local women, minorities, and youth run their campaigns. I love municipal politics but must admit that the life was difficult. Balancing municipal commitments and my family life—I have four children—became more and more stressful. In August of 2016, at the request of my family, I stepped away from politics to bring balance back to my family life. My children were growing and I knew I could never regain these precious years with them.

I think women do face the challenge of succeeding within a male-dominated political party. We consider the impact politics will have on our families, their welfare, and our future careers. We fear overzealous media attention, and we tend to lack confidence in our ability to serve effectively. We tend to have the perception that the political arena is biased against us. I feel that women need more convincing than men do to even consider running in an election, even when the seat is clearly winnable. Women who are, in fact, solid candidate material still need to be persuaded. They feel they need to prove that the skills they draw upon from the workforce, home, and the community will indeed be transferable into political life. We are often reluctant to say yes to the opportunity, and for some reason, we feel like we lack the experience to serve.

I think there are areas of concern within the electoral process as well. It is time-consuming, complex, and there is a lack of information on how to run a successful campaign, including exactly what is involved in getting nominated. Studies conclude that men do raise substantially more money than women do as candidates and individual donors, and that men donate more money to male candidates. This, too, furthers the hesitation for us to even run, as we ponder whether we can afford to run a healthy political campaign.

Incumbents, particularly those in leadership positions, tend to be men. Incumbents receive most financial resources, political support, and visibility during the campaign. For example, in Canada, 84% of mayors were incumbent. As a result, most women, many of us campaigning for the first time, are unable to mount effective campaigns or develop our public profiles to win name recognition against the incumbent.

Party leaders also unanimously agree that parties struggle to keep women members engaged between election cycles. Lack of training and opportunities to exercise leadership often discourage us from maintaining political involvement. Furthermore, parties lack a strategy for retaining women candidates who do not win the nominations or elections, and then fail to prepare them for the next election cycle.

We have a perception that political ambition is an invitation for political scrutiny into our private lives, which could have an indirect impact on our families. The expectations of motherhood are still major deterrents for women to participate in politics. Many of us do, and we have to choose between caring for our family and our children or achieving our broader political goals.

From experience, I know it's a very difficult position to be in. The day I stepped away from politics was the day that part of my spirit died. I knew I had to leave. My children needed mom, and working away from home was taking a toll on my family's well-being. Could I return to politics? I could, but I could never return to participate in my children's youth.

I'm curious to know how many men have left politics for the sake of their family's well-being.

Social media is also becoming a more definite barrier for women in politics and is probably one of the most visible deterrents today. A 2016 survey of female politicians from 39 countries found that 44% had received threats of death, rape, beatings, or abduction, and 85% had said they were often subjected to humiliating sexist remarks from male colleagues. I must admit that this is one of the most concerning barriers for me as a female politician. I have been subjected to this harassment. It's raw, it's real, and at times it's terrifying. No matter how thick-skinned you think you are, it still hurts, and I do not want my children to fear for my well-being because of a comment that someone, who may not even know me, has made from behind a keyboard.

How can we improve representation of women in politics? We need to work together to build strong support systems, including role models, strong networks, and robust teams. We need society to encourage and promote women in politics. We need interaction with more current and past female politicians, because we are their role models. We need more campaign schools, legal advice, and possible networking opportunities. We need to work together to combat the negative aspects of social media and online bullying by creating an accountability mechanism to limit the harm caused by online aggressors. We need women to know that we are not alone in the race.

What will I do? My goal is to be a mentor, to allow women, friends, and my daughters to believe in themselves and to see how we can collectively ensure that barriers are removed and that more women can become more active members within our political and leadership roles.

It's easy to research and present, but it's up to our generation to step up and offer support and courage. Imagine if we all collectively put our energy and efforts into changing the future. My hope is that our next generation will be here discussing how barriers for women were eliminated, and to reflect on how together, our generation influenced that change in politics.

In spite of barriers, I have learned to deal with them, and my goal is to share my experience so that together we can continue to raise our fellow women to their highest political potential.

An Act in Relation to Firearms

[Matthew Dubé, NDP, Beloeil—Chambly, QC]

Mr. Speaker, I see that Bill C-71 is before us again. I imagine the government felt somewhat embarrassed by how it managed this very important and sensitive file.

One thing that has become crystal clear over the last number of years when it comes to the issue of firearms in this country is that far too often, successive governments have played wedge politics with an issue that is fundamentally about respect for communities. It is about public safety, and more broadly speaking, about respect for all Canadians, including, of course, firearms owners.

When the Liberals come forward, as the minister has, with the intention of presenting legislation that seeks to provide, as he says, common-sense legislation, which is certainly, I would acknowledge, a step in the right direction, and then decide on time allocation before I, as the critic for one of the three recognized parties, have even had a chance to speak to the bill, it demonstrates, unfortunately, a lack of seriousness with respect to what is a very serious issue that we, as parliamentarians, must get right.

After less than one our of debate, the government allocated just one day of debate to this bill. The minister praised the Standing Committee on Public Safety and National Security, saying that this committee has qualified members and that they could study the technical aspects of the bill. This is very flattering, since I am a member of this committee, but let's be serious. The vast majority of members in this House have concerns to share about this bill on behalf of their constituents.

The NDP recognizes that this bill is a step in the right direction, and we are generally in favour of it, but there are some questions we want to address in this debate, and this is not solely my responsibility, as critic. All members are responsible for raising questions. It is not just up to the members who sit on the Standing Committee on Public Safety and National Security to raise these concerns.

When the government moves a time allocation motion after so little time, it goes against the principles espoused by the Minister of Public Safety. As my colleague from Berthier—Maskinongé mentioned in the debate on this motion, even the previous government, known for its record number of time allocation motions and gag orders, would not have done this.

Those principles come after excuse after excuse has been made. The Liberals have tried to blame the official opposition, saying that it moved a motion to adjourn debate yesterday. Notwithstanding whether one might or might not agree with the tactics being used in the House to make a point on certain issues the Liberals are running away from, the fact is that one party in the House voted in favour of adjourning debate on Bill C-71, and that was the Liberal Party. Despite the heckling, the Liberals perhaps should consult the Journals of yesterday's proceedings. They will see that they were the only ones in the House who voted to adjourn debate on the bill.

Moreover, last Friday members representing the Liberal Party made comments on panels, alluding to deaths in communities as reasons why we had not come to that debate, which is shameful. The Liberals have been in power for two and a half years and have not come forward with this legislation. Then they choose to blame everyone but themselves for the cavalier way in which the bill is coming through the House. That is extremely problematic. As I have said multiple times, and will continue to repeat both in the House and outside the House and at every opportunity I get, this issue should not be one in which we seek to create division and make it subject of procedural and partisan gain. It is one we have to get right.

I know the public safety minister has his heart in the right place on this. I would implore him to perhaps speak to his House leader to ensure his approach is the one being put forward, given the way the government runs the agenda in this place. We cannot afford to get this type of issue wrong. The New Democrats will work and strive in that regard, both here for the limited time we have, and in committee. I can commit that to Canadians without a shadow of a doubt.

Now that I have given an overview of the procedural issues and of how the file has been managed, I would like to focus on our concerns about Bill C-71.

Gun control is an emotional issue for many people, and with good reason. This is about showing respect for those who have had to deal with unimaginable tragedies. They see the bill as an opportunity to defend their community and neighbours and ensure that no one else has to endure such tragedies. There are also law-abiding citizens who hunt or practise shooting sports. We also want to show respect for them in the legislative measures put forward.

We therefore need to strike a balance between the two while protecting the public. That is the approach we need to take when we address these issues in the House. Instead, over the years, we have unfortunately seen more divisive approaches. Gun control has been used as a political fundraising tool, and some questionable action has been taken as gun control has been turned into a partisan issue.

For members of the NDP, one thing is clear. We want to keep the public safe while showing respect for every Canadian and community concerned by this issue.

I will, however, give the minister credit where credit is due since I think that this bill is a step in the right direction. It contains common-sense measures that we can support. I am thinking of the background checks in particular.

Currently, we only go up to five years for the retention and renewal of a licence. However, in a quick study of some of the jurisprudence, in some of the precedents that have been set by the courts, they have deemed it absolutely appropriate, legal, lawful, and respectful of charter rights to go all the way back in a lifetime examination for one's background check, whether it is criminal records or other pieces that are looked at as part of this process. Members on all sides have shown support for that. Both current and previous members from all parties have shown support for it. Essentially, when it comes to background checks, the bill would bring legislation in line with what is already appropriate practice, which has been deemed so by the courts. That is a reasonable measure to ensure we protect public safety.

The other element, one that has received a lot of attention and is a key piece of the bill, is records being kept by store owners who sell firearms to Canadians. On this, let me be clear. When it comes to maintaining those records, I agree with the minister that the vast majority of reputable businesses already do so. We are seeking to standardize the practice, because it will now become part of the law, and also protect that information from government and law enforcement unless law enforcement has a warrant obtained through the courts. That has been happening for a very long time in the U.S. Therefore, I do not see it creating an additional burden on businesses.

However, following the minister's speech before the time allocation motion, I asked him what would be done with respect to consultation with business owners to ensure the standardization did not carry an unreasonable cost and that it was done in a way that was respectful of best practices. Business people know best at the end of the day. Unfortunately, while the minister acknowledged that work had to be done to have that standardization and that it would come from best practices, the details were rather sparse. Therefore, we will be looking at that to ensure the standardization of those practices do not create an additional burden on businesses. Of course some businesses may have to modify their current practices in order to be in line with what will be a legal and government-mandated process. We will keep an eye on that, particularly through the committee process.

I look forward to hearing those business people, who are the experts, bring forward their perspectives, and how to ensure the minister's consultation is done appropriately, in a way that will ease the burden on small businesses, which is already, in some regards, far too large. I say that going beyond the issue before us today.

It is very important to emphasize the issue I raised a few minutes ago and that is obtaining a warrant.

At present, it is a standard practice for businesses to keep this data. After all, it is not unusual for them to keep records about large purchases. This is not just about firearms, and any responsible business owner already does this.

The important clarification made by the bill is that this information can only be obtained with a warrant, in the context of an open criminal investigation.

As I mentioned, we will ask questions so that the minister's consultations will ensure that the standardization of practices does not create an additional burden on businesses.

The other changes that would be brought in by this proposed legislation concern Bill C-42, which was brought forward in the previous Parliament under the Conservative government. It sought to give automatic licences for the transport, for any purpose, of restricted firearms. However, members of the law enforcement community saw that as problematic, because there would be all kinds of instances where it would be difficult for them to know whether individuals, who were stopped by roadside stops, had perhaps firearms in their vehicles, or an individual with unlawful intent, which is an important point to bring to this discussion.

One of the issues is how to find the balance for lawful purposes and more routine purposes. The legislation opens the door to that. Therefore, automatic licences for transport would still be given, for example, for bringing the firearm from the location where the purchase took place to the location where the firearm would be stored. It would be the same for an individual going from the location where the firearm was stored to a shooting range. However, we have other questions over the consequences of some of the administrative burden.

Guns shows are one example. In that context, people need to transport firearms. A number of people might want to obtain an authorization at the last minute.

The changes in this bill requiring that there be a process for obtaining such an authorization are quite appropriate. We now want to know how this will be administered.

In the technical briefing, the minister mentioned several options including an Internet portal. Naturally, any MP who does business with the federal government, for example when looking into matters for their constituents, knows that responses are not always timely. I am not referring only to matters related to firearms licences.

If an added burden is created, while entirely appropriate, it must be done as simply as possible and without creating too much bureaucracy that will make life difficult for anyone seeking to get such an authorization.

Of course, we recognize the relevance of the changes being made and the fact that this legislation repeals certain aspects of Bill C-52 regarding authorizations to transport restricted firearms in all circumstances. In the last Parliament, the NDP opposed Bill C-52, but the changes being made here are appropriate and will ensure public safety.

Another extremely important aspect of Bill C-71 is the issue of weapons classification. This issue has often been controversial, but the NDP's position has always been clear. We believe that the individuals best equipped to make those decisions are the men and women in uniform who keep our communities safe, in other words, the RCMP.

One of the changes made by the previous government gave cabinet the authority to reclassify restricted weapons. That was problematic, and brings me back to the point I made at the beginning of my speech. This issue is quite divisive and has too often been politicized. Previous governments have failed to respect the expertise of impartial individuals who make common sense decisions in the interest of public safety. That is why the NDP is pleased that the RCMP will finally be given the authority to classify firearms.

The bill does leave cabinet some power, so we will look at that in committee to make sure it does not open the door to policy decisions that could result in the kinds of situations that have come up before. It became apparent some time ago that politicians are not equipped to make those kinds of decisions and that if we wanted to ensure public safety in a way that was respectful of all Canadians and all communities, experts had to be the ones making those decisions.

The second part of the bill relates to the now-defunct Bill C-52, which this government introduced quite a few months ago. The government just added some elements that we support. It repeals the Conservative government's changes to access to information laws. The changes were made because the Information Commissioner took the previous government to court over access to information requests pertaining to the gun registry. When the registry was destroyed, the previous government began to destroy the data before the House of Commons and the Senate passed the bill.

Destruction of the data was found to be illegal. I do not want to get into the politics of the registry, but citizens did have the right to request access to that information. That led to legal action between the Information Commissioner and the government.

The government is now making these changes to the law that the Conservatives had put in place to legalize something that was illegal. By doing so, it is correcting the mistakes of the past to resolve this dispute.

There is also the fact that Quebec will be getting all of the former registry's records involving its population, the only data left from the registry. Quebec's National Assembly is entitled to continue the process as it sees fit and in accordance with the principle of asymmetrical federalism.

I would now like to return to the Supreme Court decision on this issue. The Supreme Court ruled that the federal government had the right to destroy the data but, in the spirit of co-operative federalism, it strongly urged the government to return the data to Quebec. This bill does just that, giving the National Assembly the power to do what it wants with the data, as is its right, of course.

I will close by saying that the NDP will always support a common-sense approach that respects all communities and all Canadians and guarantees public safety.

These issues are too important not to get right. They are too important to be lost in a partisan black hole.

We will continue to strive in that direction. That is always what our approach has been, and it is what it will continue to be. I look forward to doing that both here in the House and in committee, working with colleagues in all parties, including colleagues in my own caucus, hearing the comments from their constituents, to make sure that we get this right. This is a good first step. Let us keep going in this direction.

If the minister's heart is truly in the right place, I ask that he pass that message to his House leader to make sure we have the proper time to take the necessary steps to make sure that we are addressing any questions that have been raised by me and those that will inevitably be raised by other colleagues.

There are good things here, things that we support, and we just want to make sure that we get them right.

[Greg Cherewyk]

The agrifood industry has been pretty clear in its expectations about addressing two key things. One is to ensure that we create the right conditions within the legislative and regulatory framework to support effective service level agreements. With the introduction of Bill C-52, which gave shippers in this country a right to service level agreements, we made progress. With the introduction of the Fair Rail for Grain Farmers Act, we made additional progress by defining the rules of the game, by defining the operational terms that could be included in service level agreements.

The next piece that needs to be addressed, from the agriculture industry's perspective, is financial accountability. We're looking forward to seeing some move to include financial consequences in the framework that supports service level agreements. Both parties need to be held financially accountable for the commitments and obligations they make when they enter a service level agreement.

On the other hand, not every bit of traffic, not every shipper, not every location, will be covered by a service level agreement, so we need to ensure that the act in general, and the agency, create conditions whereby adequate and suitable service is provided to all in areas, even where service level agreements don't cover traffic. In that regard, we're looking to an enhancement of the Canadian Transportation Agency, with greater resources, a stronger mandate, the ability to act on their own motion, and the ability to introduce interim orders ex parte. These types of things are of critical importance to us. That agency has to be informed by enhanced public performance reporting, so we agree with the Emerson report recommendations that we need to enhance public performance reporting.

Things like interswitching have proven very successful in a short period of time, both as a means to actually access another carrier and as a tool in leverage in negotiations to access better capacity and better service. We'd like to see that made permanent.

There are a number of things we think need to be done to enhance that overall regulatory environment with respect to the act and the agency, and we're looking forward to seeing that addressed. We're also looking forward to seeing some of the commercial aspects of the interaction between railways and shippers enhanced through the regulations and legislation that pertain to service level agreements.

[Michael Bourque, President and Chief Executive Officer, Railway Association of Canada]

Thank you, Madam Chair.

My name is Michael Bourque. I am the president and chief executive officer of the Railway Association of Canada. With me today is Gérald Gauthier, our vice-president.

I'm here to speak on behalf of our federally regulated railways and to discuss our concerns with the Fair Rail for Grain Farmers Act, and in particular, the effect that interswitching provisions have on the railway sector and the customers it serves.

The Railway Association of Canada represents more than 50 freight and passenger railway companies. Our membership includes the class I freight operations of CN and CP and more than 40 short-line railways across Canada. It also includes Canada's principal passenger, commuter, and tourist railways. Since you will be hearing from CN and CP shortly, I will focus on the impact on short-line railways, but the detrimental effects of these provisions apply to class I railways as well.

Short-line railways are a vital part of Canada's transportation system. They own approximately 20% of the national rail network. One in five carloads originates on a short-line railway. These railways transport everything from bulk commodities such as metals, lumber, and grain to manufactured goods, accessing the high-density continental network operated by CN and CP.

Short-line railways provide an essential feeder service for businesses situated in rural and remote areas across the country. This service provides shippers with a cost-effective and energy-efficient option for moving their products to North American and global marketplaces.

Short-lines compete with trucking, but they are significantly different. They run on private track, not on public roads. They have lower emissions, lower greenhouse gases, and they don't congest our roads or wear them out.

Under the existing interswitching rules, a shipper serviced by one federal railway can ask the railway to move its traffic to the point where its line connects with another federally regulated railway, or the interchange point, at a prescribed rate. These rates are cost based. Subsection 128(3) of the Canada Transportation Act states that:

In determining an interswitching rate, the Agency shall consider the average variable costs of all movements of traffic that are subject to the rate and the rate must not be less than the variable costs of moving the traffic, as determined by the Agency.

As the vast majority of traffic interchanged in this country is between CN and CP, it is their costs, not the costs of short-line railways, that are considered by the agency in its rate determination. This is a fundamental flaw in the methodology as it does not align with short-line railway's unique cost structure. The RAC, our organization, has voiced its concerns to the Canadian Transportation Agency many times, including during the very brief consultation process that supported Bill C-30. Rates under the interswitching provisions are not compensatory for short-line railways.

It is important to note that short-lines have access to a limited revenue stream and are unable to make systemic improvements or expand and build their infrastructure at a rate comparable to class Is. Short-line revenues are sufficient for the purposes of maintaining existing infrastructure in accordance with regulatory requirements, but they just do not have as much investment to put in as class Is.

Over the last three years, the costs of operating a railway in Canada have increased for short-line railways. The new rail regulatory requirements for rail crossings, minimum insurance requirements for dangerous goods, and increased fuel costs have put their long-term sustainability at risk. You will recall that as part of your review of Bill C-52, short-line railways testified that the proposed minimum insurance requirements would create a substantial cost for them, and they have.

By the way, we're not arguing against these safety regulations, on the contrary. I'm simply noting that they, especially crossing regulations, have been very costly for short-line railways.

If maintained, the existing interswitching zone of 160 kilometres can have a detrimental effect on the short-line sector by further eroding their access to the revenues they require to maintain, upgrade, and expand their infrastructure. Over time, the resulting effect will be a slow and steady decline of short-line railways in Canada. For shippers in rural and remote areas, their rail link to a low-cost, safe, and highly efficient class I rail network will be lost.

In closing, the reality is that interswitching provisions, in their current format, are harmful for the rail sector in Canada. In no way can this regulation stimulate or incent the investments that are required to improve the movement of goods by rail in the Prairies. In fact, there is a demonstrable need to create a dedicated funding program for the short-line railway sector, and I would be glad to come to talk to the committee about that at another time.

Short-line railways in the U.S. have a different support structure, which includes a variety of dedicated federal and state-level funding programs. To date, there are no similar programs available to short-line railways in Canada.

The interswitching provisions brought forward under the Fair Rail for Grain Farmers Act were introduced as a temporary measure, hoping to facilitate a more efficient movement of grain in the Prairies. With the 2013-14 grain crisis behind us, we believe that the provisions should be allowed to sunset and that the public policy discussion should focus on how Canada can stimulate the investments required to remain competitive and move goods to the marketplace more efficiently and safely.

Thank you.

Alleged Premature Disclosure of Contents of Bill C-14

[Peter Julian, NDP, New Westminster—Burnaby, BC]

Mr. Speaker, I appreciate the member for Regina—Qu'Appelle, with his vast knowledge of procedure and practices here in the House of Commons, raising the point. I appreciate the chief government whip's apology.

I want to get on the record that it is indeed a very serious case in the case of Bill C-14. There is no doubt about this.

I want to cite the current government House leader when he was faced with a similar situation, not in government but in opposition, around the case of Bill C-52. The member for Beauséjour, now the government House leader, said the following on information coming out prior to disclosure of the bill in Parliament:

We believe this situation constitutes a fundamentally unfair contempt of Parliament, and we would ask you to rule on this very serious matter.

He went on to say, in the case of Bill C-52, that:

Before the opposition received an embargoed copy or before the bill was actually tabled in the House of Commons, some of us were responding to very specific media questions following...[disclosure of the bill].

He then said there is no doubt that this was a very serious breach of privilege.

Therefore, I think it is important to note the concerns of both the Conservative official opposition and the NDP opposition. We certainly look forward to the follow-up that the government will be doing in this regard.

[The Speaker, Conservative, Andrew Scheer]

I have the honour to inform the House that when the House did attend His Excellency the Governor General in the Senate Chamber, His Excellency was pleased to give, in Her Majesty's name, the royal assent to the following bills:

Bill C-247, An Act to expand the mandate of Service Canada in respect of the death of a Canadian citizen or Canadian resident—Chapter 15.

Bill C-452, An Act to amend the Criminal Code (exploitation and trafficking in persons)—Chapter 16.

Bill C-591, An Act to amend the Canada Pension Plan and the Old Age Security Act (pension and benefits)—Chapter 17.

Bill S-3, An Act to amend the Coastal Fisheries Protection Act—Chapter 18.

Bill S-6, An Act to amend the Yukon Environmental and Socio-economic Assessment Act and the Nunavut Waters and Nunavut Surface Rights Tribunal Act—Chapter 19.

Bill C-51, An Act to enact the Security of Canada Information Sharing Act and the Secure Air Travel Act, to amend the Criminal Code, the Canadian Security Intelligence Service Act and the Immigration and Refugee Protection Act and to make related and consequential amendments to other Acts—Chapter 20.

Bill C-46, An Act to amend the National Energy Board Act and the Canada Oil and Gas Operations Act—Chapter 21.

Bill C-2, An Act to amend the Controlled Drugs and Substances Act,—Chapter 22.

Bill C-26, An Act to amend the Criminal Code, the Canada Evidence Act and the Sex Offender Information Registration Act, to enact the High Risk Child Sex Offender Database Act and to make consequential amendments to other Acts—Chapter 23.

Bill C-63, An Act to give effect to the Déline Final Self-Government Agreement and to make consequential and related amendments to other Acts—Chapter 24.

Bill C-66, An Act for granting to Her Majesty certain sums of money for the federal public administration for the financial year ending March 31, 2016—Chapter 25.

Bill C-67, An Act for granting to Her Majesty certain sums of money for the federal public administration for the financial year ending March 31, 2016—Chapter 26.

Bill C-42, An Act to amend the Firearms Act and the Criminal Code and to make a related amendment and a consequential amendment to other Acts—Chapter 27.

Bill C-555, An Act respecting the Marine Mammal Regulations (seal fishery observation licence)—Chapter 28.

Bill S-7, An Act to amend the Immigration and Refugee Protection Act, the Civil Marriage Act and the Criminal Code and to make consequential amendments to other Acts—Chapter 29.

Bill C-12, An Act to amend the Corrections and Conditional Release Act—Chapter 30.

Bill C-52, An Act to amend the Canada Transportation Act and the Railway Safety Act—Chapter 31.

Bill S-4, An Act to amend the Personal Information Protection and Electronic Documents Act and to make a consequential amendment to another Act—Chapter 32.

Bill S-2, An Act to amend the Statutory Instruments Act and to make consequential amendments to the Statutory Instruments Regulations—Chapter 33.

Message from the Senate

[The Speaker, Conservative, Andrew Scheer]

I have the honour to inform the House that a message has been received from the Senate informing this House that the Senate has passed the following bill: Bill C-52, An Act to amend the Canada Transportation Act and the Railway Safety Act.

Safe and Accountable Rail Act

[Laurin Liu, NDP, Rivière-des-Mille-Îles, QC]

Mr. Speaker, I am pleased to rise in the House to speak to Bill C-52.

Basically, this bill requires railway companies that transport dangerous goods to have a minimum amount of insurance coverage. It also establishes a disaster relief fund paid for by crude oil shippers to compensate victims of derailments, provinces and municipalities.

The measures contained in this bill are vital, and that is why I support them. However, the bill is not enough to ensure proper rail safety in Canada. The Government of Canada has been deregulating the rail industry for decades. It started under the Liberals' watch. They began making amendments to the Railway Safety Act as early as 1999 in order to hasten the deregulation of this industry.

I would also like to talk about my constituents' concerns regarding the transportation of dangerous goods. Last week, I went door to door with a team of volunteers in order to talk to my constituents about the environment and their concerns about environmental assessment.

We found that a great deal of deregulation has occurred in the rail industry. There has also been a lot of deregulation regarding pipelines and the associated environmental assessments. The Conservatives have seriously undermined Canadians' confidence in the federal pipeline assessment process by gutting the environmental rules and seriously limiting public consultation.

Obviously, the Conservative government is willing to deregulate at any cost in order to promote the industry, and it is our environment and our health that will suffer for it. In fact, Ottawa recently transferred the responsibility for determining whether a pipeline project would have an impact on fish and aquatic species at risk to the National Energy Board. The National Energy Board is responsible for monitoring the oil and gas industry, not the environment and aquatic species. The board does not have the necessary expertise to reassure Canadians that there will be a rigorous environmental assessment process.

Getting back to the subject of rail industry deregulation, in 1999 the Liberal government amended the Railway Safety Act. Successive governments maintained that policy. In 2001, when direct federal government oversight was replaced by safety management systems, the federal government's rail safety role changed dramatically. Nothing in this bill guarantees that rail companies will comply with the government's regulations.

In conclusion, I would like to say that Canadians deserve a government that will take action to prevent accidents and protect their health, their environment and their safety across the country. The federal government has so neglected railways in Canada that the transportation of dangerous goods by train has become extremely risky. That is why we need a national transportation strategy such as the one proposed by my former colleague from Trinity—Spadina, Olivia Chow. We need a strategy to ensure that dangerous goods can be transported safely with the infrastructure we have in Canada. That is why we put this proposal forward. I would like to conclude by saying that the government's approach has been a complete failure. The NDP has solutions that will really keep Canadians safe.

[Rathika Sitsabaiesan, NDP, Scarborough—Rouge River, ON]

Mr. Speaker, I will be sharing my time with the member for Rivière-des-Mille-Îles.

The entire country was shaken when, on July 6, 2013, a freight train carrying Bakken formation crude oil rolled downhill and derailed. We watched footage of the explosion and the fire with our hearts in our mouths. We mourned, with the families, friends and communities, the 47 people confirmed and presumed dead. We wondered why there were more and more accidents on what was once the safest way to travel. We were shocked when we found out that in this case Maine and Atlantic Railway only carried $25 million in third party liability insurance, which is not nearly enough to cover the incredible magnitude of the resulting damage and loss of both life and property that night.

Currently, estimates of damages in Lac-Mégantic exceed $400 million, and the cost of rebuilding Lac-Mégantic to what it once was will be far higher. Taxpayers are on the hook for hundreds of millions of dollars in cleanup and rebuilding costs, and we cannot put a price on the tragic loss of 47 Canadians.

The rail system in our country has gone through decades of deregulation, underfunding, mismanagement and bad decision making under the present government and the previous government.

The bill does not go far enough to address many of our concerns. I support the bill, but we must do more. The tragic Lac-Mégantic derailment has shown us that our liability and compensation regime for rail must be strengthened. However, it is important to also address the fundamental problems that have led to a dramatic increase in rail accidents.

In 1999, the Liberal government amended the Railway Safety Act to accelerate deregulation, a policy continued by the subsequent federal governments. In 2001, direct federal oversight was replaced by safety management systems, which were drafted by the companies themselves. The federal government's role in rail safety changed profoundly.

Meanwhile during this time, we have seen a dramatic increase in the number of rail accidents. These accidents have had increasingly dangerous consequences in our communities. According to the Railway Association of Canada numbers, in 2009, only 500 cars a year were carrying highly flammable fossil fuel. In 2013, 160,000 cars carried flammable fossil fuel. By 2017, our rail system is expected to be transporting 33.9 million tonnes of fossil fuel per year. These numbers do not include other hazardous materials being transported through our communities.

There is absolutely no doubt that protecting the public is our core responsibility and improving liability and accountability measures is long overdue for our railways.

It is sad that it took the tragedy at Lac-Mégantic to get the government to be serious about that responsibility. We have had exponential growth in the transport of hazardous materials. We should have been working on increasing protections ages ago.

In 2013, 144 accidents involved dangerous goods, 7 of which resulted in dangerous goods being released. Many of us have heard of the three derailments in northern Ontario. These derailments happened in the space of less than a month, between February and March of this year. In two of these derailments, tank cars carrying crude oil burst into flames. In both of these incidents of fire, the tank cars involved were upgraded models of the DOT-111s.

The government ordered the phase-out of the DOT-111s over the span of a decade. The Transportation Safety Board, which investigates railway accidents, has flagged the length of the phase-out as a huge concern.

In fact, in February 2014, there was a derailment in my riding on Sewells Road and Reesor Road. According to police, the freight car was empty, and a CN Rail spokesperson confirmed that no dangerous goods were involved and no one was injured. We were very lucky.

My riding is criss-crossed by railway tracks and is home to CN's Toronto east rail yard. The Canadian National line, running near Steeles, transports oil and gas and other flammable materials every day. Most of the tracks run at street level, in many instances, a few metres from homes, from parks where children play or people bike and run.

I am speaking today because I am concerned about the carriage of volatile materials with inadequate regulations in such close proximity to where my community members, my neighbours live.

Aside from discussing liability after an accident, we need immediate measures so we can help prevent and mitigate disasters.

I am not the only one who feels that we need stronger measures for rail safety. On March 31, the mayor of Toronto and 17 councillors from across the municipality wrote to theMinister of Transport, asking that Transport Canada establish stronger protections for cities than the ones being implemented right now. A recent report by the Toronto Start found that dangerous goods were often transported through the heart of Toronto.

The city has a set of recommendations, and I am proud to stand with them and demand stronger enforcement of regulations, and the adoption of stronger regulations to keep Canadians safe, Torontonians safe and all Scarborough residents safe.

As I mentioned, the goods transported by our rail system have been increasingly dangerous and our rail safety regimes need an overhaul to keep people safe. This would also mean that we need adequate resources to implement this plan in Bill C-52 and to implement additional oversight and regulation called for by our communities.

However, the budget at Transport Canada was cut 11% this year, or by $202 million. The government spent $42 million on economic action plan advertisement last year, yet spent $33 million on rail safety. It is shameful. Year after year, Transport Canada has seen budget cuts.

How can the government talk of meaningful oversight without providing the resources to do so? Oversight clearly requires resources.

As for Bill C-52, essentially, it requires minimum insurance levels for railways transporting dangerous goods and establishes a disaster relief fund paid for by crude oil shippers to compensate victims of derailments, provinces and municipalities.

We are concerned that the minimum insurance levels established in this bill may not be sufficient. Insurance levels should be based on the threat to the public, not just on the type and volume of the goods being transported. Estimates of damages at Lac-Mégantic exceed $400 million, but these new rules do not appear to get us to that level for small companies.

The bill would also establish a pooled disaster relief fund that would be made available if the minimum insurance levels were insufficient. However, is the relief fund going to actually have enough money? That is the question that is on everybody's mind.

For the 200,000 barrels of oil transported daily, Transport Canada estimates that oil levies would contribute about $17 million annually to general revenues. This is a step forward, but there are certainly many outstanding concerns. We would need to have that levy in place for about 15 years before we could actually reach the $250 million level where it believes we would be able to respond to any level of crisis. I would again point to Lac-Mégantic. It cost $400 million for the damage done in that one accident alone. Therefore, this levy would certainly not be enough.

We also want to ensure that the fund being established sufficiently covers all disasters, including unlimited liability for the railway's negligence. The bill would ensure that municipalities and provinces would be better able to be reimbursed by the railway company for the cost of responding to a fire caused by their operations. However, we have a long way to go to ensure accidents are less likely.

We need to figure out how to protect the lives of people living in Canada. We need real plans to manage the risk created by the kinds of dangerous goods being transported through our communities. We need to ensure that the federal government maintains an active role in rail safety regimes. After those years when the Liberal government allowed self-regulation and we saw numerous increases in accidents and a decline in safety, we need to ensure there are independent inspectors and that companies are held accountable.

Finally, we need to continue the national conversation about how we are going to process oil, bitumen and other natural resources in our country. We have an opportunity here to do much more in Canada to create real rail safety, and passing this bill will not create a safe rail transport system. Canadians deserve real rail safety measures and safe rail systems. This bill is one step, but it just does not go far enough.

[Geoff Regan, Liberal, Halifax West, NS]

Mr. Speaker, at the outset, I want to mention that I was interested in the comment by my hon. friend from Mississauga East—Cooksville that when he was a student, he actually worked on steam engine trains. I look forward to hearing his interesting stories about growing up in Poland, where he had that experience as a young person in university at that time. I am sure he must have some interesting stories from that experience that perhaps we will hear in the House some time or that he and I might share on another occasion.

I am happy today to have a chance to participate in the third reading debate of Bill C-52 for a number of reasons. As the critic for the Liberal Party on natural resources, I recognize that the amendments to the Canada Transportation Act and the Rail Safety Act will have a profound impact in terms of shipping critical natural resources like oil, as has been discussed here today.

Unfortunately, my view is that this inept Conservative government, this Conservative regime, has completely bungled the Keystone XL project. It has bogged down the energy east pipeline project, and it should never have ignored environmental and aboriginal concerns and rubber-stamped, as it did, the northern gateway project.

The result of this ineptitude on behalf of the government in getting any pipeline project through has created a growing reliance on rail lines to get this valuable commodity to market, and hence, of course, related concerns about railway safety. These are concerns, I should add, that are in my view completely justified, given the government's track record on railway safety over the past decade.

I am also pleased to be able to speak today, because as a Nova Scotian, I am concerned about the future of the Cape Breton and Central Nova Scotia Railway, which has provided more than 135 years of rail service to Cape Breton Island. It has been very important for many industries in that area. In fact, in many ways, it made those businesses able to continue to succeed and employ people and provide benefits in their communities. It should be a concern to all of us when we see that rail line in deep trouble, because it is very much threatened today.

I know that the Minister of Transport, being a transplanted Cape Bretoner, is also concerned about the future of rail service to Cape Breton Island, as are my colleagues from Sydney—Victoria and Cape Breton—Canso. I know how critical CN Rail operations are for the Port of Halifax, my home city, when it comes to moving containers, and other goods as well, to destinations throughout North America.

Atlantic Canada has a long-standing and very deep appreciation for our national railways, which have connected us to the rest of Canada for over 100 years. Whether it is VIA Rail passenger service, which has unfortunately been curtailed significantly in recent years, or freight trains rumbling through Nova Scotia and New Brunswick, two beautiful provinces, of course, along with all the others, railways are a critical part of our economic infrastructure and are an economic lifeline for my region.

As an aside, I should note that I was happy recently to have the chance to take the VIA Rail train from Halifax, along with a number of MPs, to show our unwavering support for the continuation of strong passenger rail service from Atlantic Canada to Montreal. I am pleased that it appears that we succeeded and that the service will be maintained.

As the member of Parliament for Halifax West, I often get calls about CN's main line, which runs through my riding. It runs through Clayton Park, Rockingham, Birch Cove, and right through the heart of Bedford. In fact, I can hear the train whistle from my backyard and often hear the train rumbling by at different times of the day and night.

When I am canvassing in my riding, which I do regularly, I also hear concerns from constituents about issues like the fact that they do not always know what is being shipped through the community on those railway cars, and that can be of great concern. Perhaps they are worried about the state of the maintenance of the tracks and overpasses that are part of the system.

I had a recent example of a rail safety concern, raised by a constituent, regarding the maintenance of culverts and overpasses. When we think about rail safety, we normally think of what happened in Lac-Mégantic. We think of toxic or explosive materials being carried in railway cars. We do not think of something as simple as a culvert under a railway.

In fact, I had a call from a constituent about the fact that a culvert under the tracks in Bedford was getting clogged with debris and was causing flooding.

In my province of Nova Scotia, we had a rough winter, but we also have the experience normally of temperatures going up and down in the winter. It can be very mild one day and very cold the next. We can imagine that if a culvert backed up, there could be a substantial amount of ice developing on a railway. It is a pretty scary prospect in the middle of a community if there could be a derailment. That is something that was important to deal with. In fact, I worked with Canadian National Railway and with the City of Halifax to get the culverts cleared, which they were. It brought to light a conflict about who was responsible for the maintenance of culverts and overpasses and what impact they can have on rail safety. It is an aspect we would perhaps not think of normally.

Like all Liberal members in this place, I share Canadians' deep concern about rail safety in this country. My friend from Trinity—Spadina spoke earlier to Bill C-52, and he spoke eloquently about the issue of rail safety being paramount in his riding, which has some of the busiest tracks in Canada. He noted the ongoing challenge of trying to moderate the speed of trains in his community, something my hon. colleague from Mississauga East—Cooksville was talking about a few minutes ago, and of trying to get a handle on the dangerous goods that travel through some of the most densely populated areas of this country.

He said:

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

The member for Trinity—Spadina also commented on the fact that during the recent by-election in his riding, the New Democrats claimed that they did not support any pipelines in Canada and that their preference was to ship everything by rail. I heard earlier today my hon. colleague for York South—Weston suggest that the oil that is being transported by rail could not be transported by pipeline. That is the first I have ever heard that suggestion. As the critic in my party for natural resources, I have been hearing and reading a lot about this subject of oil and gas and so forth for quite a while now, so I would be curious to hear what kind of oil it is he is saying cannot be transported by pipeline.

They do not say to just establish a responsible situation in terms of pipelines, where we have rigorous reviews, proper environmental assessments, community involvement and support, and consultation with first nations and if it passes all that, okay.

We do need pipelines in this country, and we use lots of products that move through pipelines. The NDP's attitude seems to be no pipelines whatsoever under any circumstances.

Of course, then we have the Conservatives, who say that any pipeline in any circumstance is fine. It is an interesting dichotomy.

Let us get back to Bill C-52. This legislation is about two things: first, changing the way we establish minimum insurance levels for railway companies that are regulated by the federal government; second, creating a new compensation fund that would cover damages arising from railway accidents involving the transportation of certain kinds of dangerous goods.

Rail safety has, of course, become a profoundly important issue for Canadians since Lac-Mégantic, and the Conservative government has been slow to react. It has come out with a series of dribs and drabs and a slow release of technical and regulatory amendments in bills like Bill C-52.

The sad truth is that the government's attempts to improve rail safety are in part its reaction to the horrific train explosion at Lac-Mégantic, where so many innocent people lost their lives and so many families were touched by tragedy. I know every member in this House was saddened and horrified by happened in Lac-Mégantic.

This legislation is dubbed the safe and accountable rail act. It is always interesting the names the Conservatives come up with. I think they sometimes spend more time figuring out what attractive names to use for their bills than they do actually thinking about the contents of the legislation.

This bill would amend two other acts, the Canada Transportation Act and the Railway Safety Act. With respect to the Canada Transportation Act, Bill C-52 would strengthen the liability and compensation regime for federally regulated railway companies. It would do this by establishing minimum insurance levels for railway companies and a supplementary shipper finance compensation fund. This fund would cover damages resulting from railway accidents involving the transportation of certain dangerous goods.

Among other things, the amendments would establish minimum insurance levels for freight railway operations based on the type and volume of goods being transported. They would require the holder of a certificate of fitness to maintain liability insurance coverage as required by the act and to notify the Canadian Transportation Agency without delay if its insurance coverage was affected. Certainly that makes sense.

The amendments would establish that a railway company was liable, without proof of fault or negligence, subject to certain defences, for losses. There would be be absolute liability 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. The amendments would also 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 designated goods that exceeded the minimum liability insurance coverage.

This bill would also amend the Railway Safety Act to, among other things, allow a province or municipality that incurred costs in responding to a fire that was the result of a railway company's operations to apply to the Canadian Transportation Agency to have those costs reimbursed by the railway company.

It would clarify the cabinet's power to make regulations regarding the restriction and prevention of access to land on which a line of railway was situated, including by means of fences or signs. In other words, it would make that area safer so that people would not go on the line and perhaps intentionally cause harm or be in a situation where they might be harmed themselves. It would also authorize a railway safety inspector who was satisfied that there was an immediate threat to the safety or security of railway operations to order a person or company to take any measures the inspector specified to mitigate the threat.

It would authorize the minister to require a company, road authority, or municipality to take corrective measures the minister specified were necessary for safe railway operations. It would provide the cabinet with regulation-making power regarding the submission of information that was relevant to the safety of railway operations. Finally, it would authorize the minister to order a company that was implementing its safety management system in a manner that risked compromising railway safety to take necessary corrective measures.

While Bill C-52 and other legislation address some of the measures the Liberal Party has been calling for in this area, in my view, they fall short of the Conservative government's promise to ensure the safety and integrity of Canada's railway system.

The facts speak for themselves. We saw three new derailments in February and March in Ontario alone.

Canadians have been duped with a piecemeal approach to rail safety. This latest bill is just the latest example of a government that still fails to take rail safety seriously. How else can we explain the fact that Transport Canada's rail safety division is understaffed, underfunded, and undertrained? It has been the victim of a revolving door of Conservative ministers, with five ministers in nine years.

Transport Canada is filled with very good public servants who are dedicated to ensuring the safety and integrity of our railway system. Make no mistake about that. However, it is too bad the government does not have the same level of integrity and commitment. As my colleague from Ottawa South, the Liberal Party transport critic, has noted in his comments on this bill, rail safety funding is down 20% over the last five years. During this period, when we have had so much more concern about rail safety, the Conservative government has cut funding for rail safety by 20%. How does that match the rhetoric from that side of the House?

Let me quote my hon. colleague from Ottawa South. He said:

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.

I wish the minister would listen to my hon. colleague from Ottawa South on this file, and listen to witnesses who appeared at committee to offer constructive criticism of Bill C-52. A number of key expert witnesses testified that they had never been properly consulted by the government regarding this legislation. At committee, they expressed profound questions about the insurance implications, distributive effects, employment implications, and trade competitiveness implications of this bill. Unfortunately, these concerns seemed to fall on deaf ears.

It is important to note that this comes at a time when Transport Canada has a lot of catching up to do since its budget was slashed by $202 million in the main estimates, which is 11%. These cuts follow a scathing Auditor General's report, which noted among other things that the government only performed 26% of planned audits. It did not audit VIA Rail at all, despite VIA carrying four million passengers per year. Would VIA Rail passengers, as many of us are—and I hope more Canadian will be—not like to know that at least someone once in a while audits to make sure that the required rail safety measures are in fact being followed? The fact that this is not happening with Transport Canada's audits is very disconcerting, but it is no wonder when the government is cutting the funds to do just that.

We need to recognize that there is a capacity deficit, and we need to ask what the government's real priorities are. Let us consider these two facts. On the one hand, the Conservative regime has budgeted $42 million for economic action plan advertising. Everyone has seen these wasteful ads and vanity videos. On the other hand, the funding for rail safety is $34 million. Here we have it: $42 million for partisan self-promotional advertising, and only $34 million for rail safety. How is that for priorities? This sadly indicates the misguided priorities of a failed government corrupted by 10 years in power.

My colleague from Ottawa South said that he asked the minister 10 times in committee why she cut Transport Canada's budget by 11%, and she denied the cuts every time he asked. However, the Parliamentary Budget Officer says that those are the numbers. Therefore, it is clear that the Conservatives have made some very poor choices and have their priorities badly skewed.

The Conservatives' failure is amplified by the fact that the Auditor General's report also revealed that the government does not have enough inspectors and system auditors to carry out critical safety functions. That is extremely alarming: not enough inspectors and not enough system auditors. This is rail safety that we are talking about. It is ironic that at the same time as the government has failed to provide adequate resources to ensure we have the safest rail system in the world, its failed pipeline policies have resulted in more oil being shipped by rail, thus adding to the potential for serious accidents.

Let me wrap up by saying that Canada was unified by our national railway, and many of us in Atlantic Canada and across our great land continue to live near the same rail lines. Many of us live in communities that grew up around rail lines. It is the federal government's responsibility to ensure the safety of people who travel on rails, live adjacent to railway tracks, and operate trains.

Although this bill does not go nearly far enough to protect Canadians, it does at least contain measures that Liberals have been calling for. We appreciate that. The Liberal Party will continue to pressure the government to make a greater effort to ensure rail safety is its top priority.

[Wladyslaw Lizon, Conservative, Mississauga East—Cooksville, ON]

Mr. Speaker, it is a privilege for me to speak today in support of Bill C-52, the safe and accountable rail act.

This bill is an essential milestone in the government's ongoing work to strengthen railway safety. I would like to use my time to demonstrate to this House all the hard work we have collectively accomplished with regard to railway safety.

In November 2013, the public accounts committee tabled its seventh report that contained an examination of railway safety oversight related issues. The report's five recommendations followed similar railway safety oversight themes that were outlined in the 2013 fall report of the Auditor General of Canada.

Similarly, the Committee on Transport, Infrastructure and Communities completed an in-depth review of the Canadian regime for the safe transportation of dangerous goods and the role of safety management systems across all modes of transportation.

Before proceeding, I would like to thank the members of both committees for their thorough exploration of these issues, which serve to further enhance transportation safety for all Canadians. I would also like to thank the witnesses for participating and providing their invaluable knowledge and insight. These railway safety and transportation of dangerous goods studies and recommendations are important considerations to further enhancing the national transportation system. Let me assure the House that the safety of Canadians remains this government's biggest priority.

As such, it is important to review the many activities and measures that our government has taken to strengthen railway safety, transportation and movement of dangerous goods.

Following the tragic derailment in Lac-Mégantic in July 2013, our government took decisive action to ensure the safety and integrity of our railway system. The Minister of Transport directed Transport Canada to issue an emergency directive to railway companies. This included requiring a two-person minimum for locomotive crews on trains carrying dangerous goods. We also imposed stricter rules for securing unattended trains, and companies importing or transporting crude oil were also directed to conduct classification testing of that oil.

In January 2014, our government also launched a comprehensive review of the current liability and compensation regime for federally regulated railways. The goal was to ensure that a polluter pays and that there are resources available to compensate potential victims, pay for cleanup costs and ensure that taxpayers are protected. Input received from stakeholders during the review informed the development of the strengthened liability and compensation regime for federally regulated railways included in this bill, Bill C-52, the safe and accountable rail act. The regime includes enhanced insurance requirements for railways and a supplementary shipper-financed fund for incidents involving crude oil or other designated dangerous goods. In addition to addressing liability and compensation, we also introduced strengthened oversight and enforcement under the Railway Safety Act.

Additionally, to provide emergency planners and first responders with information to assess risks in their communities and to plan and train for emergencies, last fall we directed railway companies to share with municipalities and first responders data on dangerous goods being transported. I am happy to report that communities across Canada are now receiving this data from railway companies.

While Canada has one of the safest and most efficient railway systems in the world, we know that we can always do more and we are committed to restoring the public's confidence in our railway system. In addition to the actions I have already noted, we have taken further measures to enhance the safety of railway operations and the movement of dangerous goods, and we will continue to do so.

I can assure members that we are well advanced on implementing each recommendation the Transportation Safety Board has made. As I stated, our government is committed to restoring confidence in our railway system.

We will continue to work closely with stakeholders, including municipalities, provinces and officials in the Unites States to assess what more we can do to enhance safety.

In April 2014, our government announced measures to address initial recommendations from the Transportation Safety Board into the derailment in Lac-Mégantic. First, we ordered the immediate removal of the least safe tank cars from dangerous goods service. We also introduced new safety standards for DOT-111 tank cars and required those that do not meet these new standards to be phased out. I am pleased to say that the new safety standards for DOT-111 tank cars were published in the Canada Gazette, Part II, in July 2014. A detailed update was published on March 11, 2015, outlining the new specifications for the TC-117 tank cars that go beyond any requirements proposed for improved TC/DOT-111s. These improved tank cars would be the only option for newly built cars for the transportation of flammable liquids as soon as October 15, 2016. An aggressive phase-out program starts to remove legacy DOT-111s carrying crude oil two years from now and allows only fully retrofitted and TC-117 compliant tank cars 10 years from now.

On train speeds, we require railway companies to slow key trains transporting dangerous goods and introduce other improved operating procedures. For example, we are requiring railways that transport dangerous goods to permanently address route planning and risk analysis.

We also require emergency response assistance plans for tankers, including single tank cars carrying crude oil, gasoline, diesel, aviation fuel and ethanol. These plans have been reviewed and approved. As of September 20, 2014, there are now expert teams ready to respond to any petroleum spill, if needed. A task force has also been created to bring key groups like municipalities, first responders, railways and shippers together to strengthen the emergency response capacity across the country.

As members may recall, the Transportation Safety Board released its final report and recommendations regarding Lac-Mégantic in August 2014. The government officially responded on October 29, 2014.

First, the board recommended that Transport Canada require railway companies to put in place additional physical defences to prevent runaways. To this end, the Minister of Transport issued an additional emergency directive and ministerial order to implement significant changes to improve train securement and require railway companies to meet standardized brake requirements. The board's second recommendation emphasized the need for regular and thorough audits of railway safety management systems. In response, Transport Canada has revised its inspection and audit plans to allow for the increased frequency of safety management system audits, and allow for full audits to be completed on a three- to five-year cycle.

In addition to its two recommendations, the Transportation Safety Board also issued two safety advisories on mined gas and flammable liquid classification and on short-line railway employee training. These are being addressed as well.

Following the July 2013 Lac-Mégantic accident, we immediately required classification testing of crude oil. We also required emergency response assistance plans for specific flammable liquids and ethanol.

In July 2014, our government introduced a regulatory amendment that provides authority for our inspectors to conduct a more thorough verification of classification of dangerous goods. This amendment means that industry must now prove the results of its testing.

To wrap up, I will speak about employee training. We are requiring railways to submit training plans to the department for review. In 2015, the department will also carry out targeted audits to determine specific gaps in industry training plans. The results will help us determine what new or improved requirements are required for a strengthened training regime.

Our government remains committed to further strengthening railway safety for all Canadians. We will continue to take concrete action going forward.

I would like to ask all of my colleagues to support this bill and vote for it.

[Ed Komarnicki, Conservative, Souris—Moose Mountain, SK]

Mr. Speaker, I will be sharing my time with the member for Mississauga East—Cooksville.

I am pleased to have the opportunity to speak in support of Bill C-52, an act to amend the Canada Transportation Act and the Railway Safety Act. Many members of the House have already expressed their sound support for the safe and accountable railway act. Members opposite who have just spoken have said they are in support of the bill, so I will not repeat many of the areas that they have addressed.

Principally, the bill deals with base insurance amounts and a pooled fund to deal with disasters and ensures a structure to deal with that.

I will turn my attention today to another point of significant importance to all Canadians. That is safe grade crossings.

The safety of grade crossings is a cause championed by the member for Winnipeg South Centre, who herself proposed amendments to the Railway Safety Act through her bill, Bill C-627. She appeared before the committee to emphasize the importance of protecting people and property from unsafe railway operations. Bill C-627 and Bill C-52 have become a coordinated effort to ensure that the Minister of Transport and her officials have the mandate and powers to stop the threat to the safety of persons or property from all rail operations. It is a fairly significant addition and piece of legislative work that both the member and this particular bill address. As recognized in both these pieces of legislation, the minister must have the legislative authority to develop, administer, and enforce safety regulations of federally regulated railways.

However, our government's work goes beyond just the legislation before the House. The week of April 27 was Rail Safety Week, and we saw two important announcements that bracketed the range of rail safety challenges from local to international.

At the beginning of the week, the minister announced $9.7 million in new funding to improve safety at more than 600 grade crossings. At the end of the week, the minister and her United States counterpart announced new tank car standards in a joint United States-Canada plan to phase out rail cars that do not meet the new standards. Of course, they will be phased in, because it takes time to replace these cars. These two announcements target both local concerns—the specific places where people and trains intersect daily—and the overall safety of rail operations in Canada and the United States.

It is easy to see why Canadians are concerned about grade crossings. Canadian cities and towns grew up alongside rail lines and continued to spread around them. As subdivision plans are made and the cities continue to grow, obviously those subdivisions and those buildings will be near rail lines. As a result, we have some 37,000 public, private, and pedestrian railway crossings. Although the number of crossing accidents has fallen dramatically since 1980, the Transportation Safety Board of Canada says the risk of trains and vehicles colliding at crossings is still too high. Crossing accidents account for nearly 20% of all rail accidents in Canada, with 30% of these accidents resulting in death or serious injury.

In response to the Transportation Safety Board's call for government action on grade crossings, new grade crossing regulations came into force on November 27, 2014. These regulations and the accompanying standards are intended to help prevent accidents and improve the safety of federally regulated grade crossings.

Sometimes some small things can be done to ensure that safety is first and foremost. These include approximately 14,000 public and 9,000 private grade crossings along with more than 42,000 kilometres of federally regulated railway tracks in Canada.

The regulations that came into force on November 27, 2014, will improve safety by establishing comprehensive and enforceable safety standards for grade crossings. They clarify the roles and responsibilities of railway companies and road authorities and ensure the sharing of key safety information between rail companies and road authorities.

This last element is important. Railway companies share responsibility for grade crossing safety with road authorities, which include provinces, municipalities, band councils, and private crossing owners. All of these parties are responsible for managing railway crossing safety in Canada, so effective collaboration is crucial.

The new regulations have a phased-in approach, and railway companies and road authorities must meet all requirements over the next seven years. This phased-in approach requires immediate safety improvements at grade crossings across Canada, while allowing sufficient time to comply with all the requirements and the regulations.

The new funding for grade crossings announced on April 27, 2015, will be available through Transport Canada's grade crossing improvement program. Under this program, eligible railway crossings will be upgraded based on factors such as traffic volume and accident history. The improvements may include flashing lights and bells, gate barriers, linking crossing signals to traffic signals, upgrading to brighter LED lights, or adding new circuits or timing devices.

Transport Canada also encourages the closing of certain grade crossings under federal jurisdiction. The grade crossing closure program provides grants to crossing owners in exchange for closing a crossing. In 2014-15 Transport Canada approved $165,000 in funding to close nine crossings in the interests of public safety.

Other initiatives to improve safety at railway crossings include Operation Lifesaver. This national public education program aims to reduce loss of life, injuries, and damages caused by grade crossing collisions and pedestrian incidents. Transport Canada provides Operation Lifesaver with $300,000 per year for its outreach and education programs.

Improving safety at grade crossings is an important contribution to rail safety. Another is making all rail operations safer, especially in densely populated areas, as was already mentioned. That is why the minister issued an emergency directive this spring that set the speed limit for trains in densely populated urban areas at 64 kilometres per hour. Slower train speeds were among the Transportation Safety Board of Canada's recommendations. The directive also increases inspections and risk assessments along key routes used for the transportation of dangerous goods, include crude oil and ethanol.

The joint United States-Canada announcement on tank car standards in April was the latest step in our government's coordinated effort to improve rail safety following the Lac-Mégantic disaster. These efforts began soon after the accident and the first advisories from the Transportation Safety Board of Canada.

In July 2013, Transport Canada ordered rail companies to have crews of at least two persons on trains carrying dangerous goods and imposed stricter requirements for securing unattended trains. This was followed in 2014 by a series of measures, including banning the least crash-resistant DOT-111 tank cars from carrying dangerous goods and requiring companies to phase out cars not meeting new safety standards by May 1, 2017; the coming into force of a series of new regulations, such as the Railway Safety Management System Regulations, 2015; Railway Safety Administrative Monetary Penalties Regulations, Railway Operating Certificate Regulations, and amendments to the Transportation Information Regulations to improve data collection; requiring railways to secure unattended trains with a minimum number of handbrakes and other physical defences to prevent runaways; and tightening railway labelling of hazardous materials.

With the focus on rail safety and the dangers associated with railway operations, we must not lose sight of the important role rail transportation plays and has played in Canada's economy, supporting our exports and bringing goods to Canadians. However, the shadow of Lac-Mégantic looms over anyone living near rail lines, and the daily risk of collisions at grade crossings requires that we do more to ensure rail safety.

Our government takes these potential threats very seriously and is moving to ensure that does not happen again.

I hope that all of my colleagues will join me in recognizing Bill C-52 as a key contribution to improving rail safety and will vote in favour of the bill.

[Matthew Kellway, NDP, Beaches—East York, ON]

Mr. Speaker, I rise today in support of Bill C-52, an act to amend the Canada Transportation Act and the Railway Safety Act. The bill is returning to us from committee where we heard testimony from witnesses, representatives like Safe Rail Communities in the Toronto area, who share the NDP's view that “Although it has some promising elements...Bill C-52 could go further to ensure safety and accountability”.

Opportunities were missed here, but nevertheless I stand in support of the bill in light of the need for an immediate response to rail safety issues in Canada.

As I have mentioned in the House before, the growing frequency of train derailments since the disaster in Lac-Mégantic has led to many Conservative promises to rectify shortcomings with safety inspections and rail safety compliance measures. The Conservatives have yet to honour that commitment, and the bill goes nowhere near what they need to do to honour those commitments.

With three train derailments occurring in the span of a month last year, this is a pressing issue. It is one that the government has been scrambling to catch up with and has still not caught up.

So far, these accidents have occurred in rural areas. As the critic for urban affairs, I would note that the bill would do little to alleviate the costs and the human tragedy inevitably associated with a derailment in one of our big cities, one of our dense urban communities in this country.

Starting with the Liberal government, in 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.

The bill put forward by the minister is an effort to address some of the liability and accountability issues associated with rail safety. It proposes several necessary fixes, but it is just a start.

It appears to me that the government is in no hurry to catch up on rail safety issues. We heard the member across the aisle today talking about the need for more study, while communities across this country are anxious about dangerous goods being transported by rail quite literally through their backyards.

The bill sets out to provide some compensation for victims of derailments after the fact. It is as if the government has accepted the inevitability of train derailments in this country. We not only need stronger laws, but we need stronger enforcement of laws and regulations, and we need penalties on those who break them.

It is clear to us and to experts such as the Transportation Safety Board that the government has very serious problems in terms of oversight inspections and audits. Nevertheless, the proposed changes in the bill remain necessary, and while not fully or nearly adequate, they have the support of this side of the House.

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, and it gives more authority to the minister, cabinet, and railway safety inspectors.

With respect to minimum insurance levels, the bill provides for a legislated minimum insurance coverage of $25 million for railway companies transporting minimal quantities of dangerous goods, and up to a maximum of $1 billion for railways that are transporting substantial quantities of dangerous goods. Railway companies will 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 costs of train derailments like that in Lac-Mégantic, these measures appear to be justified.

After that disaster, the Montreal, Maine and Atlantic Railway exhausted its insurance coverage of only $25 million and went bankrupt. Yet damages paid by taxpayers with respect to that derailment have been to the tune of hundreds of millions of dollars. The Quebec government has estimated that the total cost will be well over $400 million.

The second thing the bill sets out to do is establish a pooled disaster relief fund to be made available if the minimum insurance levels are insufficient or exceeded. While this is a step forward, there are outstanding concerns that this also may not be sufficient in the event that another major disaster, particularly in an urban area.

When it comes to disaster relief, the first responders on the scene will inevitably be firefighters and sometimes the police. For that reason, the Canadian Association of Fire Chiefs asked that the committee consider a mechanism to fund training, such as through a small allocation of the disaster relief fund, since the bill did not address the serious firefighter training gap that currently existed in Canada. Indeed, equipping and supporting municipal first responders to rail emergencies is of the utmost importance, yet this important aspect is not addressed by the bill and there is no ability to fund training out of this pooled fund.

When my colleague from Brossard—La Prairie followed up at committee on the recommendation from the fire chiefs to use this relief fund to pay for this training, representatives from Transport Canada admitted that the resources had not been a key focus at this point of this bill, but that those questions would come up as they “work through the ways in which we can improve the system as a set of jurisdictions and responsible authorities”.

This is evidence of the government being excessively casual on this pressing issue of public safety. It reveals a lack of urgency from the government. It is a case of the Conservatives making promises but not following up with the necessary resources to back those promises up. It was the same lack of urgency exhibited by the minister in her recent announcement that Canadians would have to wait a full 10 years for the phase out of the dangerous railcars. That is far too long.

On the issue of authority to the minister, cabinet and railway safety inspectors, the bill implements a number of changes to the Railway Safety Act that would give more authority to the minister. As my colleague from York South—Weston has pointed out in practical terms, these are not real. However, 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. Therefore, providing extra authority to railway safety inspectors is a positive and gets us back to where authority ought to lie for safety, with the government and the inspectors it hires rather than safety management systems.

The amendments would also authorize the minister to order a company that was implementing its safety management system in a manner that risked compromising railway safety to take the necessary corrective measures. However, as my colleague has pointed out, it is not clear how the minister will understand or come to know what is in those safety management systems to act on those. Clearly, the missed opportunity here is that of increasing the number of inspectors. Since 2013, Transport Canada has hired just one additional rail safety inspector even though the amount of oil by rail has more than doubled in the last two years.

While the government has a responsibility to ensure that tragedies like Lac-Mégantic never happen again, we do want to ensure that railways have enough insurance to cover all costs in the event of a disaster, and the bill would do that.

Clearly, there is more to do. One of the things that is missing from the bill is defining “fatigue science” in the Railway Safety Act. It is our worry that its absence will not ensure that fatigue management is based on science. Fatigue has been said to be one of the contributing factors for train derailments. Therefore, the fact that the Conservatives refuse to do something about this issue is quite puzzling and disturbing.

On the environmental side, we want to see the polluter pays principle applied to ensure that the total environmental and cleanup costs of rail accidents are borne by the industry and not downloaded onto the taxpayers.

The most important thing, however, is that we pass this bill before the next election to ensure we take at least a small step forward, even though that step is inadequate.

[Matthew Kellway, NDP, Beaches—East York, ON]

Mr. Speaker, I note that the title of the bill is “an act to amend the Canada Transportation Act and the Railway Safety Act”. I heard the member say in his speech that there is much more to do on the issue of rail safety in Canada. This is a bill, even though we will be supporting it on this side, that is very light in the way of changes to increase rail safety in Canada. The member has acknowledged that there is much more to do. On this pressing issue of public safety for Canadians, why did the Conservatives not take advantage of this opportunity to do more now?

[Robert Goguen, Conservative, Parliamentary Secretary to the Minister of Justice]

Mr. Speaker, I rise to speak to the bill before us, the safe and accountable rail act. The bill would fulfill this title by strengthening safety in our efforts to further improve safety management systems in the rail transportation industry. This is especially vital for addressing safety risks before they become bigger problems and before accidents occur.

Railways are a vital part of Canada's transportation system and keeping them safe is everyone's concern. The railway industry and the government need to work together to protect the health and safety of Canadians and to secure the conditions for a prosperous economy.

In the past, railways and many other safety-critical industries pursued safety through compliance with prescriptive rules and regulations. As safety research progressed during the 1990s, however, it became clear that compliance with rules and regulations alone was insufficient to ensure the highest possible levels of safety. What companies needed for a truly effective safety regime was a proactive system approach to safety that allowed them to identify hazards and to mitigate risks in order to prevent accidents. This approach also allowed lessons learned from minor incidents and day-to-day operations to be included in the system, thereby creating a sea of continuous safety improvement with more likelihood of avoiding accidents.

When the railway safety management system regulations first came into force in March 2001, they were the first of their kind in the federal transportation sector. They were created with significant industry input and emphasized the railways' responsibilities for safe operations. The regulations were established to encourage the development of a safety culture throughout all levels of an organization and to ensure that safety is considered as a factor in all decisions.

The safety management system helps organizations better comply with regulatory requirements and demonstrate their commitment to the safety of their employees. Key elements of safety management systems include, for instance, the development of safety goals and performance targets, risk assessments, responsibilities and authorities, processes and procedures, and monitoring and evaluating. Achieving an effective safety culture is the ultimate goal of safety management systems. An effective safety culture in a company can contribute to reducing public and employee fatalities and injuries, property damage resulting from railway accidents, and the impact of accidents on the environment.

Since the introduction of the railway safety management system regulations in 2001, a lot has been done and much has changed. Our railway network is characterized and challenged by a growing user base, vast distances, new and aging infrastructure, and a significant rise in oil on rail. Regulated safety management systems have come a long way since their beginnings. They have now been implemented in rail, marine and aviation transportation modes in Canada, and have become an international standard for managing safety.

The importance of safety management systems and their implementation in Canadian railway systems was one of the most significant issues researched during the last Railway Safety Act review and a simultaneous study of rail safety in Canada undertaken by the Committee on Transport, Infrastructure and Communities. While safety management systems were generally supported, both reviews concluded that implementation among the companies was uneven and that more needed to be done by the companies and the regulator to ensure full implementation throughout the industry. As a result, Transport Canada made several amendments to the Railway Safety Act in May 2013, to increase rail safety by strengthening its oversight and enforcement capacity, and expanding safety management systems for railways. Following these amendments, Transport Canada accelerated the development of the new railway safety management system regulations, 2015, which came into force on April 1.

The new regulations improve the implementation of safety management systems by incorporating more detailed requirements to clarify expectations from both industry and the department. The new regulations also improve the overall consistency and quality of railway safety management systems by adding consistent terminology, provisions requiring evidence of implementation, requirements for the identification of an accountable executive and the creation of a policy protecting employees from reprisal for reporting contraventions, and by expanding application to local railway companies.

However, our government is not stopping there. This bill introduces an amendment that would not only make sure that railway safety measurement systems exist, but that they are also working and are effective. Under the current Railway Safety Act, the Minister of Transport can take enforcement actions, including prosecution, for any non-compliance with the railway safety management system regulations.

The minister can even order a railway company to take corrective measures, should the minister be of the opinion that the company's safety management system presents deficiencies that risk compromising safe railway operations. However, the current Railway Safety Act lacks the authority to address issues with the way the rail companies implement their safety management systems. This bill would fill that gap by introducing a new power for the minister to order a company to take corrective measures should a company's implementation of its safety management system risk compromising safety.

This new power would also allow the minister to order corrective action if a company is not following its safety management system procedures and policies to the extent of risking safe railway operations.

Fairness is also paramount to this proposed amendment, to further strengthen railway safety management systems. Similar to the current safety management systems power related to deficiencies in a company's system, an order made under this new power would be subject to review by the Transportation Appeal Tribunal of Canada; this at the request of the company.

Together, the rail industry and government have accomplished tremendous work toward enhancing the safety of our railway network in the last decade and continuously improving company safety culture, but we still have more to do to make our railway system safer. Transportation safety is crucial, not only for the welfare of families and communities in Canada but to support Canada's long-term economic growth. We need to continue to work together to achieve our goal of giving all Canadians a safer and more responsible railway system and to assure global markets that our transportation systems are not only efficient but also safe and secure.

The House resumed from May 12 consideration of the motion that Bill C-52, An Act to amend the Canada Transportation Act and the Railway Safety Act, be read the third time and passed.

Business of the House

[Peter Van Loan, Conservative, Leader of the Government in the House of Commons]

Mr. Speaker, we have no shortage of very important work to attend to.

This afternoon and tomorrow we will continue debating Bill C-59, economic action plan 2015 act, no. 1, to implement important measures from the spring's budget, such as the family tax cut, enhancements to the universal child care benefit and a reduction to the small business income tax.

The parties across the way have made no secret of their opposition to the excellent tax reduction measures we have proposed, and this week the hon. member for Papineau explained why. As he told the House on Tuesday, “benefiting every single family is not...fair”. Well, that is consistent with his approach to fiscal policy, that budgets balance themselves.

However, our budget implementation bill will deliver those benefits to every family, because that is the fair Canadian thing to do.

After our constituency week, on Monday, May 25, we will debate Bill S-6, the Yukon and Nunavut regulatory improvement act at report stage. This bill will improve opportunities for economic development north of 60.

After question period that same day, we will take up Bill C-42, the common sense firearms licensing act at report stage, and hopefully third reading. Unnecessary, cumbersome red tape facing law-abiding gun owners across Canada will be reduced, thanks to this legislation.

Also, pursuant to Standing Order 81(4)(a), I am appointing that day, Monday, May 25, as the day for consideration, in a committee of the whole, of all votes in the main estimates, for 2015-16, related to finance.

Tuesday, May 26, will be the fifth allotted day. We will debate a Liberal proposal. I expect the Liberal leader will explain why helping every family is not fair.

We will return to the third reading debate on Bill C-52, the Safe and Accountable Rail Act, on Wednesday, May 27, when I am hopeful that it will pass.

The following day, we will continue the third reading debate on Bill S-3, the Port State Measures Agreement Implementation Act. In debate last week, the hon. member for Charlesbourg—Haute-Saint-Charles said, “Soon, we will pass this bill”. I look forward to her NDP colleagues proving the hon. member right.

Later that Thursday, we will start the report stage for Bill S-7, the Zero Tolerance for Barbaric Cultural Practices Act, which will re-affirm this Parliament’s ongoing efforts to end violence against women and girls.

Safe and Accountable Rail Act

[Phil McColeman, Conservative, Brant, ON]

Mr. Speaker, I will be sharing my time today to speak to Bill C-52.

I am pleased to rise in my place to speak in favour of Bill C-52, the Safe and Accountable Rail Act. This is a bill that, among other things, would take accountability and liability for the rail transportation of dangerous goods and share it between railways and shippers. Together they would pay the costs associated with cleanup and compensation in catastrophic rail accidents, such as the one that took place in Lac-Mégantic.

It is great to have the opportunity to participate in this debate today, because railway safety is a top priority in my riding of Brant and in the city of Brantford. I have had regular meetings with city representatives and local officials to hear about their concerns in the wake of the recent disasters, and I am pleased that our Minister of Transport continues to take firm action to ensure greater safety and accountability on our railways.

I also appreciate having the opportunity to recognize the hard work and strong advocacy of Brant County Fire Chief Paul Boissonneault, who has shown great leadership on issues related to rail safety in Canadian communities. Paul is Canada's top fire chief, and during his tenure as president of the Canadian Association of Fire Chiefs, he has travelled across Canada working to ensure that first responders and Canadian communities are better protected when dangerous goods are being transported. He sat on the Emergency Response Assistance Program Working Group and the transportation of dangerous goods advisory council, and he has also appeared before the Standing Committee on Transportation, Infrastructure and Communities, including as part of its deliberations on this bill, Bill C-52.

He has stated that overall, the Canadian Association of Fire Chiefs welcomes Bill C-52, because it would define the liability of railways in order to provide claimants with greater certainty of compensation and because it would build upon recent government actions focused on strengthening rail safety. Chief Boissonneault continues to push for further measures to improve safety and accountability, and we look forward to continuing the work we have started with him.

The bill before us today represents another important step in the right direction. Hon. members will recall that the tragedy in July 2013 was caused by the explosion of tank cars carrying crude oil.

There has been a dramatic increase in the amount of crude oil shipped by rail. In 2008, hardly any crude oil moved on Canadian rail lines. By 2013, oil by rail had increased to approximately 10.6 million tonnes per year. By 2017, that number is expected to reach approximately 33.9 million tonnes per year.

The shipment of crude oil by rail will continue to play an important role in moving our resources to market. Even if pipelines in the east, west, and south of the oil fields and oil sands were approved tomorrow, it would be many years before they were operational. Until such time as new pipelines are available, rail remains the only real transportation alternative. Nor do railways have any option but to accept shipments of oil from their customers. The common carrier obligations of the Canada Transportation Act are a hallmark of the railway system that ensures that shippers can get their goods to market. Railways cannot turn down shipments of crude oil just because oil is volatile and is classified as a dangerous good. They are exposed to the liabilities associated with the freight they are required to move.

Railways are responsible for carrying insurance to provide compensation for the liabilities associated with disasters such as Lac-Mégantic. The bill before us would enhance insurance requirements by setting required minimum insurance levels for federally regulated railways that would take into account the potential severity of accidents. These would range from $25 million to $1 billion, based on the type and volume of dangerous goods the railway carried.

To enforce compliance, if a railway failed to notify the Canada Transportation Agency of an operational change that would affect its insurance, it would be subject to an administrative monetary penalty of up to $100,000 per violation.

As the tragic derailment in Lac-Mégantic demonstrates, accidents involving crude oil can be catastrophic in nature. To address such incidents where, despite increased requirements, the amount of railway insurance may be inadequate to pay for all liabilities, a two-tiered approach is proposed in the bill.

First, the bill before us would change the liability regime for rail accidents, including crude oil. In the event of an incident involving crude oil, railways physically or operationally involved in the accident would be held liable up to their insurance without fault or negligence having to be proven. When the cost of a rail accident exceeds a railway's insurance level, the bill provides for a way to cover the cost of such disasters without putting the burden on the shoulders of the taxpayer. This would be accomplished through the establishment of a supplemental shipper-financed fund.

This brings us to the polluter pays principle, which Canada is making a gold standard for nuclear energy and offshore oil production, and other modes of transportation, including pipelines and marine. Hon. members may be aware that Canada was a pioneer in implementing this principle beginning with the liability regime for marine oil spills. Since the 1970s, shipowners have been held strictly liable for costs and damages that result from the discharge of oil. To cover claims in excess of the shipowner's limit of liability, the government created a marine pollution claims fund, which is now known as the ship-source oil pollution fund.

This is the approach that we have applied to marine oil tankers, and it would also apply to the transportation of crude oil by rail as a result of the bill before us. In future years, it could apply as well to the transportation of other dangerous goods by rail.

Any liabilities that result from an accident involving crude oil above the railway's insurance level would be covered by the shipper-financed fund, known as the fund for railway accidents involving designated goods. The two-tiered regime outlined in the bill would share responsibility for damages from rail accidents between railways and shippers and ensure that adequate resources would be available to pay for all liabilities This approach, modelled on the marine mode, would achieve two important goals. First, it would give potential victims more certainty regarding compensation claims. Second, it would relieve taxpayers of excess liabilities that can result from an accident.

In summary, this bill would ensure that railways maintain appropriate insurance coverage. In addition, it would also ensure that their liability is clearly defined to more quickly address claims following rail accidents involving crude oil, and it would ensure that resources are available to pay compensation for all liabilities associated with an accident.

Let me be clear. The government's first priority is the safety of our transportation system, but in the event of a rail accident, the bill would ensure that the polluter will pay. I urge hon. members to adopt this bill.

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

Mr. Speaker, as always, it is a great honour to rise in the House representing the people of Timmins—James Bay and to speak to Bill C-52, an act to amend the Canada Transportation Act and the Railway Safety Act.

Trains play a huge role in the life and the history of our country. For any boy growing up, the thing we all wanted to be was a train. I spent my life on the Ontario Northland as a kid. My great grandfather used to be the conductor on the Sydney Flyer in Nova Scotia. He lived in Iona. a little village in Cape Breton. He used to say that the only two things that we could find in the village of Iona were holy days and MacNeills. My great grandfather was a MacNeill, so John P. MacNeill was the conductor on the Sydney Flyer. John P's great skill was that he could spot bootleggers on the platform. His eye for a bootlegger was never wrong. He always said that a man carrying a bottle of whiskey with his underwear in a bag would put that bag down with just a little more care than if there were no whiskey in the bottle.

My uncles all worked on the Ontario Northland train out of North Bay and Mattawa. In those days people either worked in northern Ontario, underground in the mines, as my grandfather MacNeill and my grandfather Angus did, or on the Northlander, like my uncles did.

I had a famous uncle who apparently used to drink a twenty-sixer every night on the run from North Bay to Timmins. They said that he was never the worst for wear, although some nights after a twenty-sixer, he would say that it was like the same as working 21 straight hours and being very tired. He did not live long enough for me to be around, but he used to tell us stories about being on those trains.

My street address is Mileage 104, which is 104 miles on the Ontario Northland railway track. Every morning there is that beautiful sound of the train whistle, going past my house, shaking everything in the foundation. It used to carry people but not anymore. The provincial Liberal government of Kathleen Wynne decided that people in northern Ontario were truly second-class citizens and did not merit public transit.

Public transit is something that belongs in urban areas and to urban voters, but people in northern Ontario are somehow second class. Therefore, the Liberal government set out to destroy a 100-year-old public institution, which is the Ontario Northland Transportation Commission.

What passes by my house daily now is the wood going south, the way the wood has always gone south, and tanker cars full of sulphuric acid from the smelter in Rouyn-Noranda, Quebec. The trains used to carry product from the smelter in Timmins, but the Liberals also allowed that to be killed because of their idiotic hydro pricing. We are used to seeing things being shipped out of our region on the train, but we used to be able to ship our people back and forth

Just this past weekend I had the great honour and great joy of travelling on the VIA train between Toronto and Ottawa. It was just like being a little kid again, getting on the train, the smell of the train, the feel of the train and the conductors. I felt the same excitement, but I felt a real sense of sadness. For so many regions of our country, the idea of a coherent national transit strategy, including trains, is being seen as somehow something that belongs in the 19th century as opposed to a very 21st century method of travel. I hope to us restore proper train transportation into our regions in the near future, when a New Democratic government is elected in Ontario and we get rid of that corrupt Liberal government.

The Ontario Liberals could learn that their right-wing austerity premier will be a footnote in history like Alison Redford, having promised to be a progressive premiere and then turning her back on the people. From our colleagues in Alberta, we can see how we can elect a progressive woman and actually get it.

I want to speak today about the importance of the safety transportation changes that are coming, changes that need to happen. We have seen an enormous shift in the movement of goods. Over the last five years, there has been a 28,000% increase in the transportation of fuels from western Canada, particularly on the rail lines. Trains are carrying fuel from the Bakken fields, which we know is highly combustible. They are also carrying diluted bitumen and heavy crude.

The incredible increase of this transportation on the transit system has raised serious questions about issues of safety, particularly when we saw the tragedy at Lac-Mégantic.

However, warnings about a potential rail tragedy have been discussed in Parliament for many years. I remember being here in 2004 and trying to get the Liberal government of Paul Martin to see some common sense, which it refused to see. The Liberal government believed that privatizing, allowing companies to look after themselves, getting rid of inspectors and saving money for the government would somehow make things better. Therefore, the Liberal government brought in changes to the Railway Safety Act. The Liberals went to the self-management system and told us that was the future.

It was just like the Liberals told us at that that they could do the same thing for the banking rules. The push at that time was to change Canada's banking laws to allow the banks to self-regulate. We were told in the House of Commons that the NDP was somehow the nanny state NDP because we said that we needed rules around banking. However, at the time, my Liberal colleagues thought that the great future was in City Bank and the amalgamation and investment that was happening in the United States. We saw how that ended up.

In good times, it is easy to say that we do not need regulation. In good times it is easy to say that we should let everything happen and things will carry on. We know our role as regulators is to ensure we have basic rules in place to protect people from potential accidents.

After the changes that came in under the Liberals in self-management, we found there was a whole series of increases in accidents, but because the companies were self-managed, they did not bother to report them. The Transportation Safety Board in 2005 became suspicious of CN's accident numbers compared to other operators. All of a sudden there was a large discrepancy of the number of derailments or lack of derailments. It turned out that over 1,800 derailments and accidents were simply not reported, including 44 that happened on key rail arteries. We have oversight because we want to ensure that when companies are self-regulating, they do not do what they did at that time, which was simply not bothering to report. This is a very serious issue, particularly in light of the accidents we have seen recently.

In my region of northern Ontario, we have had three serious train derailments on the rural subdivision at Hornepayne and two at Gogama. The last two incidents were February 14 and March 7, with CN freight trains carrying between 94 and 100 cars. The March 7 train was 6,089 feet long. A staggering amount of crude oil was being carried on that track.

They had come on the rural subdivision that exists between Capreol, in the south toward Sudbury and Hornepayne. It is primarily composed of a continuous welded rail and is classified as class 4 track under the transportation safety rules. Class 4 is the second-highest rating and allows trains to travel 60 miles an hour for freight and 80 miles an hour for passenger trains. However, we do not see many passenger trains anymore in the north. There were a number of slow orders given because of problems along that track. We had the accident on February 14 at Gogama and then again on March 7. At the time of the March 7 derailment, the eastbound freight was moving at 43 miles an hour and at 2:40 in the morning, at a temperature of -10C, the train jumped the tracks and cars spilled into the Mattagami River.

What was very disturbing about the 700 feet of track that was destroyed at that junction and the cars going in was that a great deal of work had happened in our region in terms of the Mattagami River, which is one of the great northern river systems feeding into James Bay. A lot of work has been done to secure fisheries and build up spawning grounds. Having heavy crude pouring into and burning across that river system was certainly deeply disturbing for residents of my region. They see that as one of the great river systems of northern Ontario.

The issue of transportation safety, given the huge increase in combustible fuels that are being transported on trains, is very serious because many communities were built on the rail line. Therefore, trains actually travel through the centre of many communities across western Canada and northern Ontario. In Sudbury, cars sit at lights as trains speed by. If the Gogama derailment had happened in an urban area, it could have been a tragedy in the nature of Lac-Mégantic.

What do we do to alleviate this? Whenever we talk about the transportation of dangerous goods, whether it is through a pipeline or by rail, we have to ensure there are rules in place for oversight and public safety. There are some very positive elements in this bill, which the New Democrats will be supporting, such as putting in place minimum insurance levels for railways transporting dangerous goods based on the type and volume of goods being transported and also establishing a disaster relief fund to deal with accidents such as occurred in Lac-Mégantic.

There have also been a number of changes, including increased powers for inspectors. This is important to have. Is this enough? Given the potential damage that could be caused by a catastrophic train derailment, perhaps not. We need to speak to this. The issue of polluter pays is a fundamental principle that Canadians agree with and in improving rail liability and accountability, we do not want the public on the hook for any potentially catastrophic disaster. Therefore, the question is how to establish a regime that is still profitable and able to transport goods by rail. We want to ensure that rail remains a profitable system, while also assuring the public that in cases of liability, there will not be fly-by-nighters, like happened at Lac-Mégantic, saying that they do not have any money and wanting to skip town. That is not good enough, not when lives and the environment are at stake.

Essentially, Bill C-52 would require minimum insurance levels for railways transporting dangerous goods and would establish a disaster relief fund paid for by crude shippers. However, regarding the issue of minimum insurance levels from $25 million for companies transporting low-risk goods up to a maximum of $1 billion for railways transporting high-risk goods, the question is at what point we would get to a level within the fund where money would available to offset a potential disaster.

I would like to compare what happened in Gogama with the situation in Kalamazoo. In the Kalamazoo blowout, it was a pipeline and not a rail disaster, but that pipeline was carrying raw bitumen. When the bitumen hit the water, cleaning it up was not so simple. In fact, it has cost over $1 billion to attempt to remediate the bitumen in the Kalamazoo River. Bitumen is a very difficult and dangerous product to deal with, especially when it sinks to the bottom. The chemicals that are involved make it a very different issue.

Whether we are talking about pipelines or rail, we get back to one of the root issues, which is that we need to move toward upgrading at source as much as possible to limit the potential for environmental damage. Also, we need to ensure that we see the benefit of whatever we produce in Canada, in terms of natural raw materials, as much as possible. We need to have discussions in the House of Commons about how to limit the environmental damage from such massive projects, because we are in a world that deals with the potential for catastrophic climate change and the government has literally buried its head in the oil sands, refusing to deal with its international obligations.

However, as Canadians, we need to deal with this. Canadians feels very inspired to take action on this. We have seen, with the recent New Democratic Party win in Alberta, that Albertans are deeply concerned about how we make developments that are sustainable, how to limit the impact of greenhouse gases, how to ensure that if we transport our incredible natural resources, which we are blessed with right across the country, we get the maximum benefits, so that Canada is not just a place where the ground is ripped out and products are shipped to refineries in Texas or to China, but we see the benefit from that.

These are all interrelated issues that really need to be discussed in Parliament. We need to have a national conversation about where we are going with this.

The bill, in response to the situation in Lac-Mégantic, is a good first step. As I said, we in the New Democratic Party have many questions about whether this insurance is enough. We certainly question some of the numbers.

For the 200,000 barrels of oil transported daily, Transport Canada estimates that oil levies would contribute about $17 million annually to general revenues. This is a step forward, but there are certainly outstanding concerns. We would need to have the levy in place for about 15 years before we reached the $250-million level where it believes we would be able to respond to any level of crisis. I would again point to Lac-Mégantic. It cost $400 million for the damage done in that one accident. Therefore, this levy would certainly not be enough.

Under the legislated summary we received from the Library of Parliament, the act would amend the Railway Act to allow a province or municipality that incurs costs in responding to a fire that was, in its opinion, the result of a rail company's railway operations to apply to the Canada Transportation Agency to have those costs reimbursed by the rail company. That is an important role, but we also need to work closely with municipalities. They are very concerned about the kinds of dangerous goods being transported through their communities and the need for plans to make sure that if something did blow out, such as in Toronto, where the rail line comes right through parts of the city, we would all be working together on this.

The Canadian Federation of Municipalities certainly supports what the New Democrats have been saying. It is interested in the issues of insurance and liability. Brad Woodside, who is president, called for a “comprehensive approach that makes railways and crude oil shippers pay the full costs of rail disasters, and not leave municipalities and taxpayers footing the bill”.

That is a fundamental principle. It should not be the taxpayers of the country who are subsidizing these operations. These operations need to be profitable in their own right, and they need to carry the cost of the potential damage through proper insurance.

The Railway Association of Canada believes that the compensation fund should cover the cost of not only crude oil but other dangerous goods, such as chlorine, which is a very interesting element. In my region, they are carrying tanker cars full of sulphuric acid on the rail lines. I remember a number of years ago when the ONR line went over just south of Temagami and pretty much destroyed a lake because of the amount of sulphuric acid that entered the water. These rail lines are carrying very dangerous goods at times, and we need to have that overall policy.

The Canadian Transportation Agency has said:

The tragic derailment in Lac-Mégantic has raised important questions regarding the adequacy of third party liability insurance coverage to deal with catastrophic events, especially for smaller railways.

This is another important issue in terms of what we saw at Lac-Mégantic, where we had a small, fly-by-night company that, when the damage was done, simply was not going to be around the next day to deal with it.

In closing, this improvement in rail safety and the creation of a fund is important, but we still need to have that conversation about how to ensure that the industry is covering off its own costs so that municipalities, provinces, and the federal government are not on the hook. We need to make sure that the federal government maintains an active role. After those years when the Liberal government allowed self-regulation and we saw numerous increases in accidents and a decline in safety, we need to make sure that there are independent inspectors and that the companies are accountable.

Finally, we need to continue the national conversation about how we are going to process oil, bitumen, and other natural resources in our country.

[Elizabeth May, Green, Saanich—Gulf Islands, BC]

Mr. Speaker, before I begin, I just wanted to double-check because I believe there was still some time on the clock for the hon. member for Gaspésie—Îles-de-la-Madeleine. I thought I saw him here a moment ago, but if that is not the case, I am more than prepared to proceed.

I rise to speak today on a bill that is important and has my support, but it opens up an area of public policy that really bears fuller examination. This bill gives us a chance to discuss that. I speak of Bill C-52, a bill for rail safety. As we all know, the issues of rail safety have become increasingly of concern to Canadians.

The title of Bill C-52 is the safe and accountable rail act, but I think it needs to be acknowledged that, while the bill is certainly welcome and is a step in the right direction, it actually only speaks to the accountability side of safe and accountable. It speaks to what we do in the event of accidents, such as who is responsible, how much insurance they must carry, and who can sue after the fact under the polluter pays principle. It does provide a number of important improvements, particularly for municipalities and others affected by rail accidents. It does create a minimum insurance requirement of $1 billion. These things are welcome.

However, the issue of rail safety continues to be one of deep concern. So many of the witnesses before committee spoke to the fact that Bill C-52, while welcome, does not go nearly far enough, and the steps that have been taken so far by Transport Canada to improve rail safety in the wake of the disaster at Lac-Mégantic also are moving too slowly and, even if fully implemented, do not go far enough.

I would like to take a moment to point out that, if we look at Lac-Mégantic as an example—and this was an example put forward by witnesses at committee—a $1 billion minimum insurance requirement for class 1 railways is something that was legislated mandate. The class 1 railways have already been carrying it. Certainly we never wanted to see the Lac-Mégantic disaster. May we never again see a disaster of that scale. However, now that we know it is possible, it behooves us to put in place the insurance requirements that would meet a disaster of that scale, which would, according to witnesses, be closer to six times that amount, or $6 billion.

Looking at the issue of rail safety, over the last number of years we have had what I would almost put forward as a perfect storm of changes in the private sector, in government, and in the types of goods we are shipping. They come together in ways that leave us less safe than we have been before, even with the improvements Transport Canada and the minister have made. For instance, as recently as 2009, only 500 cars a year were carrying highly flammable fossil fuels, the flammable crudes that take up most of our discussion these days. We know the number has gone up in the last two years, but in 2013 we were up to 160,000 car loads. This is a phenomenal increase in hazardous goods moving on our rails, and that leaves out other types of hazardous goods, whether chlorine or other hazardous substances.

The Canadian Association of Fire Chiefs took this statistic and converted it into millions of barrels and said that, as of now, we have a million barrels of crude oil, flammable class 3 liquids, per day moving on our rails. It also pointed out that in 2013, the last year for which I have statistics, which I found through the witnesses, there were 144 accidents that involved dangerous goods, 7 of which resulted in dangerous goods being released.

We have seen steps taken. I referred to them briefly before. The transportation safety boards in Canada and the U.S. make findings about safety but do not have the regulatory power to implement them.

The transportation safety boards on both sides of our border found some time ago that the DOT-111 railcars constituted an unsafe way to transport such hazardous and flammable materials.

We have taken some steps, as has the U.S., but there is a long lead time for the implementation, so now we are taking class 1232 trains and retrofitting them for crude oil. That must be done by 2020 and for less flammable materials by 2025. Still, until 2017—so we have 2 more years to go—the unsafe DOT-111 cars will still be rolling through our communities; 80,000 DOT-111 railcars will be still in service in the U.S. and Canada until 2017.

Why did I speak of the trends? We have essentially less safety and more hazardous goods. The rail industry, in theory, whether moving passengers or goods, is one of the safest and most environmentally appropriate way to move people and goods. This needs to be reiterated because it is an essential part of our infrastructure, and one of our arguments as Greens is that it is an essential part of our infrastructure that we have been ignoring too long.

We need to upgrade in the passenger context, and we need to invest in more modern trains and better rail beds. We need to continually upgrade the access to passenger rail and invest in VIA Rail for Canadians from coast to coast—and ultimately to coast, at least insofar as the Hudson Bay train would get there. Coast to coast to coast rail service makes sense, and modernizing it to bring it into the 21st century is an important investment for Canadians. It is an important part of our transportation infrastructure.

In the case of goods travelling by rail compared to by truck, it is safer in terms of accidents on our highways and, in theory, it reduces greenhouse gases. It is by far the safest way to transport hazardous goods. The difficulty we have is what has been happening in practice. Over the last decade or so—certainly not just in recent years—we saw a change through the smart regulatory regime; we have seen a change through private sector pressures to improve productivity; we have seen a change through government cutbacks; and ultimately we have greater risks because of the change in our industry.

Let us look, in terms of reduced safety, at the first point I wanted to make. The freight industry in Canada is private sector, whereas VIA Rail is a Crown corporation. We are now dealing with the pressure of for-profit companies, and one certainly understands their point of view, but as a result of their pressure to improve the profit bottom line, we heard from the rail sector labour force, and particularly from the unionized members and the union in that rail sector, of a continual cutback in engineers and onboard rail crews that has led to greater safety concerns.

We have also seen a failure to pay sufficient attention to maintenance along tracks. A number of the significant derailments that have occurred recently occurred because of failure to keep tracks and bridges operating properly. We even had a fatality because of the failure to keep a railway trestle in proper repair.

Back in 2005, a CN train derailed at Wabamun Lake in Alberta and resulted in a substantial spill, in which CN Rail was ultimately fined $1.4 million, which was a very modest fine, given the scale of that spill. The inquiry into that found that the rails over which that train was travelling were worn out and they had not been kept in adequate repair.

That was certainly a significant event, but there were a number of derailments right after it in 2005. This started creating more concern about the use of rail for freight that extended right across Canada, asking what more we could do and what the Transportation Safety Board was doing to ensure rail safety.

The second piece that made us less safe has been in the government decision to move to safety management systems. It is essentially a form of deregulation that came into effect some time ago.

I direct the House to a finding in a report released in 2007 by the Canada Safety Council. It reported that the system is one that:

...allows rail companies to regulate themselves, removing the federal government's ability to protect Canadians and their environment, and allowing the industry to hide critical safety information from the public.

One would think that having gone to a system such as this, Transport Canada would have a supervisory authority to review these SMSs, or safety management systems, to ensure their adequacy. However, it does not appear that is the case.

The third part of the less safe system is cutbacks at Transport Canada. We now have fewer engineers than we used to have available in Transport Canada to do the work of reviewing rail safety. According to a number of media reports, Transport Canada currently has, and has had since 2009, 30 critical rail safety positions that have remained vacant. These are for engineers who could do such things as anticipate and organize the removal of DOT-111 cars from the tracks. Missing critical people in rail safety and critical people at Transport Canada who deal with hazardous goods is not a good sign to Canadians. We saw budget cuts at Transport Canada in 2012 that seem to now put in stone the fact that these positions are not likely to be filled again.

We have hazardous goods moving through communities, as the committee was reminded by the Federation of Canadian Municipalities and citizen groups concerned with hazardous goods rolling through communities, yet we have not filled critical safety positions within Transport Canada.

The third part relies on what is happening in the private sector and why we are seeing more and more freight, and particularly more and more dangerous freight, on our tracks. I am a huge supporter of passenger rail, as members can probably tell by now from my speech. I have travelled Canada's rails, criss-crossing the country as often as I get the chance. Often, I have done it in the context of political campaigns and whistlestop tours, where it really matters to know that we are going to arrive at our destination some time near the scheduled time on the VIA Rail schedule.

As anyone who pays attention to rail in Canada knows, VIA Rail has to rent the tracks from CN and other rail owners. VIA Rail is not in control of the switches or the red, yellow, and green lights. In other words, passenger rail in Canada and on-time arrivals are virtually entirely hostage to freight. When we have increasingly long trains that can no longer pull over onto sidings and VIA Rail passenger rail that is short enough to stay on the sidings, VIA Rail passenger trains often have to wait for hours for the convenience of freight to go by.

We have not given adequate concern or attention as Parliament or Transport Canada's regulators to the length of freight trains and the fact that they are often stacking cars, and then again to the kinds of material that they are shipping. The horrors of Lac-Mégantic woke us up to what they are shipping. I do not think that any of us will ever forget the horror of the morning of July 5, 2013, of the disaster that killed 47 people.

The Transportation Safety Board had already approved what looked like a perfectly satisfactory system of safety on the part of the Montreal, Maine and Atlantic Railway. It had provided its safety management system to Transport Canada, and it was entirely legal on July 5, 2013, for an engineer to leave an idling train above a community, having set hand brakes with the assumption that the air brakes would not fail. The engineer actually set seven hand brakes when, in fact, the minimum number of hand brakes on the company chart was nine. The Transportation Safety Board has since found that nine hand brakes would not have held the train if the air brakes had failed.

As we know, the disaster of Lac-Mégantic is one of a train barrelling into a community that lay entirely unaware of the disaster that was about to befall it. Not only did the community not know that it was legal and that Transport Canada had approved a system that allowed an idling train to be left unattended with hand brakes on above a community, but no one really knew what kind of flammable and dangerous materials were on board, because it was reported as crude oil.

It was in fact Bakken shale, which is an entirely different chemical composition, and as we know, to our horror, it formed a fireball that destroyed much of that community, killed 47 people, and injured many more.

As we stand here today on May 12, 2015, are we sure that such a disaster as Lac-Mégantic could not happen in another Canadian community? Despite all the safety measures I mentioned, and in the face of Bill C-52, the safe and accountable rail act, we have to say no.

We know a lot more about Bakken shale, and there is a greater requirement that communities be notified if it is moving through the community, but Bakken shale is not the only unconventional oil. If we mix bitumen with diluent, it also becomes far more flammable than bitumen by itself.

I should mention parenthetically, because I think it is of some interest to people, that if bitumen by itself is heated so that it can be put into a railcar without the presence of diluents, it is virtually not a dangerous material at all. It cannot spill and it does not blow up.

However, we have not taken safety measures to ensure that diluent will not be moved by rail. Diluent is the stuff they mix with bitumen. It was diluent, which is toxic and hazardous, that was being shipped to northern Alberta through the city of Calgary in those railcars that were hanging so precipitously over the Bow River during the flooding when the bridge gave way. The municipal workers of Calgary had to thread cables through those railcars to keep them from falling into the river. The material in those railcars was diluent, and it was headed to northern Alberta to be stirred in with solid bitumen so that it would be capable of being shipped, whether by pipe or by rail, without resorting to steam-liquefied bitumen, which can actually be moved into railcars without adding diluent.

A wide range of toxic and and dangerous substances are being moved by rail, and I want to turn to the evidence of the Canadian Association of Fire Chiefs, as presented by Paul Boissonneault, fire chief of County of Brant Fire Department and current president of the Canadian Association of Fire Chiefs. He has pointed out a number of things that we could do to make the situation safer. One would be to divert some funding for firefighter training to assist people in communities and local fire departments to be able to confront threats. Firefighters should never be exposed to something as dreadful as Lac-Mégantic and neither should the community, but we do have a serious gap that the fire chiefs have pointed out in terms of preparation for firefighters.

They are also looking specifically at other hazardous goods. The bill deals with various forms of crude oil and the most flammable and dangerous forms of crude oil, which are not really crude at all, such as Bakken shale or bitumen mixed with diluent. However, the firefighters also point out that the propane and chlorine that move on our rails also need to be brought into the bill for further measures for safety.

We need to have much more information sharing, and the bill makes some good first steps. The bill would allow requirements relating to information sharing between railways and municipalities in response to emergencies, but we do need greater levels of detail in that information, and the communities have a right to know.

We need to do much more in strengthening the Canadian Transport Emergency Centre to be part of current regulatory activities. We need municipalities to be sitting down with Transport Canada and with the shippers to find better and safer ways. There are some that we know about; one is called “positive train control”. It is used in the United States and is in its rail safety act, although it is not fully implemented yet. It constitutes an on-board computerized system that creates very clear advance information and very immediate real-time information about where brakes are weak, where parts of the trains are overheating, whether speed is out of control, and whether there are problems on board. Positive train control is now part of the U.S. rail safety act; it should be part of ours.

We can also take steps to regulate for shorter freight trains. Braking is far more dangerous and difficult when trains are essentially too long to stop.

We have an opportunity to do much more in Canada to create real rail safety. While I will be voting for Bill C-52, I want no Canadian under any illusion that passing the bill will create a safe rail transport system. It will not, and Canadians deserve a real safe rail system in this country.

The House resumed from May 7 consideration of the motion that Bill C-52, An Act to amend the Canada Transportation Act and the Railway Safety Act, be read the third time and passed.

Railway Safety Act

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

Mr. Speaker, I thank my colleague for introducing Bill C-627, which I will be talking about. This bill is a step in the right direction, but it underscores the gaps in existing regulations.

The NDP has long criticized the fact that companies are allowed to self-regulate and self-inspect. The objective is to provide powers to the minister and inspectors so they can intervene if there is a problem.

However, there are not enough inspectors. We have been looking at this issue for a long time in committee, and the problem has not necessarily been solved. Yes, we can grant more powers, but if there is nobody on the ground to ensure that rails and crossings are safe, that does not solve the problem. The Conservatives have cut the budget for rail inspection by 20% since 2010. The government is not investing in inspections.

I support the bill since it is a step in the right direction, even though it is a private member's bill and it conflicts somewhat with Bill C-52, which I talked about earlier. The fact that members have to fix government rail safety regulations shows that there are problems.

What is funny is that in committee, we examined Bill C-627, a private member's bill, before we examined Bill C-52, but we debated Bill C-52 first. Bill C-52 really should have contained mechanisms that referenced Bill C-627. It is a bit complicated and it shows that the government did not do its homework with regard to rail regulations. The government is rushing to fix things after the Lac-Mégantic tragedy, and it is improvising quite a bit.

In short, I will support the bill because it is a step in the right direction. However, the government could do more in terms of rail safety.

Safe and Accountable Rail Act

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

Mr. Speaker, I will try to be brief. Today, we are debating a bill that will supposedly improve rail safety in Canada. One of the government's main responsibilities is definitely to ensure public safety.

There has been a spectacular increase in the amount of oil shipped by rail. In 2009 there were 6,000 cars transporting oil, whereas last year, in 2014, there were 110,000. Canadians certainly have the right to ask questions, especially whether their safety is really this government's priority. The Lac-Mégantic disaster showed that there are serious flaws when it comes to safety.

Today, we have before us a bill that will not improve rail safety, but will instead address the issue of insurance after an accident. This is a reactive rather than a proactive bill.

We do not improve the safety of Canadians by sending a cheque after an accident occurs. We must improve the public's safety. The quality of Canada's rail system is very questionable, primarily because of the bills passed by successive governments in the past 20 years. That is what I am going to talk about.

I welcome the opportunity to address the government's bill, Bill C-52, the so-called safe and accountable rail act, which is a revised version of the existing Canada Transportation Act.

The biggest problem I have with the legislation is that it is based on an act that was inadequate when it was passed in 1996 by a Liberal government, and in turn, that bill was based on an even worse act passed by the Conservatives in 1987.

What we are being asked to do now, frankly, is comparable to rearranging the deck chairs on the Titanic. We have a fundamental responsibility to ensure safety, not to spend hours discussing insurance liability for rail companies. That is certainly a first step, and it is why I am going to support the legislation, but it is a tiny step. We need to go an awful lot further.

The changes proposed today are only the beginning of an answer. Canadians need a new act that is based on fundamental elements that have been lacking all along. From the very start, the current act has lacked the basics necessary to maximize the performance and safety of our multi-modal transportation system and especially its rail component.

The maintenance and safe, effective operation of a national transportation system fully addressing the needs of this country, the private owners of the majority of that system, and the shippers and passengers who depend on it requires that it be conceived as a whole. The essential elements would be policy, legislation, planning, and adequate funding, which the government sorely lacks in many fields of its jurisdiction.

Legislation is but one element in the development of a comprehensive and effective national transportation system. However, the Canada Transportation Act lacks many of these building blocks, the most elementary being a basic national policy balancing public and private interests.

As is said in the introduction to this legislation's review discussion paper, Canada's transportation system is “substantially more market-based, deregulated and competitive” than it was in the period before the Mulroney Conservatives introduced their deregulatory act in 1987.

In fact, our transportation system today is largely based on a laissez-faire approach that reserves only a few areas for public oversight. Its most vital flaw is the lack of an underlying, proactive policy.

As a result, Canada's transportation system is a series of silos that have been cobbled together by multiple and often competing owners without a comprehensive plan. All of them have wound up being patched up with this makeshift legislative and financial band-aid to correct the flaws created by a boundless faith in this hands-off, strictly-for-profit approach. It is totally unrealistic.

The VIA Rail Canada program, funding for remote airports and roads, scattershot safety fixes, a last minute renewal of federal funding for the Algoma Central passenger service and the government's Fair Rail for Grain Farmers Act, these form a patchwork of intervention in a system that the government likes to think does not require intervention, yet it continues to intervene.

There is no central policy or plan at work here, and it has been said that this type of necessary intervention is too frequently only taken by governments such as this in the run-up to an election. Pardon the pun, but this is no way to run a railroad. It is certainly no way to run a country.

The Canadian approach is far different from that taken by other countries that view transportation not just as a business, but as a potent tool for national, economic, social and environmental growth and security. This especially applies to the rail sector.

The United States took a similar laissez-faire approach to railroading for decades. With the construction of its highway interstate network, the national rail system there drifted along without benefit of a clear policy, nor comprehensive planning, nor balanced or sustainable funding, very similar to Canada today. The result was the collapse of large parts of the system and the need for government intervention under crisis conditions.

The revision of the U.S. approach to railroading is now under way with the enunciation of clear, inclusive policies that are interlocked with legislation, planning and funding to realize this new national vision. The objective is to maximize the potential of rail in concert, not in competition, with the other modes.

Making changes to the limited amount of legislation embodied in this CTA is only a small part of the solution. Without a clear and comprehensive national policy, even the best legislation will fail because it is based on what amounts to an absence of policy. Revising the CTA in the absence of enlightened and proactive policies cannot and will not decisively correct its major deficiencies.

There are two specific areas that concern me greatly. The first is the safety of the transportation network that has evolved under the current CTA and the predecessor deregulatory act on which it is based. This especially applies to rail.

We have now gone through a wave of rail accidents that have demonstrated how much our system has declined. If this was only to include Lac-Mégantic, that would already be much too much, but we have experienced numerous major derailments, both before and after that disaster, that have demonstrated that our rail system is degrading, and degrading rapidly.

Just as bad, it is not being monitored adequately on behalf of the public. What we have now is a self-regulating rail safety network, and it is not working.

Our rail safety regime under the CTA is badly flawed. It provides inadequate protection for individuals, inadequate protection for communities and its workers. In the pursuit of profits, corners are being cut and this inadequate attention to safety is not being revealed until it is too late. What we have now is reactive rail safety legislation.

To be effective, there must be a new safety legislation within the CTA that is not only better, it must be vigilantly enforced. Any new legislation must recognize that the public interest can only be adequately protected when the regulator has the power and the resources to enforce the rules.

Some believe that compelling the railways to carry more insurance is the answer. This is the very basis of this current legislation. While it is part of the solution, this is reactive in nature and after the fact. It does not prevent accidents; it merely analyzes them after they have occurred.

Funds should also be invested in improved infrastructure and safety appliances, which would prevent fiery derailments that pose an unnecessary risk to public safety. I am extremely disappointed that the bill does not include the implementation of a safety system that would have a major impact on Canadian rail safety. PTC, positive train control, a highly effective high-tech system, has been mandated by the U.S. Congress for all main lines handling passenger trains and freight trains carrying dangerous goods.

PTC would have had substantial impact on the Lac-Mégantic tragedy. In fact, it could have prevented it by alerting employees of the impending catastrophe as soon as that train began to be under way. There could have been intervention at a critical time. At the very least, the PTC system would have allowed for the minimization of the eventual derailment that led to the devastating explosions and the horrible loss of life. This bill does not even contemplate the application or the requirement for advanced technologies such as PTC.

I would also point out that the requirement to safely equip and maintain operations with advanced systems such as PTC would generate a domestic economic uplift. It would stimulate Canadian railway supply industries and creates jobs, such as in La Pocatière, Quebec and in Thunder Bay, Ontario. Private railway funding of large insurance policies usually just goes to offshore insurance companies and does nothing really to improve safety.

Furthermore, legislation aimed at improving rail safety must recognize that it requires on-the-ground inspection by trained government personnel who have the power to rigidly enforce the rules. There must be an adequate number of them to do it on a constant and daily basis.

I also believe that CTA needs to be revised to play a major role in proper functioning of our passenger rail service, VIA Rail Canada. There is precious little in the act today aimed at establishing the mandate, rights or obligations of our national passenger service, or even other passenger or commuter operations. I attempted to correct this situation with Bill C-640, An Act respecting VIA Rail Canada and making consequential amendments to the Canada Transportation Act, which would have required consequential amendments to the current CTA. That overdue legislation was defeated by the current Conservative government.

There is little in the current act to protect and direct the provision of a proper rail passenger system. There is, in fact, only one clause in the current CTA that affords any legislative rights in delivering a necessary service to millions of Canadians. When it has been applied on a very few occasions, it has been helpful but it does not go far enough in establishing VIA's right to operate on the lines of the privately owned freight railways.

VIA, like the whole transportation system, will never function effectively as long as our national transportation system is based on legislation that does not allow for the protection of the public interest. Nor does it respect the fair rights of our for-profit freight railways. These two are not mutually exclusive. A strong and healthy transportation system is vital to improve Canada's global competitiveness, security, social well-being and environmental performance. We won't have that as long as we allow our multi-modal system to function in what amounts to a policy vacuum. That is what we have today under the CTA, and no amount of tinkering is going to correct it.

As other nations with which we compete have demonstrated, the federal government needs to become much more engaged, innovative and supportive in addressing the numerous challenges that stand in the way of delivering safe, modern, adequate and sustainable transportation services across our land. To be truly effective, the CTA needs to be revised on the basis of a comprehensive national transportation policy that takes into account the needs of all stakeholders, public and private. This is a matter well beyond any revision of the act, solely presented here before the hon. members. It must originate at the highest levels of our federal government and it must include a serious dialogue.

The current bill was presented to a parliamentary committee in two sittings. This very important piece of legislation was rammed through much too quickly. Many stakeholders did not have the opportunity to speak. We need to take all of the steps necessary. This bill is simply a first step.

Let us remember that when the minister recently, with her American colleagues, announced new regulations regarding the transportation of dangerous goods, the minister and her American counterpart said that from now on, in urban areas of 100,000 people or more, the speed limit for dangerous goods will be 40 miles an hour. The problem with that is that it is not the density of the population nearby that is the real problem; it is the quality of the railway itself.

There are many areas of this country where we have allowed companies not to complete sufficient rail maintenance. They have deferred it to future periods, and when the rail cars run on these inadequately maintained rails, there is risk of accident. The government then has to act in a crisis situation, such as it did in northern New Brunswick, where it had to negotiate under the gun with a rail company to ensure that the railway was going to be properly maintained over the next 15 years.

This should not be managed in a crisis mode. We know the problem is the quality of the rail itself. We know that private companies are self-monitoring. Without proper supervision by the government and its agencies, this problem is simply going to be compounded. Again, the amount of rail transportation of our oil products is skyrocketing, and the danger to the public goes up at the same rate.

We have to take our responsibilities seriously. The government has taken only a very small step in that direction with this legislation. We need to do an awful lot more to prove to the Canadian public that we are taking our job seriously.

[Jeff Watson, Conservative, Essex, ON]

Thank you very much to our witnesses for appearing.

My apologies right off the top. I was speaking in the House, so I missed your opening presentations. I was speaking to Bill C-52, our safe and accountable rail act, which was important. If any of my questions relate to something that I may have missed, you'll understand why.

First of all, Mr. McBride, I think earlier you suggested that the so-called rise of public-private partnerships came out of problems identified with traditional procurement. I've been listening closely today, and I think you mentioned only three of the four. I wasn't sure what the last one was. You said the first one was when you pay but you don't necessarily get what you want. The second was that creditor oversight is a strong discipline on the contractor. The third was the tendency to ignore the life cycle of an asset when doing design and build only. What was the fourth?

[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.

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

Mr. Speaker, I am pleased to rise today to speak to Bill C-52 at third reading.

As the NDP transport critic and vice-chair of the Standing Committee on Transport, Infrastructure and Communities, I found it interesting to study this bill.

I agree with the Liberal member who said in his question that there was not enough consultation and perhaps not enough study. Indeed, the study period was relatively short for such an important bill.

Let me be clear: the NDP will support the bill. We believe that the polluter pays principle is important. Clearly, it was only after the Lac-Mégantic tragedy that the government finally decided to do something about rail safety. Unfortunately, it took a tragedy to finally spur the government to action, a tragedy that cost 47 people their lives, cost millions of dollars in damages and ruined many other lives.

It is sad that previous Liberals governments and the current government have been ignoring rail safety, the very principle of our rail system, ever since the Liberals privatized it. The problems only started when they privatized everything. They also left all the regulations, even inspections, up to the rail companies themselves. As we often say, the system that was implemented is based on self-regulation, and all the companies do their own audits and inspections. That is very clear.

This bill does have some very important points. As I have said from the beginning, we support the polluter pays principle. Obviously, it is not up to the public to pay for damages caused by the industry.

In the case of the Lac-Mégantic accident, MMA had only $25 million in liability insurance. When I asked the minister and Transport Canada officials about the cost, I was not able to get any firm figures, since the numbers vary. Apparently, $400 million has already been spent to repair damages. However, it could cost billions of dollars in the end. That is a huge amount of money.

Unfortunately, governments must pay because MMA filed for bankruptcy. The federal and the Quebec government had to spend money to repair the damage. When I refer to damage, I am also referring to the damage caused by the Conservative government for allowing self-regulation at a time when the rail transportation of crude oil has increased exponentially.

As for the budget, we see that there are gaps, and that has been raised many times. The government says it is taking action. However, there are budget cuts.

Let us look at just the office responsible for rail safety, the people who specifically look after implementing the system and ensuring that it is safe. We see that between 2010 and 2015, there were cuts of about 20%. Those cuts affected the people who look after rail safety and ensure the safety of Canadians. That shows that the government does not have its priorities straight.

We agree that there must be minimum liability levels. Once again, we deplore the fact that this was not the case earlier and that a company like MMA, with respect to Lac-Mégantic, only had $25 million in insurance coverage.

This bill is certainly a step in the right direction. It contains various categories for many rail companies, which will have to have minimum insurance levels based on the volume of dangerous goods shipped via its rail lines.

However, I asked the parliamentary secretary a question about the calculations. We wanted to know whether the amount established was sufficient. I gave the example of class 1 railways, like CN and CP, that have minimum insurance coverage of $1 billion. We learned from the news or other studies that these companies probably already had insurance coverage in excess of $1 billion.

Ultimately, the government reduced the amount of insurance coverage companies are required to have, when the purpose of the bill is to increase it.

Unfortunately, as the parliamentary secretary mentioned, when we asked questions in committee we were told that the information belonged to the railway companies. However, the government has the power to get that information. The Conservatives are the ones who did the study regarding the insurance limit, and once again, they are not being transparent. That is shameful.

The parliamentary secretary spoke about the additional powers granted to inspectors and to the minister in cases where tracks are not safe. That makes me think about what happened in Gogama, in northern Ontario, where other derailments occurred. They happened despite the events at Lac-Mégantic and the public outcry in regard to the dangers associated with the transportation of dangerous goods by rail. I think that, like me, any Canadians who saw the pictures were shocked to find out that this type of derailment is still happening. Cars carrying crude oil are still exploding.

The parliamentary secretary told us that the government introduced new standards for the DOT-111 cars, which will eventually be replaced. However, it will be another 10 years before they are all replaced. These cars will still be on our tracks for another 10 years, even though the Transportation Safety Board described them as dangerous and unsafe. The TSB said that these cars were essentially the same as the old DOT-111 cars that exploded in Lac-Mégantic.

This concern has to be taken into consideration. I am asking the government to set a deadline and show more leadership when it comes to protecting the public.

There is also the issue of inspectors and self-inspection. The system that was put in place and that has the support of the Liberals allows companies to do their own inspections before potentially, maybe, submitting them to Transport Canada for inspection.

The Auditor General issued a scathing report on rail safety. He said that the inspectors overseeing the safety of the system did not fulfill their obligations and that all they do is look at the rail company's plans without ensuring that they effectively protect the environment and the public. That is a problem.

Another problem with inspectors has existed for a long time. Let us take the example of the derailments in Gogama, which caused explosions. According to the TSB's preliminary report, the condition of the rails was definitely a factor. When we talk about inspectors, the government responds that the companies do the inspections themselves and that it expects companies to properly inspect their rails. However, it is careless to rely on self-inspection.

Before the events in Lac-Mégantic in 2013, there were 116 rail inspectors at Transport Canada. After the events in Lac-Mégantic, there were 117. The government added just one inspector. It seems that others were hired, but they are not officially assigned to rail safety.

What is certain is that all of the workers and unions in this sector agree that there is a problem with inspection. Even the rail companies, as well as the Railway Association of Canada, report the same problem. It is clear that there is a problem.

The government, meanwhile, is addressing this problem by making budget cuts. It makes no sense.

How can the government say that it cares about the safety of Canadians and then turn around and cut the budgets of those who conduct inspections and make sure that laws are in place and that the companies are complying with them, as well as ensuring that the rail lines themselves are safe? It is shameful.

As for the polluter pays principle, I applaud the fact that the bill provides for a compensation fund. Unfortunately, as my NDP colleague mentioned in his question, this fund applies only to accidents or disasters involving crude oil.

One question was raised by the Federation of Canadian Municipalities, the Canadian Association of Fire Chiefs and a number of other stakeholders who appeared before the committee. Why did the government not include other dangerous goods? The Conservatives were asked that question today. They replied that they were studying the issue and they would see. Do we need to have another accident like the one in Lac-Mégantic for them to realize that something has to be done? It is important to raise this issue. This is not about demagoguery. The government did indeed act after the Lac-Mégantic tragedy. The government has even said that this bill resulted from that tragedy. Why not also include a compensation fund for other dangerous materials, since that is a concern and the municipalities and first responders are asking for it?

Let us come back to firefighters. A question about training was raised by the Canadian Association of Fire Chiefs, a question that we had also brought forward. Yes, the aim is to prevent accidents. However, prevention depends on inspection. As we know, the government is failing in that regard. What must be done to prevent an accident, or at least to respond quickly when one does occur? How can we ensure that first responders are properly trained and that they have the resources they need?

Unfortunately, this bill is silent on that issue. This is what firefighters, among others, proposed: since there is already a fund in place—once again, I am referring to the fund established from fees paid by oil companies—why not use it to pay for training to ensure that first responders, firefighters and those who respond to emergencies receive the training they need?

This problem has been flagged and it is a serious problem, especially because we are shipping more and more dangerous goods by rail. Furthermore, based on the Lac-Mégantic accident and what is happening in the United States, for example, we can say goods are increasingly dangerous and there is less and less information about these goods. That was clearly the case in Lac-Mégantic. The dangerous nature of the goods being moved was underestimated.

Legislators or those who implement the regulations are not well informed. What about the people who respond to emergencies? What we are asking for is simple. We are asking for a fund to cover training for first responders such as firefighters and paramedics. How do we intervene in this situation? The Lac-Mégantic accident opened our eyes.

The bill could have covered this, but unfortunately it does not. There is still work to be done. As I said, the NDP will support the bill and hopes that it will pass quickly. However, there is still a lot of work to be done.

In committee, an amendment did not pass. It dealt with fatigue, or what is known as fatigue management.

The bill actually repeals a clause, repeals the definition of fatigue management, and we do not understand why. Just to be clear, what the definition basically said is that we have to base fatigue management on science, and what we are doing here is actually repealing that definition.

I asked the minister and officials, and the answer was not satisfactory. I think we want to make sure that we have a base, and our base was the definition of fatigue management, fatigue science. It was scientifically based, but unfortunately, that was deleted.

We will have to take a close look at the regulations. Unfortunately, from our perspective, the approach was going in the wrong direction.

We did not anticipate one of the other consequences that witnesses told us about in committee, namely the fact that some companies do not do the same kind of transportation for dangerous goods. Some companies transfer oil and other goods in certain places. These companies, therefore, do not transport goods the same way and do not have the same problems. This concern was raised, and I asked questions about it. I was told that these cases can be addressed through regulations. I asked the question clearly and openly, and now we will have to follow up. We have to figure out how to treat companies that do not pose the same risk but that transport goods that are, by definition, dangerous. We have heard that the costs can be quite high for these small companies. We are talking about smaller companies that might not have the means to pay for this insurance. As legislators, we need to trust Transport Canada and its officials to take that into consideration. We will keep a close eye on this issue.

There is something else we are disappointed in. It was already mentioned, and that is the fact that the environment has been put on the back burner. Certain priorities have been set out in the bill. We agree that municipalities or individuals who are victims of accidents should be compensated and helped at any cost. There is no doubt that they must compensated. However, the wording of the bill puts long-term environmental impacts in the back seat. The request cannot necessarily come from an individual who says he can no longer use a certain natural resource for the long term, a river for example, and that his rights have been violated in the long term. According to the current wording of the bill, only the government can go after the railways and say that they caused damage that undermines the long-term use of the environment. However, we know that in fact the government does not do that. It will not go after a company for damages. We are a bit surprised to see that this aspect does not have the same priority in the bill. We would have preferred it to be considered on an equal footing.

I would like to come back to the question that we asked ourselves: why did the government not go further in terms of coverage for dangerous materials? The reason I am mentioning this again is that the committee was almost unanimous in this regard. Firefighters, the Federation of Canadian Municipalities and the oil industry all asked us why the bill only went after oil companies or crude oil and why it did not provide for a fund that would cover other dangerous goods, since we know that other dangerous materials are being transported on our tracks. I asked the government that question. I was told that the matter was being looked into. I would have liked a more concrete answer.

However, we did obtain a more concrete answer in regard to what the Parliamentary Secretary to the Minister of Transport said about the cars. He said that there will be new standards for the cars. However, the United States announced that a braking system will be implemented and gave us a timeline.

The government established a deadline of 10 years for oil cars, but as we said, we would like that deadline to be shorter. The United States said that the braking system for cars was a safer system. Unfortunately, the government did not give a deadline in that regard in its announcement.

The government told us that it was looking into the issue, but it has not even set a deadline yet.

We need to learn from our mistakes. Twenty years ago, the Transportation Safety Board of Canada said that the DOT-111 cars were dangerous. The Liberal government did not do anything about it. The federal government did not do anything either and the Lac-Mégantic tragedy occurred. We need to think about that. The government needs to act quickly, show some leadership and protect the public.

[Jeff Watson, Conservative, Essex, ON]

Mr. Speaker, I only wish there were more facts involved in that particular intervention.

As the member will know if he studies the estimates, investments in front-line safety in every single mode of transport are up this year. That is in marine, rail, air safety, every single mode.

The department has suggested what resources it needs. Obviously, that is what the main estimates are for. There are also supplementary estimates should it become clear that the department needs additional resources to carry out its mandate.

Make no mistake that Bill C-52 is the product of extensive consultations, particularly when it comes to the liability and compensation regimes. We have heard from the railway companies that they would rather not have strict liability insurance. They do not want the strict measures that are in this particular bill. I would expect that from the railway companies. That is fair enough; they can take that position. The government, though, after that consultation and after listening to their position has determined that they will face tougher insurance levels, that there will be strict liability and therefore we will not have to prove their claims in court up to the maximum level of their liability.

Shippers also will share in that particular liability and compensation regime. They did not want to do that either, but we know that is the right way to go. Canadians support us in enhancing our system.

[Jeff Watson, Conservative, Essex, ON]

Mr. Speaker, I think all of us in the House would agree on this. The practice of using slow speed by railway companies is no substitute for proper track maintenance. We expect rail companies to ensure that their property is well maintained in that way.

When it comes to the regime that has been instituted with respect to liability and compensation contained in Bill C-52, we did extensive consultations. One of the things that we are grappling with as a recent phenomenon has been the tremendous growth in the transport of crude oil by rail. By crude, I mean the many different forms, including the highly-flammable Bakken formation oil as well. That was the particular dangerous good involved in the tragic Lac-Mégantic derailment. We wanted to ensure we had an adequate regime for that.

The member will know that the bill does contain a provision in it for the regime to be expanded at any point in the future to deal with other dangerous goods, should that be determined necessary.

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

Mr. Speaker, I am pleased to rise today to commence third reading of Bill C-52, the safe and accountable rail act, which seeks to amend both the Canada Transportation Act and the Railway Safety Act.

As parliamentary secretary to the Minister of Transport, I have the great privilege to be a member of the Standing Committee on Transport, Infrastructure and Communities and to have been able to take part in the study of this extremely important piece of legislation.

Before I speak to the important points raised during committee stage, I would like to take a few minutes to remind all members of this place of the important components of this legislation, beginning with the important amendments to the Canada Transportation Act.

As stated by the Minister of Transport at committee, the tragic Lac-Mégantic derailment has shown us that our liability and compensation regime for rail must be strengthened. The Montreal, Maine and Atlantic Railway only carried $25 million in third-party liability insurance, which we now know is not nearly enough to cover the incredible magnitude of the resulting damage and loss of both life and property that night.

With this bill, railways would be required to hold a mandatory level of insurance based on the type and volume of dangerous goods they carry. These levels would range from $25 million for short lines carrying limited or no dangerous goods to $1 billion for railways carrying significant amounts of dangerous goods, namely CN and CP.

These mandatory insurance requirements have been set based on analysis of historical accident costs, taking into account the severity of past accidents involving certain goods. These requirements would make certain that a railway's insurance directly reflects the risk associated with its operations.

These insurance levels were determined to be adequate to cover the cost of the vast majority of potential accidents and, while a scenario of the magnitude of Lac-Mégantic is an extremely rare occurrence, we want to be certain that all costs in such a case would be recovered.

That is why a supplementary shipper-financed fund would be created to provide compensation above the railway's insurance for accidents involving crude oil and any other goods added through regulation.

In the event of a rail accident involving crude oil, railways would be automatically liable, without the need to prove fault or negligence, up to their insurance level, and that would happen immediately.

The bill provides that they would be liable for all actual damages, which includes damages to people, property, and the environment. There would be certain defences to this strict liability. A railway, for example, would not be held liable if the accident were a result of war, hostilities, or civil insurrection such as a terrorist act, as these occurrences are outside of the railway's control. If accident costs reached beyond the railway's mandatory insurance level, the supplementary fund would cover the remaining damages.

For the supplementary fund, we have included a broad definition of crude oil in recognition of the serious damage that all crude can cause if released. Even a less-volatile crude can have a grave impact on the environment and result in very high remediation costs.

The fund would be financed through a levy on shippers of $1.65 per tonne of crude oil transported by federally regulated railways, indexed to inflation. The aim is to capitalize the fund to $250 million, which is an amount that would provide substantial additional coverage for crude oil accidents above the insurance levels. Based on a reasonable projection of oil-by-rail traffic growth in the coming years, we have determined that, with the $1.65 per tonne levy, we would reach that target in approximately five years.

That said, however, it is important to emphasize at this point that the $250 million capitalization is a target and not a cap. The bill would allow the Minister of Transport to discontinue or reimpose the levy as necessary.

This means that the levy could continue longer than five years should oil-by-rail traffic grow at lower than expected rates. It also means that the fund could be capitalized to a different amount should that be considered appropriate.

Just to be clear. The fund will cover all costs above the railway's insurance and will not be capped. In the unlikely event that damages from a crude oil accident surpass both the railway's insurance level and the amount in the supplementary fund, the government's consolidated revenue fund would back up the compensation fund and would be repaid through the levy.

Bill C-52 also propose amendments to the Railway Safety Act, which would seek to further strengthen the oversight of Canada's rail safety regime in certain areas. These include the following: first, a new power for the Minister of Transport to order a company to take corrective measures should that company's implementation of its safety management system risk compromise safe railway operations; second, a new authority to regulate the sharing of information, records and documents from one party to another, other than the department, for example, from a railway company to a municipality; third, to broaden railway safety inspectors' powers to intervene in a more effective way with any person or entity, including companies, road authorities, and municipalities, to mitigate threats to safety; fourth, a broader power for the Minister of Transport to require a railway company, road authority, or municipality, to stop any activity that might constitute a threat to safe railway operations, to follow any procedures, or taking any corrective measures specified; and, finally, a cost reimbursement scheme for provinces and municipalities that respond to fires determined to be caused by a railway company's operation.

Part of Transport Canada's prevention strategy has been to ensure the department has an effective oversight regime. This means both ensuring that industry is in compliance with the various rules and regulations that govern them and also responding to changes in the risk environment.

Transport Canada continuously examines and monitors its resource levels to adjust and reallocate, as needed, to address emerging issues, trends and higher-risk issues.

Transport Canada has further enhanced railway safety in Canada by establishing the following new or amended regulations: grade crossings regulations; railway operating certificate regulations; railway safety management system regulations, 2015; transportation information regulations; and railway safety administrative monetary penalties regulations.

Allow me to refer back to the review of the bill at the committee stage.

The review of Bill C-52 provided the opportunity for the committee members to examine, in detail, the text of the bill, its purpose and objectives. Particular issues were raised and the hon. Minister of Transport provided some important clarifications, which bear repeating in the House today.

First, the minister assured committee members that no additional financial resources would be required for the implementation of these new proposed authorities and requirements. The department's operational budget was assessed and represents the level of resources adequate to carry out all of the projects and the priorities. Nonetheless, in the event additional funding is requirement, the government always has the ability to reallocate or request funding through the supplementary estimates.

Second, with regard to the supplementary shipper-financed fund, the minister made a number of important clarifications. The fund has been proposed, through Bill C-52, to provide substantial additional coverage for incidents involving crude oil. The fund would cover any damages that surpassed the railway's required minimum insurance coverage. To finance the fund, the government would introduce a levy of $1.65 per tonne on shipments of crude oil transported by a federally regulated railway. The formula used to establish the levy would be based on a mid-range growth estimate of projected oil by rail. The supplementary shipper fund cannot apply retroactively for incidents that occur prior to the coming into force of the legislation.

As previously mentioned, the proposed supplementary fund would not be capped or cut off. Therefore, claims against the fund would not be limited. The fund would be capitalized to $250 million. However, Bill C-52 would allow the Minister of Transport to suspend or reinstate the levy as would be necessary. This would ensure that the fund would be at the appropriate level to pay for damages in excess of railway insurance levels without holding excess capital unnecessarily.

The government modelled this compensation fund on the ship-source oil pollution fund in the marine mode. Levies for that fund were suspended once it had been capitalized. The fund has grown through interest over the past 40 years without the need for further levies. For the time being, the supplementary compensation fund will cover incidents involving crude oil.

However, the bill provides regulation-making authority to include other types of dangerous goods in the future. Moreover, Bill C-52 provides for a loan from the consolidated revenue fund if the resources in the fund have been exhausted. This loan would be subject to terms and conditions established by the Minister of Finance and would be repaid through the shipper levy.

Furthermore, this bill includes the authority to put in place a special levy on railways to help repay the CRF loan to ensure that liability continues to be shared appropriately in the event of a catastrophic accident. The funds would be supplementary to the newly proposed minimum liability insurance coverage for railway companies transporting dangerous goods.

The strengthened liability and compensation regime in the bill is in line with the modernized liability and compensation regime put forward for pipelines in Bill C-46, as well as the regime for offshore oil and gas in Bill C-22, which received royal assent on February 26. This includes a provision that ensures that the strengthened regime for rail would not preclude any other regimes, including future regimes with higher limits of liability from being applied to a railway accident.

It is also important to highlight the clarification made by the Minister of Transport at committee regarding subclause 152.7(1) of the bill. Through this subclause, only a railway company that is involved in a crude oil accident through physical operation of a railway, for example, moving a train or responsibility for tracks or cars, would be held liable without regard to fault or negligence.

In the Canada Transportation Act the terms “operate” and “railway” are defined in section 87 of the act. They are defined in a physical sense, not a commercial sense. Therefore, a carrier that quotes a through-rate or interswitches with a railway company that later has an accident would not be considered involved in an accident. With this strengthened liability and compensation regime for rail, the minister clearly stated in committee that she was confident, and “we do have the ability to ensure that the polluter pays and that taxpayers don't have to incur costs”.

The minister confirmed to committee members that where a crude oil accident was the result of an act of terrorism, the railway company would not be held automatically liable under our proposed legislation.

Finally, the committee discussed the cumbersome definition of “fatigue science” presently found in the Railway Safety Act. As stated by the minister, the definition included in the act is simply a definition of a term and does not add any implementation requirements toward the railway companies. By having the term predefined, it restricted the department's ability to enforce. Amendments to the act seek to remove the definition allowing the application instead of the new Railway Safety Management System Regulations, 2015, to fulfill its purpose of ensuring a company's safety management system includes mechanisms for applying the principles of fatigue science when scheduling the work of certain employees.

Following the Lac-Mégantic derailment, the Speech from the Throne in 2013 and the Auditor General of Canada's fall 2013 report, our government has worked to bring forward these amendments to strengthen railway safety in Canada and increase the industry's accountability. Within this process, consultation with our stakeholders, particularly on liability and compensation, was essential to achieve the results we see today in this bill. We are grateful for their collaboration, support and commitment to improve the safety and security of the railway system.

I urge all members to vote in favour of Bill C-52 so it can be referred to the other place as soon as possible.

The House proceeded to the consideration of Bill C-52, An Act to amend the Canada Transportation Act and the Railway Safety Act, as reported with amendment from the committee.

Business of the House

[Peter Van Loan, Conservative, Leader of the Government in the House of Commons]

Mr. Speaker, I agree with the hon. member so far as his first statement is concerned, that this has been a good week for Canadians.

It has been, because today the House of Commons voted on a ways and means motion and introduced a budget bill that would reduce the small business tax rate from 9% to 7%, although the NDP voted against that this morning, and it brought in a family tax cut to bring fairness to families, except the NDP and the Liberals voted against that.

We also introduced, of course, expanded flexibility for seniors on their RRIFs and increased room for all Canadians on tax-free savings accounts. Unfortunately, the Liberals and NDP voted against it, but that does not matter, because we delivered, and Canadians will get to enjoy the benefits of that because of the vote we had today in this House.

It has indeed been a good week for all Canadians, certainly those who care about and want lower taxes.

After this statement, we will debate Bill C-52, the Safe and Accountable Rail Act, at report stage and third reading. This bill strengthens Canada’s rail safety system, and I understand that all parties are interested in seeing this bill move forward quickly.

As I announced in the House yesterday, tomorrow shall be the third allotted day. Monday will be the fourth allotted day. Additionally, I am designating Monday as the day, pursuant to Standing Order 66(2), when we will conclude the debate on the eighth report of the Standing Committee on Finance.

On Tuesday morning, we will continue the debate on Bill C-52.

After question period today, we will consider Bill S-4, the digital privacy act, at report stage and second reading. This legislation would provide new protections for Canadians when they surf the web and shop online. These changes to protect Canadians' personal information are key elements of Digital Canada 150, our government's plan for Canada's digital future.

Starting on Wednesday, and for the remainder of next week, we will debate Bill C-59, economic action plan 2015 act, No. 1, which was introduced earlier today, as I already referenced.

This critical economic legislation would reduce taxes, including many of those I already spoke about, and deliver benefits to every Canadian family through the family tax cut; our enhancements to the universal child care benefit; encouraging savings with enhanced tax-free savings accounts; lowering the tax rates for small businesses; introducing the home accessibility tax credit, a very important improvement for seniors to help them stay in their homes for longer; and expanding compassionate leave provisions; and the list goes on and on.

As the hon. member said, it has been a very good week for Canadians, even though he opposes all of those measures.

Regrettably, the Liberal leader, earlier this week, announced that he would raise taxes for middle-class Canadians by replacing that very same family tax cut with a family tax hike, and despite this Liberal tax, the Liberal leader is discovering that budgets do not balance themselves. He has a $2 billion hole in his plan. Canada cannot afford that kind of reckless, high-tax, deficit-building approach.

In voting against our tax cuts for families set out in the ways and means motion the House adopted—

Transport, Infrastructure and Communities

[Larry Miller, Conservative, Bruce—Grey—Owen Sound, ON]

Mr. Speaker, I have the honour to present, in both official languages, the eighth report of the Standing Committee on Transport, Infrastructure and Communities in relation to Bill C-52, An Act to amend the Canada Transportation Act and the Railway Safety Act. The committee has studied the bill and has decided to report the bill to the House with amendments.

[David McGuinty, Liberal, Ottawa South, ON]

The railway insurers came here. They testified that the vagueness of the language in C-52 was problematic for them. What I'm saying is that this is different language from what I've seen elsewhere. It's very broad. I'm wondering, too, about the risk here of insurance withdrawal, as well as any kind of protracted and unnecessary litigation. From 2006 to last year, this federal government has outsourced $460 million on outside legal fees on top of having 2,550 full-time lawyers at Justice Canada. Are you not worried at all about this or given any thought to the possibility that this is going to create a significant amount of litigation?

If there is a sizable spill and sizable funds are spent to clean it up and there is sizable litigation on who was responsible for it, won't there a problem with the clarity of the language between “that is involved in a railway accident” and the party who is in “charge, the management or control” at the time of the accident or release?

Business of the House

[Peter Van Loan, Conservative, Leader of the Government in the House of Commons]

Mr. Speaker, I admire the quality of optimism, and I know that hope springs eternal in my colleague's breast.

After this statement, we will complete the motion, pursuant to Standing Order 78, in relation to Bill C-51. After that, we will consider Bill C-46, the pipeline safety act at report stage, and then proceed to debate it at third reading. This bill would ensure that Canada's pipeline safety regime remains world class. That debate will continue next week, on Wednesday.

Tomorrow we will wrap up the second reading debate on Bill C-50, the citizen voting act. The House will have an opportunity later today, I hope, to deliberate on how that will proceed.

Monday, we will conclude the report stage debate of Bill C-51, the Anti-terrorism Act, 2015. Our Conservative government takes all threats to the security of Canada and Canadians very seriously.

That is why we are moving forward with Bill C-51 and the crucial provisions contained in it to protect our national security. Third reading of this important bill will take place Tuesday.

Thursday, before question period, we will consider Bill S-3, the port state measures agreement implementation act at report stage, and hopefully, third reading. This bill passed at second reading with widespread support, and I am optimistic that third reading will be no different.

I understand that the Standing Committee on Transport, Infrastructure and Communities is meeting this afternoon to give clause-by-clause consideration to Bill C-52, the Safe and Accountable Rail Act. This bill would further strengthen Canada's rail safety regime and ensure that adequate compensation is available. If the committee finishes that work today, we will consider the bill at report stage and third reading after question period next Thursday.

At second reading, New Democrats spoke about the importance of passing this bill urgently and therefore I hope that they will see to letting this legislation pass next week, so that the Senate will have plenty of time to complete its consideration of the bill before the summer adjournment.

[Nina Frid, Director General, Dispute Resolution Branch, Canadian Transportation Agency]

Yes. Thank you very much, Mr. Chair.

Mr. Chair, honourable members of the committee, thank you for inviting us to appear before you on the subject of Bill C-52, An Act to amend the Canada Transportation Act and the Railway Safety Act.

I am Nina Frid, from the Canadian Transportation Agency, where I am responsible for the Dispute Resolution Branch. My colleague, Liz Barker, is the agency's general council.

With your permission, I would like to briefly outline the role of the agency.

The agency is a federal administrative tribunal and economic regulator with jurisdiction over a broad range of air, rail and marine matters. As well, the agency is responsible for removing undue obstacles to the mobility of persons with disabilities within the federal transportation network.

The Canada Transportation Act is the agency's enabling statute. It outlines the extent of the agency's authority and jurisdiction, as well as the agency's role in administering the act. As a tribunal, the agency resolves a range of disputes, by facilitation, mediation, arbitration, and adjudication. With respect to our role in rail transportation, the agency mandate applies to railway companies under federal jurisdiction. There are currently 30 active railways under federal jurisdiction, including class ones and short lines.

Pursuant to the Canada Transportation Act, the agency resolves disputes pertaining to level of service; road and utility crossings; noise and vibration; interswitching; and disputes between a public passenger service provider and a railway company. The agency issues certificates of fitness to railway companies, approves railway line construction, establishes interswitching rights, determines the maximum revenue entitlement for the movement of western grain, and determines the net salvage value of railway lines under the transfer and discontinuance provisions.

When we appeared before your committee last year as part of your study on rail safety, we spoke about the agency's consultation on third-party liability insurance. As you may recall, in the summer of 2013, we announced our intent to review the approach to determining the adequacy of railway third-party liability insurance, as our immediate response to the tragic derailment in Lac-Mégantic.

At that time, a year ago, we informed the committee that our consultation was an information-gathering exercise designed to serve as a basis for the work that our colleagues at Transport Canada conducted as part of their broad consultation on the policy aspects of liability and compensation. I'd like to tell you that the policy is not within the legislative authority of the agency under the Canada Transportation Act.

As part of our consultations, the agency explored a number of issues that helped provide information, and, in some instances, inform the work that happened to develop the bill that is before you. Specifically, we consulted on whether there should be additional or different third-party liability insurance requirements related to the transportation of certain commodities like dangerous goods, whether minimum coverage requirements for liability insurance should be established, and whether administrative monetary penalties or other mechanisms would be appropriate for non-compliance.

The agency received comments from over 25 organizations, including a wide range of stakeholders: railways, both class ones and short lines; the insurance industry; shippers; and municipal associations. I would like to thank our stakeholders for their thoughtful comments, including the Federation of Canadian Municipalities; the Canadian Association of Petroleum Producers; the Freight Management Association of Canada—and many others you saw today who provided their comments to us—as well as Marsh Canada, which advised us; and the Railway Association of Canada, which provided comments on behalf of the rail industry.

We heard from our stakeholders that they support the introduction of minimum requirements of insurance. They support the different requirements for various commodities, especially dangerous goods, and the use of the administrative monetary penalties as an effective compliance tool in our compliance toolbox.

Bill C-52, the safe and accountable rail act, clarifies a number of sections of the Canada Transportation Act and updates the aspects that were covered by the agency regulations for third-party liability insurance coverage, and introduces new requirements for compliance and enforcement. This bill, in our view, will strengthen the liability and compensation regime for federally regulated railways 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.

Under the new regime introduced in this bill, the agency will assign legislated minimum levels of insurance to railways based on the type and volume of commodities they carry, including dangerous goods. Minimum insurance levels would vary by type and quantity of crude oil or dangerous goods, as specified in schedule IV of the bill.

To address concerns that some short lines may have difficulty absorbing the costs of minimum insurance requirements, we would say that they will be phased in over time. Initial insurance requirements corresponding to half of the full amount specified in schedule IV will come into effect in 12 months, and then the full amount a year after, while class ones will be requiring $1 billion.

To ensure that liability is shared, as designed in the new regime, the bill also makes changes to section 137 of the Canada Transportation Act to clarify that railways will not be able to impose their third-party liability on shippers unless it is done by means of a contract signed by both parties. We understood from our consultations that this is a very important point for the shippers.

Bill C-52 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, the agency will be empowered to make inquiries on our own motion to determine compliance and as before, or as currently, the agency will be able to suspend or cancel the certificate of fitness of a railway that fails to comply with insurance requirements.

As well, the bill introduces administrative monetary penalties up to a maximum of $100,000 for contravention of the requirements. Like our stakeholders we believe that it is an effective mechanism to ensure compliance without having to cancel or suspend railway operations, because that is what the shippers want and it supports the economic activity.

In terms of the measures introduced under the Railway Safety Act, this is a completely new mandate for the agency. According to the proposed amendments, a province or a municipality that believes the fire was a result of railway operations can apply to the agency for reimbursement of costs incurred in responding to the fire. This amendment gives the agency new authority, and the agency will work very hard to develop the process and procedure and the steps and guidance for the parties so they can take advantage of these provisions, and do it in a transparent and predictable way.

These applications will be adjudicated by the agency. It will be a two-step process, where, in the first step, the agency would have to determine whether the fire was caused by a railway operation. Once that is established, the agency will review the claim of the cost that's presented and establish what costs are properly assigned to the railway, and then order the railway to reimburse the municipality or province.

This certainly will be a bit of challenge for us since this is a new mandate. As we have done with the previous Bill C-52, and after Bill C-30, we'll do our best to make sure that these measures are available and clear.

In conclusion, I would like to thank you very much for the opportunity.

My colleague and I would be pleased to answer your questions.

[Robert Ballantyne, President, Freight Management Association of Canada]

Thank you very much, Mr. Chairman.

I appeared before this committee just about a year ago when it was talking about safety management systems in particular, and the safe and accountable rail act, of course, is a good follow-up to the work that's gone on over the past year.

The Freight Management Association has been around for 99 years representing the views of shippers. We advocate for our member companies regarding air freight, trucking, marine, and rail. Just as background, I am a member of the Transport Canada advisory committee on rail safety, representing the shipper community.

Before addressing Bill C-52 specifically, I'd like to offer a few general comments about transportation safety, and let me preface it by saying I don't work in the rail industry. We have a lot of conflict with the rail industry between the shipper community.

With that I would say the following: first, by any reasonable standard modern transportation in all modes in the western world is safe; second, as long as there is movement controlled by human beings there will be accidents; third, safety can never be taken for granted and vigilance can never be let down; and fourth, there is always room for improvement.

The Canadian transportation safety regime—that is, policy, laws, regulation, enforcement, accident investigation and practices—focuses on prevention of accidents, and this is as it should be.

The recent Lac-Mégantic derailment was a tragedy and the work by all stakeholders in both Canada and the U.S. to take actions to minimize the possibility of another such accident has been intense and thorough. The Transportation Safety Board has made its recommendations and the government has taken action in response. This includes, of course, Bill C-52.

I should point out that such accidents are extremely rare and that this needs to be considered in any actions the government takes. While there are derailments periodically—as there have been, and always will be—as the previous speaker mentioned, the last accident that came anywhere close to Lac-Mégantic in terms of its impact was the derailment of propane tank cars and other dangerous goods cars, including chlorine, on the Canadian Pacific Railway, in Mississauga on November 10, 1979. That's nearly 36 years ago. In that accident, no one was killed or injured. There was limited property damage, and about 250,000 people had to be evacuated for several days. Transport Canada and the railways learned a lot of lessons from Mississauga, and the result is that there has been no accident as severe as Mississauga on either of the two class 1 railways since that time.

The Transportation Safety Board is the scorekeeper with regard to accidents in aviation, marine, rail, and pipeline, and the statistical long-term trend in all modes is in the right direction. There are perturbations from time to time and there has been a little bit of an uptick in some of the modes in the last couple of years.

So looking at Bill C-52, we did provide some comments to the Transport Canada discussion paper that was issued last year, and there are a number of points we made to them, and I'll make them again today.

First, of basic and fundamental importance to the Canadian economy are the common carrier or level of service provisions, that is, sections 113 to 116 of the act. With only two class 1 railways in Canada, with many commodities that have no other practical transportation option, including a lot of dangerous commodities, it is imperative that this basic provision of Canadian law be maintained. Bill C-52 does maintain the level of service provisions and adds proposed subsection 113(2.1), which provides a mechanism for the railways to collect the levy for shippers of crude oil.

Second, and this is from the government discussion paper, the Transport Canada discussion paper: “A cornerstone of the Government’s approach to liability and compensation regimes in other modes and sectors is the “polluter-pays” principle...”.

FMA agrees with the government that this is a fundamental cornerstone of the third-party liability and compensation regime and is in line with long-standing legal principles that have been confirmed by the courts over time, and Bill C-52 appears to follow that principle.

Third, given the rarity of such major accidents and the ability of the class 1 railways to manage the aftermath of such accidents, and given the levels of third-party liability insurance, we understand that while the bill is only calling for a maximum of $1 billion, my understanding—albeit I can't confirm this—is it's been reported that CN and CP have each been carrying about $1.5-billion worth of liability insurance.

It's imperative that the bill should focus on the short-line railways, especially those that carry significant quantities of dangerous goods, especially inflammable goods.

Reinforcing this point, the safety record of the class1 railways, their knowledge of handling dangerous goods, and their safety procedures and training activities make it less likely they will have an accident of Lac-Mégantic proportions. The thing to remember is that Lac-Mégantic was a runaway train. All the other derailments that have been talked about are ones where the train has been under power.

Fourth, shippers, especially those that produce and ship dangerous goods, carry appropriate amounts of insurance and are prepared to live by the polluter pays principle. If the shipper is negligent, the courts will assess the degree of negligence and assess damages accordingly.

Fifth, as noted in a Transport Canada discussion paper, issues of national competitiveness and the need to maintain rail service on short lines for industries important to regional economies are factors that need to be considered in making any changes.

Some specific comments on Bill C-52 include the minimum liability insurance coverage. This is essentially the first line of defence for ensuring that valid claims resulting from a railway accident are paid. When dangerous goods are in the care of the railways, the first claim should be on the railways and Bill C-52, in my reading, confirms this.

Bill C-52 appears to have been sensitive to the balance that is required with regard to short lines and regional railways, which is that the insurance coverage should be high enough to address the risk, but not so high as to put the short lines out of business. The four levels of coverage proposed in schedule IV attempt to meet this balance, and proposed subsection 92(4) provides authorization for the Governor in Council to revise schedule IV, and, as more experience is gained with proposed levels, presumably the minister will be able to amend the schedule as required.

Item 4 of schedule IV is of concern. This is the one that requires railways in this category—essentially, CN and CP—to have minimum liability coverage of $1 billion per occurrence. The Transport Canada discussion paper reports that “Large North American railways carry third party liability insurance coverage of up to $1.5 billion each.” It is understood that CN and CP have coverage in this range.

There is concern that, if the law requires only $ 1 billion, the class1 railway carriers may reduce their current level of coverage. FMA recommends that Transport Canada review this with CN and CP, and that Parliament amend item 4 of schedule IV as per recommendation from Transport Canada. In this connection, proposed section 152.7 limits the railway liability to the maximum liability insurance coverage. This would appear to potentially reduce the liability of CN and CP to $1 billion each from their current level of $1.5 billion.

Second, regarding the crude oil shipper finance supplementary fund, division VI.2, proposed subsection 153.4(1), liability and compensation in case of railway accidents involving designated goods, establishes a fund for accidents involving these designated goods. By proposed section 155.3, shippers of crude oil are required to pay a levy of $1.65 per tonne until March 31 of next year.

[Patricia Lai, Co-founder, Safe Rail Communities]

Thank you. Good afternoon, everyone. Bonne après-midi. Thank you for this opportunity.

Before I share our thoughts on Bill C-52, I'd like to tell you a bit about our organization.

Safe Rail Communities was created in the wake of the Lac-Mégantic rail disaster, which occurred in the early hours of July 6, 2013. Forty-seven people died a violent death that night. Why? They were too close to a rail line where crude oil tank cars derailed and exploded.

My neighbours and I live within metres of a rail line in the west end of Toronto in an area called The Junction. Our riding is bordered on three sides by rail. Trains are a part of our daily life. Their low rumble is our constant soundtrack. When we learned that the same lethal tank cars that derailed in Lac-Mégantic first travelled past the windows of our children's bedrooms as they slept, we realized that we needed to act.

We researched derailments and plotted their steady rise. We learned that tank cars carrying the same type of volatile crude oil that exploded in Lac-Mégantic were travelling past our homes in never before seen numbers. In 2014 it was 280 times the number of cars that travelled in 2009.

In March of 2014 Safe Rail Communities was born. We are a group of ordinary citizens who are concerned about dangerous goods being transported by rail. Our goal is to raise awareness on this issue and to press government and industry to take meaningful action. We share our knowledge and resources with others across Canada who live close to rail lines. We take every opportunity to publicly document our recommendations on this issue, which is why today I am pleased to share with you our group's thoughts on Bill C-52.

Although it has some promising elements, we feel that Bill C-52 could go further to ensure safety and accountability. Before I discuss what Safe Rail Communities would like to see added to Bill C-52, I would like to discuss six concerns that our group has identified within the current legislation.

Our first concern relates to liability insurance. Bill C-52 sets a minimum insurance requirement of $1 billion for class 1 railways, but CN and CP already carry at least $1 billion in liability insurance without a law telling them to do so. An accident on the scale of Lac-Mégantic would require liability insurance about six times this amount. This estimate of $6 billion U.S. for a high-consequence event comes from the Pipeline and Hazardous Materials Safety Administration in its draft regulatory impact analysis.

Our group would instead recommend that class1 railways carry unlimited liability to cover the full cost of a rail accident. This would put the focus squarely on prevention. It also fits with the polluter pays principle, which is the supposed basis for Bill C-52.

Our second concern with the bill concerns how this minimum insurance coverage is determined. Right now the amount of insurance needed is dictated by the total tonnage the railway carries in a year. However, the risk of accident is always in relation to a single event. This means a railway carrying only a few large loads a year could have coverage that is drastically insufficient to cover the damage those few large loads could cause.

Our third concern is who has a say in deciding liability. Railways can avoid liability if they can establish, according to Bill C-52, that any other defence set out in the regulations applies. The federal cabinet is given power to decide these regulations. The cabinet's future decisions about what defences will be available to railways adds uncertainty to this legislation. It also provides the possibility of decisions that could undermine the effectiveness of Bill C-52.

Our fourth concern with the bill is that it restricts the ability to sue for environmental damages to the government. This means members of the public, whether an individual or group, will not be able to sue for environmental damages. Our concern is that even though both the federal and provincial governments have had the ability to sue for environmental damages for more than a decade, they have not done so. We wonder who will hold railways responsible for the damage they do to the environment.

The fifth point we'd like to make concerns the compensation fund that the bill proposes. Bill C-52 imposes a levy on the companies that ship dangerous goods by rail. The levies collected will be used to create a $250 million compensation fund. But again, $250 million is relatively small compared to the estimated cost of $6 billion U.S. needed to compensate a high-consequence event. Moreover, there is likely no access to the compensation fund for environmental damages because of the priority given to other types of damages.

Our sixth and last point concerns railway safety inspectors. Bill C-52 authorizes inspectors to identify immediate risks and request any measure that would mitigate risk. We find this amendment to the Railway Safety Act unclear. We would like to see included in the bill an inspection schedule with specific criteria to determine risk and with specific corrective action.

These six deficiencies of Bill C-52 that I've just outlined for you are of great concern to us. In our view, a preventative approach that highlights meaningful action should be the focus of legislation covering railway safety and the transportation of dangerous goods. Prevention should be paramount, then mitigation.

I'd now like to share what we feel should be included in any legislation that addresses safe and accountable railways. First, there should be increased government regulation and enforcement. The rail disaster in Lac-Mégantic and subsequent fiery derailments have shown that the current safety management system, with its reliance on self-regulation, is inadequate.

Secondly, existing rail safety technologies such as positive train control, automated railcar monitoring, and automated track inspection should be implemented with robust standards.

Third, first responders should receive current information about any dangerous good travelling through their communities. In a rail disaster precious time is wasted confirming train manifests.

Our fourth recommendation also touches on the matter of transparency. Last summer's Bill C-31 included the repeal of sections of both the Railway Safety Act and the Transportation of Dangerous Goods Act. These sections provided the opportunity for Canadians and interested groups to review and comment on proposed regulation at the last stages of the regulation-making process. These sections should be reinstated.

Our fifth point is that crude oil can and should be stabilized and/or treated at the point of departure to decrease its volatility.

Our sixth point is that we would like to see effective tank car standards for crude oil. The current standard is the CPC-1232, which has been shown in the Lynchburg and Gogama derailments to be inadequate.

Finally, we believe that the speed of trains carrying dangerous goods should be monitored and enforced.

The safe transport by rail of dangerous goods, including crude oil, involves many factors, such as track condition, volatility, tank car integrity, and speed.

[Jeff Watson, Conservative, Essex, ON]

I appreciate that. I am not sure many stakeholders, let alone the government, would agree with that position, which is why we have the bill in front of us today.

Mr. Boissonneault, you've raised a number of items in your presentation today. On the aspect of a training fund levy or set-aside, with respect to the levy that is considered in Bill C-52, are you asking the committee to establish that?

[Paul Boissonneault, Fire Chief, County of Brant Fire Department, and President, Canadian Association of Fire Chiefs]

Thank you, Mr. Chair, and good afternoon, everyone.

My name is Paul Boissonneault. I'm the fire chief for the County of Brant, Ontario, and president of the Canadian Association of Fire Chiefs. Founded in 1909, the CAFC is an independent, non-profit organization representing approximately 3,500 fire departments across Canada. As the voice of the fire services in Canada, the CAFC promotes the highest standard of public safety in an ever-changing and increasingly complex world. The CAFC acts as the national public service association dedicated to reducing the loss of life and property from fire.

Canadian communities face an ongoing and growing risk from the consistent and substantial increase in the quantity of dangerous goods being shipped, particularly flammable class 3 liquids shipped by rail over the last five years. In the case of crude oil, we went from 500 carloads in 2009 to an estimated one million barrels per day today.

This risk has been realized in an increase in the number of accidents and near misses involving these goods. In 2013 there were 144 accidents involving dangerous goods, seven of which resulted in a dangerous goods release. When these accidents occur, firefighters will almost inevitably be the first responders on the scene.

Canada’s economy and thousands of jobs depend on the safe and timely production and transportation of dangerous goods. They are essential to a variety of industries. The risk they pose to communities and the environment, however, needs to be better managed.

The tragic derailment in Lac-Mégantic highlighted the need to further strengthen the rail regime to ensure there are sufficient resources to fund response and recovery in the event of a disaster. The cleanup costs alone have been in the hundreds of millions of dollars, but the railway company had third-party liability insurance of only $25 million and has subsequently gone bankrupt.

Because railways will never be able to prevent all accidents, all of us have the shared responsibility of mitigating the community impact of a train derailment involving dangerous goods in Canada. To do so, we need a system that improves the liability and compensation regime of Canada's railways. CAFC believes Bill C-52 is a step in the right direction as it protects municipalities, the fire service, and more generally, Canadian taxpayers from having to bear the substantial financial responsibility of a catastrophic incident.

Extending the responsibility for compensation to railways and shippers embraces the polluter pays principle, a notion that CAFC has supported in the past. Requiring shippers to share the liabilities associated with the transport of their goods reflects the fact that the qualities of their product contribute to the risks and costs associated with an accident. Moreover, while CAFC recognizes that a drop in oil prices is putting a strain on shippers, the risk posed by their products remains the same regardless of the price.

Since the Lac-Mégantic derailment, CAFC has been asking government to consider a modest, true-cost user fee levied on a per-tanker-car basis payable by the shippers for all class 3 flammable liquids, dangerous goods transported by rail to establish a flammable liquid firefighter training fund. Since the bill does not address the serious firefighter training gap that currently exists in Canada, we would ask this committee to consider a mechanism to fund this training, such as through a small allocation of the disaster relief fund.

Few fire services, whether career, composite, or volunteer, have the necessary training or specialized equipment to adequately respond to these incidents involving flammable liquids transshipped via rail through their areas of responsibility. The issue has been raised in several accident investigation reports from the Transportation Safety Board. Most firefighters in Canada are trained to firefighter level 1 and some are further trained to a hazardous materials awareness level, which is only a basic level of training. Moreover, neither training is adequate for responding to railway incidents involving multiple tank cars of class 3 products in a large-scale fire situation.

The lack of specialized training increases the probability of serious consequences during this response. Properly trained firefighters have the ability to assess a situation, understand the intervention's risks based on the products involved. This in turn would allow them to take appropriate actions to protect themselves, the public, property, and the environment, thus mitigating the impact of the incident.

The CAFC has been working with various industry stakeholders to help develop and promote training programs for fire departments, municipal officials, and emergency planners. It is imperative that we provide firefighters with the appropriate training and equipment for these types of incidents.

Another aspect of Bill C-52 that the CAFC supports is the ability of a province or municipality to apply to the Canadian Transportation Agency to recoup costs it must pay as a result of putting out fires caused by railway operations. This new authority would allow the Canada Transportation Agency to determine whether in its view the fire was indeed caused by a company's railway operations, and relieve the financial burden of these fires on provinces, municipalities, and specific fire services.

Overall the CAFC welcomes Bill C-52 because it defines the liability of railways in order to provide claimants with a greater certainty of compensation. It builds upon recent government actions focused on strengthening rail safety and the transportation of dangerous goods. It is consistent with liability and compensation regimes used in other modes and sectors.

The CAFC does have some concerns with the bill. First, we would like to ask the committee to reevaluate the $250 million limit for the disaster relief fund. Considering the costs of the Lac-Mégantic tragedy, we believe that a higher limit is required to ensure that the fund is able to meet its objectives in the case of a large-scale disaster.

Second, recognizing that crude oil is not the only product that could cause significant damage if involved in a rail accident, we ask the committee to consider the inclusion of other dangerous goods, such as propane and chlorine, in a shipper-financed fund amendment.

Third, the bill gives authority to inspectors and the minister to order a company to immediately correct safety problems. This is very important, but ensuring that there are enough inspectors with all the required resources to audit the safety management systems is as important in preventing these incidents.

Fourth, the bill allows for requirements related to information sharing between railways and municipalities to improve the response in case of emergencies. The proposed changes to the regulation do not reflect the level of detail contained in protective direction 32 of the Transportation of Dangerous Goods Act. This direction requires disclosure of yearly aggregate information on the nature and volume of dangerous goods to the designated emergency planning official of each municipality through which dangerous goods are transported by rail. We cannot stress enough the importance of this information for emergency response planning as well as immediate access to train manifest information and material safety data sheets when a derailment occurs.

Fifth, the CAFC believes that maintaining and strengthening the Canadian Transport Emergency Centre should be part of the current regulatory revisions. CANUTEC is a vital resource for emergency response with planning and real time support during a dangerous goods incident. It is the equivalent to a first responders’ call for 9-1-1. Its industry leading emergency response guidebook and its experienced 24-hour-a-day professional chemists assist emergency responders with advisory and regulatory information in the event of a dangerous goods accident.

Finally, despite the progress achieved to date in railway safety and accountability, our work is not yet done as derailments continue to occur. CAFC believes that greater emphasis should be placed on the prevention of these incidents through increased safety and monitoring measures. We should be proactive in planning rather than reactive in emergency response. The CAFC is committed to continue working with government, industry, and this committee to ensure that first responders have the information, training, and emergency planning protocols to protect Canadians and our communities when incidents occur.

We recognize Bill C-52 is a step in the right direction in the government action required to address the evolving risks associated with the transportation of dangerous goods in Canada.

On behalf of the CAFC, our chief fire officers, and firefighters from across Canada we thank the committee for this opportunity to share our point of view. I look forward to any and all of your questions.

[Jenelle Saskiw, Mayor of Marwayne, Alberta, Federation of Canadian Municipalities]

Thank you very much. Good afternoon and thank you, Mr. Chair, for your introduction and thank you to the committee members for extending an invitation to the Federation of Canadian Municipalities to participate in your study of Bill C-52, the safe and accountable rail act.

The FCM last appeared before your committee in March 2015 as part of your study on Bill C-627, an act to amend the Railway Safety Act and we are pleased to be here again today.

I am the mayor of Marwayne, Alberta; the chair of FCM's standing committee on municipal transportation and infrastructure; and the co-chair of the joint proximity initiative between FCM and the Rail Association of Canada. I'm happy to be here today to represent FCM as co-chair of the National Municipal Rail Safety Working Group. The working group was established after the tragic derailment that devastated the community of Lac-Mégantic in 2013. Our work is guided by three priority areas: to equip and support municipal first responders to rail emergencies, to ensure that federal and industry policies and regulations address the rail safety concerns of municipalities, and to prevent the downloading of rail safety emergency costs to local taxpayers.

I'm joined today by Daniel Rubinstein, manager of policy and research at FCM and our policy lead on rail safety and the transportation of dangerous goods.

The Federation of Canadian Municipalities is the national voice of our municipal governments. Our member municipalities come from every corner of Canada and collectively represent over 90% of Canada's population. Members include Canada's largest cities, all urban and rural communities, and 20 provincial and territorial municipal associations. In leading the municipal movement, FCM works to align federal and local priorities, recognizing that strong hometowns make for a strong Canada.

FCM is an active participant in a number of initiatives related to rail safety and the transportation of dangerous goods. We are members of the TDG general policy advisory council, the advisory council on railway safety, and Transport Canada's emergency response task force. We also actively engage Minister Raitt and Transport Canada's senior leadership on these critical issues.

Before speaking on Bill C-52, I want to reiterate for committee members that FCM and the National Municipal Rail Safety Working Group are guided by the essential work undertaken by the Transportation Safety Board of Canada. The TSB serves a critical function in making safety recommendations to the federal government. At FCM we believe that the standard for progress is full implementation of TSB safety recommendations. My colleagues and I from FCM are pleased that the government has substantively responded to the TSB's reports and recommendations following the tragedy in Lac-Mégantic. We expect the same type of response once the TSB has completed its investigation into the recent derailments in northern Ontario and has made additional recommendations to government.

In terms of the focus of today's meeting, let me say a few words about Bill C-52. The key elements of the legislation respond directly to concerns raised by FCM related to insurance and liability, information sharing, and Transport Canada's oversight of federal railways. The bill is an important step forward in improving the safe transportation of dangerous goods by rail. The changes to insurance requirements for railways and a new levy for crude oil shippers, in particular, will address an important concern of municipalities and ensure that those affected by rail emergencies at the local level are fully compensated. While we understand the decision to focus on the risks posed by crude oil shipments, we hope that Transport Canada will look closely at the possibility of expanding the new levy to shippers of other dangerous goods once Bill C-52 has come into effect. It is a positive sign that the legislation includes the ability to scope in other products in the future.

Bill C-52 also represents an important step forward in providing both the minister and the railways inspectors with new powers that will allow for specific corrective actions to be ordered in the event of unsafe railways operations. This includes new power for the minister to issue an order to address any threat to safe railway operations, as opposed to only an immediate threat under the existing railway act. FCM is pleased to see these measures included in Bill C-52, as they should provide the regulator with additional tools to improve rail safety.

Bill C-52 also includes provisions for Transport Canada to develop expanded regulations on information sharing between the railways and third parties, including municipalities. Municipalities need to know about potential risks associated with rail corridors in their communities to reduce the safety risks related to the transportation of dangerous goods by rail and to ensure that local services can plan and respond effectively to emergencies. We look forward to a detailed discussion with Transport Canada on the development of these regulations.

Now, I will shift from the provisions in Bill C-52 to land use planning near rail corridors. As discussed at our last appearance on Bill C-627, FCM and the Railway Association of Canada are committed to building common approaches to the prevention and resolution of issues that may arise when people live and work in close proximity to rail operations. In May 2013, we unveiled new proximity guidelines and a new website intended to promote best practices and awareness about the issues associated with developments near railway operations. Several of Canada's largest cities are now in the process of studying how best to implement these guidelines locally.

Given the considerable interest in proximity issues at our last committee appearance, I want to reiterate that a one-size-fits-all approach on proximity issues is not suitable for a country as geographically and jurisdictionally diverse as Canada. Thus it is critical for the federal government to continue to work closely with provincial and local governments on any new policy initiatives related to land use in proximity to railway operations.

These are a few of the policy areas where proactive and ongoing discussions between FCM and our member municipalities, the federal government, and industry have resulted in concrete reforms that will improve the safety of Canada's railways.

That said, unfortunately our work is not yet done. As derailments continue to occur, again we look to the TSB to provide Canadians with analysis of the causes of recent derailments and recommendations to further improve rail safety in Canada. We look to the government, the rail industry, and the Parliament, through this committee, to ensure that any recommendations are implemented in full.

In closing, FCM welcomes a new insurance and third-party liability regime for railways and dangerous goods shippers, as well as new measures to expand and clarify the oversight and enforcement powers of the minister, the CTA, and railway safety inspectors, including the amendments to the Railway Safety Act and Canada Transportation Act in Bill C-52. We hope that Transport Canada and the Canadian Transportation Agency will ensure that these powers are fully implemented as soon as possible.

Again, thank you very much to the committee for giving FCM the opportunity to present our municipal perspective on Bill C-52. Daniel and I will be happy to answer any questions in regard to the bill, as well as any other issues related to rail safety and the transportation of dangerous goods by rail through our municipalities.

Thank you.

[Tim McMillan]

Great.

Good afternoon. Thank you, Mr. Chairman and members of the committee.

My name is Tim McMillan. I'm president and CEO of CAPP, the Canadian Association of Petroleum Producers. Our industry association represents both large and small companies on the upstream aspects of oil and natural gas. We represent about 90% of the oil and natural gas produced in Canada.

The goal of this bill is to improve accountability through increased liability by railways that carry crude oil and other designated goods. In this bill, provisions are made for appropriate insurance for railway companies, which will be available if accidents involving crude oil or other designated goods happen. Provisions are also made for a supplementary compensation fund—the fund for railway accidents, financed by crude oil shippers—similar to what is in place for marine transport.

To put the issue of rail transportation in perspective, today Canada produces about 3.7 million barrels of crude oil per day. We ship the majority of that on pipelines, but about 5%, 200,000 barrels a day, is currently utilizing our rail system. We expect that number to grow in the coming years. Canada has been endowed with great resources—valuable resources that contribute greatly to the prosperity of our country and its people. Maintaining the competitiveness of this resource is a key priority.

Safety is paramount to our industry. We are committed to the safe, environmentally responsible development of the resource, and, as such, operators are responsible for and face the liability for their decisions.

We are not alone in this business. Our industry relies on others to transport our products to market. Pipelines are responsible for the safe transport of oil that they accept for shipment. They face the liability if there is a failure and a loss results. The shipper may also see costs of the insurance reflected in the rates charged by the pipeline, but the liability is clearly on the pipeline. This reinforces accountability.

We support a system for rail transportation that also is based on the liability of the carrier, coupled with a regulatory system that ensures that the carrier's commitment to safety is achieved. In broad terms, we are pleased that steps are being taken through this bill to reinforce accountability to support the commitment to safety of rail carriers.

Canadian oil is not the only oil making use of the Canadian railway system. There has been tremendous growth of U.S. oil production, and that oil is finding its way to eastern Canadian refineries. In fact, imports of U.S. oil are substantially displacing offshore oil transported by ships in eastern Canada. We want to make sure that all oil carried on Canadian railways pays into the new fund. We also want to make sure that payment into the new fund is collected only once. We have pointed out areas where we feel the language in the bill could be improved to ensure that this intent is clear.

I should also mention that crude oil is not the only commodity moved by rail that is categorized as hazardous. There are many other dangerous goods transported by rail. We are firmly of the view that rail safety is not simply an issue of crude oil. We believe that all dangerous goods should be designated and contribute to the new fund.

In the event of an accident, there must be effective response and responsibility. These are matters of great concern for our members. CAPP has been supportive of and engaged in the many initiatives taken to enhance rail safety. It is the railway's commitment to safety that we all acknowledge and rely on. Likewise, it is the railways that are accountable and bear the liability. We believe that if a shipper contracts with a major railway company to carry a shipper's oil and the railway company makes use of another smaller railway where an accident occurs, then the liability under Bill C-52 should fall on both companies. This will make the higher insurance held by the larger company available to compensate for the loss.

While the bill contemplates that more than one railway can be liable for an accident, the bill is not clear on how that liability would arise. We have pointed out an area in our written submission where the language of the bill could be improved to provide more clarity.

In regard to the new fund for railway accidents, the equivalent marine liability fund is capped. We look to the government to place a cap on the fund at the $250 million target that was mentioned in the House on March 30, 2015.

With that, Mr. Chairman and committee members, thank you for your interest and for including CAPP and our perspective in your discussions today. Thank you very much.

I look forward to your questions.

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

Thank you, Mr. Chair.

Thank you to our witnesses for being here.

Mr. Taylor from CP, I wanted to start with a couple of questions for you. You mentioned that there are a number of items in Bill C-52 that you have been calling for, and for some time. Could you outline what aspects of the bill those are? Obviously, these are aspects of the bill that you deem to be critically important. Could you tell us what they are?

[David McGuinty, Liberal, Ottawa South, ON]

Another thing that jumps out is that one constituent said to me that this bill appears to be all about fossil fuels. I want to get a better sense of your perspective on this. There are many dangerous goods being transported. In the hierarchy of risk, as I think Mr. Bourque alluded to earlier in one of his answers, we have a number of different products that are risky.

In the insurance sector, Mr. Beardsley—perhaps this is for Ms. Gardiner, but I don't know—what would be the most dangerous in terms of the hierarchy here, and is it being addressed properly in Bill C-52?

[Terry Berthiaume, President and Chief Executive Officer, Essex Terminal Railway Company, Railway Association of Canada]

Thank you, Mr. Chair. I'm very grateful to have this opportunity to speak about how Bill C-52 may have some unintended consequences that will affect my company and the community in which we operate.

I will start by saying first that while all men are created equal, all railways are not. That's especially true in the case of the Essex Terminal Railway Company. One hundred per cent of our revenue is from interswitching. It's from servicing the industries that are located on our line and taking those goods to and from the main-line carriers that we connect with. I believe that we are unique in that aspect. The CTA recognized that when they exempted us from the interswitching regulations due to the fact that 90% of our revenue is from interswitching operations.

We're unique in other ways. We operate totally within yard limits. We do not have main-line track. Our main track is only 19 kilometres in length. Although we don't handle crude oil, we do handle dangerous commodities in excess of 40,000 tonnes. Seventy per cent of those commodities travel only 4.4 kilometres on our railroad at speeds of 10 kilometres per hour or less during daylight hours, on very flat geography where there are no hills. We have an incredible safety record.

I have been with the company for 34 years. We have a very strong safety culture. Never in the 34 years has our insurer had to pay a claim due to damages to third party property or rail.

But because of Bill C-52, we will be forced to increase our insurance four times. That will come with very significant costs, and they are costs that we cannot pass on to our customers. We are operating in a very competitive environment in a very depressed local economy. We have the highest unemployment in Canada. We have lost 50% of our business in the last 10 years. We've lost that business because plants have closed. They've moved their operations to other areas where operating is more economical. Anything we do to increase the cost of our customers' business will undoubtedly result in lost business for them and lost jobs for the 850 or so people who work for the industries we serve.

I was glad to hear the minister say that the railway liability limits should be equal to the risk of the company. The risk of our operations obviously is not the same as that of MM and A. We operate at very slow speeds. As I said before, we have an impeccable safety culture.

[Robert Taylor, Assistant Vice-President, North American Advocacy, Canadian Pacific Railway, Railway Association of Canada]

Good afternoon, Mr. Chairman and committee members.

My name is Robert Taylor, and I'm the AVP for North American advocacy at CP. We operate a 22,000-kilometre network throughout Canada and the United States. In 2014, we moved over 2.7 million carloads of traffic.

I am proud to say that CP is the safest railway in North America. We have achieved the lowest frequency of train accidents in each of the last eight years. In 2014, we had 1.2 train accidents for every million train miles. Our performance in 2014 was a 30% improvement over the previous year, which is a new record.

Rail safety is critically important, as is modernizing the liability and insurance regime for Canada. Our journey is not yet complete, but continuous improvement in safety is evident.

It’s important to recognize that North America's rail network moves 99.998% of hazardous materials, including crude, without incident. Because even one accident is one too many, we are continuously working to eliminate the last 0.002% of risk from our operations. We can safely and securely move dangerous goods.

Now I will talk about the bill.

We support the intent of Bill C-52, which is to better define and make accountable all those involved in the production, manufacture, transportation, and distribution of dangerous goods. We need to strengthen the safety and security of the rail supply chain so we can maintain a world-class transportation system, one that is accountable and responsive and works to prevent incidents from occurring as well as to provide compensation and liability in the event of an incident.

Several elements of this bill are items that CP has been calling for over the last number of years, and we welcome action. We do think, however, that in a few important areas the bill lacks policy clarity, and we urge the committee to consider this as you perform your review of this bill. The most important of these are as follows.

One, in proposed section 152.7, is the wording “involved in a railway accident”, especially in instances where traffic is interchanged or passed between railways. The second is proposed section 152.9, which references other acts that could negate the railways strict liability cap. The third is how how the shipper fund is to be recapitalized if depleted. Fourth, we also question why the shipper fund is only initially capitalized to $250 million while the railway has a strict liability of $1 billion.

These are important items that need to be clarified in your consideration of this bill.

Thank you.

[James Beardsley, Chairman, Global Rail Practice, Marsh and McLennan Companies, Railway Association of Canada]

Thank you, Mr. Chairman.

Thanks to all of you for allowing us to speak today.

My name is Jim Beardsley, and I am the chairman of Marsh’s Global Rail practice. I am here with Ms. Lois Gardiner, senior vice-president with Aon Global Risk Consulting. We represent the two largest rail insurance brokers in Canada.

We appreciate the opportunity to offer our collective view on some of the potential ramifications in the railway insurance market if Bill C-52 is passed into law in its current form. We believe these potential ramifications could hinder the railways in their effort to comply with the bill and perhaps create unintended and negative repercussions in the delivery of these essential services that the railways provide for the Canadian economy and in the wider economic benefits for all organizations in the supply chain.

The general insurance market today is one where the insurance buyers are enjoying an abundant supply of insurance. However, it is important to note that the railroad liability is not a general insurance market, but a global specialty market. Specialty markets are more limited than the general market when it comes to the number of insurers available and the amount of insurance or capacity. In addition, due to varying appetites for risk among those same specialty insurers capacity is not interchangeable throughout a program tower.

If you review the program tower graph that we had submitted, you can see that the insurers that write the risk at the top of the tower are usually different from those that write at the bottom or in the middle. The point is that if capacity is lost from one part of the placement, there is no guarantee their vacancies can be filled from the other existing insurers.

In 2008, for the first time in Canada, the railways were able to construct a liability tower to over $1 billion, suggesting now that market disruption might jeopardize the ability for the most active railways, through insurance, to meet the $1-billion minimum limit that the bill requires. For short lines, this level of coverage is theoretically available; however, it would not be financially viable, nor would it be likely to be self-insured.

Insurance underwriters manage their exposure through the use of familiar data that adds security to their underwriting process. A major concern is that in a fluid, cyclical market, some of the proposed wording in Bill C-52 and some of the coverage extensions could create enough uncertainty in the underwriting community to undermine the railways’ ability to comply with the bill.

Lois.

[David Yurdiga, Conservative, Fort McMurray—Athabasca, AB]

Thank you, Minister.

As you know, proposed section 152.9 of Bill C-52 states:

If a railway company is liable, without proof of fault or negligence, under subsection 152.7(1) and under any other Act with respect to the same railway accident, the company is liable under that subsection up to the greater of the limit of liability for an amount that is referred to in that subsection and the limit up to which the company is liable under the other Act.

Could you please elaborate on the intent of this clause and whether it will expose the railways to any additional risk?

[Jeff Watson, Conservative, Essex, ON]

Thank you, Mr. Chair.

We are here to talk about Bill C-52, not last year's public accounts, and certainly not tank cars, which are not what's in Bill C-52, so I will direct my questions, Minister, to the actual legislation in front of the committee.

Proposed section 153.1 of Bill C-52 states:

A railway company is not liable under subsection 152.7(1) if it establishes that (a) the railway accident resulted from an act of war, hostilities, civil war or insurrection; or (b) any other defence set out in the regulations applies.

Minister, does this proposed subsection also establish terrorism, including, for example, a lone terrorist attack, as a defence to the railway company's liability?

[Lisa Raitt, Conservative, Minister of Transport]

Thank you, Mr. Chair.

I just want to note that we're starting exactly one minute early, which is a good thing today.

Good afternoon, Mr. Chair and honourable committee members.

I am very pleased to be here with you today to talk about Bill C-52, the safe and accountable rail act, which, as you well know, is unquestionably a very important piece of legislation that aims to amend both the Canada Transportation Act and the Railway Safety Act.

I'm going to begin with the proposed amendments to the Canada Transportation Act, or CTA.

The tragic Lac-Mégantic derailment has shown us that our liability and compensation regime for rail must be strengthened. The Montreal, Maine and Atlantic Railway carried only $25 million in third party liability insurance, which we now know is not nearly enough to cover the incredible magnitude of the resulting damage to and loss of both life and property that night.

In the 2013 Speech from the Throne, our government committed to holding railways and shippers more accountable. Bill C-52 does that by ensuring that sufficient compensation will be available to pay for damages and compensate victims in the event of a railway accident.

With this bill, railways will be required to hold a mandatory level of insurance based on the type and volume of dangerous goods that they carry. These levels will range from $25 million for short lines carrying limited or no dangerous goods to $1 billion for railways carrying significant amounts of dangerous goods, namely, CN and CP.

These mandatory insurance requirements have been set based on analyses of historical accident costs, taking into account the severity of past accidents involving certain goods. These requirements make certain that a railway's insurance directly reflects the risk associated with its operations. These insurance levels were determined to be adequate to cover the cost of the vast majority of potential accidents.

While a scenario of the magnitude of Lac-Mégantic is thankfully an extremely rare occurrence, we want to be certain that all costs in such a case would be covered. That is why a supplementary shipper-financed fund was created to provide compensation above the railway's insurance for accidents involving crude oil, and any other goods added through regulation.

In the event of a rail accident involving crude oil, railways will be held automatically liable, without the need to prove fault or negligence, up to their insurance level, and that will happen immediately. There will be certain defences to this strict liability. For example, a railway would not be held liable if the accident was a result of war, hostilities, or civil insurrection such as a terrorist act, as these occurrences are outside of the railway's control. If accident costs reach beyond the railway's mandatory insurance level, the supplementary fund covers the remaining damages.

For the supplementary fund, we have included a broad definition of crude oil in recognition of the serious damage that all crude can cause if released. Even a less volatile crude can have a grave impact on the environment and result in very high remediation costs. The fund will be financed through a levy on shippers of $1.65 per tonne of crude oil transported by federally regulated railways, indexed to inflation.

The aim is to capitalize the fund to $250 million. That amount would provide substantial additional coverage for crude oil accidents above the insurance levels. Based on a reasonable projection of oil-by-rail traffic growth in the coming years, we have determined that with a $1.65 per tonne levy, we would reach that target in approximately five years. That said, however, it is important to emphasize at this point that the $250-million capitalization is a target. It is not a cap.

The bill allows the Minister of Transport to discontinue or reimpose the levy as necessary. It could be put in place indefinitely or for any specified time period. This means that the levy could continue for longer than five years should oil-by-rail traffic grow at lower than expected rates. It also means that the fund could be capitalized to a different amount should that be considered appropriate.

Just to be clear, Mr. Chair, the fund will cover all costs above the railway's insurance and will not be capped. In the unlikely event that damages from an accident surpass both the railway's insurance level and the amount in the supplementary fund, the government's consolidated revenue fund will back up the fund but then be repaid through the levy.

By creating mandatory insurance levels for railways and providing an additional pool of available funds, Bill C-52 makes certain that, in the event of a rail accident, there will be sufficient resources to cover all damages.

Following the tragic Lac-Mégantic derailment, and to address the recommendations in the Auditor General of Canada's fall 2013 report, the proposed amendments to the RSA will further strengthen the oversight of federally regulated railways and Canada's railway safety regime in certain areas.

These include the following: a new power for the minister to order a company to take corrective measures should a company's implementation of its safety management system risk compromising safety; a new authority to regulate the sharing of information, records, and documents from one party to another, other than the department, and an example here, of course, is from a railway company to a municipality; broader railway safety inspectors' powers to intervene in a more effective way with any person or entity, including companies, road authorities, and municipalities, to mitigate threats to safety; a broader power for the minister to require a railway to stop any activity that might constitute a risk to safe railway operations, or to follow any procedures or to take any corrective measures specified; and, a cost reimbursement scheme for provinces and municipalities that respond to fires believed to be caused by a railway company's operation.

Part of Transport Canada's prevention strategy has been to ensure the department has an effective oversight regime. This means both ensuring that industry is in compliance with the various regulations that govern it and responding to changes in the risk environment. Transport Canada continuously examines and monitors its resource levels to adjust and reallocate as needed to address emerging issues, trends, and higher-risk issues.

I announced, as part of the department's response to the Transportation Safety Board report on Lac-Mégantic, increased resources dedicated to the rail safety program. Rail safety had approximately 100 inspectors at the time of the Lac-Mégantic accident. As of March 2015, Transport Canada employed 122 rail safety oversight personnel.

Furthermore, I do want to assure the committee that the safety management systems are not self-regulation—far from it. Safety management systems complement a robust railway safety regulatory regime that includes requirements of the Railway Safety Act and the associated regulations, rules, and engineering standards. The new railway safety management regulations of 2015, which came into force on April 1 of this year, are more prescriptive than the 2001 regulations and really will further strengthen railway safety operations across Canada.

Mr. Chair, I would be pleased to answer any questions you may have.

This concludes my remarks.

Safe and Accountable Rail Act

[Mike Wallace, Conservative, Burlington, ON]

Mr. Speaker, it is my honour and pleasure to speak today to Bill C-52, the safe and accountable rail act. In response to the previous question, we on this side agree that this is part of a three-part analysis or attempt to make rail traffic as safe as possible in this country. One pillar, which the parliamentary secretary talked about in his speech earlier today, is prevention. In the second pillar, we need to be ready for response in case there is an emergency. What we are dealing with in Bill C-52 is the part about accountability, making federally regulated rail companies accountable for what they are doing.

In the next few minutes I want to talk about some of the questions that have been asked of the government and of this legislation before it goes to committee so that more discussion can happen, and I know my opposition friends are eager to have witnesses at committee to discuss the bill in more detail.

Why is the government changing the liability and compensation regime for rail? I think it is relatively obvious to all of us in the House, and it was mentioned by every member who has spoken to it today, that the issue of having the government responsible for the safety of Canadians is a number one priority for our government, and it should be. Unfortunately, we have had some very tragic incidents in terms of rail safety issues in this country, such as Lac-Mégantic, Quebec, with the terrible tragedy that happened there in July 2013. I am from Burlington, Ontario, where we have had rail derailments. Unfortunately, the most recent one was a passenger rail issue and people died from that derailment also. However, this discussion is really about product that travels by rail, not people, so this is important to the people of Burlington to have the opportunity to make sure that there is accountability with rail lines and what they are shipping through our neighbourhoods across the country.

When would this new change come into effect? This is basically about changes to the insurance requirements of rail companies, and we are giving them about a year from when it comes into force to get ready for that, which means they will have to make sure their insurance coverage, the accountability aspects, are in place prior to one year from when the bill gets royal assent.

Did we consult stakeholders? Of course we consulted stakeholders. That is important because, whether it was municipalities or railway lines or others affected, there were a couple of rounds of stakeholder outreach in terms of getting feedback on what can be done as the accountability piece. I believe we received feedback from approximately 27 stakeholders on this, from railways, shippers, and local municipalities.

This is important because the issue of rail travel for products and goods is important. Let us face it: it was important in bringing Canada together as a country, and we need to make sure everyone is involved in that discussion of where we are headed in terms of accountability, of being proactive and prepared to respond, and of prevention. That is why the stakeholders played a big role in coming up with what is in the bill.

I think it would be naive to say that everyone agreed on exactly what to do and at what level, but that is why we have consultations. We think that the polluter pay principle should be put forward as the number one tenet of the accountability portion of this.

What does polluter pay mean for rail? It is an important principle that those who cause the damage as a result of their operations would pay for the damage. It is important that it is the company and, in this case, we are adding a fund from shippers. They need to take significant responsibility in terms of the levels of insurance coverage they need. It should not be the taxpayer. That is what the polluter pay principle is, that it is not the general taxpayers' responsibility. It is the government's responsibility to develop the safety standards, to make sure the rail system is safe, but if something does go wrong, it is not the taxpayers' responsibility to cover those costs but the polluter.

These measures of liability should not be new to companies. No company should say it is not its responsibility, it should be the taxpayers' responsibility. At the end of the day, based on the consultations with stakeholders, including the rail companies, we came to an agreement, which we see in Bill C-52, to deal with this.

Let me go over the proposed amendments. They would make all railways hold a minimum level of insurance, which we have heard many times today, based on the risk posed by the type and volume of dangerous goods being moved. It makes sense that if a company is moving non-dangerous goods, its liability should be less, but a company moving dangerous goods, including oil products and others that can cause significant damage, has to have higher liability. It has to have more insurance to cover the costs because if there is an accident, the damage that is done is much more significant with dangerous goods. We came up with a proposal that railways would have to carry higher amounts of insurance for dangerous goods. It is common sense and something that both the public and the railways clearly understand is the railways' responsibility.

There would be an initial requirement for them to hold either $50 million or $125 million in insurance, depending on the type and volume of the dangerous good being carried. That is an initial requirement. Then one year after that, those requirements would double to $100 million and $250 million, respectively. These are the carrying costs that would have to be built into the operational aspects of running a railway. It is important for the railways to have the coverage so that taxpayers would not be on the hook for the cleanup of any damage done from any unfortunate accident. When I say “damage”, it can obviously be both physical damage, property damage, damage to the environment, and, of course, to human life. There have been tragedies in this country where that has happened. We need to make sure that taxpayers are not going to be responsible for that, but the actual railway shipping the goods is responsible.

Another question was with regard to what we think the financial impact would be, particularly on short-line railways. People tend to think about CP and CN, the big railways in Canada, but we would also require the short-line railways to carry the same requirement. It would be part of railways doing business in this country. It would be part of the decision to carry goods and it would be included in this new regime. This would increase their operating costs, there is no doubt about it, but it is much-needed protection for taxpayers as we continue to implement the polluter pay principle, including short-line railways.

Is there insurance available at this level? We are assured that there is. We have had a number of insurance brokers say that it is possible for them to provide that level of insurance and are willing to take the risk. Therefore, they cannot use as an excuse that they cannot get the insurance, which was an issue we needed to resolve to make sure it was available.

I will conclude by saying we have had some tragic rail accidents in my own riding of Burlington in the last number of years. We have also seen across the country other very significant accidents in the railway system, mainly dealing with the shipping of dangerous product. We need to have assurance that the polluter needs to pay and we need to protect the taxpayers, and this is what Bill C-52 would do.

I look forward to the bill going to committee for discussion and back to this House quickly so that we can pass it and make it law, because it would not take effect until a year after it has royal assent. Therefore, we need to get royal assent as soon as possible.

[Peggy Nash, NDP, Parkdale—High Park, ON]

Mr. Speaker, I will be sharing my time with the member for Saint-Bruno—Saint-Hubert.

I am very pleased to speak to the issue of rail safety. It is a very important issue for my riding, which I will explain shortly.

We are debating second reading of Bill C-52, which would amend the Canada Transportation Act and Railway Safety Act. This is something that is closely watched by people in my community, in my riding of Parkdale—High Park.

The bill would require minimum insurance levels for railways transporting dangerous goods, based on the type and volume of goods being transported. It would establish a disaster relief fund to compensate victims of derailment paid for by levies on railway companies that are transporting crude oil. This would be on top of the minimum insurance levels. It would also implement other changes to increase the powers of inspectors.

In general, we support the bill. We think it is important to take immediate action and any improvement is certainly positive. We need to improve the liability and accountability regime for Canada's railways and we need to ensure that the government enforces the legislation, that the regulations are enforced and that the inspectors and auditors have the resources required for this effective oversight. We believe the bill should have gone much further, but I will come back to that in a couple of minutes.

What got everyone's attention in the country on the issue of rail safety was the terrible, tragic rail disaster in Lac-Mégantic in 2013. It is a situation we know well, where a freight train loaded with Bakken crude oil travelled down a hill unattended. It derailed and on impact exploded, caught fire and killed 47 people. The town centre was destroyed. Eight hundred people were evacuated. The land was contaminated. It was a traumatic situation not only for the people who were horribly affected by the devastation but for our entire country.

The subsequent reports made a number of findings and recommendations. They found that back in the 1990s, with the Liberal governments and continuing with subsequent Conservative governments, deregulation of the railway sector and a transferring of responsibility for safety from the government to the railway companies began. In this case, they found a series of problems with the company that was responsible in Lac-Mégantic, such as a very weak culture of safety, mechanical problems and a lack of staffing. With Transport Canada, they found inadequate oversight and inspection. What was highlighted was the weakness of the tank cars.

It is fair to say that people assumed the government was looking out for them and taking care of their safety, that this was surely one of the basic responsibilities of government, to ensure that public safety was respected.

I want to read into the record in the House an email I received from a constituent because this got the attention of people in our riding of Parkdale—High Park. One neighbourhood in our riding is called The Junction. The Junction is the crossing of the CN and CP lines. As one can imagine, there is quite a bit of rail traffic going through our neighbourhood. This was historically an industrial neighbourhood, which over the years has seen a greater number of people with their homes right by the tracks.

I want to read from a constituent's letter: “My partner and I currently own and live on...a street beside the tracks. Our property backs onto the rail yard. Our bedroom is less than 40 feet from the rails that transport tons and tons of goods, many of which are unknown to us. We see black oil tankers go by multiple times a day, cars with perforated holes in them. Since the Lac-Mégantic catastrophe as well as others across the country—they seem to be happening more and more frequently—we are deeply concerned for our safety as well as the safety of our neighbours and friends. Because of our home's proximity to the rail lines, if anything were ever to happen on the rail lines behind us, a derailment or an explosion, we would most likely lose our home and potentially our lives. The number of lives that could be at risk if such an accident occurred here is absolutely staggering.”

This is a concern that is very real in our neighbourhood. It goes well beyond the issue about liability, while liability is a key factor because we saw in Lac-Mégantic there was clearly a lack of responsibility and a lack of liability on the part of the shipper.

We have a number of questions from members of our community who have organized into an organization called Safe Rail Communities. They want to know why, while the technology to stabilize light crude oil by extraction of volatile gases exists and is mandated in the state of Texas, it is not required to be stabilized before it is transported by rail. Most of this is required to be stabilized before it is transported by pipeline. People want the substances that are being transported made as safe as possible.

They also want to know why Canadians must wait until 2025 for the new TC-117 tank cars, the safer tank cars. Why do people have to continue to see the DOT-111s or even the newer cars that crashed in northern Ontario roll past their bedroom windows when there are safer alternatives? Why do we have to wait 10 years for safer tank cars to roll on the Canadian lines? Why can people not know what is being transported through their communities? Why do people not have a right to know the hazards that are rolling right past their bedroom windows? These are fundamental questions that need to be answered.

They also want to know, when a catastrophic accident from a flammable train in a densely populated area could have costs going up to $6 billion, why the strictest requirement is only $1 billion. In fact, we have written to CN and it has told us that it already has more than $1 billion in liability insurance, so this would put no new higher standard on it. Why do we not require shippers and those responsible for the products that are being shipped to have insurance that would cover the complete liability? Why would we allow any exposure to liability in our communities?

When we think of the potential tragedy of a major rail accident in our largest city, the city of Toronto, where hundreds of these tank cars carrying Bakken oil or dilbit are transferred every day, surely we need to prevent as much as possible any potential accident from happening. People want to know that what is being shipped is as safe as possible, that it is being shipped at as slow speeds as possible, that wherever possible it is rerouted from their area to the less-populated neighbourhoods, but then should there be any tragedy that the community would not have to once again pick up the tab.

Protecting the public is a core responsibility of the government. New Democrats believe we need to do everything in our power to ensure that tragedies such as that which occurred in Lac-Mégantic never happen again. Fixing liability is just the beginning. We need stronger laws, stronger enforcement, penalties for those who break the laws, and much more serious oversight, inspections and audits by the government.

[Joyce Bateman, Conservative, Winnipeg South Centre, MB]

Mr. Speaker, I am very pleased to speak today to the Safe and Accountable Rail Act, or the Act to amend the Canada Transportation Act and the Railway Safety Act.

I would like to draw the attention of the House to the changes we are proposing to provide greater oversight of federally regulated railway companies.

We are indeed proposing to further strengthen oversight of federally regulated rail companies. The safe and accountable rail act is progressive and forward-looking. The amendments to the Railway Safety Act would mean better safety for Canadians and Canadian communities, strengthened safety management systems, enhanced sharing of information and a safer rail industry in a stronger national economy.

All of these are priorities of the government, and I believe should be priorities of each and every member of this House of Commons. There is nothing more important than the safety and prosperity of Canadians. That is why my private member's bill is the complementary Bill C-627, which was inspired by my constituents of Winnipeg South Centre.

The Railway Safety Act provides the Minister of Transport with the authority to oversee the safety of federally regulated railways. Transport Canada's role is to monitor for threats to safe railway operations, as well as compliance to the Railway Safety Act and its rules, regulations and engineering standards through audits and inspections.

The amendments to the Railway Safety Act would further strengthen oversight and address issues raised by the Lac-Mégantic derailment, and the Transportation Safety Board's recommendations, as well as the recommendations in the Auditor General of Canada's fall 2013 report.

By proposing these amendments, the federal government is reiterating its commitment to a safe and secure national railway system, and to the safety of communities right across this country. The government is focusing on four key areas that will have the most direct and positive impact: meeting the needs of communities; ensuring the people or companies responsible are accountable; strengthening safety management systems; and increasing authorities for our railway safety inspectors.

Collaboration between railways and communities is crucial to ensure the safety of Canadian citizens across our vast country. The Government of Canada is committed to enhancing confidence in railway safety, greater sharing of information and co-operation between railway companies and communities.

This is precisely why we are proposing new regulation-making powers, requiring companies to share information with municipalities. This would help address community railway safety concerns, and I know these changes, along with my private member's Bill C-627, would be extremely well received in my home riding of Winnipeg South Centre.

Too often it is the provinces and municipalities, also known as the taxpayers, that are left to pick up the pieces and pay the bills after a railway incident, especially one that requires the assistance of first responders for issues such as fire.

The Safe and Accountable Rail Act also proposes changes to allow a province or municipality that incurs costs in responding to a fire that would appear to be the result of a railway company’s railway operations to apply to the Canada Transportation Agency to have those costs reimbursed. These changes would give the Canada Transportation Agency the power to determine whether the fire was indeed the result of the railway operations of the railway company in question, and, if so, the Agency would have the authority to order the railway company to reimburse the province or municipality, thereby avoiding downloading the costs on to municipal taxpayers.

Under the auspices of the Railway Safety Act, Transport Canada is responsible for oversight, which includes monitoring for threats to rail safety operations, as well as compliance with the Railway Safety Act and its rules, regulations and engineering standards through audits and inspections. The proposed amendments in this bill include broadening authorities to allow inspectors to issue notices in the event of a threat to safety to any person or entity that has responsibility in relation to that threat, including companies, road authorities and municipalities.

Furthermore, in the event of an immediate threat, an inspector may issue a notice and order to any person or entity, again including companies but now also including road authorities and municipalities, and order them to take specific corrective actions to remove the immediate threat. These broadened authorities complement a broader new authority for the Minister of Transport.

Currently, the Railway Safety Act allows the minister to order only railways to take corrective action in cases of immediate threats to safety. The amendments propose adding an additional power to allow the minister to order a railway company, road authority or municipality to take corrective action following specific procedures or to stop any activity in the interest of rail safety operations.

These amendments are about oversight and advancing railway safety oversight and enforcement, together with furthering safety management system implementation by clarifying and broadening the authority and responsibilities of the minister and railway safety inspectors.

What is more, this act would fully align and complement my own private member's bill, Bill C-627, an act to amend the Railway Safety Act, which aims to provide greater protection to persons and property from risks inherent to railway operations. I introduced that bill on September 23, 2014, and I understand it is in committee as we speak. Furthermore, both bills align with the objectives of the Railway Safety Act to further strengthen railway safety in Canada.

The safe and accountable rail act and Bill C-627 are both about safety, they are both about protecting people, they are both about protecting communities.

It is hard to argue with these changes. The railway is an integral part of Canada's current infrastructure and will continue to be in the future. The railway has to be sound, reliable and safe.

This government believes these amendments to the Railway Safety Act are essential. They would modernize the Railway Safety Act to reflect the requirements of a growing and increasingly complex rail industry. I believe the important safety amendments contained in the bill are ones that we can all agree on, both quickly and unanimously.

This bill is a step forward. It is a step forward for Canadians and a step forward for rail safety. With the agreement of each and every member of the House, we can take these steps together toward a safer, more reliable and economically viable freight and passenger railway system for all Canadians.

[John Carmichael, Conservative, Don Valley West, ON]

Mr. Speaker, I am pleased to have the opportunity to speak about our government's efforts to improve the safety of Canada's national railway system through the safe and accountable railway act, a bill to amend the Railway Safety Act. Today I will be sharing my time with the member for Winnipeg South Centre.

I will begin by explaining to my hon. colleagues why these amendments are so important and why we should all support the bill. While Canada's railway system is one of the safest, we all recognize that, like other means of transportation, railways are not without risk. Rare devastating accidents like the tragic derailment that occurred at Lac-Mégantic give us pause and focus our attention on improving rail safety.

The amendments proposed in the bill build on the difficult lessons learned following Lac-Mégantic, address issues identified in the Auditor General's fall report of 2013, and also respond to issues raised in the Transportation Safety Board's final report on Lac-Mégantic.

My esteemed colleagues will remember that, in the immediate aftermath of Lac-Mégantic, our government quickly implemented a series of immediate and concrete actions to significantly improve the railway transport safety regime. We also made enhancing the regulatory framework a priority. Let me remind the House that the fundamental purpose of this already-robust regulatory framework is to protect people, property, and the environment from potential harm caused by railway operations.

The Railway Safety Act, which passed into law in 1988 and came into effect in January 1989, provided the legislative authority for the minister of transport to assume responsibility for the safety regulation of federally regulated railways in Canada. Following a mandatory review in 1994, the RSA was amended in 1999 to modernize the legislative and regulatory framework for railway safety. Included in the amendments were regulations for railway safety management systems, which formally integrate safety into the railway companies' day-to-day operations.

Following the tragic Lac-Mégantic derailment and to address recommendations in the Auditor General's fall 2013 report, the Minister of Transport committed to accelerating a regulatory development to enhance the framework and further strengthen oversight of federally regulated railways across Canada. As a result, the grade crossing regulations and the railway operating certificate regulations are now in force and the administrative monetary penalty regulations, new railway safety management systems regulations 2015, and amendments to the transportation information regulations will come into force on April 1, 2015.

Allow me to highlight why each of these regulations is equally important to enhancing the regulatory framework as well as strengthening oversight and enforcement of railway safety in Canada.

The first of the series of regulatory packages, the grade crossing regulations, came into effect on November 27, 2014, and improved safety by establishing comprehensive and enforceable safety standards for grade crossings, clarifying the roles and responsibilities of railway companies and road authorities, and ensuring the sharing of key safety information between railway companies and the road authority. I am certain members would agree that, whether we are pedestrians, drivers of cars, or passengers on a train, we all will benefit from safer grade crossings. These regulations do just that and will lead to reductions in collisions, fatalities, injuries, and property damage, as well as reducing the potential for environmental disasters resulting from a spill of dangerous goods.

The railway operating certificates for federally regulated railways came into force on January 1, 2015. These certificates, which will be issued to railways once they meet certain safety conditions, significantly strengthen Transport Canada's oversight capacity by giving the department the authority to stop a company from operating in the event of severe safety concerns.

New railway safety administrative monetary penalties regulations introduce a new tool to the rail safety program's enforcement regime that would be used to ensure compliance with the Railway Safety Act, as well as to put in place further regulations, rules, orders and emergency directives.

Amendments to the transportation information regulations would improve data reporting requirements to better identify and address safety risks before accidents happen. This would improve safety by supporting better planning and performance measurements, allowing for more focused audits and inspections, and targeted programs that address specific safety issues.

The new railway safety management systems regulations build on the progress and the lessons learned since the first regulations were introduced in 2001. As such, federally regulated railway companies and local companies operating on federal main track would have to appoint an executive to be accountable for SMS and responsible for the operations and activities of the company.

Railway companies must establish policies and procedures so that employees may report safety contraventions and hazards to the company without fear of reprisal. Railway companies must apply the principles of fatigue science to their employee scheduling processes.

All these regulations build upon the existing strong rail safety program and federal rail safety rules and regulations in place to ensure the safety and protection of the public. They provide Canadians with the safest railway system possible.

In addition to these regulations, in Bill C-52, the Minister of Transport has introduced amendments to the Railway Safety Act to further strengthen oversight of federally regulated railway companies and address issues raised by the Lac-Mégantic derailment and the Transportation Safety Board's recommendations, as well as the recommendations in the Auditor General of Canada's fall 2013 report. These amendments signify better safety for Canadians and Canadian communities, strengthened safety management systems, enhanced sharing of information, and a safer rail industry in a stronger national economy. These are priorities that we all share.

I encourage all members to support this bill. With the agreement of all members we can take a significant step forward to improve the safety of our railways for all Canadians and Canadian communities, and provide a stronger foundation for our national transport system and economy for years to come.

The House resumed 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.

[Bev Shipley, Conservative, Lambton—Kent—Middlesex, ON]

Mr. Speaker, it is always an honour to stand and speak in this great place. Today it is regarding Bill C-52, the safe and accountable rail act.

The bill would fulfill its title, in part, by strengthening the authorities of the Minister of Transport and the rail inspectors of Transport Canada in their efforts to maintain and improve the rail safety regime of Canada's rail transportation system. This is especially vital in the transportation of dangerous goods, including crude oil.

Canada has a good rail system. Some would argue that it is among the best in the world, both in terms of safety and in its ability to deliver transportation services that enable shippers to compete in a global economy. Under the current safety regime, 99.997% of dangerous goods transported by rail arrive safely. That is quite an impressive statistic, but we also know that we can never rest while there are still means available to increase that number even further.

Hon. members may recall that in May 2013, the Safer Railways Act introduced new safety provisions. It strengthened Transport Canada's oversight and enforcement capacity by giving it the authority to make regulations and by requiring all railways to meet regulatory requirements to obtain a safety-based Railway Operating Certificate. Transport Canada's enforcement powers were also strengthened at that time with the implementation of administrative monetary penalties. Existing judicial penalties were also increased.

Now, with the safe and accountable rail act before us, we go further. We would respond to issues raised by the 2007 review of the Railway Safety Act, the 2013 report of the Auditor General, and the recent report of the Transportation Safety Board on the Lac-Mégantic tragedy. Each has called attention to the need for Transport Canada to strengthen its oversight regime for rail.

The bill before us would provide the Minister of Transport and the railway inspectors with more oversight of railway safety and the ability to act when they believe that action is required to address threats to safety.

Bill C-52 would amend subsection 47.1(1) to enable information-sharing regulations that would require railways, for example, to prepare a summary of any risk assessment they have conducted. The summary would also include the mitigation measures identified and the plan to monitor the effectiveness of the mitigation plan itself.

Under future regulations, this summary would be shared with parties affected by any significant change to railway operations. In other words, local municipalities would be informed of changes to operations that would have an effect on safety in their communities. That was just addressed a few minutes ago.

Section 37 of the Railway Safety Act would be amended to permit the sharing of information related to safety. Detailed information on a risk assessment, for example, would be required to be provided to the minister under the terms of the Canada Transportation Act.

The bill would also require railway companies to comply with engineering standards, and failure to comply with these standards would then mean that they broke the law.

Under section 31, railway inspectors would be given broadened authority to issue notices and orders where there was a threat or an immediate threat to safety. Under the current regulatory regime, Transport Canada inspectors are limited in how they require railways to address safety concerns. The bill would broaden that authority so that in the case of an immediate threat, the inspector would have the power to order any appropriate corrective measures to be taken.

The Minister of Transport would be given new powers and authorities under this bill. When she believed that there was a particular threat to safety, she could order a company, road authority, or municipality to take corrective action, stop any action, follow any procedure, or suspend operation. This would give the Minister of Transport a powerful tool to oversee the safety of Canada's rail transportation system. Bill C-52 would also extend this new oversight authority to the safety management systems created by the railways.

I would like to clear up some misconceptions about the safety management systems, or the SMS. They do not represent an abdication of the government's responsibility to regulate and monitor railway safety by passing it off to the railways themselves. Rather, the SMS create an additional level of safety management to how the railways actually operate. An SMS includes, for example, safety goals and performance targets along with risk assessments.

In addition to following existing rules and regulations, the railways needs to identify hazards and mitigate risks to prevent accidents, often learning from minor incidents and trend analysis on day-to-day operations.

Transport Canada has created regulatory requirements around safety management systems, and oversees a railway's compliance to the SMS regulations. The department assesses the SMS documents developed by the railways and conducts periodic inspections and audits.

The role of safety management systems in all modes of transportation was studied by the Standing Committee on Transport, Infrastructure and Communities, but in the meantime, our government has taken steps to increase the regulatory enforcement of an SMS in rail and has given the minister authority to apply it in an effort to promote a safer railway systems.

Under the bill before us, if the minister believes the manner in which the railway is implementing its safety management system in fact compromises safety, the Minister of Transport can use a ministerial order to direct a company to take specific necessary actions. In this way, the SMS truly becomes another level of safety prevention, adding to the measures already in place to ensure safe and secure transportation.

Another component of the changes to the Railway Safety Act gives new authorities to the Canada Transportation Agency. A new section 23 of the act would permit a province or municipality to apply to the Canada Transportation Agency to recoup costs it must pay as a result of putting out fires believed to be caused by railway operations. Previously, these costs were paid for by the province, the municipality and taxpayers.

The Canada Transportation Agency would then determine whether, in its view, the fire was indeed caused by a company's railway operations. Sometimes those are very difficult to determine on rolling stock. It would determine whether the fire was indeed caused by a company's railway operations, what the costs were and would require the railway to reimburse the provinces or municipality for those costs.

There are many ways in which the safe and accountable rail act would give new force to the regulatory authorities and promote the safety and security of our rail system. We are taking the transportation system and making it better.

Clearly, this is a significant endeavour that will improve rail safety and its protection. Therefore, supporting Bill C-52 is a reasonable and sensible thing to do.

[Rachel Heft, Legal Counsel, Department of Transport]

As it stands, the coordinating amendments for Bill C-52 make sure that any changes that are made to section 31 of the Railway Safety Act through Bill C-627 are dovetailed with those in Bill C-52. Any changes made with respect to this amendment would have to be later coordinated with Bill C-52 as well, so it would create some complexity there.

[Jeff Watson, Conservative, Essex, ON]

I have just a quick question. Obviously, we know that Bill C-52, which is the government's bill, touches on or tries to dovetail with, I would say, Bill C-627.

Would the addition of these amendments create any kind of complexity in how to deal with Bill C-52 and how the two fit together, if we were to accept an amendment like this?

[Mike Allen, Conservative, Tobique—Mactaquac, NB]

Mr. Speaker, I appreciate the opportunity to rise today to speak to Bill C-52, the safe and accountable rail act.

Before I start, I would like to say that I appreciate the opportunity to share my time with the hard-working member for Lambton—Kent—Middlesex.

There are three points I want to make today. One is why Bill C-52 is important. I want to also talk a bit about the approach that we are using and how this compares to other liability legislation in recent times, and then about some basic provisions of the bill.

The first priority of Transport Canada, as we know, is safety and the prevention of accidents, but if an incident does occur, the liability and compensation regime must be able to respond to and support Canadians and their communities. We must take the steps necessary to ensure that in the event of a catastrophe, sufficient funds are available to compensate potential victims and pay for environmental cleanup and remediation.

We all know, as it has been commented on earlier in the House today, about the tragic accident in Lac-Mégantic with the Atlantic railway in 2013. The cleanup costs alone have been in the hundreds of millions of dollars, but the railway company had third party liability insurance of only $25 million. The railway has subsequently gone bankrupt. The Minister of Transport has moved quickly following the tragedy to improve the safety regime that applies to railways, especially for the transportation of crude oil.

In January of 2014, there was an accident in my riding involving CN Rail just outside of Plaster Rock, New Brunswick, in a small community called Wapske. It was not a big thing like Lac-Mégantic by any stretch of the imagination, but there were a number of railcars carrying oil and propane.

It is important for us to represent our communities, especially rural communities with a lot of volunteer first responders and firefighters. Kudos to all the first responders who came to the scene during that accident and guaranteed community safety at that time, especially Tim Corbin, the fire chief at the Plaster Rock Fire Department, Mayor Fenner for Plaster Rock, as well as all the first responders and the hazardous materials people who attended the site.

Over the long term, though, we have to ensure that adequate resources are available to compensate third parties so that taxpayers are not responsible for paying. Indeed, the bill before us is based on generally accepted principles that polluters should be held accountable for covering the costs for which they are responsible. How is this principle incorporated into the liability and compensation regimes for other sectors, such as marine and pipeline? Let me share with the House a few observations on those.

I will begin with the marine sector. In the event of a marine oil spill, the financial burden of an incident is shared between those responsible for transporting the oil, the shipowner, and those who benefit from the movement, the receivers of the oil. In the marine sector, there are several sources of compensation for oil spills. This starts with the insurance carried by the shipowners themselves to cover their liabilities.

As well, Canada is a member of the International Oil Pollution Compensation Funds. This body administers two international funds to compensate oil pollution damage caused by persistent oil. In addition, Canada's ship-source oil pollution fund, which is financed by levies on oil shipped by marine, pays compensation for damages caused by spills of any type of oil from any ship. Taken together, this fund provides funding of approximately $1.4 billion per incident.

What if the extent of a marine spill damage exceeds that amount? Earlier this year, the government announced it would remove the per incident limit of liability to make the full amount of the ship-source oil pollution fund available as part of a world-class tanker safety system. If the costs of an oil spill go beyond the amounts available from the ship-source oil pollution fund and other sources, the government will ensure that the fund is temporarily topped up to cover damages and cleanup costs for the spill. These amounts will be recouped from the industry through a levy. In other words, the polluter will pay.

Another example is the liability and compensation regime for pipelines. In Canada, we are strengthening the regime to ensure that pipeline companies are responsible for damages resulting from an incident. The former minister of natural resources announced that the government will require oil pipeline operators to be able to pay for any damage caused by spills or incidents.

On December 8, 2014, the pipeline safety act was introduced in the House. The act would amend the National Energy Board Act and the Canada Oil and Gas Operations Act to, among other things, strengthen the liability and compensation regime for pipelines. Major oil pipeline companies would be required to demonstrate a minimum financial capability of $1 billion and would be liable for damages up to that amount, regardless of fault. Above that amount, the liability would be determined by who was at fault for the accident. If a pipeline company were to become insolvent as a result of an incident, the government would pay for the cleanup and compensation using the consolidated revenue fund as a backstop. However, the industry would be levied to recover those costs.

These are examples of approaches to liability and compensation in which the polluter must pay for the cost of cleanup and compensation.

The marine model is built around different tiers that enable the sharing of responsibility for those costs. For marine and pipeline modes, the taxpayers is protected when the government is able to levy industry to recoup any loan from the consolidated revenue fund.

The bill before us draws on those best examples from the liability and compensation regimes in these other modes and uses them to create a regime for rail transportation of dangerous goods. First, it would apply the polluter pays principle to rail freight transportation through mandatory minimum insurance levels. This insurance would cover third-party liabilities resulting from any type of rail incident. In addition, it would establish a fund to cover the cost of major accidents involving crude oil that exceeds a railway company's insurance level. The regime could later be expanded to include other designated goods.

Under the bill before us, mandatory minimum insurance requirements would be imposed on federally regulated railways, depending on the type and volume of crude oil and other dangerous goods they transport. Railways that carry small quantities of dangerous goods would be required to hold $25 million in insurance. For railways carrying higher amounts of dangerous goods, there would be an initial requirement to hold either $50 million or $125 million in insurance, depending on the volume. One year later, those requirements would rise to $100 million and $250 million respectively. This approach would provide short-line railways with sufficient time to adapt to these new requirements so that there would be a certain predictability for that business and for its customers.

Finally, railways carrying substantial amounts of specified dangerous goods, such as class one railways, would be required to hold $1 billion in insurance. The Canadian Transportation Agency would assign each railway an insurance level based on its traffic and would review insurance coverage to ensure that each railway carried the appropriate amount. Railway companies would be required to inform the agency of any changes that would affect their insurance coverage. The agency would be authorized to make inquiries as necessary for assessing compliance. If a railway company failed to comply with the insurance requirements or to notify the agency of an operational change that would affect its insurance, it would be subject to an administrative monetary penalty of up to $100,000 per violation.

One thing we should understand about this insurance, and I heard in some of the comments in the debate earlier today about insurance and what it does, is that it can also be preventative. Insurance will add a certain amount of rigour to this process, because to obtain coverage, the companies themselves will have to have proper safety management systems and will have to account for that as well. In my view, that will also ensure that they up their game when it comes to their safety management systems.

The second tier of funding would be provided by shippers of crude oil collectively. They would be required to pay a levy of $1.65 on each ton of crude oil carried by a federally regulated railway as a condition of its movement. These amounts would be held in a special account in the consolidated revenue fund called the “fund for railway accidents involving designated goods”. Should the cost of an accident involving crude oil exceed the mandated third-party insurance, this account would be used to compensate for remaining liabilities.

The bill before us would establish this new regime. It is consistent with other polluter pays regimes we are having in the marine and pipeline industries, and it is a regime we need in place in response to the tragedy we saw at Lac-Mégantic and to what we saw on a smaller scale outside my community of Wapske. Doing what we are doing demonstrates that we are determined to learn from these incidents to build a more comprehensive liability and compensation regime for the future.

I can tell from the debate that many of my colleagues in this House support this bill going to committee, and I look forward to their support as we send it to committee for further study.

The House resumed 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.

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

Mr. Speaker, I will be splitting my time with the member for Davenport.

I appreciate the opportunity to speak to the bill, which is strangely entitled “the safe and accountable rail act”. I would question the safe part of it, but it certainly is a way of making railroads more accountable for their actions.

The parliamentary secretary said a moment ago that the prime purpose of the bill is to make Canadians safer. I wonder how a bill that deals primarily with insurance and liability would actually make Canadians safer, unless of course, we are proposing to give over the regulation of the railroads to the insurance companies and make the insurance companies responsible for making sure the railroads are safe. Maybe that is what it is doing, but that is certainly not something I am in favour of.

It is a core responsibility of government to protect its citizens. That can come in any number of ways, but here we are talking about how to protect the citizenry of Canada from the actions of a federally regulated body, namely the railroads.

Protecting our citizens is not something the government should see as an expense on the expense line of the ledger, and yet that is all too often what we hear about. It is actually a duty and it is not something on which we should be looking to cut our expenses or cut taxes and make Canadians less safe. It is not something it should be seeming to do, but we have seen the Conservative government do it time and time again, in food safety, in airline safety, and now in rail safety, where we have a system that clearly did not protect the 47 residents of Lac-Mégantic nor the centre of that town which was destroyed by the rail system, which the current government and the Liberal government before it helped to create.

The bill is a step in the right direction. Clearly, the government seems to have adopted the NDP principle that the polluter should pay and that the person who is responsible for something like this should pay, but we think that this could go a whole lot further. There are flaws in the bill that need addressing, and we will discuss those in committee.

However, the bill would not really do what the government suggests it would do to make the rail system safer. It would make the rail system more financially reliant on the shippers and rail companies themselves and less so on the federal and provincial governments. It is a shifting of responsibilities. It is not a creation of safety per se, unless, as I said earlier, we are expecting the insurance companies to be the ones to manage the safety systems in Canada.

Why is there all this focus on rail safety suddenly in this country?

The focus is caused in part because of Lac-Mégantic. Lac-Mégantic opened our eyes to a number of other issues that face us in the rail safety world.

One was that there is a 500-fold increase in the amount of crude oil that is being transported across the country, and it's crude oil that we have also discovered is not particularly inert. In fact, it is very explosive. Once this oil reaches its containers, it catches fire almost immediately, in some cases with huge and explosive results, as was the case in Lac-Mégantic and a number of other places across this country.

As a result, we have witnessed, with that 500-fold increase in the transportation of these dangerous goods, an alarming increase in the number of incidents involving these dangerous goods. There were 11 in the past two years alone. They were major accidents involving rail and the transportation of crude oil.

Now, I will hear the Liberals yelling that if we are not going to have it in rail, we are going to have it in pipelines. Some of this oil, in fact most of this oil, cannot be transported in pipelines because it is too dangerous. It is too gaseous. It would create too high a pressure inside a pipe. It does the same thing in rail but in a much smaller container. As a result, while rail containers are apparently safe as long as they are standing still and not moving, those rail containers, once they are moving and break, have disastrous consequences.

We also have discovered that the containers the government has been using for some considerable period of time to transport water, milk, and inert substances, but only in the last few years have we been transporting enormous quantities of dangerous goods in these containers, were known in 1989 to be unsafe. That was over 25 years ago and yet the government did not do anything about this until last year.

Last year, the minister announced that 5,000 of the 80,000 of these railcars would be taken off the rail immediately and that the rest would be replaced over the course of three years. Then we discovered that the ones that are replacing them are not safe either. Now we have been told that we are going to replace the railcars over a period of 10 years because the DOT-111s and DOT-1232s are not safe for the transportation of oil.

What do we do in those 10 years? What kind of effective safety are we promoting for the people of Canada if the vehicles that are going by their homes, schools, churches and daycare centres are not safe? That is part of what we are hoping the government will actually consider.

We also discovered as a result of this incident, but also as a result of the good work by the Auditor General, that Transport Canada is not doing a good job in particular with regard to managing the safety management system, SMS, with which the Government of Canada has replaced the direct oversight of the rail system. In theory, where before we had random inspections by government inspectors, now we have a system where the government inspects a safety management system put in place by a railroad for compliance and that the inspection of that system is how the government inspects the railroads. The trouble is the inspection of the system did not happen. As the Auditor General discovered, it was not happening, and in something like only 20% of the cases where transport officials intended to audit a railroad did they actually do it.

The Transportation Safety Board also found that Transport Canada had not been doing a good job with regard to its inspections of the safety management systems of the very railroad that failed, MMA, Montreal, Maine and Atlantic Railway. We examined the results of the Transport Canada investigation. It found 18 separate causes for the incident, although the minister and the parliamentary secretary said it was just one individual. No, it was not one individual. The Transportation Safety Board said very clearly there were 18 separate causes, some of which were with Transport Canada. It did not audit MMA. Despite knowing that it had serious flaws since 2002, it did not audit it. It did not follow up on the safety deficiencies and did not oversee the organizational and operational changes which MMA made, including the one-man crews, which was part of the reason that this all happened.

We have a government that is responsible for Transport Canada, and in turn Transport Canada, with a 20% cut in rail safety over the past few years, does not have the wherewithal to do all of the inspections that it needs to do of the safety management system. We have a system that is falling apart all around us, caused at first by the Liberals and now continued by the Conservatives, a safety management system that is not keeping Canadians safe.

I come back to the title of the bill, the safe and accountable rail act. Yes, it does something about when there is an accident, but we should not be saying “when there is an accident”. We should be saying that there should be no accidents.

Last week at committee, CN admitted freely that there will be accidents, that there will be derailments. If we are going to admit that there are going to be derailments, how are we going to effectively protect Canadians? These railcars are not going to be replaced for 10 years. In the derailments that have taken place, such as in Lynchburg last year, the railcars carrying dangerous oil were the DOT-1232s, the newer more modern ones, and the train was going 24 miles an hour. In Gogama the train was going 38 and 43 miles and hour. In Mount Carbon, West Virginia, the train was going 33 miles an hour. In Galena, Illinois, the train was going 23 miles an hour. They all exploded. They all broke and exploded.

We have been told by the government that it is going to limit the speed of these vehicles in cities to 40 miles an hour. Clearly, even 23 miles an hour is too fast. If we are going to have derailments, we should at least make sure that the oil stays in the car when it derails. The only way to do that is to slow the trains right down, maybe to the speed that was in place after the Mississauga derailment, which was 15 miles an hour.

I welcome the fact that the government is paying attention to rail safety, but I wish the government would actually do something to make Canadians more safe.

[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.

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

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

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

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

Could my colleague elaborate on that?

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

Mr. Speaker, I am pleased to rise to debate Bill C-52. This is a government bill that amends the Canada Transportation Act and the Railway Safety Act. It is a reaction to what happened in Lac-Mégantic.

I would like to begin by saying that I support the government's amendments because they are a step in the right direction. However, we would like to know why the government waited so long to do this. Why did it take a tragedy like Lac-Mégantic for the government to fix some of these problems?

Before getting into the details of the bill, I would like to go over the background. In 2013, a tragedy occurred that shocked the entire nation and had a terrible impact on the people of Lac-Mégantic. Everyone knows that 47 people were killed. Unfortunately, we cannot change that. However, the NDP has said since the beginning that we must learn from our mistakes. What happened? Why was the self-regulation and self-inspection system, which was implemented by the Liberals and maintained by the Conservatives, in place for so long?

As we all know, the Standing Committee on Transport, Infrastructure and Communities studied the transportation of dangerous goods. The NDP presented a supplementary opinion. We found that, once again, the recommendations were a step in the right direction, but did not go far enough. Meanwhile, we did not hear any recommendations from the Liberal Party.

We need to know why the Lac-Mégantic tragedy happened. Despite a study that took from November 2013 until now to complete, since the report was tabled in the House relatively recently, many questions remain unanswered. That is why one of the NDP's recommendations called for a public inquiry to really get to the bottom of what happened. Our proposal has the support of the people of Lac-Mégantic and, more recently, the support of the Lac-Mégantic city council.

A lot of questions remain unanswered. For instance, why is it that the government authorized MMA to operate with a single conductor, especially considering that company's poor safety record? Why was MMA given an exemption? I would remind the House that in the entire country, only two companies were exempt from the rule that required two conductors. Why did the government authorize just one conductor, especially in the case of MMA, a company with a troubling history, as we know?

Other questions were also raised. How is it that the government still has not assumed its share of the responsibility, despite the investigation done by the Transportation Safety Board, which found the government at least partially to blame? It is rather uncommon for the Transportation Safety Board to come down so hard on a government. I spoke with some residents of Lac-Mégantic, and I can assure you that they remain frustrated about the lack of information. They do not feel as though justice has been served. No one can understand why the government refuses to launch an independent public inquiry to really get to the bottom of what happened.

To come back to the bill, the Lac-Mégantic tragedy made us realize something else. Afterward, we realized that MMA had $25 million in liability insurance. That amount does not even begin to cover the $400 million that has been spent to date on cleaning up and rebuilding, and that cost may still go up. How can a company have only $25 million in insurance? One of the ways that the government responded and the reason why we are supporting this bill is that it will require rail companies to increase their liability insurance, or at the very least, it will impose a minimum amount on them. As I said, this is a step in the right direction. However, if we take a closer look at the table, we see that a minimum of $25 million is being imposed on the smallest rail companies that transport smaller amounts of dangerous goods.

That is the same amount that was set for MMA. On the other hand, the government wants to set the minimum level of liability coverage for larger companies at $1 billion. That includes CN and CP, which are class 1 railways that carry substantial amounts of dangerous goods. Without getting into too much detail, the bill sets out minimum levels of liability insurance up to a maximum of $1 billion based on the type of dangerous goods that the company transports.

Why are these levels based on the quantity of dangerous goods that are transported all year? The Lac-Mégantic incident involved a small rail company that happened to be transporting a fairly large quantity of dangerous goods at the time. However, the costs associated with the disaster are far greater than the limits set out in this bill, particularly for small companies.

Once again, we will not give the government a blank cheque. We know that this bill is a step in the right direction, but we want answers to these questions.

What is more, this bill provides for a disaster relief fund financed by shippers to cover any damages resulting from accidents involving crude oil.

I asked the question of the minister today regarding what I will call the disaster relief fund. The minister said today that it would be pegged at $250 million. I am asking why we are pegging the disaster relief fund at $250 million.

I mentioned before that the Lac-Mégantic disaster will cost more than $400 million. Also, if we really believe in the principle of polluter pays, why put a cap? Does that not mean that in the case that the railroad company does not have enough insurance, then the disaster relief fund would apply? If it is capped at $250 million, who else would have to pay for the cleanup and reconstruction? At the end of the day, it is the taxpayers who would have to pay, through the government.

That is actually what is happening right now. We saw it happening in Lac-Mégantic. Unfortunately, we do not understand why there will be a cap here, especially of $250 million. That is another question we will have to ask the minister and probably a Transport Canada official.

I asked the minister another question, and we will probably agree to disagree. The minister said they have increased the number of rail safety inspectors to a sufficient number. I mentioned before in the House and in committee that the government has only hired one additional inspector for rail safety. I am not the person who is saying that; it is Transport Canada actually answering one of my questions.

We know the impact on the environment after what we saw in Lac-Mégantic and with the derailments in the northern part of Ontario. My colleague from Timmins mentioned the Gogama derailment and the implications it has with respect to the environment. If the only answer from the government is to hire one more rail safety inspector, that is a problem, especially after we read in the TSB's preliminary report that there were issues with rail infrastructure.

The government says it is not allowing self-inspection or that SMS is sufficient. What the NDP is saying on this side of the House is that although the safety management system put in place by the Liberals is a system that goes in the right direction, how it is applied and enforced is key, and what we have seen is the government just transferring all the responsibilities to the railway companies.

That is clear because when we ask questions to railway companies as to who is responsible for inspections, they will tell us they are.

On the other side, all Transport Canada is looking at is mainly whether the safety management system is existent. Again, the Auditor General and the TSB said that the way it was applied and enforced was not sufficient.

Questions were raised with regard to whether Transport Canada had enough resources. We know the rail safety directorate, the body that is in charge of overseeing and ensuring that rail safety is enforced and applied, has had its budget cut by 20%, if we look at the 2010 numbers. The government's actions speak louder than words. It is cutting the rail safety directorate, the body that looks at ensuring rail safety is enforced.

When we talk about rail safety, again, there is the issue of the lack of oversight. That was raised a long time ago by the TSB, and it has been raised by the official opposition. However, when we look at the action, which is cutting budgets to the rail safety directorate, we do not understand where the government intends to take leadership in ensuring that oversight is there.

I have also asked the minister questions about the number of railways that have received penalties in the past few years.

The response from the Minister of Transport is zero. The railway companies have been fined zero dollars, when we know that some companies have not been obeying the laws or the regulations and are cutting corners.

The government is currently cutting the budget of those responsible for inspecting the railway companies and enforcing the law, but what is more, it is fining the railway companies zero dollars. The law is not actually being enforced.

Further on in Bill C-52, some measures are introduced to give the minister and the inspectors more authority. On that issue, we support the proposed amendments.

Indeed, when we know that a railway company is breaking the rules or has some safety problems, then it is important for the government to take action.

Again, we take issue with the lack of transparency in all this. There is a reason we asked for a public inquiry into the Lac-Mégantic tragedy and the transportation of dangerous goods. Again, we are not getting all the answers that we and the public are looking for.

When it comes to lack of transparency, we need not look very far; we just have to look at the government. The former minister said that if municipalities wanted information about dangerous goods passing through their area, they would have to complete an access to information request.

I have to acknowledge that the current minister has made progress. However, that does show this government's reluctance to share information and work with the municipalities.

There is not yet full co-operation with the municipalities. I wonder how the municipalities are going to pay for their first responders' training and ensure that they have all the training information and the resources needed to respond to an emergency.

Unfortunately, what I heard from the many municipal councillors and mayors I met with is not reassuring. I travelled around Quebec to hear from Quebeckers and, unfortunately, they still feel that there is a lack of co-operation and information-sharing.

For example, since Lac-Mégantic, the Transportation Safety Board has asked railway companies to provide their risk assessments.

Companies must assess the risks, for example when they pass through a densely populated area or when they are transporting a certain quantity of a particular type of product. In the United States, the assessments are public and can be viewed. The Canadian government has not taken steps to enable the public—and especially the groups affected, like municipalities—to access these assessments.

In committee we asked why a particular risk was taken, what risk assessments were done and whether Transport Canada had received them. The response was that risk assessments had been done. Transport Canada responded that all of that information is not made public. We cannot get an answer to our question. The NDP thinks that the government should be much more transparent.

Unfortunately it takes disasters like the one in Lac-Mégantic and the ones in northern Ontario for people to truly see what is going on. It is shocking to see what happens, for example, with train derailments and the impact they have on the environment. The government continues to lack transparency.

I have to say that this and other bills have been steps in the right direction. However, there are still some unresolved issues. One of those issues is the rail cars that were introduced after the Lac-Mégantic accident even though the Transportation Safety Board of Canada has been asking the government to make rail cars safer for the past 20 years. At the time they were called DOT-111 tank cars, or class 111 tank cars. “DOT-111” is the term used in the United States.

Last year, the government introduced new standards in response to Canadians' concerns. The government said it would take three years for all of the rail cars in use in Canada to comply with the new standards. Unfortunately, the Gogama incident and the subsequent Transportation Safety Board report showed that CPC-1232 tank cars were not adequate either. The new DOT-111 tank cars, which the minister said are the new standard, are not appropriate. They respond just like the old DOT-111 tank cars. That is not according to me; that is according to the Transportation Safety Board itself. We still have the same concerns.

The minister said that new standards would be brought in. I asked why it took so long for that to happen.

The minister's response was that it was negotiating and dealing with the U.S., which takes time. However, when we talk about the safety of Canadians, we know these standards are not sufficient. It will take another 10 years to put the promised standards in place. That is 10 more years for us to have these unsafe rail tankers going through our cities and near our schools. I have heard a lot about that from Canadians from coast to coast to coast. They are worried.

Although these are steps in the right direction, there is still a requirement for stronger regulations and enforcement. The main concern is with respect to the lack of oversight. The government has said that it is moving forward on that front, but we know the budget for the rail safety directorate has been cut by 20% since 2010 and when we only have one additional inspector, those actions speak louder than words. The government needs to do more to ensure that safety of Canadians is the number one priority.

[Lisa Raitt, Conservative, Halton, ON]

Mr. Speaker, I would refer the hon. member to proposed section 87 of the Canada Transportation Act, under clause 4 of Bill C-52, where we give the definition of crude oil. I can assure the member that there was a lot of discussion with respect to that with Transport Canada officials. Where we landed is where we list it here, which is in compliance with the United Nations designation and classifications.

We will always make sure we are getting the appropriate capture with respect to crude oil to ensure it is part of the shippers' fund. We cast the net quite widely in this case, but if there are any specific concerns that the member may have with respect to that, I will ask her to bring it up for Transport Canada officials, through me, and we will be able to get you the appropriate answer.

My understanding is that we threw the net widely in order to capture the entire definition in accordance with the United Nations regulations.

[Lisa Raitt, Conservative, Minister of Transport]

moved 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.

Mr. Speaker, today I rise in my place to begin the second reading of Bill C-52, the safe and accountable rail act.

Since arriving at Transport Canada, I have made safety my absolute top priority.

As minister, I have borne witness to events that have led us to examine the safety regime and the manner in which railways and shippers are held accountable when things go wrong. Things can and do go wrong.

The most notable event without question was the explosion of railway cars in Lac-Mégantic, Quebec, on July 6, 2013, and the 47 people who died that day, a day that will be inscribed in the memory of all members of this House. It has galvanized our determination to find better ways to protect Canadians and our communities, and better ways to safely move the goods on which the Canadian economy depends.

We are committed to achieving that, and we have taken decisive measures to do so.

Very soon after the tragedy, we introduced measures to address safety issues. We established two-person minimum crews for locomotives pulling dangerous goods, and we slowed the speed of all of those trains. We adjusted the specifications of tank cars, and immediately took the least crash-resistant cars off the rails. We strengthened regulations and we increased inspections. We also took steps to address longer-term issues. We have been working with municipalities, first responders, railways and shippers to strengthen emergency response across this country.

In August, the Transportation Safety Board issued its final investigation report on the Lac-Mégantic tragedy, and again we responded. Last October, I introduced further measures, including an emergency directive on how trains are to be braked, the accurate classification of dangerous goods and steps to improve training of all rail employees.

We also introduced measures to make safety management systems more effective in ways that I will discuss in more detail, but I want to emphasize this: this government has implemented every single one of the recommendations of the Transportation Safety Board in response to Lac-Mégantic. We have learned the lessons inherent in past tragedies, and our commitment to safety is absolute.

The bill before us introduces further steps to strengthen the safety regime of Canada's railways and ensure the accountability of railways in the case of accidents. It moves on three different fronts. The first is prevention. Amendments would strengthen the regulatory regime to reduce the likelihood of rail accidents. The second is communication for effective response. The bill would allow for requirements related to information sharing between railways and municipalities to improve the response in case of emergencies. The third is accountability. The bill would take steps to ensure railways have enough insurance to pay for damages. It would also make crude oil shippers accountable for what they put on the rails by ensuring they pay into a supplementary fund that would be available when an accident involves crude.

The bill before us would amend two pieces of legislation: the Railway Safety Act and the Canada Transportation Act. Taken together, these amendments represent a significant step in improving the overall safety in Canada's railways, especially in the transportation of dangerous goods. These amendments respond to the recommendations of the Transportation Safety Board in response to Lac-Mégantic, and the 2013 fall report of the Auditor General. We welcomed all their input.

Let me begin with prevention and the features of the bill that would help prevent rail accidents. The Railway Safety Act sets out a regulatory framework to address the safety, the security and the environmental impact of rail. Under the act, federally regulated railways are responsible for the safety of their rail line infrastructure, of their railway equipment and of their operations.

Transport Canada monitors the railway's compliance with the act and with the department's rules, regulations and engineering standards.

Transport Canada also conducts audits and inspections to ensure that the overall safety of railway operations is maintained. Canadians can be assured that Transport Canada does not and will not hesitate to take appropriate action to address safety concerns. The bill before us today would provide new authorities to the safety inspectors and to the Minister of Transport to do just that.

Under this bill, a new provision would give the Minister of Transport the authority to order a railway to take a corrective action, to stop any action, to follow any procedure or to suspend operation. In other words, the minister would be able to intervene directly should there be a concern for safety.

A Transport Canada railway safety inspector would be given broader authority to issue notices and orders to any person or entity, including railway companies, road authorities and municipalities, relating to safe railway operations. By increasing the authorities for the minister and railway safety inspectors, we would increase Transport Canada's ability to administer the Railway Safety Act and the regulations, the rules and the engineering standards made under the act. These are all powerful tools and they would increase the regulation of oversight of railway companies that Transport Canada regulates and would ensure that railways operate according to the standards established in the act.

However, I would like to emphasize that some of the most important steps that railways make to improve safety and safety culture are not the results of the provisions of the Railway Safety Act but are contained within their own safety management systems or SMS. I want to be clear on this point. A safety management system is not deregulation and it is not self-regulation; it is an internationally recognized, science-based process that has been used in rail transportation since 2001. SMS do not replace rules or regulations or inspections. They provide a systemic approach to safety that incorporates specific regulations and proactive measures to identify hazards and to mitigate risks.

Transport Canada has created regulatory requirements around safety management systems and the bill before us would strengthen the department's oversight. Under the amendments, I believe that if a railway company were implementing its safety management system in a way that could compromise railway safety, I could take that company to corrective action by placing an order. With this additional oversight, railways would have further incentive to ensure that they manage the risks associated with operating a railway.

I would like to draw the attention of the House to the elements of this bill that would help quicken emergency response through closer communication and co-operation between railways and municipalities through which they pass. Under this bill, Transport Canada would have new authority to regulate the sharing of information, of documents and of records from one party to another other than the department, for example, from a railway company to a municipality.

Canada's history is one of towns and cities that sprang up along the rail lines in this country. We have to ensure that the people who live in these areas are safe. The collaboration between railways and communities on such matters would no longer be at the discretion of the railways. It would form part of a mandatory regulatory framework. The Federation of Canadian Municipalities has been an outspoken champion for better communication and more transparency between railways and municipalities on safety-related issues, and we thank its members for their input and advice.

In addition to prevention and effective communication for improved response, the third pillar of the bill involves accountability. By this, I mean the need to ensure those responsible for operating the railway system and those who put high-risk goods into the system would have the financial resources they need to compensate victims and to clean up communities if things go wrong. This is not just an issue that results from major tragedies such as what happened in Lac-Mégantic, although I will return to that in a moment.

More frequently, municipalities are called to respond to incidents of lesser impact, such as putting out fires that may have been caused as a result of a railway operation. Under the current regime, these costs are often borne by the provinces and municipalities and ultimately their taxpayers. However, under the bill before us, if a province or municipality believes that a fire was started as a result of railway operations, it can apply to the Canadian Transportation Agency for reimbursement. The amendment would give the agency authority to determine if indeed the fire was caused by railway operations, and would be able to determine the costs incurred in putting out the fire and require the railway to reimburse the province or municipality for those costs.

This amendment and the others I have spoken to today are changes to the Railway Safety Act that promote a safe and secure, efficient and environmentally responsible transportation system in Canada. The amendments would give Transport Canada more authority and oversight in rail operations, bring in a new era of communication between railways and municipalities in an effort to improve emergency preparedness, and help make the railways accountable for the costs incurred from fighting fires that result from their operations.

However, another important issue of accountability became all too apparent in the aftermath of the Lac-Mégantic tragedy. The cost of the disaster in terms of the lives lost was incalculable. They are beyond words. However, there were calculable loss costs as well, and the costs of putting out the fire and clearing the debris, cleaning up the effects on the environment, and, of course, the costs of rebuilding a community and compensating, truly shattered lives. No one wants to anticipate such a disaster, but any responsible company must prepare for such eventualities by carrying sufficient insurance to cover the costs.

Under the Canada Transportation Act, federally regulated railways must carry insurance, but the Lac-Mégantic tragedy has proven that the measures now in place are simply not sufficient. Therefore, the bill before us identifies specific levels of insurance that must be carried, depending upon the type and volume of dangerous goods that the railway transports. These insurance requirements would come into force 12 months after the bill's royal assent, giving the insurance market the necessary time to adjust, and railways enough time to obtain the necessary insurance, which is usually purchased on an annual policy.

Class 1 railways carry significant quantities of dangerous goods, and they will be required to hold $1 billion in insurance. The House will be reassured to know that both CN and CP customarily carry more insurance than that. At the other end of the spectrum, railways carrying little or no dangerous goods would be required to hold $25 million in insurance. For short-line railways carrying higher amounts of dangerous goods, there would be an initial requirement to hold either $50 million or $125 million in insurance. One year later, those levels would increase to $100 million and $250 million respectively. This phase-in period would allow short-line railways time to adjust to the new requirements. The agency would be able to make inquiries to determine whether railways are maintaining the correct amount of insurance, and must revoke or suspend the certificate of fitness of any railway that fails to comply.

The agency can also enforce insurance requirements through administrative monetary penalties of up to $100,000, and there is more. Unfortunately, there is always the possibility and potential for a tragedy to exceed the ability of a railway's third-party insurance to cover the damages, so crude oil shippers must also share in the responsibility that comes with the transport of their dangerous goods. For those reasons, the bill would also create a supplemental fund that would be financed by levies on crude oil shippers, in the amount of $1.65 for every tonne of crude that is shipped. If the damages caused by a catastrophic crude oil accident were more than a railway company's insurance could cover, the fund would be there to cover the cost, not the taxpayers.

This is consistent with the polluter pays principle and is similar to the approach taken in marine transportation; the costs associated with an incident are shared by industry.

Crude oil shippers are included in the amendments before us today, but Transport Canada is looking at the possibility of expanding the regime to cover industries that ship other dangerous goods. In this way, we promote a shared accountability between rail carriers and the shippers of dangerous goods to ensure that victims and taxpayers are fully protected from bearing the costs of rail accidents.

Our goal is to ensure that communities, citizens, and taxpayers are protected in the event of an incident. The polluter will pay to clean up and provide compensation. We support a competitive rail sector and the resource economy that brings jobs to Canadians, but when it comes to safety in the transportation system, communities and citizens will always come first.

The measures in this bill come in addition to the steps the government has already taken to improve the rail safety regime. I would point out that there is a private member's bill that has been tabled to amend the Railway Safety Act, and I would like to commend the work of our colleague, the hon. member for Winnipeg South Centre. Her private member's bill, Bill C-627, is also designed to provide greater protection to persons and property from railway operations.

The government supports this bill, and I wish to assure the House that we have coordinated the amendments in the bill before us to ensure that both bills will be harmonized when they reach royal assent. This is the customary way to give effect to two bills and will result in both bills having equal and consistent impact on the Railway Safety Act.

Railway operators and Transport Canada have taken many measures to improve rail safety, and this has reduced accident rates over the past several years. However, the amount of dangerous goods and other commodities moving by rail is increasing, and it will continue to grow. We need proper oversight to reduce accidents. We need better communication between railways and municipalities to provide more effective response, and we need a stronger liability and compensation regime in the event of an accident.

The bill addresses each of these areas. It introduces substantial changes to the regimes for both rail safety, and liability and compensation. In the last Speech from the Throne, this government committed to drawing upon the lessons of the tragedy at Lac-Mégantic to make shippers and rail companies accountable for rail safety.

With this bill, we are fulfilling that commitment.

Our system of transportation safety is strong, but it can be improved. By strengthening the safety, liability, and compensation regimes, we will improve public confidence in the rail industry. Above all, we will underscore that the safety and the security of Canadians remain the top priority of Transport Canada.

We have put in place many rail safety initiatives, through directives, orders, and regulations within the existing legislation framework.

This bill will enable us to take further measures.

I hope hon. members share my sense of urgency that we get this done, and that they join me in supporting this extremely important bill.

[Daniel Rubinstein]

Yes, from FCM's perspective, as I mentioned before, I think the key trend, both with this bill and Bill C-52, is the expansion of the scope in which the minister and inspectors can act when there's a threat. We know the development of the grade crossing regulations dealing with walk-crossing issues is prescribed right now for immediate threats. That's very narrow, so “significant threat” in this bill and then even the broader interpretation in Bill C-52 are welcome.

[Jeff Watson, Conservative, Essex, ON]

Now, from the government's perspective, obviously, and we've heard some of this today at the table, we have a private member who has seen an issue and has tried to address it with Bill C-627. Obviously, the government, from its own perspective, has brought forward a bill, Bill C-52, that takes a number of issues but has recognized what the private member has done and is looking for a way, I think, if it were to pass first, to dovetail that into the legislation.

We don't know which bill will pass, or both, or whatever. We're coming to the end of a parliament, so this committee is tasked with dealing with this specific bill and this specific language. Given that and Bill C-52 aside, do the stakeholders here support the measures of Bill C-627 moving forward? That's what this committee has to decide.

[Daniel Rubinstein]

No, FCM wasn't contacted on the content of the bill.

Just to make one point, I know Mr. Komarnicki asked whether, with the changes, it makes sense to have more powers to the minister to act when there's an issue. We would certainly say, yes, that in the current Railway Safety Act, it's limited to an immediate threat. This bill talks about expanding to significant threat. Bill C-52 goes further—

[Phil Benson]

What I'm saying is that if this bill were to include “imminent danger” it would be better. Our confusion is dealing with Bill C-52, where we think the minister's proposals are more fulsome. That's why we're suggesting to perhaps incorporate them into this bill, pass it, and at least we can get that part of it done before the end of the session.

I congratulate Ms. Bateman for bringing it.

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

Thank you, Mr. Chair.

I want to thank the witnesses for their presentations. They were most interesting.

I think the bill deserves even more attention. Everyone has brought up the fact that another bill is also under consideration. It's a bit difficult to see what the impact of this legislation will be on Bill C-52. It will make the discussion a bit more complex.

Be that as it may, we are discussing Bill C-627 today, and I will try to focus on that.

I would like to start with Ms. Quilan.

[Don Ashley, National Legislative Director, Teamsters Canada Rail Conference, Teamsters Canada]

Thank you, and thank you for having us here.

When it comes to the bill itself, we are fully supportive of anything that improves rail safety and gives the minister more regulatory impact on improving rail safety.

When it comes to crossing incidents, it's very impacting on our membership. The devastating effects that the public and the community see with these crossing accidents also deeply impacts our members and their families, and they're lasting affects. One of our highest areas of injury are critical incidents from these crossing accidents. Again, anything that can be done to improve that area would be supported by Teamsters Canada.

With the bill itself, the language is good. When it comes to the changes to sections 31 and 32 of the Railway Safety Act, we prefer the language in Bill C-52. Whether this bill gets picked up and the proposed change to section 9 gets moved to Bill C-52 or you amend this bill with the language from Bill C-52 in regard to sections 31 and 32, we would support either one of those alternatives.

[Phil Benson, Lobbyist, Teamsters Canada]

Thank you, Mr. Chair.

I'm a lobbyist for Teamsters Canada and with me is Mr. Don Ashley. He's the national legislative director for the Teamsters Canada Rail Conference. I'll be dealing with some background issues and Mr. Ashley will be dealing with the bill itself.

Just to start, the Teamsters Canada Rail Conference represents the running trades, main lines and most of the short lines. With other components of teamsters divisions, we represent approximately 65% of rail labour.

I want to thank you for having me before the committee. In case this is the last time we get to come here during this Parliamentary lifespan, I'd like to thank the members present and past for their courtesy and for all their hard work. I think we've achieved a lot. We still have a lot to do, but I do want to thank you. If we have a chance to come back, that's great. If we don't, again, thank you very much.

As background, of course, we've seen recently that we have derailments and we have track issues with CPC-1232 cars. Previously, before the committee, we raised our concerns about the CPC-1232 cars, about whether they were actually suitable and if they would work. As we know, from the Gogama tragedy and elsewhere close to tragedy, there seem to be severe problems with them. Similarly, we all have concerns about the new 1711s.

The other issue that is a great concern to me is the movement of dilbit. After Lac-Mégantic and that tragedy—and our prayers and concerns still go out to the families there, that's going to be a long healing process—the issue of dilbit was not a concern from the experts that I attended meetings with, and I certainly attend a lot of them. The issue was shale oil. Clearly, after the Gogama accident, that region and track, that whole dilbit issue and synbit has to be reviewed again. I know it will be in upcoming meetings going forward, but that was a great surprise to me. It's not something that I expected.

Of course, we have Bill C-52.

The other thing we have been very busy with—you can see my stack of notes—is the safety management system regulations that will be in effect on April 1. We have been very busy over the last three weeks to a month being briefed on the bill, on the safety management systems, the processes, the updates, when it's going to happen. To be honest, there are parts we're confused about, parts we're disappointed with, and other parts we're quite pleased with.

One issue that's quite interesting for us is one of the issues that was raised before the committee during the Railway Safety Act amendments. That was the direct line from workers to Transport Canada rail safety, a 1-800 number to report safety issues. I'll ask you as I did last time, where's our 1-800 number? It seems to have not quite vanished, but I do not understand why it's a particular problem to set up a 1-800 number.

It's our position, as a matter of policy, that we do not support private members' bills on areas of transport and the Transportation Act unless the subject matter is tangential to the overall safety scheme. I think Bill C-52 really proves our point on that issue.

That being said, we want to thank Ms. Bateman for bringing it because obviously she had concerns. We would have supported the bill in a way because we did not find it particularly offensive in part. It is important for members to bring forward private members' bills. I'm not discouraging members to do it. However, quite often, acts like the Transportation Act are quite complex and it's very hard to just take out one little section without realizing there are a lot of other implications.

With that, I'll pass it over to Mr. Ashley to deal with the bill.

[Michael Bourque, President and Chief Executive Officer, Railway Association of Canada]

Good afternoon, Mr. Chairman, and members of the committee. Thank you.

I want to begin by saying that safety is of the utmost importance to the railway industry. Our members are committed to safety and are constantly looking for ways to improve their performance whether it's through training, risk assessment, infrastructure investments, or technology.

Our industry aIso believes in working collaboratively with government, labour groups, municipalities, and other stakeholders on improving our safety performance. ln the last 20 months especially, we've seen new train securement and operating practices, new tank car standards, and many other measures introduced, all of which will contribute to improving safety.

Crossing safety, which member of Parliament, Joyce Bateman, identified as the motivation behind Bill C-627, is aIso a pressing issue for our industry. There are currently more than 31,000 federally regulated grade crossings in Canada, and crossing accidents account for nearly 20% of all rail incidents in Canada. Sadly, a third of those incidents result in death or serious injury.

Crossing safety is an important issue, but I'm not sure Bill C-627 is the best way to tackle it. In fact, I'm questioning why we're discussing it today. As a number of committee members pointed out earlier this week, Bill C-52 will repeal key sections of this bill.

Our primary concern with Bill C-627 is that it may be redundant and it could create confusion. Section 4 of the current Railway Safety Act already states that “regard shall be had not only to the safety of persons and property transported by railways but also to the safety of other persons and other property” in determining whether railway operations are safe, or whether something constitutes a threat to safety.

ln addition, under section 31 of the current Railway Safety Act, railway safety inspectors, on behalf of the Minister of Transport, already have the power to order a rail line or crossing to be closed, or the use of railway equipment to be stopped, if they deem it to be a threat to safety. However, it may well be that improvements to the act are required, and we certainly appreciate many of the crossing safety concerns that Ms. Bateman raised before this committee.

As a result of urban growth around railway operations, traffic has increased at existing crossings and additional crossings have been built to relieve road congestion across the country. Communities and city planners need to think about alternatives to creating new grade crossings, and what upgrades can be made to improve safety at existing crossings.

Although not specifically aimed at crossings, we're making some progress through our joint proximity initiative with the Federation of Canadian Municipalities, and we recently saw Montreal adopt our Guidelines for New Development in Proximity to Railway Operations as part its long-term development plan. Montreal was the first major urban centre to adopt the guidelines and we're hopeful that other cities will follow suit.

But more can be done. I'll read you a quote. I'm sorry, it's a little bit long, but bear with me.

ln its report, the advisory panel for the Railway Safety Act review recommended that the act be amended to require developers and municipalities to engage in a process of consultation with railway companies prior to any decision respecting land use that may affect railway safety.

We believe that one of the most efficient ways of improving railway safety in this area is to give the Governor in Council the power to make regulations respecting notices that should be given to railways regarding the establishment of a local plan of subdivision, or zoning by-law, or proposed amendments thereto, where the subject land is within 300 metres of a railway line or railway yard. We believe the 300 metres is a distance that makes sense from a safety point of view.

Further, we also believe, as is done in the Aeronautics Act today, that power should be given to the Governor in Council to make regulations respecting the control or prohibition of any other activity in the vicinity of a land on which a line of railway is situated, to the extent that it could constitute a threat to safe railway operations.

These comments were made by my predecessor, Cliff Mackay, to this committee during its review of the Railway Safety Act in 2012, and this is still our position today. Railways are required by law to notify municipalities of any proposed work. We would like to see the Railway Safety Act amended to require developers and municipalities to consult with railway companies prior to making decisions about land use that could affect railway safety.

Another way that we can tackle the issue of crossing safety is to review the existing regulatory approach for opening and closing rail crossings in Canada. Under the existing regime, Transport Canada has the authority to close grade crossings after completing a risk analysis. Meanwhile, the Canadian Transportation Agency has the authority to open new crossings without having to assess public safety. This dichotomy of authority has jeopardized public safety and led to some counterproductive outcomes. In one case, the Canadian Transportation Agency ordered a railway to open a crossing after Transport Canada had ordered it permanently closed for safety reasons.

Furthermore, the number of crossing-related accidents has not decreased over the last decade. Since 2003, there have been more than 2,300 crossing-related accidents and 670 serious injuries and/or fatalities. As I mentioned earlier, 30% of the crossing-related accidents over the last five years have resulted in serious injury or fatality. The increasing number of level crossings, the increase in traffic moved by freight and passenger rail, as well as truck and automobile traffic suggest that crossing-related injuries and fatalities will continue to be a problem in the future if action is not taken. Recent government efforts to improve safety at grade crossings will help, but the best way to improve safety is to close more crossings.

Canada's grade crossings regulations came into effect last December 17. These regulations outline a series of improvements that must be made to grade crossings, including private crossings. Short line railways alone expect that they will invest somewhere in the order of $85 million to meet these regulatory requirements, and the estimate at the time of regulation was a cost of about half a billion dollars to the industry to meet these regulations.

There is also the issue of private crossings. We have many instances where private roads crossing over rail lines are used by one or more landowners, and where there is no crossing agreement. In these situations, railways advise users of the crossing of the need for a crossing agreement, setting out terms of use for construction and maintenance. But in many cases, users are unwilling to enter into these agreements, especially when crossing upgrades are necessary.

Section 103 of the Canada Transportation Act deals with the situation in which the railway company and the landowner adjoining the railway disagree on the suitability or maintenance of a private crossing. Currently, section 103 only permits the landowner to apply to the agency for the resolution of a dispute. There is no comparable right given to the railway company. We believe that, in the interest of safety, railways should have the equal right to apply to the agency under section 103.

The government aIso recently made changes to its grade crossing improvement program. Transport Canada has considerably reduced the amount that it will contribute towards grade crossing improvements. Transport Canada used to cover 80% of the cost of a grade crossing and now only covers 50%. Under the current funding formula, railways are expected to absorb almost 40% of the cost of these upgrades. Furthermore, we are told that compliance with the new regulations will not be an accepted reason for applying for funds under the grade crossing improvement program, and that these funds are not available to provincially regulated railways, which must nevertheless comply with the regulations.

When Joyce Bateman was testifying to this committee the other day, I noticed that what started as an issue of safety quickly morphed into an issue of convenience. I understand it is difficult when constituents call and complain about waiting at a railway crossing for 15 or 20 minutes, but let's consider the alternative.

Earlier this week, Jim Vena, from CN, mentioned that it's not unusual to have trains that are over 150 cars long. One hundred and fifty railcars is the equivalent of about 375 tractor trailers that would otherwise be on our roads. Without rail service, we would have more congestion, more pollution, less safety, and more greenhouse gases. Rail is about 20 times more efficient than trucks in terms of greenhouse gas emissions' intensity, and let's not forget about the economic argument. Railways need to maintain velocity and fluidity on their tracks in order to deliver high levels of service to their customers. When an accident occurs, the whole network gets clogged.

The rail industry is currently operating under a quota for grain. Last year's enormous grain crop was 20 million metric tonnes larger than the average crop. This 20 million metric tonnes required around 2,000 trains, each with 100 cars, to move it to port; then they had to return.

We need rail to move the economy, so before we start making small steps that we think may solve a specific problem, let's make sure we are not further hindering our ability to enable the competitiveness of our customers and the economy in this globally competitive world.

Thank you very much.

[Pauline Quinlan, Co-Chair, National Municipal Rail Safety Working Group, Mayor, City of Bromont, Federation of Canadian Municipalities]

Thank you, Mr. Chair.

Good afternoon and thank you, Mr. Chair, for your introduction. Thank you to the committee members for extending an invitation to the Federation of Canadian Municipalities to participate in your study of Bill C-627, an act to amend the Railway Safety Act, safety of persons and property. FCM last appeared before the committee in May 2014, as part of your study on safety management systems and the transportation of dangerous goods, and we are pleased to be here again.

I am the mayor of the City of Bromont, Quebec, and chair of the Quebec caucus of the Federation of Canadian Municipalities. I am happy to be here today to represent the Federation of Canadian Municipalities as the co-chair of the FCM's National Municipal Rail Safety Working Group.

The National Municipal Rail Safety Working Group, which I co-chair, was created in the wake of the catastrophe that devastated the town of Lac-Mégantic in 2013.

The group's work is guided by the following three principles: equipping and supporting municipal first responders to rail emergencies, ensuring that federal and industry policies and regulations address the rail safety concerns of municipalities, and preventing the downloading of rail safety and emergency response costs to municipal taxpayers.

I am joined today by Daniel Rubinstein, Manager of Policy and Research at the Federation of Canadian Municipalities. He also handles issues related to rail safety.

The Federation of Canadian Municipalities represents 90% of Canada's population and about 2,000 municipalities from across the country. Our mission is to promote and protect the interests of all communities—small or big, urban or rural, central or remote—on issues related to policies and programs that fall under federal jurisdiction.

The federation raises various issues related to rail safety and actively participates in many rail safety initiatives. We are a member of the Transportation of Dangerous Goods General Policy Advisory Council, the Advisory Council on Railway Safety, as well as the emergency response task force. We are also working closely with Minister Raitt and Transport Canada officials on all those issues.

Before speaking about Bill C-627, I want to reiterate for committee members that FCM and the national municipal rail safety working group are guided by essential work undertaken by the Transportation Safety Board of Canada.

The TSB serves a critical function in terms of making safety recommendations to the federal government, and at FCM we believe the standard for progress is full implementation of TSB safety recommendations. My colleagues and I at FCM are pleased that the government's response to the TSB report into the tragedy in Lac-Mégantic has indeed been fulsome. We expect the same type of response once the TSB has had the opportunity to fully investigate the recent derailments in northern Ontario and make additional recommendations to government.

In terms of the focus of today's meeting, let me say a few words about Bill C-627. FCM fully supports any legislative measure that clarifies or enhances the ability of the Minister of Transport and Transport Canada officials to conduct robust oversight and enforcement of safety on Canada’s federal railways. Bill C-627 does that just by clarifying that safe railway operations also includes the “safety of persons and property”.

As was discussed at the committee's last meeting this past Tuesday, these provisions complement the enhanced oversight and enforcement powers contained in Bill C-52, the safe and accountable rail act, which was introduced by Minister Raitt last month.

Related to Bill C-627 is the issue of safety standards at railway-roadway level crossings, otherwise known as grade crossings. FCM is fully supportive of Transport Canada’s new grade crossing regulations, which for the first time establish standards for sightlines, warning systems, and other key safety components at both new and existing crossings. These regulations respond to a long-standing recommendation from the TSB.

Over the next seven years, all existing grade crossings in Canada will need to be upgraded to the basic standards laid out in the regulations. Our members and federal railways are in the very early stages of sharing information with each other about existing crossings, which is the first step laid under the regulations. Information sharing must be completed by the end of 2016.

You can expect to hear more from the FCM about the need for additional federal funding for grade crossing improvements once we are able to assess the cost impact of meeting the new grade crossing regulations at existing crossings.

Shifting from rail safety to emergency planning and response, the national municipal rail safety working group has also been vocal about the need for shipments of flammable liquids to require detailed emergency response assistance plans, or ERAPs. ERAPs play a critical function in assisting local first responders in the event of a serious incident involving dangerous goods.

In April 2014 Transport Canada responded favourably to FCM’s request, by expanding Transport Canada’s ERAP requirements to shipments of crude oil, ethanol, gasoline, diesel, and aviation fuel. This regulatory change has provided municipalities with certainty that shippers of flammable liquids will provide specialized assistance when major incidents take place involving these products.

Also in April 2014 Minister Raitt established an emergency response task force with participation from key stakeholders, including FCM, to strengthen nationwide emergency response planning and training. The ERTF has a mandate to submit its recommendations later this year.

As I mentioned earlier in my remarks, in February Minister Raitt announced new legislation, Bill C-52, to improve rail safety and the transportation of dangerous goods in Canada. Key elements of Bill C-52 respond directly to concerns related to insurance and liability, information sharing, and Transport Canada’s oversight of federal railways that were raised by FCM at our last appearance in May 2014.

These are a few examples of policy areas where proactive and ongoing collaboration between FCM and the federal government has resulted in concrete reforms that will improve the safety of Canada’s railways and Canada's population.

That said, unfortunately our work is not yet done as derailments continue to occur. Again, we look to the TSB to provide Canadians with an analysis of the causes of recent derailments and recommendations to further improve rail safety. We look to the government, the railway industry, and Parliament through this committee, to ensure that any recommendations are implemented in full.

In closing, FCM welcomes new measures to clarify and expand the oversight and enforcement powers of the minister and railway safety inspectors, including the amendments to the Railway Safety Act proposed in Bill C-627.

I want to thank the committee once again for giving us an opportunity to share our point of view.

Business of the House

[Peter Van Loan, Conservative, Leader of the Government in the House of Commons]

Mr. Speaker, this afternoon we will continue debating government Motion No. 17, respecting Canada's military contribution to the campaign against the Islamic State of Iraq and Levant. Considering the importance of that debate, we will be continuing it, under an order of the House, until midnight tonight.

ISIL has stated its intention to target Canada and Canadians. In fact, ISIL issued a call to action for people to attack targets in Canada. So far two attackers have responded to that call. That is why we have to take on ISIL, take on the threat it poses and keep it from establishing a geographic foothold from which to operate. We intend to continue to degrade and destroy ISIL.

That is why we are seeking the support of Canadian parliamentarians for our decision to extend and expand Canada's military mission with our allies so we can effectively fight this jihadism which threatens our national security and global security.

We will return to that debate on Monday afternoon and complete it that day.

Tomorrow, we will continue—and, hopefully, conclude—the third reading debate on Bill C-26, the Tougher Penalties for Child Predators Act.

Monday, before question period, we will start the second reading debate on Bill C-52, the Safe and Accountable Rail Act. This legislation will improve railway safety and strengthen oversight while protecting taxpayers and making the rail industry more accountable to communities. This debate will continue on Tuesday.

On Wednesday, the House will resume the second reading debate of Bill C-42, the common sense firearms licensing act. The bill meets the government's objective to cut red tape for law-abiding firearms owners and provide safe and simpler firearms policies. Changes to the Criminal Code would enable the government to take steps to ensure the rights of lawful firearms owners would be respected. The debate will continue on Thursday, when we will adjourn for Easter.

[David McGuinty, Liberal, Ottawa South, ON]

Hi, Ms. Bateman. Thanks for joining us.

I want to commend you on your work and on the bill. It's a positive step forward and I think Canadians will appreciate it. In my own city of Ottawa we suffered a terrible tragedy some time ago when an OC Transpo bus was hit by a train at a level crossing. People lost their lives and many people are still recovering and families are still traumatized. I think if this goes some distance in preventing this kind of accident in the future, it would be very positive.

Following up on my colleague's line of questioning, which I was going to take as well, there appears to be some duplication here between your bill and the government's Bill C-52.

Maybe just to cut right to it, are you prepared to have your bill amended so that it's actually integrable with the government's measures or “fungible” as we would say?

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

Well, it doesn't presume. It says if it passes, because right now we're wondering whether or not Bill C-52 from the government is going to become law.

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

In Bill C-52, which we haven't debated yet, there are provisions that actually deal with your bill. They actually repeal what your bill is bringing forward. I'll give you the example of subclause 39(1). It states:

39. (1) Subsections (2) to (7) apply if Bill C-627, introduced in the 2nd session of the 41st Parliament

Then it states:

If subsection 25(1) of this Act comes into force before section 2 of the other Act, then

(a) that section 2 is deemed never to have come into force and is repealed;

So we're talking about your section.

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

Have you seen or have you read Bill C-52, which was brought forth by the government regarding rail safety?

Rail Transportation

[Lisa Raitt, Conservative, Minister of Transport]

Mr. Speaker, I greatly appreciate the opportunity to talk about the safe and accountable rail act, which our government introduced last week. I certainly do hope that the opposition members will support it full-throated because of the great things it would do. For example, it would make sure that polluters do pay in the case of an untimely accident with respect to rail.

Specifically, it is important to note that it is a very comprehensive regime, with $1 billion in liability insurance backed up by a $250-million compensation fund paid by shippers and all backstopped by being able to go out and charge railroads, should it be in excess of that.

[Lisa Raitt, Conservative, Minister of Transport]

Thank you very much, Mr. Chair.

Thank you very much to the committee for the invitation to be here today. As you already said, I'm joined by the deputy minister, Louis Lévesque. Also joining me are André Lapointe, the assistant deputy minister of corporate services and the chief financial officer; and Laureen Kinney, the assistant deputy minister for safety and security.

We are very pleased to be here today to address the supplementary estimates (C) for 2014-15, and our main estimates for 2015-16. I'd also like to take the opportunity to update the committee on various matters relating to transportation and, of course, the work of Transport Canada.

Obviously, the matter I consider to be the priority of the government when it comes to transportation is transportation safety. That matter is our ongoing effort to strengthen safety across all modes of transportation. The tragic accident that happened at Lac-Mégantic demonstrated very clearly why safety in preventing accidents has to remain our government's transportation priority. On February 20 of this year, I introduced legislation that, if passed, will make the rail industry and crude oil shippers even more accountable to Canadians. Bill C-52, the new safe and accountable rail act, proposes amendments to the Canada Transportation Act and the Railway Safety Act.

One of the things to do is to develop a new liability and compensation regime for federally regulated railways. This includes minimum insurance requirements, a compensation fund financed by levies on crude oil shippers, increased information-sharing provisions, and stronger oversight powers for the minister and Transport Canada.

I also announced the new railway safety management system regulations, 2015, which will require companies to develop and implement a formal framework that integrates safety into their daily operations.

In marine transportation, we continue to develop our world-class tanker safety system. Under this system we're implementing a comprehensive list of measures that will meet our ongoing commitments to responsibly transport our natural resources and to help protect our marine environment. We'll do this by enhancing our ability to prevent ship-source spills from happening in the first place, and clean them up quickly if they do occur and, of course, ensure that polluters pay.

To give you an example, last fall I announced that we'd provide up to $20 million over three years to Ocean Networks Canada for its smart ocean initiative, which supports the world-class tanker safety system. The funding will allow ONC to transform the oceanographic data it collects into navigational safety information that will help vessel operators and others avoid navigational hazards and prevent marine accidents.

In air transportation as well, safety is our priority. That's why last year Transport Canada took part in the International Civil Aviation Organization, or ICAO, task force on the risks to civil aviation arising from conflict zones. The work that task force carried out in 2014 is truly helping us better understand and address the risks that civilian aircraft face around the world. We also recently took part in ICAO's second high-level safety conference in Montreal, where Transport Canada presented working papers on the regulation of unmanned air vehicles, UAVs or drones, as they're often called. These papers complement the new safety guidelines for UAVs that I announced last fall, as well as a safety awareness campaign to help UAV users, both recreational and commercial, to understand the rules of the sky and always consider safety.

Now, while addressing safety, I would like to provide the committee with an update on our actions relating to the recent tank car derailment in northern Ontario. Transport Canada has inspectors and resources on site. Local first responders are there and are supported by CANUTEC, our 24-hour emergency response centre, whose scientists provide real-time information concerning any dangerous goods being transported. We also put into place and into play our national aerial surveillance team. They're flying over the scene, or they have flown over the scene, to assist the response to the derailment, and we continue to assist the Transportation Safety Board, which is leading the investigation into this incident.

Stepping back from what happened this week, our government has taken a number of actions already to address rail safety in the transportation of dangerous goods. We continue to train and hire inspectors. They carry out more frequent audits. We have removed the least crash-resistant DOT-111 tank cars from service. We require that DOT-111 tank cars that don't meet the new standards that we published this year be phased out within three years.

Also, we require emergency response assistance plans for trains transporting crude oil, gasoline, diesel, aviation fuel, and ethanol. We have developed regulations as well to update tank cars to a new model that requires thicker steel, half head-shield protection, and top-fitting production. Finally, we're working with the United States to develop a new standard of tank car used to transport flammable liquids, and we're expediting this work to harmonize tank car standards in all of North America.

All that being said, we are concerned with the number of derailments that have taken place in this area. We don't know what caused this derailment yet, but we expect that the company will fully cooperate with the Transportation Safety Board in its investigation.

At this point in my speech, Mr. Chair, I would make a request to the committee, if I may. I would like to ask that the committee consider calling CN to appear with regard to the recent derailments in Gogama, Ontario.

Mr. Chair, we continue to work to support Canada's economy. Last March, to address a backlog of grain on the Prairies and get grain moving faster in the short term, we required CN and CP to increase their capacity and carry minimum volumes of grain. Last November our government extended this grain volume requirement for railways until March 28 of this year, so CN and CP have to move minimum volumes of grain, subject to demand and corridor capacity.

We took these measures to support grain transportation and to help maintain the confidence of international customers in Canada as a reliable source of grain. Transport Canada reviews weekly reports on grain volumes that CN and CP submit to ensure that the railways are meeting their requirement.

Our government believes that measures such as these are necessary to help grain shippers move products to market and to maintain Canada's reputation as a world-class agricultural commodity supplier. Given that we are the world's fifth-largest exporter of grain, that reputation is important.

To support the efficient and strong trade that we have with the United States, we are continuing to advance the Detroit River international crossing. Last month I was pleased to confirm that, following significant discussions with both the United States and Michigan governments, Canada agreed to an arrangement regarding U.S. port of entry to ensure that the project proceeds without delay.

Under the terms of this deal, a public-private partnership will help design, finance, construct, operate, and maintain all components of the crossing, including the U.S. inspection plaza. The cost of the U.S. port of entry will be repaid from future toll revenues, and not by Canadian taxpayers. It's an arrangement that is good for Canada, because it allows us to move forward on the project on both sides of the U.S.-Canada border.

What we have achieved with the Detroit River international crossing is a really good example of the kinds of initiatives this government has pursued through our gateways and corridors program. That program was put in place to strengthen our transportation system and our infrastructure to make sure that we're supporting trade, not only here on our continent but with markets around the world as well. The Asia-Pacific gateway corridor initiative has seen an investment by us of about $1.4 billion. By connecting workers with jobs and products with markets, investments like these help our economy remain strong and competitive.

I close, Mr. Chair, by reminding the committee that last June we launched a comprehensive review of the Canada Transportation Act. It's being led by the Hon. David Emerson, and it really is an opportunity to review transportation policy in Canada to see how we can best support growth and how we can increase our domestic competitiveness and our international competitiveness as well.

It has been 14 years since we reviewed transportation policy in this country, and we need to know that we have modern measures for modern times. I'm sure that this review, which is at arm's length, will produce solid recommendations to help map out transportation plans for the future, and I look forward to input the members of the committee may want to make to the review as it continues to advance. These initiatives and the others demonstrate our actions to keep transportation in Canada safe, secure, efficient, and environmentally responsible.

I would conclude on a very personal note by saying thank you so much to the committee and by expressing my gratitude to you for your hard work and your dedication to these transportation files. I look forward to continued input throughout this end of Parliament. I would say that it has been since July of 2013 that we commenced on this road to making sure that modes of transport are safer in this country. I think we have accomplished a lot together, and I know we'll accomplish more.

That concludes my opening remarks, Mr. Chair. I'm happy to take any questions you may have, and if I don't have the specific answer, I will be asking my officials to help out, to make sure we get the right information.

Impaired Driving

[Mark Warawa, Conservative, Langley, BC]

Mr. Speaker, I sadly present this petition to inform the House that Bryan McCron, a 49-year-old single dad, was tragically killed by a drunk driver. As he lay dying along the side of the freeway with his son holding him, the drunk driver came over and started beating up on both of them.

Families for Justice is a group of Canadians who have also lost loved ones to impaired drivers. They believe that Canada's impaired driving laws are much too lenient. They want the crime to be called vehicular homicide, which is in Bill C-52, and they also want the government to introduce legislation that would require mandatory sentencing for those who have killed somebody while driving drunk.

Safe and Accountable Rail Act

[Lisa Raitt, Conservative, Minister of Transport]

moved for leave to introduce Bill C-52, An Act to amend the Canada Transportation Act and the Railway Safety Act.

(Motions deemed adopted, bill read the first time and printed)