Bill C-33

Strengthening the Port System and Railway Safety in Canada Act

An Act to amend the Customs Act, the Railway Safety Act, the Transportation of Dangerous Goods Act, 1992, the Marine Transportation Security Act, the Canada Transportation Act and the Canada Marine Act and to make a consequential amendment to another Act

This enactment amends several Acts in order to strengthen the port system and railway safety in Canada.
The enactment amends the Customs Act to require that, on request, any person in possession or control of imported goods make those goods available for examination in accordance with regulations and deliver those goods, or cause them to be delivered, to a secure area that meets the requirements set out in regulation.
The enactment also amends the Railway Safety Act to, among other things,
(a) add a definition of “safety” that includes the concept of security;
(b) prohibit interference with any railway work, railway equipment or railway operation, or damage or destruction of any railway work or railway equipment, without lawful excuse, in a manner that threatens the safety of railway operations;
(c) prohibit behaviour that endangers or risks endangering the safety of a station, railway equipment or individuals who are at the station or on board the railway equipment and unruly behaviour toward employees, agents or mandataries of a company;
(d) authorize the Minister to order a company to take necessary corrective measures if the Minister believes that
(i) a measure taken by the company in relation to a requirement of a regulation made under subsection 18(2.1) has deficiencies that risk compromising the security of railway transportation,
(ii) the security management system developed by the company has deficiencies that risk compromising railway security, or
(iii) the implementation of the company’s security management system has deficiencies that risk compromising railway security;
(e) authorize the Minister to grant, refuse to grant, suspend or cancel a transportation security clearance;
(f) strengthen the administrative monetary penalty regime; and
(g) require a review of the operation of the Act every five years.
The enactment also amends the Transportation of Dangerous Goods Act, 1992 to, among other things,
(a) require persons who import, offer for transport, handle or transport dangerous goods to register with the Minister;
(b) provide to the Minister powers relating to the management of safety risks; and
(c) establish an administrative monetary penalty regime.
The enactment also amends the Marine Transportation Security Act to, among other things,
(a) set out the Act’s purpose and allow the Minister of Transport to enter into agreements with organizations in respect of the administration and enforcement of the Act;
(b) set out regulation-making powers that include powers respecting threats and risks to the health of persons involved in the marine transportation system, the sharing of information and the establishment of vessel exclusion zones;
(c) authorize the Minister to make interim orders and give emergency directions and modify the Minister’s power to give directions to vessels; and
(d) create new offences, increase certain penalties and extend the application of certain offences and the administrative monetary penalty regime to vessels.
The enactment also amends the Canada Transportation Act to, among other things,
(a) specify that the Minister may use electronic systems in making decisions or determinations under an Act of Parliament that the Minister administers or enforces and provide that a power of entry into a place under such an Act may be exercised remotely by means of telecommunications; and
(b) reduce the threshold above which the Minister and the Commissioner of Competition must receive notice of proposed transactions relating to a port.
The enactment also amends the Canada Marine Act to, among other things,
(a) set out that port authorities are responsible for management of traffic and create regulatory authorities respecting fees and information and data sharing in respect of that management;
(b) provide the minister with the power to require, by order, the taking of measures to prevent imminent harm to national security, national economic security, or competition; and
(c) require port authorities to establish advisory committees, which must include representatives from local Indigenous communities, require periodic assessments of port authorities’ governance practices and set out new requirements respecting plans and reports relating to climate change.
Finally, it makes a consequential amendment to the Transportation Appeal Tribunal of Canada Act .

[Marc Brazeau]

Just to be clear, are you talking about rail police and its contribution to governance under Bill C-33?

[Vance Badawey, Liberal, Niagara Centre, ON]

Thank you, Mr. Iacono.

Thank you, Mr. Chairman.

Mr. Cato, I want to go a step further and talk about vision and next steps. As was mentioned earlier, we have established a ports modernization review. A supply chain task force report is currently under way. We have the St. Lawrence Seaway review, Bill C-33 and Bill C-52 amongst reports that have been completed or are under way. To date we have those to update as well as to modernize.

This committee has completed two interim studies on establishing a transportation logistics strategy. In 2015 David Emerson completed a CTA review, making numerous recommendations, as I'm sure you've read.

You spoke about governance reforms within individual—individual—port structures to ensure that they're establishing and adhering to their individual strategic plans; governance that reflects supply chain experience, as you mentioned; but equally as important, experiencing and working in partnership with communities, other partners that are part of the supply chain to look at the bigger picture.

With that said, my question is this: Do you feel there should exist a binational body that would work toward establishing a binational transportation strategy that would strengthen a binationally integrated supply chain—operational in capital, moving away from protectionism, and with that, of course, ensuring that the fracture between capital transportation investments between both countries does not happen but that these investments are actually done together—and more toward an integrated North American economy, in turn strengthening our combined international trade performance?

[Eric Harvey]

My understanding of it is that exemption requests and exemptions allowed by Transport Canada are not confidential within the meaning of the act. Now with Bill C-33, I believe Transport Canada would be given an opportunity to conduct consultations. At the moment, unions are consulted when we request an exemption. Transport Canada would now have the time, I think, to also consult other groups. We have no objection to that.

[Xavier Barsalou-Duval, Bloc, Pierre-Boucher—Les Patriotes—Verchères, QC]

Thank you, Mr. Chair.

Thanks also to the witnesses here with us today.

I'd like to echo the words of one of my colleagues, who said that we had up until now spoken at length about ports in the study of bill C-33, but very little about rail transportation. I am therefore very pleased to have people from that sector here with us.

Mr. Harvey, a week or two ago I believe, we received some people from the unions who mentioned that they had reservations about the exemptions linked to the traditional safety management systems, namely for inspections carried out by people. That's the way it's usually done.

They went on to say that they would have liked the Transport Canada exemptions to be made public. I'd like to know whether it would bother you if the general public were to be informed, perfectly transparently, of the special exemptions you received from Transport Canada, so that they could reach their own conclusions.

[Annie Koutrakis, Liberal, Vimy, QC]

I have one minute. Great. I get to ask one more question.

Any one of you can answer this. In your opinion, does Bill C-33 do enough to address the environmental risks that are associated with rail and marine transportation?

[Annie Koutrakis, Liberal, Vimy, QC]

Because safety is number one throughout our transportation grid—not just with rail, but everywhere—do you feel that safety and security are being enhanced by Bill C-33? I know we already have a very robust regulation system in place, but do you think Bill C-33 enhances the security piece?

[Eric Harvey]

I'd like to start by saying that Transport Canada performs audits of the manner in which railways implement the SMS regulations and how they implement the processes mandated by the SMS regulations.

I don't want to comment specifically on what the Auditor General said at the time. What I can say, being involved with a railway and being exposed to the role and the monitoring of Transport Canada, is that Transport Canada, in our view, performs their reviews and monitors our compliance in a significant way.

In terms of improvements coming from Bill C-33, I would say that the decision or the proposal to include security will obviously broaden the scope of the review or the monitoring by Transport Canada to extend to that subject matter in addition to safety. Therefore, that should provide some visibility to the government about the work that railways and Canadian railways are already doing with numerous partners, be they CBSA or our own approach to security threats, etc. To some degree that will provide that visibility that is maybe lacking now.

[Annie Koutrakis, Liberal, Vimy, QC]

Thank you very much, Mr. Chair.

I'd like to welcome our friends. It's a pleasure to see you here once again.

The Office of the Auditor General of Canada in 2021 released a report and noted that Transport Canada had increased the number of risk-based inspections, but “did not assess the effectiveness of the railways' safety management systems”. Mr. Brazeau touched upon that a little bit in his testimony when he spoke about the SMS regulations.

I'm just wondering if I could hear from each of you your own perspectives. To what extent, if any, does Bill C-33 propose to address the effectiveness of railway safety management systems in identifying hazards and mitigating risks?

[Dan Muys, Conservative, Flamborough—Glanbrook, ON]

Okay, so there's no material improvement to supply chain performance.

Let me ask about cost analysis.

We were surprised by the Transport Canada officials who were before the committee at our first meeting studying this legislation. When we asked whether a cost analysis had been done for the all of the proposed change, like the committees and the regulations that have been added to ports, the answer was that no cost analysis had been done. We did hear from one of the port authorities that it could be $200,000 or two employees on an annual basis from their perspective.

Have you done a cost analysis from a railway perspective of how the changes in Bill C-33 would impact you?

I'll probably ask the same question of Mr. Harvey as well.

[Dan Muys, Conservative, Flamborough—Glanbrook, ON]

Does Bill C-33 fall short of achieving that necessary objective after all these years of reviews? Some of these reviews began seven years ago.

[Dan Muys, Conservative, Flamborough—Glanbrook, ON]

Because Bill C-33 is purported to be a response to supply chain issues, which you've raised in your opening testimony as well as in the previous question, are there things that you found lacking from CP's interaction with the National Supply Chain Task Force or even the supply chain task force report from your read of it in Bill C-33?

What's missing?

[Dan Muys, Conservative, Flamborough—Glanbrook, ON]

Thank you, Mr. Chair, and to the witnesses who are here today for your testimony.

We hadn't heard the perspective of the railways yet for our study of this bill, so it's been helpful.

Let me start with you, Mr. Cato, because you talked about the port boards' governance. That's something we've asked the ports and the associated ports about when they were here. I'm interested to hear your perspective as a user of the ports.

You talked about how Bill C-33 is really a missed opportunity in your viewpoint when the minister is appointing the chair and when there's as much prescription as to what that board needs to look like. This is what we heard from the port authorities as well, that it's an impediment.

Perhaps you could elaborate a bit more on that.

[Nathan Cato, Assistant Vice-President, Government Affairs, Canada, Canadian Pacific Kansas City]

Thank you, Mr. Chair.

And thank you to the committee for the invitation to appear today regarding Bill C‑33.

I'm the Assistant Vice-President, Government Affairs, Canada, Canadian Pacific Kansas City.

On April 14, 2023, Canadian Pacific and Kansas City Southern combined to create the first and only class 1 railway network uniting North America by seamlessly connecting Canada, the United States and Mexico. The combined CPKC network allows us to offer safer, more reliable and additional competitive options for shippers, particularly now with unrivalled access to North American ports.

I will start with safety, because at CPKC everything starts with safety, every day.

Railway safety is foundational to everything we do.

In 2022, our legacy Canadian Pacific network once again led the North American rail industry in safety, achieving the lowest train accident frequency among all class 1 railroads for the 17th consecutive year, and our safety performance continues to improve.

Our 2022 train accident frequency is CP’s lowest on record. We are also achieving a stronger safety performance relative to our industry peers. In 2013—ten years ago—our legacy CP network had a train accident frequency rate that was approximately 29% below the class 1 industry average across North America. In 2022, our legacy CP network was 69% below the class 1 industry average.

In 2022, CP also achieved a 40% improvement for personal injury safety performance since 2016.

These safety results are driven by strong investment in people, processes and technology. In fact, our capital investment over the past decade, after inflation adjustment, is approximately 50% higher than it was in the decade previously.

CPKC supports the railway industry’s position that Parliament should amend Bill C-33 to include separate definitions for “safety” and “security” in the Railway Safety Act. As drafted, Bill C-33 would insert into the RSA a definition of “safety” that includes the concept of “security.” “Safety” and “security” are distinct concepts.

Security programs are designed to prevent intentional acts by individuals seeking to do harm or damage. By necessity, measures implemented to address security risks are different than those for safety, and information about them is significantly more restricted to maintain their effectiveness.

Including separate and distinct definitions for these two concepts in the RSA would be more clear, precise and accurate.

With respect to the amendments to the Canada Marine Act, we urge Parliament to amend Bill C-33 to require logistics and supply chain expertise for appointments to the boards of directors for Canada's port authorities.

Canada’s ports need to be more accountable to port users, including terminal operators, railways and vessel lines. If maximizing throughput is the goal for Canada’s supply chains, which it ought to be, then ports must be governed by boards that have deep experience and expertise with complex supply chain logistics.

The current governance structure has permitted ports to be governed by boards of directors that often lack expertise in port management, freight transportation, and business.

The lack of expertise often results in decisions that undermine the optimal efficient management of freight through Canada’s ports, which are critical elements of our supply chain infrastructure.

An example is the inefficient use of port lands, which constrains the ability of ports to accommodate growing volumes of freight. Canada’s supply chains need world-class ports. To achieve that goal, it is imperative that our ports operate in a way that optimizes and synchronizes maximum efficiency and throughput.

Improving port performance ought to be an urgent priority. The Port of Vancouver was recently ranked number 347 out of 348 on the World Bank and S&P Global's market intelligence container port performance index.

Bill C-33 as drafted is a missed opportunity to make meaningful improvements to port governance in Canada. Canada has world-class logistics and supply chain expertise. It's regrettable that this legislation does not embrace that expertise by confirming its importance through governance reform.

This is not a new concept for transportation in Canada. For example, many of Canada's airport authorities have bylaws that prescribe qualifications for appointments to their boards. Similarly, Nav Canada's bylaws prescribe specific requirements that users be appointed to a minimum number of board positions.

Parliament should seize the opportunity before it to improve the performance efficiency, reliability and throughput of Canada's ports by insisting that they be governed by boards of directors with deep supply chain expertise.

Thank you.

[Eric Harvey, Senior Counsel, Regulatory, Canadian National Railway Company]

Thank you, Mr. Chair.

CN, the Canadian National Railway Company, would like to thank the committee for its invitation to appear today in connection with Bill C‑33, which amends various legislative provisions, including the Railway Safety Act and the Canada Marine Act.

As the operator of a railway which links the Atlantic Ocean to the Pacific Ocean within Canada, and to the Gulf of Mexico in the United States, we are pleased to be able to provide our comments on this bill.

Generally speaking, we encourage the government to show restraint and to intervene in the transportation sector only where a rigorous analysis has shown that there is a problem that business interests can't resolve, and only when absolutely necessary to deal with that specific problem. It should also factor in the impact that one or more interventions may have on the whole supply chain. Every legislative intervention needs to look at the major investments required to maintain safe and effective railway services that meet the legislative requirements for the services we need to provide to all our customers.

With respect to the amendments to the Railway Safety Act, we understand the government's desire to provide a better framework for railway safety. I would underscore the fact that Canadian railways have for many years, of their own volition, established protocols to prevent the types of events covered by the bill and to respond to such events. We therefore view this proposal favourably.

I would nevertheless like once again to repeat the suggestion that the words “security” and “safety” be redefined separately rather than combined in a single concept, as Bill C‑33 proposes. This failure to make a distinction could lead to unnecessary debates over the scope of implementation or monitoring measures.

We have also taken note of Transport Canada's intention to add prohibitions with respect to the alteration, damage and description of railway facilities, in addition to dangerous behaviour at such facilities. These would constitute additional legal grounds enabling us to respond where necessary.

The Canada Marine Act requires ports under its jurisdiction to manage their affairs on a commercial basis to maximize the efficiency of their operations and support the Canadian economy. We understand that Bill C‑33 will not change this guiding principle, and we appreciate that this is the case.

There is no doubt that Canadian ports are critical infrastructure for our national supply chain. Their efficiency defines the throughput of that supply chain and goes directly to the bottom line of the Canadian economy. From our perspective, Canadian ports have delivered in a manner consistent with their mandate under the current structure.

We support the provisions of the bill that will declare port terminals to be to the general advantage of Canada. This will provide greater certainty with respect to federal jurisdiction over these entities so that data can be collected and used to increase port efficiencies. To maximize the existing available capacity, better coordination between port terminal operators, port users, railways and other supply chain participants through the exchange of real time information is needed. This provision is a step in the right direction.

Even though Bill C‑33 does not deal with this question directly, we would like to comment on an important point for which there is a broad consensus: the need for investments in the Canadian supply chain.

A recent report assessed that Canada needs, in the next 50 years, investments of $4.4 trillion in marine and transportation infrastructure to meet growth in population and in GDP. This conclusion is consistent with the consensus that there is an opportunity for all participants in the supply chain and various levels of government to work together towards a collective goal. We have made suggestions to the government to put this option in motion, starting with fiscal measures that would encourage investments by all participants in the supply chain. We reiterate this imperative today. We believe that this measure would encourage grain terminals in Vancouver, for example, to prioritize infrastructure that enables the loading of grain ships in the rain, an operation currently not efficiently possible at our country's busiest port but available just south of the border, which limits the capacity of the Canadian grain supply chain.

We'd like to thank you, and we are grateful for the opportunity we have been given to discuss any questions you may have with members of the committee.

[The Chair, Liberal, Peter Schiefke]

I call this meeting to order.

Welcome to meeting number 85 of the House of Commons Standing Committee on Transport, Infrastructure and Communities.

Pursuant to the order of reference of Tuesday, September 26, 2023, the committee is meeting to discuss Bill C‑33, an act to amend the Customs Act, the Railway Safety Act, the Transportation of Dangerous Goods Act, 1992, the Marine Transportation Security Act, the Canada Transportation Act and the Canada Marine Act and to make a consequential amendment to another act.

Today's meeting is taking place in a hybrid format, pursuant to the Standing Orders. Therefore, members are attending in person in the room and remotely using the Zoom application.

I wish to inform the committee that all witnesses appearing virtually have been tested for sound quality for the benefit of our interpreters, and all of them have passed the test.

Colleagues, appearing before us today from 3:30 to 4:30 for the first half of our committee meeting, we have, from the Canadian National Railway Company, Mr. Eric Harvey, senior counsel.

Welcome.

We also have, from Canadian Pacific Kansas City, Mr. Nathan Cato, assistant vice-president, government affairs.

Welcome to you as well, sir.

Finally, we have, from the Railway Association of Canada, Mr. Marc Brazeau, president and chief executive officer.

Welcome.

We will begin with opening remarks.

For that, I will turn the floor over to you, Mr. Harvey. You have five minutes, sir.