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 .

[Churence Rogers, Liberal, Bonavista—Burin—Trinity, NL]

Thank you for clarifying that for us.

The other point I wanted to make is that Bill C-33 would amend the Transportation of Dangerous Goods Act to establish a regime of administrative monetary penalties and provide for fines and even the terms of imprisonment for failure to comply.

I'll ask you first, Mr. Campbell: Do you expect the proposed new regime of administrative monetary penalties to have a positive impact on compliance with the provisions of the Transportation of Dangerous Goods Act?

[Mark Strahl, Conservative, Chilliwack—Hope, BC]

You talked as well about servicing Trois-Rivières. We certainly heard concerns from port authorities and other witnesses that Bill C-33 seems to have a one-size-fits-all approach and that it's not taking into account the unique situation in the local markets. For instance, you have the Port of Vancouver, which will be served by class 1 railways almost exclusively. As you said, you're providing a key service in Trois-Rivières. Do you think that Bill C-33 needs to be amended to ensure that those unique features of each port authority are taken into account? How would it benefit short-line railways if that were done?

[Rick McLellan, President, Genesee & Wyoming Canada Inc.]

Good afternoon, Mr. Chair and members of the committee.

I am pleased to appear on behalf of Genesee & Wyoming Canada Inc., which is a shortline railway holding company operating nine shortline railways and two rail repair facilities in a total of five Canadian provinces.

We employ roughly 400 Canadian railroaders, operate 940 track miles and, above all, move more than 100,000 carloads a year.

Short-lines provide vital first-mile, last-mile services that connect customers to the broader North American freight-rail network via class 1 railways, as well as to remote communities and global markets. Twenty per cent of Canadian rail volume is handled, one way or another, by a short-line. Short-lines provide a safe, environmentally friendly, low-cost and reliable transportation option for Canadian businesses of all sizes.

Genesee & Wyoming is recognized as an industry leader in safety excellence. We regularly participate in and host tabletop and full training exercises alongside Transport Canada and first responders in the different communities we serve. We hold safety workshops, conduct internal audits and support industry-wide safety programs. All our meetings start with safety as agenda item one.

Genesee & Wyoming invests in safety. These investments are non-negotiable, and a commitment to operating safely every day is a condition of employment for every one of our team members. Whether it's infrastructure upgrades, asset replacement or award-winning training programs, Genesee & Wyoming Canada is investing with the goal of achieving targets of zero, which you can find on each of our locomotives, our vehicles and our equipment along our network. At Genesee & Wyoming Canada, we will continue to build a strong safety record and culture that our customers, partners and communities continue to rely on.

Before getting to the substance of Bill C-33, I want to highlight for the committee the many challenges confronting short-lines in Canada. High fixed costs, aging infrastructure, commodity price volatility and policy imbalances with other jurisdictions and along with other transport modes, combined with taxes and expanding regulatory burden are threatening the sustainability of short-line operations.

Short-line revenues narrowly outpace their expenses. The average operating expense-to-revenue rate for a short-line railway is roughly 90%. A high operating ratio limits the ability of short-line railways to invest in enhancing the capacity and fluidity of supply chains, especially because investments in safety are, rightfully, non-negotiable.

Short-lines compete directly with trucks on publicly funded highways for traffic while operating lower-density lines than their class 1 counterparts do.

Short-lines need predictable, consistent government support to remain a viable alternative to trucking.

Despite significant support in the United States in the form of a 45G track maintenance tax credit and various other programs, there is no dedication of federal funding or incentive for short-line railways in Canada. Instead, our tax system disadvantages railways compared with trucks, and Canadian railways compared with American railways.

I urge this committee to note in its report that the federal government must do more to ensure the sustainability of our short-lines. This brings me to Bill C-33.

This committee should accept the recommendations put forward by the Railway Association of Canada with respect to port governance and separating out safety and security definitions.

We rely on the efficient functioning of Canadian ports—big and/or small.

Our Quebec Gatineau Railway exclusively serves the Port of Trois-Rivières. The QGRY is a great example of the first-mile, last-mile benefits that short-line railways provide.

The QGRY moves products, from wind turbines to bulk solids to liquids. Our business is highly integrated with and dependent on the Port of Trois-Rivières.

The port's vision and leadership matter, and so do the vision and leadership of the other Canadian ports we serve and all ports across Canada.

Ports need leaders who have operational and commercial qualifications and experience. This group of experienced individuals should select the chair.

We share the concern that has been raised at this committee about the time it takes for the government to make appointments. That is another reason for the board to choose the chair.

Our company manages several comprehensive safety and security management systems that are renewed and submitted to Transport Canada and are internally audited by us for effectiveness as well as by Transport Canada.

I'd like to add my voice to what my colleagues said about the distinction can be made between the two concepts of security and safety.

I'd like to thank the committee for having given me this opportunity to speak.

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

Thank you, Mr. Chair.

Mr. Harvey, the matter I would like to discuss with you may not be directly linked to Bill C-33, but it is certainly a current issue. I thought it was important to raise it with you.

A few years ago, I attended a press conference with some union representatives who were condemning the transfer of employees from the railway control centre in Montreal to Western Canada. Not so long ago, something similar occurred again, this time for customer service employees, approximately 50 of whom were transferred to Western Canada.

On these two occasions, the main concern was being transferred to a region where most people did not speak French. Lots of people in Montreal speak French and lots speak English. In Western Canada, finding someone who can speak French is like searching for a needle in a haystack.

First of all, how come jobs are being transferred systematically from Montreal to the west, when we know that it will have an impact on the quality of service in French? Secondly, what is CN's commitment to Montreal? According to the terms of its privatization, CN has an obligation to provide services in French and to keep its headquarters in Montreal.

[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?