Finance Committee on May 28th, 2012

[The Chair, Conservative, James Rajotte]

I call this meeting to order. This is the 62nd meeting of the Standing Committee on Finance. The orders of the day are pursuant to the order of reference of Monday, May 14, 2012. We are continuing our study of Bill C-38, An Act to implement certain provisions of the budget tabled in Parliament on March 29, 2012 and other measures.

Colleagues, as you know, we are continuing with part 4. We are starting with division 31.

We have officials with us from Transport Canada to discuss division 31.

If you'd like, you can give us an overview of this specific section, and then we'll have questions from the members on it.

[Karen Swol, Director, Program Management, Rail Safety, Department of Transport]

Good afternoon. I'm Karen Swol from Transport Canada.

The amendment we're going to present to you is on the Railway Safety Act. It's division 31, part 4. The amendment to the Railway Safety Act is as a result of a DRAP initiative from budget 2012, which reduced funding to the grade crossing improvement program.

The grade crossing improvement program provides funding to railways and road authorities to make improvements to federal railway crossings across Canada. The reduction involves reducing the federal contribution portion from 80% funding to 50% funding.

In order not to download additional costs to the road authorities, which are provinces and municipalities, the following amendments to the Railway Safety Act are being proposed.

The first amendment, which is in subclause 484(1) is an amendment that limits the amount that the Canadian Transportation Agency can apportion to road authorities to a maximum of 12.5% of the construction and alteration costs. This is traditionally what the provinces and municipalities have paid in the past.

The second amendment, which is subclause 484(2), provides the Governor in Council with the regulation-making power to exempt any railway work, or any person or railway company, or any group or class of persons or railway companies, from the first proposed amendment.

The remaining clauses, numbers 485 and 486, are administrative in nature. Clause 485 includes the regulation under proposed subsection 50(1), which includes a list of the regulations under the Railway Safety Act, and clause 486 is a coming-into-force clause.

[The Chair, Conservative, James Rajotte]

Thanks for your presentation.

We'll have questions from members.

We'll start with Ms. Nash.

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

I'll defer to Mr. Marston.

[Wayne Marston, NDP, Hamilton East—Stoney Creek, ON]

Thank you, Mr. Chair.

I had the good fortune early in my career of being a signal maintainer on the CNR, so I installed a lot of miles of crossing protection, for about a six-year period.

In the past one of the problems we had with level crossings was the accidents on them. You had to have a certain body count before they would actually invest in those crossings. It was a huge investment in those days for the municipality.

What I'm hearing is that now we're reducing the share of the cost that the federal government would have.

[Karen Swol]

That's correct.

[Wayne Marston, NDP, Hamilton East—Stoney Creek, ON]

Has anybody done any assessing or been in dialogue with either the provinces or the municipalities or the cities as to the impact on their ability to do the upgrades? With the trains as fast as they are today, and traffic.... To be quite frank, the people today are not paying attention as much as they once did, so there's a higher risk in my opinion.

I had a crossing called Thorold Stone Road, in Niagara Falls. There were four people killed at that crossing in 11 months simply because they were in a rush. They were in a tourist area.

My concern is whether there has been an assessment of any sort on the impact of this.

[Karen Swol]

Prior to the DRAP initiative there wasn't, because the initiatives under the DRAP were secret. Since this has now been produced in the budget, we have informed the stakeholders and we're assessing feedback at this point.

[Wayne Marston, NDP, Hamilton East—Stoney Creek, ON]

I'm surprised to hear the word “secret”. Normally when you have funding partners in anything you're doing, you would think you'd want to talk to them, because they're the ones who come to you with the expression of need in a circumstance like this. Hopefully it's not because of fatalities, and hopefully it's more because of close calls, but either way I'm a little surprised to hear that.

There was an exemption in here. Does that exemption allow the minister to pay more? Is that the intent of that exemption?

[Karen Swol]

With regard to the regulation-making power, yes. Instead of having to go back and change the act, should a change be required to the first amendment, it can be done through a regulation-making power. It could be in a regulation.

[Wayne Marston, NDP, Hamilton East—Stoney Creek, ON]

What is the cost today to put in a set of gates?

[Karen Swol]

It can range anywhere from $200,000 to $350,000.

[Wayne Marston, NDP, Hamilton East—Stoney Creek, ON]

It was $35,000 for flashers and $55,000 for gates when I was doing it.

[Karen Swol]

That would be for the full package: the gates, bells, lights, and larger packages. It would depend on how many masts you were putting in.

[Wayne Marston, NDP, Hamilton East—Stoney Creek, ON]

So when we're talking about that amount of money, would our portion be roughly $25,000?

[Karen Swol]

In the $200,000 scenario we would pay $100,000. We used to pay 80%, and now it's 50%.

[Wayne Marston, NDP, Hamilton East—Stoney Creek, ON]

Okay. I wrote that down wrong.

I think that's what I need.

Thank you.

[The Chair, Conservative, James Rajotte]

Mr. Brison, please.

[Scott Brison, Liberal, Kings—Hants, NS]

Thank you.

The federal funding portion will be reduced from 80% to 50%. You're saying there won't be any off-loading to road authorities, so will the slack be picked up entirely by the railway companies?

[Karen Swol]

Yes.

[Scott Brison, Liberal, Kings—Hants, NS]

We just finished with Bill S-4 on the Railway Safety Act. Why weren't these changes included in that piece of legislation?

[Karen Swol]

This came about as part of the DRAP exercise. If you recall, it started off as Bill C-33. It was reintroduced after the election and had been going on for quite some time. That bill was probably already in the Senate by the time these decisions were made to go forward with changes to this. So it was not part of the original thinking.

[Scott Brison, Liberal, Kings—Hants, NS]

Is there some concern that during these uncertain economic times we're adding cost to the railway companies like CP?

[Karen Swol]

I guess. It's part of a reduction measure, but perhaps responsibility in areas where the benefits are to be gained as well....

[Scott Brison, Liberal, Kings—Hants, NS]

I also notice in division 31 that the Minister of Transport will now have the authority to make regulations exempting any railway work, or any group or class of persons or railway companies, from the application of the proposed limit.

Why is that change being made now?