Evidence of meeting #20 for Transport, Infrastructure and Communities in the 41st Parliament, 2nd session. (The original version is on Parliament’s site, as are the minutes.) The winning word was goods.
A video is available from Parliament.
Executive Vice-President and Chief Operating Officer, Canadian National Railway Company
I am not in the position to comment about that. I don't know what we did. I was not in that part of the—
Executive Vice-President and Chief Operating Officer, Canadian National Railway Company
I was in the U.S. for five years before I came to Canada.
NDP
Mike Sullivan NDP York South—Weston, ON
Okay.
Mr. Creel, are you aware of a risk assessment on abandoning the Ottawa Valley line?
President and Chief Operating Officer, Canadian Pacific Railway
No, I'm not.
President and Chief Operating Officer, Canadian Pacific Railway
We'll have to get back to you, yes.
NDP
Mike Sullivan NDP York South—Weston, ON
One of the concerns of the people of Toronto is abandoning those alternate routes. You're doing that again in New Brunswick. You are driving dangerous goods through heavily populated areas.
With regard to your own liabilities, James Beardsley, an executive with Marsh and McLennan, told the Wall Street Journal that there isn't enough insurance on the planet to safely insure a worst-case scenario involving the transportation of dangerous goods by rail. What is your response to that?
Executive Vice-President and Chief Operating Officer, Canadian National Railway Company
We have liability and we look at what we need to carry for insurance, and we're carrying enough insurance. We have never had anything near the level of insurance that we carry—nowhere near.
NDP
Mike Sullivan NDP York South—Weston, ON
But this is a worst-case scenario, something that hasn't happened yet.
Executive Vice-President and Chief Operating Officer, Canadian National Railway Company
I'm just telling you that we are very diligent in how we go through this process. I was asked by one of the members, and I'm sure he knew the number before he asked me, about the amount of revenues that we have. We have a responsibility as a company to make sure that we handle that part of our due diligence properly, and we're very comfortable that we're carrying enough insurance at CN. I'm sure CP is in the same boat.
President and Chief Operating Officer, Canadian Pacific Railway
I have a bit of a different view. I don't know if the gentleman is right or wrong, but I would say that the railway has secured all of the insurance that we can secure. We can't buy any more insurance.
I would say that there's potential for certain accidents that would exceed the value of the insurance that we have. That's why we're so compelled, and we're such strong advocates that the only other people who can buy additional insurance would be the shippers of the products. This should be a collaborative effort. We secure all that we can secure. They secure all that they can secure. That has not happened. They've not been mandated to do that. It's not a regulatory requirement. We're huge advocates of that, and it needs to happen.
NDP
Mike Sullivan NDP York South—Weston, ON
We learned on Tuesday that the DOT-111 cars are unsafe, above 20 miles an hour at least. We don't know what speed they are safe at, but if, as was done with the Mississauga train derailment, your companies were limited to—that is, if you're going to continue to use DOT-111s for at least the foreseeable future because there isn't a way today to replace them all—a 15 mile an hour speed limit for travelling dangerous goods through densely populated areas, what would their reaction be?
President and Chief Operating Officer, Canadian Pacific Railway
Sorry, what was the question again?
NDP
President and Chief Operating Officer, Canadian Pacific Railway
I would be extremely concerned with all of the unintended consequences. If we slow trains down to 15 miles an hour through all urban centres across this country and across the United States and North America, there's a whole series of other unsafe situations that would occur. We'd have blocked crossings. We'd have people who—and they have and they will and they do—would get impatient when there are slow moving trains. They would run around gates; they would expose themselves and their families.
I don't think it's as simple as saying there's one silver bullet. The best answer is to eliminate the pre-2011 DOT-111 car. That's the best answer. That is the best way to make it—
NDP
Mike Sullivan NDP York South—Weston, ON
In the meantime, if it's unsafe, you guys are going to carry them anyway.
President and Chief Operating Officer, Canadian Pacific Railway
Well, I wouldn't suggest....
Listen, let's be honest. Let's be realistic. It's about risk mitigation. Everything in life can be unsafe if it's not done properly. For us to be able to take a railway, where we're trying to move the Canadian economy's goods, and grain specifically.... I've spent a lot of my time talking about grain over the past couple of months.
President and Chief Operating Officer, Canadian Pacific Railway
Could you imagine if we were mandated to do what we do and we moved all of those trains at 15 miles an hour?
There's a degree of risk in everything you do. There's a degree of risk when you get out on the highway and you drive your vehicle. You could have a flat tire. You could have a blown tire and wreck that vehicle. The only way to eliminate that risk, the only way to make an unsafe situation safe, is to eliminate the activity. That would equate to almost eliminating the activity. There would be tremendous unintended consequences.
I would be extremely concerned if that was the resolve that was to come out as a result of this.
Conservative
Conservative
Ed Komarnicki Conservative Souris—Moose Mountain, SK
You just mentioned grain, and of course in my riding in southeast Saskatchewan, grain is fairly important to both CN and CP. We need to keep up the game in moving that 100-year crop.
The other commodity that happens to occur in my riding is Bakken crude. It's in southeast Saskatchewan and North Dakota and South Dakota. One of the areas of concern, of course, is that there has been a significant increase in the number of cars or tankers being utilized for moving crude, a substantial increase, with the understanding that there will be yet a further increase, and safety, of course, is important. What I haven't heard a lot about is the fact that there are transload facilities. Some of the oil gets trucked to a transload facility and then placed on cars that are moved to various parts. I understand there will be a significant increase in transload facilities. Some of the Bakken crude, of course, is volatile, and there may be some concerns about safety responsibility and what might happen.
One of the questions I have, and of course it affects my city—I know that CP hauls the crude from southeast Saskatchewan—is that in terms of your transload facilities, the one I'm particularly concerned about is located right in the middle of a city, because you probably have track there.
I have three questions for you. One, what is the risk assessment in terms of transload facilities? Two, why would they be placed in cities when they could be placed elsewhere? It's not like a moving car. It's simply a matter of having a siding or a track where you can park cars for transloading facilities. Three, you've had transload facilities in places, smaller communities, where the local fire departments have concerns about whether they're able to respond. We see transload facilities there whether or not they're capable of responding.
Could you answer those questions, Mr. Creel?
President and Chief Operating Officer, Canadian Pacific Railway
I'll do my best.
Let me start with the actual location of the facilities. The customers by and large determine the location of the facilities. We don't own the facilities where these transload operations are occurring.
To the second point, from a risk mitigation standpoint, that's something we've been very seized with as this crude by rail has grown. What we've done specifically at CP, and what we continue to do, is through an investment where we're taking jointed track out and we're replacing it with ribbon rail, or continuous welded rail, heavier rail, stronger rail, more ties, more ballast. We're in about a five-year process now where a lot of these territories, from a risk assessment standpoint or from a risk mitigation standpoint, that this crude runs on is where we're strategically investing additional money. Through inspection, we've purchased during the process.... Just last year we ordered three rail defect test cars that we'll own ourselves and will operate on a continuous loop in these areas where the crude moves. If there is a track defect, a rail defect, we'll find it and mitigate it and remove it before it causes a derailment.
There are multiple layers of approach that we're taking to mitigate the risk and to reduce the likelihood that an incident will occur in these areas.
Conservative
Ed Komarnicki Conservative Souris—Moose Mountain, SK
You've answered two of the questions; we'll come back to the third. In terms of the location of the transload facility, are you saying that you haven't done any risk assessments in terms of whether it's better to have a transload facility where there are houses and people living as opposed to outside of the community, when it's a question of investing in a siding rail or a place where they can be transloaded? Are you saying you haven't done that risk assessment?
President and Chief Operating Officer, Canadian Pacific Railway
Let me clarify my statement. I've only been at CP for 13 months, so I'm not certain of that answer. I would assume the answer is yes, but instead of my making an assumption, we'll get a firm answer and we'll come back to the committee with it. My colleagues can get that information for you.
