Thank you, Mr. Chairman, for this opportunity to appear before the committee.
I'm the president of the Saskatchewan Association of Rural Municipalities, and we've appeared before the committee in the past and appreciate the ongoing relationship we have with the members.
Today, I'd like to provide you with a summary of the current and future challenges facing rural Saskatchewan regarding rail safety. These issues are of great importance to SARM and our member municipalities. Rail transportation service is an issue of vital importance to our province. Our small, yet growing population, large volume of agriculture, and oil and potash production right in Saskatchewan mean that a significant amount of our products are exported. The distance to ports and the landlocked nature of our province make rail the only mode of transportation currently available to haul our products to export position.
As a result, our province’s economic advantage is very much dependent on a competitive rail transportation system. The recent rail disasters have clearly raised questions about the safe transport of dangerous goods via railways through our municipalities across Canada. We'd like to begin today with comments on grade crossing regulations.
Proposed changes to rail crossings currently being consulted through part I of the Gazette raise issues of concern about both safety and cost for municipalities. SARM supports the intent of the proposed grade crossing regulations; however, their current direction is unclear. SARM is concerned with safety and emergency service access to communities and the length of trains. We understand that there will be a move to two-mile trains and this will block crossings and cause unintended consequences for communities. The continuous obstructions of grade crossings by trains is a large concern for municipalities.
SARM recommends that guidance be provided by the Department of Transport to municipalities on how to address these issues at the local level to increase safety.
The costs for municipalities to upgrade crossings are unknown, and the long-term maintenance can be expensive. It is required that all crossings be upgraded to meet the indicated standards. There remains a possibility that smaller municipalities will face significant costs, ones they cannot afford. Not maintaining crossings will result in closures as a result of municipalities being unable to meet the expense for upgrading sight-line requirements. This would have tremendous impact on local ratepayers and the rural municipalities.
SARM recommends that additional funding be provided to ensure municipalities can comply with the requirements.
It is our understanding that there will be some flexibility in meeting the requirements within the final regulations. SARM recommends that a reference guide be developed that outlines the flexibility that local authorities have to comply with the regulations.
In consultation with the Saskatchewan Shortline Railway Association, SARM has made a submission to the Canadian Transportation Agency on third party liability insurance coverage regulations. The Lac-Mégantic tragedy was a rare case in which no reasonable requirements for third party liability insurance would have provided adequate coverage. After an internal review and consultations with industry stakeholders in our province, we don't believe there should be additional or different third party liability insurance requirements related to the transportation of certain commodities such as dangerous goods.
Our recommendations include the following.
Provincially regulated short lines are a lot different from the high volume, high speed railways that are federally regulated. If minimum requirements for liability insurance are imposed, SARM recommends that the short-line railway requirements be less than those of class I railways.
We also recommend that adequate consideration be given to the level of risk posed by provincially regulated short lines and that, if regulations are imposed on them, they correlate with the level of risk. Because railway operations vary in terms of the volume of traffic, commodity mix, scope of operation, and number of crossings, minimum requirements should be less on shoreline railways and based on individual risk assessments, past history, and length of service.
Short lines have become integral to the transportation network, moving Canada’s mining resources to local and regional markets. Our concern is in regard to increased liability and whether or not the requirements for class I railways will be downloaded onto short lines. The shoreline sector is essential for providing a continuous railway network across federal and provincial jurisdictions; therefore, additional costs in obtaining higher third party liability insurance could be detrimental to their business. SARM recommends that these additional costs remain with the class I railways.
With respect to rail shipments, SARM has always advocated that an effective rail transportation system is critical to the competitiveness of our agriculture sector and other rural-based industries in Canada, including oil and potash, which we will see being transported via rail more regularly as pipelines hit capacity and potash production increases.
The poor level of rail service for the grain industry has been affecting grain profitability across Canada. The rail capacity to handle increased grain exports is vital to supporting the Canadian economy and to the competitiveness of our agriculture and food sector.
SARM supports the efforts the federal government has made to improve grain movement throughout our province, and supports the amended version of Bill C-30, the fair rail for grain farmers act. We are, though, disappointed that the legislation did not include more substantial penalties on the railways and failed to increase the number of grain cars that railways are required to deliver.
With regard to stiffer penalties and minimum grain cars, in order to ensure that a similar backlog does not reoccur in future years, SARM recommends that mandatory levels of rail service agreements be legislated, with much stiffer penalties imposed when levels of service are not met, and that legislation be implemented to ensure that the railways move a minimum of 13,000 cars.
In closing, SARM recommends the following to ensure that rail transportation service continues to sustain Saskatchewan’s growing economy.
If costs for municipalities to meet the proposed grade crossing requirements prove to be too expensive, additional funding should be provided to ensure that municipalities can comply. Guidance should be provided to municipalities to address safety concerns regarding obstruction of grade crossings, and a reference guideline should be developed that outlines the flexibility that local authorities have while attempting to comply with the regulations.
Second, third party liability insurance requirements should be lower for short-line railways than for class I railways, and additional costs should remain with the class I railways.
Finally, to improve the overall current level of rail service for the shipment of products, stiffer penalties should be imposed when levels of service are not being met to ensure that the minimum cars will be moving grain.
Thank you very much, Mr. Chairman, for this opportunity.