Transport Committee on March 24th, 2015

[David McGuinty, Liberal, Ottawa South, ON]

Wouldn't it be in the interest of CN to be more seized of some of the shortfalls at the regulator level?

Mr. Finn, as the chief compliance officer for a $12-billion corporation with six executive members and 23 vice-presidents, would you not say it is in the interest of CN and its shareholders to make sure that your partnership with the regulator is properly being fulfilled by the regulator?

[Sean Finn]

Yes, and I think that with Mike Farkouh's presence on the minister's committee and our involvement through the RAC, the Railway Association of Canada's industry panel, we're very much focused on that.

If you look at the last 12 or 18 months since Lac-Mégantic, the amount of regulation that has been put in place is substantial. We make sure that we comply with every regulation, but we also have views. When a regulation is out for consultation, we're very much present and we make sure our views are heard. If we think the regulation doesn't go far enough, we'll be the first to say so.

[David McGuinty, Liberal, Ottawa South, ON]

Has your company, as part of the rail safety advisory committee, put pressure on this government to ensure that the shortfalls that have been pointed out by, first, the Auditor General, second, the Transportation Safety Board, third, this committee, and fourth, the Transportation Safety Board's investigation progress update for the Gogama derailment...? Is your company not putting pressure on the regulator to make sure that they have the capacity to do their job? We've now had two, three, four independent voices saying that they're not.

[Jim Vena]

We look at it that we work very well with Transport Canada, the regulators, and the TSB, who do a great job of looking, giving trend lines, and understanding. We have a great relationship with them in the sense that they push us. We give them information and they ask for information.

[David McGuinty, Liberal, Ottawa South, ON]

Are you pushing them back?

[Jim Vena]

I don't need to push them back.

[David McGuinty, Liberal, Ottawa South, ON]

You don't need to push them back.

[Jim Vena]

I'll tell you what I'm focused on. What I'm focused on—this is very important—is that we do—

[David McGuinty, Liberal, Ottawa South, ON]

You're focused on running a railway and keeping it safe. I understand that, but do your shareholders agree with that statement?

[Jim Vena]

I would love to answer that question. You asked me a key question.

[David McGuinty, Liberal, Ottawa South, ON]

Weave it into your answer. Does your shareholder in California agree with that statement?

[Jim Vena]

Every shareholder does. I'm a shareholder and it's very important for me as a shareholder—it doesn't matter the size of the shareholder—that you have a company that's responsible, that understands what's happening, that reacts properly, has the right amount of funding, and does everything they possibly can to run a safe railroad. That's what's important.

[David McGuinty, Liberal, Ottawa South, ON]

Has your board of directors been seized with the findings of the successive reports that have pointed out the shortcomings of the regulator and the job it's doing?

Mr. Finn, you're the chief compliance officer. I'm going to ask you this. Has your board been seized with these reports and what action is it taking to ensure that your partnership with the regulator...? You partner with them. You sit on safety committees.

You say you're pushed, Mr. Vena. Can you tell us—

[Sean Finn]

We obviously have an environment safety committee of the board that is chaired by Maureen Kempston Darkes. I can tell you that ultimately in every board meeting, every committee, we update on regulatory matters, and they would see in those matters changes in regulations, proposed regulations. I can tell you that our CN board is very much seized of these issues. They're discussed at every board meeting, so rest assured that they're very much aware of it. They make sure that we adhere to the regulations, but also adhere to our own safety practices to the utmost.

[The Chair, Conservative, Larry Miller]

Thank you, Mr. Finn.

Mr. Watson, you have seven minutes.

[Jim Vena]

I guess you won't let me answer that question.

[Jeff Watson, Conservative, Essex, ON]

Thank you, Mr. Chair.

Mr. Vena, thank you for being here at committee again. You participated, of course, in SCOTIC's hearings into safety management systems and the transportation of dangerous goods last year. I appreciate your return today for this briefing.

I have a couple of very brief questions related to the slide presentation you gave us, and then I want to turn to the TSB's interim report on Gogama.

I'll start with page 8, CN investment in track infrastructure. You mentioned your 2015 capital budget of $2.6 billion, with $1.3 billion for safety and integrity of the network, particularly track infrastructure. You say, particularly track infrastructure but not exclusively. How much of the $1.3 billion is actually for track infrastructure?

[Jim Vena]

The majority of the $1.3 billion is rail and ties. I don't have the exact—

[Jeff Watson, Conservative, Essex, ON]

Is it a billion? Is it $800 million?

[Jim Vena]

I would say that it's more than a billion dollars.

[Jeff Watson, Conservative, Essex, ON]

More than a billion, okay. So it's not $1.3 billion in track infrastructure, it's something under that.

I understand that the thrust of your presentation today, if I understood it correctly, was that effectively CN, in terms of its spending on safety and its accident ratios, is in line with the rest of the industry. I appreciate that you're measuring against your competitors, but it begs the question of why you're not measuring against the standard.

Mr. Vena, I imagine some are wondering how many derailments CN is prepared to accept because its spending and its accident ratios are in line with its competitors.

[Jim Vena]

That is not the way we look at it at all. The nature of the business that we're in is that we're moving railcars, and with rail and weather, it's an outdoor sport. Every accident for us is important. It's every accident that we'd like to deal with and see if there's a way for us to get down to zero.

[Jeff Watson, Conservative, Essex, ON]

I'm just not sure if you have the right metric if you're measuring against the rest of the industry, instead of the responsibility itself.

I'd like to turn to the TSB's news release related to the derailment and fire of a second CN crude oil train near Gogama, Ontario. I have a few questions about that. In it they mention that there are a number of permanent slow orders in the Ruel subdivision. Are those exclusive to the three separate incidents—that being mile 88, mile 111.2, and mile 243.5—or are there other permanent slow-speed orders in Ruel at different locations, and if so, how many more?

[Jim Vena]

There are permanent slow orders set up because of the configuration or the curvature of the track. We have track speed, class of track, and we have permanent slow orders. Those are there permanently across the whole network, all 22,000 miles. It's not all at 60 miles per hour.

Then there are some temporary slow orders that are put in place because of the infrastructure. If we run a geometry test car over the track and it tells us that the frost is coming out or there is a heave, it automatically tells us we have to put them in place.

So yes, we do have a number of locations, and at this time of the year it would be normal for us to have a number of temporary slow orders—

[Jeff Watson, Conservative, Essex, ON]

How many additional temporary slow orders do you have?