Transport Committee on May 16th, 2016

[The Chair (Hon. Judy A. Sgro (Humber River—Black Creek, Lib.)), Liberal, Judy Sgro]

I call to order the 14th meeting of the Standing Committee on Transport, Infrastructure and Communities in this first session of the 42nd Parliament.

I welcome our witnesses as we continue our report on railway safety, which we're hoping to table before the House rises. I'd say “this summer”, but I'm not sure it's summer yet.

With us today from the Canadian Transportation Agency are Fred Gaspar, chief compliance officer, and Randall Meades, chief strategy officer.

Gentlemen, I'll turn the floor over to you.

[Fred Gaspar, Chief Compliance Officer, Canadian Transportation Agency]

Thank you, Madam Chair.

Honourable members of the committee, thank you for once again inviting the agency to appear before you.

My name is Fred Gaspar. I am the chief compliance officer for the CTA. With me today is Randall Meades, our chief strategy officer, as you've heard.

We are representing our chair and CEO, Scott Streiner, who unfortunately could not be here today as he's travelling outside the country, but he did ask us to advise you that he looks forward to appearing before this committee at the next possible opportunity.

I'd like to start by offering a brief overview of our organization and its mandate.

The Canadian Transportation Agency is an independent body. As a federal quasi-judicial tribunal and regulator, we have jurisdiction over a broad range of air, rail and marine matters.

The Agency has essentially three core mandates. Its first mandate is to help keep the national transportation system running efficiently and smoothly. The second mandate is to protect the human rights of travellers with disabilities by ensuring that the transportation system is fully accessible. And the third mandate is consumer protection for air travellers.

The Canada Transportation Act is the Agency’s enabling statute. It outlines the extent of the Agency's authority and jurisdiction, as well as the Agency's role in administering the Act.

The Agency shares responsibility for certain provisions in the Railway Relocation and Crossing Act and the Railway Safety Act, focused mainly on resolving disputes and cost recovery.

The Canadian Transportation Agency does not handle matters of safety, which is the responsibility of the Transportation Safety Board and Transport Canada.

And where Transport Canada is the primary source of public policy advice to the Minister of Transport, the Agency works at arm's length to regulate industry and to resolve disputes.

When it comes to rail transportation, the agency's mandate applies to railway companies under federal jurisdiction. There are currently 32 such active railways, including class 1s and short-line railways.

The agency plays an important role in helping to resolve disputes as well. We have expertise in alternative dispute resolution, such as mediation and arbitration. In our experience, these methods can be faster and less expensive, producing a resolution that benefits all sides.

Although the agency has a number of rail-related responsibilities, today I'd like to focus on four elements of our rail mandate that perhaps may be of most interest to this committee.

The first element relates to the certificate of fitness. If a railway company would like to construct or operate a freight or passenger railway under federal jurisdiction, they must apply to the agency for a certificate of fitness. The agency ensures that railway companies have the level of insurance that they need to begin to operate and to continue to operate in Canada.

The Safe and Accountable Rail Act requires appropriate levels of insurance coverage based on the type and amount of dangerous goods that railways carry each year. The agency is engaging currently with railway companies so that they can be prepared to meet the new insurance requirements once the act comes into effect. We are fully ready to administer these requirements to ensure that they maintain at all times the applicable minimum liability coverage requirements.

The Agency's second role is related to cost recovery for rail-related fires. Under the Railway Safety Act, provincial or municipal governments may apply to the Agency to recover costs reasonably incurred in responding to a fire when the applicant believes that the fire resulted from a railway company’s railway operations. To date, we have not received any applications under the fire provisions.

The third mandate is related to the relocation of railway lines or the rerouting of railway traffic in urban areas in situations where a railway company and the provincial or municipal government cannot agree. However, these powers may be used only when certain criteria are met, including a determination by the agency that any such relocation or rerouting would occur at no net cost to the railway company. Importantly, the agency has not been approached under this act since the 1980s.

The fourth rail-related mandate deals with railway crossings and cost apportionment.

The construction or reconstruction of a crossing can be negotiated between a railway company and other parties. If the parties cannot come to an agreement, the parties can ask the Agency to resolve the dispute. The Agency also has a role to play when parties cannot agree on how to apportion the costs of constructing, altering or operating a railway work. If the parties cannot agree on the allocation of costs, either party may refer the matter to the Agency, before, during or after construction or alteration of the railway work, to resolve the dispute.

As you can see, the agency plays a variety of roles within the rail transportation system. It's a mandate we take seriously and execute proudly every day on behalf of Canadians.

With that, Madam Chair, thank you.

We look forward to your questions.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

Any further comments?

All right.

Ms. Watts, for six minutes.

[Dianne Lynn Watts, Conservative, South Surrey—White Rock, BC]

Thank you very much. I appreciate your being here.

There are a couple of questions just perhaps for clarification. You were talking about relocation and rerouting of rail lines and dispute resolution and that there have to be certain criteria within the relocation or rerouting. Can you describe a bit of what that looks like?

[Fred Gaspar]

First of all, under the Railway Relocation and Crossing Act one of the first first triggers is that the parties are required to negotiate and submit an accepted plan. It's important, as I think all members would agree, that they come together and come up with a transportation plan to reflect how the entirety of the region is going to be affected by the relocation.

Once that plan is submitted, we obviously look at it from a number of perspectives, not the least of which is to ensure it does actually meet the requirements that are being shown, and we also do tests to see that it is done in a manner that is of net cost to the railway. The act also provides an opportunity for federal funding for the act if such an application has been made and accepted.

[Dianne Lynn Watts, Conservative, South Surrey—White Rock, BC]

You said that it has not been used since 1980. That seems like quite some time ago, during which I know there have been significant movements of population into urban areas. I would expect that you would have some significant issues as a result, in terms of the interface between the rail lines and the urban containment boundaries within that.

Why has it not been used since 1980?

[Fred Gaspar]

I should clarify: I think it was in 1987.

This is conjecture, and I'm always hesitant to get into that realm, but I suspect that it has something to do with the financial implications, obviously.

One of the standards is that, effectively the railway has to be made whole, and it's pretty hard to arrive at that resolution, first and foremost. Obviously, we can't speak definitively as to why it hasn't been used, but I suspect that's probably it.

[Dianne Lynn Watts, Conservative, South Surrey—White Rock, BC]

What would incent a rail line to move or relocate? There would be no incentive for them to do it because there's no mechanism in place to do that.

[Fred Gaspar]

Madam Chair, that gets to the heart of what makes this so difficult to do, because there has to be an arrival of interests for all parties at the same time. There are circumstances whereby it would be efficient and effective for the railway to consider doing that, whereby there might be operational gains to be considered. The act does permit, for instance, that such benefits might be factored into the overall determination of the economics of the proposal.

If a railway, by diverting a few kilometres out of town, could pick up 20 or 30 kilometres of speed on their route, just as an example, this might be something that might incent them to act, but obviously their interests have to come together at the same time with those of the municipality—and, admittedly, that's a difficult thing to align.

[Dianne Lynn Watts, Conservative, South Surrey—White Rock, BC]

What then is the point of having it in place if you can never reach that benchmark?

[Fred Gaspar]

I think parliamentarians are best positioned to speak to the merits of the act. It is what it is.

[Dianne Lynn Watts, Conservative, South Surrey—White Rock, BC]

Okay.

In terms of dispute resolution, if you had a rail company that was not complying with certain aspects of the regulations and it was not being dealt with in a proper fashion, would that be something that you would have the resolution with, perhaps, a level of government and the rail line?

[Fred Gaspar]

I should start by apologizing. My colleague, Doug Smith, who is our chief dispute resolutions officer, is not here today. But we do have a system and the mechanism in place to facilitate that under this act, and a number of other provisions. We always try to encourage negotiated solutions. That's why we've recently started to diversify to look into mediation services as well, because, obviously—I think members would agree—those solutions that are arrived at by the parties directly are ultimately much more sustainable. But if need be, we can make a pronouncement on our own.

In the case of the Railway Relocation and Crossing Act, if one party felt that they were being treated unfairly by the other or that the numbers actually were not correct, then certainly we could make a decision accordingly. But it's best when the parties do it themselves.

[Dianne Lynn Watts, Conservative, South Surrey—White Rock, BC]

Right. And you'd have to have two or three willing parties to come to that.

My next question is in regard to what you were saying about the insurance coverage for the rail lines being in place, that you would ensure they had adequate insurance. So if there was a derailment or anything to do with hazardous goods or anything like that, you would make sure that was in place?

[Fred Gaspar]

As part of the issuance of the certificate of fitness, which is effectively the operating licence, we look at the insurance. We first do a certificate of insurance. Under the Safe and Accountable Rail Act the government has now prescribed a set definition of what constitutes adequate insurance levels, depending on volumes and types of materials being carried.

We are currently in discussions with all affected parties to ensure that we will be compliant once the law comes into effect.

[Dianne Lynn Watts, Conservative, South Surrey—White Rock, BC]

When is the law coming into effect?

[Fred Gaspar]

Parliament will decide.

[Dianne Lynn Watts, Conservative, South Surrey—White Rock, BC]

Does this deal not just with Canadian rail lines, but also railway companies that are coming up from the U.S.?

[Fred Gaspar]

Yes, if you're operating on a federally regulated line in Canada.

[Dianne Lynn Watts, Conservative, South Surrey—White Rock, BC]

It's all those measures. Okay.

[The Chair, Liberal, Judy Sgro]

Mr. Hardie, for six minutes.

[Ken Hardie, Liberal, Fleetwood—Port Kells, BC]

I'll continue from where Ms. Watts was headed on this. I thank you both for being here.

Earlier in our process we heard very specific information about the Burlington Northern and Santa Fe line, which comes up through the border with British Columbia and Washington state and then proceeds through to downtown Vancouver. What we heard very specifically was that there were some issues with a small community called Crescent Beach where the train would basically close access to that neighbourhood, which is quite substantial in size, for extended periods of time.

A number of questions arise out of this. There is, I understand, a requirement for crews to break a train if it blocks an intersection for more than five minutes. Is that your understanding?

[Fred Gaspar]

Yes, and importantly, these are regulations that are administered by Transport Canada. I think you're referring to the shunting of rail cars.

[Ken Hardie, Liberal, Fleetwood—Port Kells, BC]

No, I'm not. This is actually just a train on its way through that stops for whatever reason. It's not really your issue at all. I'll leave that for them.

When we do come, then, to railway crossings, you mentioned that you get involved with the change in location of a railway crossing. Would you also get involved where there was a reasonable argument for a grade-separated crossing?

[Fred Gaspar]

Yes. Amongst its other duties, the agency is responsible for resolving crossing issues between the federally regulated companies and other interested parties as well. This is related to matters as diverse as infrastructure, relating to level crossings versus grade crossing separations.

The interested parties could be landowners, utility companies, public passenger services, and we do have a role to adjudicate such disputes.