Transport Committee on Oct. 30th, 2023

[Eric Harvey]

I'd like to start by saying that Transport Canada performs audits of the manner in which railways implement the SMS regulations and how they implement the processes mandated by the SMS regulations.

I don't want to comment specifically on what the Auditor General said at the time. What I can say, being involved with a railway and being exposed to the role and the monitoring of Transport Canada, is that Transport Canada, in our view, performs their reviews and monitors our compliance in a significant way.

In terms of improvements coming from Bill C-33, I would say that the decision or the proposal to include security will obviously broaden the scope of the review or the monitoring by Transport Canada to extend to that subject matter in addition to safety. Therefore, that should provide some visibility to the government about the work that railways and Canadian railways are already doing with numerous partners, be they CBSA or our own approach to security threats, etc. To some degree that will provide that visibility that is maybe lacking now.

[Annie Koutrakis, Liberal, Vimy, QC]

Mr. Brazeau or Mr. Cato, would you have something to add to that?

[Marc Brazeau]

The only thing I'll add is that the SMS audit is an opportunity for continuous improvement. It's an opportunity for continuous improvement through the audit to the inspection reports that are put forward by Transport Canada, and also the railway companies' doing regular check-ins and making sure that their safety management systems are robust and are meeting the needs of their employees and its customers.

I would say that continuous improvement is certainly an ongoing opportunity, and it's an opportunity the railways take full advantage of as well.

[Nathan Cato]

Mr. Chair, I'll just add, regarding safety management system audits, that we are routinely and frequently audited by Transport Canada on not just the existence of an SMS. It's not just checking a box as to whether you have an SMS or not; it's also about how effective your SMS is at improving safety, at ensuring regulatory compliance and at drilling down into all aspects of safety within the organization at every level across the entire geography of the network.

The data speaks for itself. The data demonstrates that not just CPKC but the entire rail industry in Canada is improving over time. We are seeing those results. SMS is part of that. A big part of it, too, like I said in my remarks, is very strong investment in people, processes and technology. That's how we're unlocking safety benefits.

[Annie Koutrakis, Liberal, Vimy, QC]

Because safety is number one throughout our transportation grid—not just with rail, but everywhere—do you feel that safety and security are being enhanced by Bill C-33? I know we already have a very robust regulation system in place, but do you think Bill C-33 enhances the security piece?

[Nathan Cato]

What it does on the security side, as Mr. Harvey mentioned, is give the government more visibility into what we're doing. We've had security management systems in place for quite some time. It was shortly after 9/11 that we brought into place security management systems. That's something that we're doing.

Security of the railway is critical every day. That's something we take very seriously. What this will do now is that there will be a statutory requirement to have that in place. It will give Transport Canada more visibility into what's happening.

[Annie Koutrakis, Liberal, Vimy, QC]

I have one minute. Great. I get to ask one more question.

Any one of you can answer this. In your opinion, does Bill C-33 do enough to address the environmental risks that are associated with rail and marine transportation?

[The Chair, Liberal, Peter Schiefke]

Give a 20-second response, please.

[Marc Brazeau]

We would have to get back to you on that, Ms. Koutrakis.

[Annie Koutrakis, Liberal, Vimy, QC]

Thank you very much.

[The Chair, Liberal, Peter Schiefke]

Mr. Barsalou‑Duval, you have the floor for six minutes.

[Xavier Barsalou-Duval, Bloc, Pierre-Boucher—Les Patriotes—Verchères, QC]

Thank you, Mr. Chair.

Thanks also to the witnesses here with us today.

I'd like to echo the words of one of my colleagues, who said that we had up until now spoken at length about ports in the study of bill C-33, but very little about rail transportation. I am therefore very pleased to have people from that sector here with us.

Mr. Harvey, a week or two ago I believe, we received some people from the unions who mentioned that they had reservations about the exemptions linked to the traditional safety management systems, namely for inspections carried out by people. That's the way it's usually done.

They went on to say that they would have liked the Transport Canada exemptions to be made public. I'd like to know whether it would bother you if the general public were to be informed, perfectly transparently, of the special exemptions you received from Transport Canada, so that they could reach their own conclusions.

[Eric Harvey]

Thank you for your question.

The exemptions, and the use of new technologies to replace traditional inspections are a very important issue, because these new technologies are likely an outstanding opportunity to improve railway safety.

I'm saying this because that's what we at CN did, with two tests allowing temporary Transport Canada exemptions. The first was an autonomous inspection of a stretch of railway tracks via a wagon containing high-technology equipment while the train was transporting other goods. The second used inspection portals, which basically photographed the four sides of the entire train. I believe it was in the Winnipeg area that we tested a portal for the first time.

In both instances, the use of algorithms and artificial intelligence did an excellent job of identifying and rapidly rectifying minor and major problems.

[Xavier Barsalou-Duval, Bloc, Pierre-Boucher—Les Patriotes—Verchères, QC]

Thank you for explaining the perceived benefits of these new technologies. I presume these are important tools for a company like CN. I hope that everyone in the industry will begin to use the latest technology.

To return to the issue of public exemptions, are you opposed to them? Would they raise any concerns?

[Eric Harvey]

My understanding of it is that exemption requests and exemptions allowed by Transport Canada are not confidential within the meaning of the act. Now with Bill C-33, I believe Transport Canada would be given an opportunity to conduct consultations. At the moment, unions are consulted when we request an exemption. Transport Canada would now have the time, I think, to also consult other groups. We have no objection to that.

[Xavier Barsalou-Duval, Bloc, Pierre-Boucher—Les Patriotes—Verchères, QC]

Thank you.

Mr. Brazeau, over the past few years, and in this study, there has been much discussion of climate change and greenhouse gases, GHGs. In your opening address, you said that the railway industry emitted far less GHG than the trucking industry per tonne of goods transported.

Do you believe that railway companies have a responsibility to contribute to GHG reduction efforts? I don't mean simply transporting goods that would otherwise have been shipped by truck, but also to your efforts to reduce greenhouse gas emissions.

[Marc Brazeau]

Definitely.

We signed a voluntary agreement with Transport Canada under which we would report our GHG emission figures to them each year. There has been a reduction in these gases for a number of decades now. Indeed, it has become increasingly clear that it is better to transport goods by train than by truck.

[Xavier Barsalou-Duval, Bloc, Pierre-Boucher—Les Patriotes—Verchères, QC]

Mr. Harvey, in the legislative provisions being proposed for ports, there would be a requirement for ports to adopt GHG emission reduction plans.

Do you think it would also be appropriate to require railway companies to adopt GHG emission reduction plans, and that these plans be public?

[Eric Harvey]

We publish our GHG emission commitments in our annual report every year. In the 2022 report, there were three pages about it.

We have made a number of commitments and have been demonstrating that rail transport is environmentally efficient, not only because it pollutes less than trucks, but also because it can haul a lot more goods.

At CN, our GHG emissions reductions are significant, even when transporting more goods. This demonstrates the efficiency of this mode of transport. We also made a commitment to reduce our GHG emissions by 43% between now and 2030, mainly, I believe, through the acquisition of more efficient locomotives and other similar measures.

[Xavier Barsalou-Duval, Bloc, Pierre-Boucher—Les Patriotes—Verchères, QC]

Thank you.

[The Chair, Liberal, Peter Schiefke]

Thank you, Mr. Harvey.

Thank you, Mr. Barsalou‑Duval.

Next, we have Mr. Bachrach.

Mr. Bachrach, the floor is yours. You have six minutes.

[Taylor Bachrach, NDP, Skeena—Bulkley Valley, BC]

Thank you, Mr. Chair.

Thank you to our witnesses for being with us today to answer our questions.

For years now, communities in northern B.C. have been asking questions about emergency response when it comes to major rail incidents, such as fires. They see the dramatic increase in the transport of dangerous goods by rail and want to know their communities are protected. Many of them are surprised to learn that small, volunteer fire departments funded through municipal property taxes are the first—and in many ways the only—line of defence against industrial rail fires involving companies like yours, Mr. Harvey. The community of Smithers, where I live, has a municipal budget of less than $10 million. The last time I checked, CN had a market capitalization of $95 billion.

Does it seem fair to you that small communities are having to put up the cost of responding to industrial rail fires involving companies like yours?

[Eric Harvey]

Thank you for your question.

I want to start by saying that, under the Transportation of Dangerous Goods Act, railways have the duty to respond. In other words, it's our responsibility to answer emergency situations. It's not the responsibility of the local communities.

What happens is that when there is an incident, there is coordination among all the resources available in an area and a unified command of those resources, and each party involved in the emergency response is asked to act in a manner consistent with their means. In other words, it's not for a small community with limited equipment to answer a major emergency.

Consistent with that obligation, CN has equipped the area. I want to confirm that it's accurate to say there is some increase in volume, in your area, of dangerous goods. This has been the object of safety assessments. We have taken specific measures to address this by hiring a dangerous goods officer based in Prince George, where most of our equipment is located. We also have equipment in Prince Rupert, where we're ready to answer and coordinate any emergency that may happen.

[Taylor Bachrach, NDP, Skeena—Bulkley Valley, BC]

Mr. Harvey, Prince George and Prince Rupert are eight hours apart. There are communities in the middle that are four hours away from resources. There is no mandated maximum response time for those resources. From what I can tell, it's unclear what those resources are that are going to travel by road four hours to get to an industrial rail fire in the heart of our communities.

Can you speak to the time it's going to take you to get those resources to our communities, whether it's Houston, Telkwa, or Smithers? How long is it going to take, and what are your responders going to show up with? The last time I checked, there was no CN Rail fire department with trucks that are capable of addressing a major fire involving multiple cars of liquid propane that have caught on fire in the heart of our communities.

[Eric Harvey]

I'll make a couple of points.

Our emergency response plans that we prepare under the Transportation of Dangerous Goods Act take into account the time needed to respond. Those plans are provided to Transport Canada and validated.

Specifically on the equipment, I would be glad to have a separate discussion with you, and meeting with your communities.