Mr. Speaker, I think it is best to start our remarks in the House of Commons on this or any subject by addressing first principles.
I believe the first principle is the government should only do what only government can do. Public safety is one of those areas that the citizen or the enterprise cannot simply manage all by themselves. As a result, protecting the security and the safety of the individual is a primary responsibility of government. Thus, we have Bill S-4, which deals in particular with railway safety and the statute assigned to that goal.
I will go into the history of this statute and the framework of legislation that has existed and continues to do so. Before I do that though, I will state my full support for the bill. It is a bill to amend the Railway Safety Act. It furthers our government's agenda to ensure a safe, reliable and economically viable freight and passenger railway system.
The amendments proposed in the bill will increase the public safety of Canadians, enhance the safety of our communities, and contribute to a stronger economy, a modern infrastructure and a cleaner environment.
The Railway Safety Act came into force in 1989 during a period of significant transformation in the Canadian rail industry. It was a time of privatization and restructuring, supported by a new federal policy that separated economic and safety legislation to provide the railway companies with flexibility so that they could grow and prosper.
I should mention in passing that Conservative and Liberal governments in the last two and a half decades have moved toward greater privatization and less government control in all areas of transportation, including ports, railways, airports, airlines and a whole series of other specific areas within the country's transportation system. That decision by both Liberals and Conservatives to move toward privatization has been a resounding and unmitigated success for Canada and for Canadians.
Today, economic regulation of the rail industry is guided by the Canada Transportation Act, which provides an overall framework to ensure a national transportation system that is competitive, economic and efficient. The act, which came into effect in 1996, also established the Canadian Transportation Agency, which is responsible for dispute resolution and economic regulation of all modes of transportation under federal jurisdiction, including rail.
Rail safety regulation on the other hand is governed by the Railway Safety Act, which was developed in the spirit of co-operation between industry and government. This act moved away from a fully prescriptive regulatory approach to one that recognized the responsibility of railway companies for the safety of their own operations.
At the same time, the federal government through Transport Canada retained the responsibility and the power to protect people, property and the environment by ensuring that the railway companies operate safely within that national framework. Once again, we liberated the market to find the best ways to achieve safety, but we created a legal framework to ensure that people and property and the environment are protected as the industry does its work.
Transport Canada undertakes its responsibility to maintain a safe national rail system through a policy and regulatory development, through outreach and education, through oversight and enforcement of the rules and regulations it implements under the Railway Safety Act.
Applied in tandem, the Railway Safety Act and the Canada Transportation Act have successfully guided the growth of Canada's rail sector since the 1990s, but there are issues and challenges. As it stands today, the interrelationship of these two acts has created a notable gap in railway safety oversight that must be addressed if we are to ensure the continuing safety of our national railway system.
Currently under the Canada Transportation Act a new railway company is allowed to begin operations immediately upon receiving a certificate of fitness from the Canadian Transportation Agency. This certificate indicates that the railway is under federal jurisdiction, has sufficient financial capacity to operate, and has obtained appropriate third party liability insurance coverage. This is in keeping with the economic mandate of the Canadian Transportation Agency. It is not, however, fully in keeping with the national safety mandate of the Railway Safety Act.
In accordance with the Railway Safety Act, a new railway must comply with all safety regulations in force at the time it begins operations. It is important to recognize that there are no regulated requirements in the Canada Transportation Act to verify the safety capacity of the company before a certificate of fitness is issued and the company's operations begin.
As the Railway Safety Act does not currently specify minimum baseline safety requirements for a new railway company either, a gap in oversight is created and a new railway could theoretically operate for a year or more before the effectiveness of its safety systems was formally verified. This is an important safety issue which the government is striving to correct through these amendments.
The introduction of a railway operating certificate is a key component of this bill, and will continue to resolve this long-standing safety issue in our railway system. The amendment represents an important step in the right direction to strengthen the safety of our vital rail industry. Anyone who likes to eat food, consume retail goods, drive a car, basically perform any function as part of a modern society requires the use of goods that are brought by rail. We cannot underestimate the importance of this industry to the operation of the Canadian economy.
When the Minister of Transport appointed the independent advisory panel to lead the Railway Safety Act review in 2007, he provided them with a clear mandate to identify steps in the Railway Safety Act and make recommendations to strengthen the regulatory regime to ensure the changing nature of the railway industry and its operations were protected.
Following extensive consultation with stakeholders and careful consideration of these consultations during the year-long course of review, the advisory panel specifically recommended in its final report in 2008:
A railway should be required to obtain a Rail Operating Certificate (ROC ) as a precondition to obtaining a Certificate of Fitness (from the Canadian Transportation Agency) and to commencing or continuing operations.
The intent of this recommendation is clear. This government emphatically agrees that the implementation of railway operating certificates is an optimal solution to improve regulatory oversight and ensure that new railways have met clearly defined baseline safety requirements before they begin operations anywhere in the country.
Bill S-4, the safer railways act which we are discussing today, will give the Governor in Council, that is the cabinet, the authority to require railway companies to apply for and receive a railway operating certificate. Bill S-4 will also give Transport Canada the power to establish the baseline safety requirements for the certificate by regulation. Establishing these requirements by regulation will provide Transport Canada with the authority to undertake a comprehensive safety review for every new railway to determine whether it complies with the regulatory framework proposed.
Once the regulator is satisfied that all baseline safety requirements have been met, an operating certificate will be issued. It is important to note that this requirement for railway operating certificates will apply to all railways under federal jurisdiction, including those already in operation, such as CN, CP, VIA Rail and numerous other short lines. It is obviously impractical and economically unviable for these companies to cease operations until a certificate can be issued. As such, existing railways will have a grace period of two years from the coming into force of the new regulations to meet the requirement for the certificate.
Should there be instances where the railway operating certificate is refused, suspended or cancelled, the applicant will have the right to appeal by requesting a review by the Transportation Appeal Tribunal of Canada. That being said, it is critical to add that this government is committed to ensuring that the introduction of railway operating certificates will be developed and implemented in the same spirit of co-operation between government and all stakeholders which guided the creation of the Railway Safety Act nearly two decades ago. Once this bill is passed, Transport Canada will consult stakeholders on the development of regulations that relate to this important new initiative to improve railway safety in this country.
In summary, I will say that the safety benefits of this proposal for the introduction of a railway operating certificate are clearly evident. An important regulatory gap will be effectively and efficiently addressed. Transport Canada's railway safety oversight powers will be enhanced to meet the changing nature of the industry over the long term. Canadians from coast to coast will reap the personal and economic advantages of a safer and more secure Canadian rail system.
When the Minister of Transport launched the Railway Safety Act review, Canada had recently suffered a series of devastating train derailments. These derailments caused the death of loved ones, the disruption of businesses and the serious pollution of trackside lakes, rivers and communities. During the course of extensive inspections and audits undertaken by Transport Canada following these incidents, the regulator identified numerous deficiencies that contributed to the decreased safety levels, including non-compliance by the railway companies with various safety requirements.
There was a general concern with the level of the railways' compliance with the regulations. Accordingly, the terms of reference for the Railway Safety Act review specifically directed the independent panel to examine the adequacy of Transport Canada's enforcement powers and to consider whether administrative monetary penalties should be added to the range of enforcement powers available to the department. Upon examination, it became clear that Transport Canada's enforcement powers under the Railway Safety Act needed to be strengthened to encourage better regulatory compliance, increased safety and help to prevent further incidents like those that originally triggered the review.
The independent panel's final recommendation on the issue, as detailed in its report of March 2008, plainly stated that an administrative monetary penalty scheme should be included in the Railway Safety Act as an additional compliance tool to enhance safety in the rail industry. This government fully agrees with the panel's assessment, and the introduction of a scheme for administrative penalties has been included as an important and integral part of this plan.
Administrative monetary penalties are certainly not new in the transportation sector. They were successfully introduced in the air industry back in 1986 and were subsequently introduced in the marine sector in 1991.
Penalties of this nature have been introduced in the transportation industry because they work. In the simplest terms, administrative monetary penalties are similar to traffic tickets for car drivers. When a company or individuals break the rules or do not comply with the regulations, the department can impose a pre-established administrative monetary penalty or fine to help encourage compliance in the future.
Administrative monetary penalties have other safety benefits as well. With these penalties in place, there is a perception of fairness because the operator knows in advance the cost of non-compliance and it is applied uniformly. Penalties can also be applied more uniformly as there is less discretion for giving warnings and therefore less opportunity for inconsistency.
Under the current Railway Safety Act, Transport Canada's options for enforcing non-compliance are very limited. When a violation is found during the course of an inspection or audit, an inspector will normally issue a letter of non-compliance and follow-up in a given time frame to confirm that corrective action has been taken. If the situation has not been corrected, the regulator has only one option, prosecution, which is both costly and time consuming. Therefore, it is ineffective for a large number of violations. This is a significant weakness in the current enforcement scheme of the act.
We believe administrative penalties should be implemented as an additional enforcement tool under the act to provide an efficient, effective and less costly alternative to prosecution, particularly in the cases of persistent non-compliance with the act and its safety requirements. This is consistent with the principle of minimizing the regulatory burden for Canadians, while at the same time promoting regulatory certainty and compliance.
In the interest of fairness for all parties, the proposed administrative penalty scheme will allow for a review of the regulator's penalty decisions by the Transportation Appeal Tribunal of Canada. This scheme will also include provisions related to the minister's decision to impose a penalty, the due process to be followed, the review of the decisions by the appeal tribunal and the level of fines to be paid for non-compliance and infractions. Maximum levels for administrative monetary penalties will be $50,000 for an individual and $250,000 for a corporation.
In addition to the implementation of an administrative penalty to improve railway safety, we propose, through these amendments, to raise existing judicial penalty levels, which were established 20 years ago and are no longer consistent with other modes of transportation. Maximum judicial fines for convictions on indictment for a contravention of the act would increase from $200,000 to $1 million for corporations and $10,000 to $50,000 for individuals. Maximum fines on summary conviction for a contravention will increase from $100,000 to $250,000 for corporations and $5,000 to $25,000 for an individual.
Implementing these penalties, as proposed in the bill, is clearly an important step in the development of an effective railway safety regime with sufficient scope and strength to ensure that our railways are safe and that they remain safe for the long term as the rail industry continues to evolve and to grow.
I began today with basic principles: that government should only do what only government can do. Public safety is an example of one of the things that only government can enforce. That is why we are creating a legislative framework in which free enterprise can operate in a manner that is safe, efficient and fair for the Canadian people.