moved that Bill C-52, an act to amend the Canada Transportation Act and the Railway Safety Act, be read the second time and referred to a committee.
Mr. Speaker, today I rise in my place to begin the second reading of Bill C-52, the safe and accountable rail act.
Since arriving at Transport Canada, I have made safety my absolute top priority.
As minister, I have borne witness to events that have led us to examine the safety regime and the manner in which railways and shippers are held accountable when things go wrong. Things can and do go wrong.
The most notable event without question was the explosion of railway cars in Lac-Mégantic, Quebec, on July 6, 2013, and the 47 people who died that day, a day that will be inscribed in the memory of all members of this House. It has galvanized our determination to find better ways to protect Canadians and our communities, and better ways to safely move the goods on which the Canadian economy depends.
We are committed to achieving that, and we have taken decisive measures to do so.
Very soon after the tragedy, we introduced measures to address safety issues. We established two-person minimum crews for locomotives pulling dangerous goods, and we slowed the speed of all of those trains. We adjusted the specifications of tank cars, and immediately took the least crash-resistant cars off the rails. We strengthened regulations and we increased inspections. We also took steps to address longer-term issues. We have been working with municipalities, first responders, railways and shippers to strengthen emergency response across this country.
In August, the Transportation Safety Board issued its final investigation report on the Lac-Mégantic tragedy, and again we responded. Last October, I introduced further measures, including an emergency directive on how trains are to be braked, the accurate classification of dangerous goods and steps to improve training of all rail employees.
We also introduced measures to make safety management systems more effective in ways that I will discuss in more detail, but I want to emphasize this: this government has implemented every single one of the recommendations of the Transportation Safety Board in response to Lac-Mégantic. We have learned the lessons inherent in past tragedies, and our commitment to safety is absolute.
The bill before us introduces further steps to strengthen the safety regime of Canada's railways and ensure the accountability of railways in the case of accidents. It moves on three different fronts. The first is prevention. Amendments would strengthen the regulatory regime to reduce the likelihood of rail accidents. The second is communication for effective response. The bill would allow for requirements related to information sharing between railways and municipalities to improve the response in case of emergencies. The third is accountability. The bill would take steps to ensure railways have enough insurance to pay for damages. It would also make crude oil shippers accountable for what they put on the rails by ensuring they pay into a supplementary fund that would be available when an accident involves crude.
The bill before us would amend two pieces of legislation: the Railway Safety Act and the Canada Transportation Act. Taken together, these amendments represent a significant step in improving the overall safety in Canada's railways, especially in the transportation of dangerous goods. These amendments respond to the recommendations of the Transportation Safety Board in response to Lac-Mégantic, and the 2013 fall report of the Auditor General. We welcomed all their input.
Let me begin with prevention and the features of the bill that would help prevent rail accidents. The Railway Safety Act sets out a regulatory framework to address the safety, the security and the environmental impact of rail. Under the act, federally regulated railways are responsible for the safety of their rail line infrastructure, of their railway equipment and of their operations.
Transport Canada monitors the railway's compliance with the act and with the department's rules, regulations and engineering standards.
Transport Canada also conducts audits and inspections to ensure that the overall safety of railway operations is maintained. Canadians can be assured that Transport Canada does not and will not hesitate to take appropriate action to address safety concerns. The bill before us today would provide new authorities to the safety inspectors and to the Minister of Transport to do just that.
Under this bill, a new provision would give the Minister of Transport the authority to order a railway to take a corrective action, to stop any action, to follow any procedure or to suspend operation. In other words, the minister would be able to intervene directly should there be a concern for safety.
A Transport Canada railway safety inspector would be given broader authority to issue notices and orders to any person or entity, including railway companies, road authorities and municipalities, relating to safe railway operations. By increasing the authorities for the minister and railway safety inspectors, we would increase Transport Canada's ability to administer the Railway Safety Act and the regulations, the rules and the engineering standards made under the act. These are all powerful tools and they would increase the regulation of oversight of railway companies that Transport Canada regulates and would ensure that railways operate according to the standards established in the act.
However, I would like to emphasize that some of the most important steps that railways make to improve safety and safety culture are not the results of the provisions of the Railway Safety Act but are contained within their own safety management systems or SMS. I want to be clear on this point. A safety management system is not deregulation and it is not self-regulation; it is an internationally recognized, science-based process that has been used in rail transportation since 2001. SMS do not replace rules or regulations or inspections. They provide a systemic approach to safety that incorporates specific regulations and proactive measures to identify hazards and to mitigate risks.
Transport Canada has created regulatory requirements around safety management systems and the bill before us would strengthen the department's oversight. Under the amendments, I believe that if a railway company were implementing its safety management system in a way that could compromise railway safety, I could take that company to corrective action by placing an order. With this additional oversight, railways would have further incentive to ensure that they manage the risks associated with operating a railway.
I would like to draw the attention of the House to the elements of this bill that would help quicken emergency response through closer communication and co-operation between railways and municipalities through which they pass. Under this bill, Transport Canada would have new authority to regulate the sharing of information, of documents and of records from one party to another other than the department, for example, from a railway company to a municipality.
Canada's history is one of towns and cities that sprang up along the rail lines in this country. We have to ensure that the people who live in these areas are safe. The collaboration between railways and communities on such matters would no longer be at the discretion of the railways. It would form part of a mandatory regulatory framework. The Federation of Canadian Municipalities has been an outspoken champion for better communication and more transparency between railways and municipalities on safety-related issues, and we thank its members for their input and advice.
In addition to prevention and effective communication for improved response, the third pillar of the bill involves accountability. By this, I mean the need to ensure those responsible for operating the railway system and those who put high-risk goods into the system would have the financial resources they need to compensate victims and to clean up communities if things go wrong. This is not just an issue that results from major tragedies such as what happened in Lac-Mégantic, although I will return to that in a moment.
More frequently, municipalities are called to respond to incidents of lesser impact, such as putting out fires that may have been caused as a result of a railway operation. Under the current regime, these costs are often borne by the provinces and municipalities and ultimately their taxpayers. However, under the bill before us, if a province or municipality believes that a fire was started as a result of railway operations, it can apply to the Canadian Transportation Agency for reimbursement. The amendment would give the agency authority to determine if indeed the fire was caused by railway operations, and would be able to determine the costs incurred in putting out the fire and require the railway to reimburse the province or municipality for those costs.
This amendment and the others I have spoken to today are changes to the Railway Safety Act that promote a safe and secure, efficient and environmentally responsible transportation system in Canada. The amendments would give Transport Canada more authority and oversight in rail operations, bring in a new era of communication between railways and municipalities in an effort to improve emergency preparedness, and help make the railways accountable for the costs incurred from fighting fires that result from their operations.
However, another important issue of accountability became all too apparent in the aftermath of the Lac-Mégantic tragedy. The cost of the disaster in terms of the lives lost was incalculable. They are beyond words. However, there were calculable loss costs as well, and the costs of putting out the fire and clearing the debris, cleaning up the effects on the environment, and, of course, the costs of rebuilding a community and compensating, truly shattered lives. No one wants to anticipate such a disaster, but any responsible company must prepare for such eventualities by carrying sufficient insurance to cover the costs.
Under the Canada Transportation Act, federally regulated railways must carry insurance, but the Lac-Mégantic tragedy has proven that the measures now in place are simply not sufficient. Therefore, the bill before us identifies specific levels of insurance that must be carried, depending upon the type and volume of dangerous goods that the railway transports. These insurance requirements would come into force 12 months after the bill's royal assent, giving the insurance market the necessary time to adjust, and railways enough time to obtain the necessary insurance, which is usually purchased on an annual policy.
Class 1 railways carry significant quantities of dangerous goods, and they will be required to hold $1 billion in insurance. The House will be reassured to know that both CN and CP customarily carry more insurance than that. At the other end of the spectrum, railways carrying little or no dangerous goods would be required to hold $25 million in insurance. For short-line railways carrying higher amounts of dangerous goods, there would be an initial requirement to hold either $50 million or $125 million in insurance. One year later, those levels would increase to $100 million and $250 million respectively. This phase-in period would allow short-line railways time to adjust to the new requirements. The agency would be able to make inquiries to determine whether railways are maintaining the correct amount of insurance, and must revoke or suspend the certificate of fitness of any railway that fails to comply.
The agency can also enforce insurance requirements through administrative monetary penalties of up to $100,000, and there is more. Unfortunately, there is always the possibility and potential for a tragedy to exceed the ability of a railway's third-party insurance to cover the damages, so crude oil shippers must also share in the responsibility that comes with the transport of their dangerous goods. For those reasons, the bill would also create a supplemental fund that would be financed by levies on crude oil shippers, in the amount of $1.65 for every tonne of crude that is shipped. If the damages caused by a catastrophic crude oil accident were more than a railway company's insurance could cover, the fund would be there to cover the cost, not the taxpayers.
This is consistent with the polluter pays principle and is similar to the approach taken in marine transportation; the costs associated with an incident are shared by industry.
Crude oil shippers are included in the amendments before us today, but Transport Canada is looking at the possibility of expanding the regime to cover industries that ship other dangerous goods. In this way, we promote a shared accountability between rail carriers and the shippers of dangerous goods to ensure that victims and taxpayers are fully protected from bearing the costs of rail accidents.
Our goal is to ensure that communities, citizens, and taxpayers are protected in the event of an incident. The polluter will pay to clean up and provide compensation. We support a competitive rail sector and the resource economy that brings jobs to Canadians, but when it comes to safety in the transportation system, communities and citizens will always come first.
The measures in this bill come in addition to the steps the government has already taken to improve the rail safety regime. I would point out that there is a private member's bill that has been tabled to amend the Railway Safety Act, and I would like to commend the work of our colleague, the hon. member for Winnipeg South Centre. Her private member's bill, Bill C-627, is also designed to provide greater protection to persons and property from railway operations.
The government supports this bill, and I wish to assure the House that we have coordinated the amendments in the bill before us to ensure that both bills will be harmonized when they reach royal assent. This is the customary way to give effect to two bills and will result in both bills having equal and consistent impact on the Railway Safety Act.
Railway operators and Transport Canada have taken many measures to improve rail safety, and this has reduced accident rates over the past several years. However, the amount of dangerous goods and other commodities moving by rail is increasing, and it will continue to grow. We need proper oversight to reduce accidents. We need better communication between railways and municipalities to provide more effective response, and we need a stronger liability and compensation regime in the event of an accident.
The bill addresses each of these areas. It introduces substantial changes to the regimes for both rail safety, and liability and compensation. In the last Speech from the Throne, this government committed to drawing upon the lessons of the tragedy at Lac-Mégantic to make shippers and rail companies accountable for rail safety.
With this bill, we are fulfilling that commitment.
Our system of transportation safety is strong, but it can be improved. By strengthening the safety, liability, and compensation regimes, we will improve public confidence in the rail industry. Above all, we will underscore that the safety and the security of Canadians remain the top priority of Transport Canada.
We have put in place many rail safety initiatives, through directives, orders, and regulations within the existing legislation framework.
This bill will enable us to take further measures.
I hope hon. members share my sense of urgency that we get this done, and that they join me in supporting this extremely important bill.