Jeff Watson

[Rail Transportation, April 22nd, 2015]

The member is not listening, Mr. Speaker. The government is putting in place a number of tough standards. She should update her statistics, by the way. I know she stopped at 2013, but oil by rail is actually significantly down, though it is still the government's responsibility. Should the economy pick up, we want oil by rail to continue to be safe. That is why we take actions.

There is no deregulation in our country. There are tough regulations. There are also operating rules that have the force of regulations because they are approved by Transport Canada. Therefore, we expect that rail companies should operate safety, that is the first thing. That is why they have to conduct inspections themselves, look at their equipment, but we check their homework. The number of inspectors are up as are the number of Transport Canada TDG inspectors. The number of inspections are at record levels over the last three years, some 30,000-plus inspections each and every year.

We are taking strong action. The member opposite should support that.

[Rail Transportation, April 22nd, 2015]

Mr. Speaker, this government is and will continue to take actions to protect public safety while dangerous goods are being transported. This government has demonstrated it in the actions we take every day to enhance public safety. We remain committed to finding the appropriate solutions to enhance the rail system and regain the confidence of Canadians in the safe transport of dangerous goods, particularly in the wake of recent derailments, such as that which took place at Gogama, Ontario on March 7.

Transport Canada has been deeply involved in work to improve the safe transportation of dangerous goods by tank car. Actions to date include: first, issuing a protective direction requiring the removal of the least crash resistant DOT-111 tank cars from dangerous goods service in Canada; second, issuing a protective direction to require emergency response assistance plans for certain flammable liquids and this requirement has since been regulated under the transportation of dangerous goods regulations; third, requiring railway companies to reduce the speed of trains carrying dangerous goods and implement other key operating practices to help improve safety; and fourth, creating an emergency response task force to bring stakeholders such as municipalities, first responders, railways and shippers together to review and strengthen emergency response capacity across the country, for instance, involving flammable liquid transported by rail.

The Transportation Safety Board has noted that not enough was known about the properties of the cargo carried on the train that exploded in Lac-Mégantic. As a result, Transport Canada is conducting research into the properties, behaviour and hazards of crude oil. The results are expected in the spring of this year.

Transport Canada continues to take actions based on a holistic risk-based approach, one that includes new train operation requirements, new compensation and liability requirements, increased inspections, among many others. As for an enhanced flammable liquid tank car standard, this government is in the final stages of developing, in collaboration with our American counterparts, the next generation of tank car for the transportation of flammable liquids, which, as part of a holistic approach, will reduce the risk of leaks in the event of a derailment.

Transport Canada has developed this new proposed tank car design, TC-117, to replace the current DOT-111 and CPC-1232 tank cars for the transport of flammable liquids by rail such as those involved in the recent Gogama derailment.

This new class of tank car would be the most robust tank car design for flammable liquid transport. In addition, the department has drafted retrofit requirements to meet the minister's direction on the phase-out refit schedule for the legacy DOT-111 tank cars announced on April 23, 2014. Transport Canada intends to publish the tank car standard this spring.

[Safe and Accountable Rail Act, March 31st, 2015]

Mr. Speaker, I am not sure that the member has read the provisions of Bill C-52, in which the short-line railways would be expected to carry more liability insurance based on the type and volume of the dangerous goods they are carrying. That is one of the very first ways to ensure that railway companies are bearing increased responsibility for the safe operation and transportation of dangerous goods, specifically crude, by rail.

Beyond those increased levels of insurance, there is the supplementary fund. As I have said, we are targeting that fund at $250 million, but there is obviously flexibility in the way the mechanism of the fund and the implementation of the levy are put to place. That would be done for repayment.

With a review at least every five years, if the risks change, there is flexibility built into the law such that the fund itself and the amounts in the fund could be re-examined and, if necessary, adjusted.

[Safe and Accountable Rail Act, March 31st, 2015]

Mr. Speaker, I thank the member for Tobique—Mactaquac for his intervention and for his strong work on this and a number of important matters the government is engaged in.

We conducted some exhaustive consultations. It was the two-step process the member alluded to and that I talked about in my speech. We were not only consulting with railway companies and shippers, which could be affected by a new liability and compensation regime that is jointly shared by both, but were seeking important information, technical information, and input from municipalities and other stakeholders. Those consultations led to the measures contained in this particular bill.

First of all, we are keeping our commitment that the liability regime should be shared. It is not just railway companies that would be required to be liable. The liability would be shared with shippers.

There is also the establishment of a new fund and in how the levy would be done to ensure that the taxpayers would not be burdened by the cost of either the cleanup or charges to victims. I mentioned earlier first responders and firefighters who attend to a fire. The costs they incur in their cleanup would be covered. Those claims would be fully compensated by the shippers and the railway companies.

[Safe and Accountable Rail Act, March 31st, 2015]

Mr. Speaker, first of all, I would like to address the exponential growth in oil traffic that is being talked about here. We heard at the standing committee on transport, in our recent study, that oil by rail actually went down by a significant amount last year, relative to 2013. There were some 35,000 fewer carloads, I believe, in 2014. That is not to say that with the pickup in the economy oil by rail could not potentially go up again. That is why we want to provide a safe regime, which includes liability and compensation.

The government is obviously sensitive both to the safety management systems functioning properly, with the creation of a safety culture for the federally regulated railway company and how it enforces its own practices, and to oversight. It has increased the number of railway safety inspectors by 10%. The number of transportation of goods inspectors is up by about 85%.

The government has taken the recommendations of both the Auditor General and the Transportation Safety Board very seriously and is acting on them to ensure that we are fulfilling our responsibility.

[Safe and Accountable Rail Act, March 31st, 2015]

Mr. Speaker, I thank my colleague opposite who has been working obviously on matters related to the Sherbrooke Airport as well, in co-operation with the government. We appreciate his contributions in this House.

I want to assure the member opposite that with this bill the government not only is addressing the question of the liability of federally regulated railway companies, but it is also ensuring that the liability regime is shared, in the case of accidents involving crude by rail, to include the shippers, by a new fund, a new levy that would establish the supplementary fund such that when railway companies' insurance level has been maxed out, shippers then will participate additionally in any charges that may result. It might be compensation for victims. It might be for remediation of the environment. It might be the costs of municipal forces, such as firefighters who come to fight a fire related to an accident.

There are a number of charges laid out in the bill. I hope that the member will support it.

[Safe and Accountable Rail Act, March 31st, 2015]

Mr. Speaker, I am pleased to join the debate here today on Bill C-52, the safe and accountable rail act. The tragic July 2013 derailment in Lac-Mégantic was an unprecedented event that I know none of us will forget.

Our government's response to the tragedy has three fundamental components: accident prevention, preparedness and response, and accountability. Under the first two pillars, our government has introduced a number of measures to address issues related to rail safety and the transportation of dangerous goods. Bill C-52 goes further to address these issues.

Today I would like to speak to the third pillar, accountability, and specifically the liability and compensation regime for rail. The Lac-Mégantic tragedy highlighted the need to further strengthen the rail regime to make sure that if an accident does occur, there are sufficient resources to compensate victims, pay for cleanup and protect Canadian taxpayers.

To do this, our government undertook a comprehensive review of the liability and compensation regime for rail. As part of this review, Transport Canada did in-depth research and analysis and consulted subject matter experts. The department also undertook a two-phase consultation process in which a wide range of stakeholders, including railways, shippers, provinces and communities, shared their views and technical information. All of the input and analysis generated during the review has informed the regime changes put forward in the bill.

Today, I would like to outline how Bill C-52 improves upon the current liability and compensation regime for rail and how these changes would benefit Canadians. Liability and compensation for railway accidents is determined through the courts based on fault or negligence. Under the current regime, the Canada Transportation Act and the Railway Third Party Liability Insurance Coverage Regulations require that a railway company carry adequate third party liability insurance coverage as a condition of receiving a certificate of fitness allowing it to operate.

The Canadian Transportation Agency determines what constitutes adequate insurance on a case-by-case basis. This is based on an assessment of risks associated with the railway's operation. It also makes a comparison with insurance held by railways with similar operations and with industry practices.

Under the Canada Transportation Act, it is up to the railway company to notify the agency in writing whenever it cancels or alters its third party liability insurance coverage, or whenever a change in operations may mean that its coverage is no longer adequate. If the agency determines that a railway's third party liability insurance is no longer adequate, it may suspend or cancel the railway's certificate of fitness.

The Transportation Safety Board's report on the Lac-Mégantic derailment indicated that the Montreal, Maine and Atlantic Railway did not notify the agency of certain significant operational changes, namely its increased transportation of crude oil.

Following the Lac-Mégantic tragedy, it also became clear that the $25 million in insurance held by the Montreal, Maine and Atlantic Railway would be insufficient to cover the scope or damage from this unprecedented and catastrophic accident.

In the 2013 Speech from the Throne, our government committed to ensuring that railways carry more insurance. Bill C-52 will implement four levels of mandatory minimum insurance requirements for railways. Under this new regime, the Canadian Transportation Agency will assign railways to a minimum insurance level based on specific criteria focused on the type and volume of dangerous goods hauled.

Railways that carry little or no dangerous goods will be required to hold $25 million in insurance. For railways carrying higher amounts of dangerous goods, there will be an initial requirement to hold either $50 million or $125 million in insurance, depending on the type and volume of dangerous goods carried. One year later, those requirements will double to $100 million and $250 million respectively. This phase-in will provide short line railways with sufficient time to adapt to these new requirements.

Finally, railways that carry substantial amounts of specified dangerous goods, namely class 1 railways, CN and CP, will be required to hold $1 billion in insurance. A railway's third party insurance will have to cover specific risks, including bodily injury or death, property damage and risks associated with pollution.

These new insurance requirements will ensure that the risk associated with a railway's operation is assessed objectively using specific criteria and that a railway's third party liability insurance is aligned with that risk. These requirements will also ensure that there will be sufficient insurance to cover the full cost of the vast majority of potential accidents.

As it stands in the current regime, there are no additional sources of funds to turn to in the event of a catastrophic incident other than the public purse. Often the process for addressing claims in such cases can be lengthy and costly, with delayed and uncertain outcomes for victims.

Bill C-52 ensures that the liability and compensation regime for rail will be able to address a catastrophic incident without burdening the taxpayers. It does so by creating a modernized two-tier regime to cover the cost of accidents involving crude oil, like the one experienced in Lac-Mégantic. This new regime will extend responsibility for compensation beyond railways to include shippers as well. It will also define the liability of railways in order to provide claimants with greater certainty of compensation.

In the case of a rail accident involving crude oil, a federally regulated railway will automatically be held liable without the need to prove fault or negligence. Railways' liability would be capped at their minimum mandatory insurance level and they will have the ability to seek financial redress from at-fault parties through the courts.

Federally regulated railways will also be held liable for crude oil accidents involving any provincially regulated railways operating on their tracks. This will ensure that all railway accidents involving crude oil that occur on federal track are covered through the new regime.

To ensure that liability is shared as designed in the new regime, the bill makes changes to section 137 of the Canada Transportation Act to clarify that railways will not be able to impose their third party liabilities on shippers, for example, through a tariff. Railway insurance will be the payer of first resort, and as I mentioned, would be sufficient to cover the cost of most rail accidents. However, should the damage from a rail accident involving crude oil exceed the railway's insurance level, the new shipper-financed compensation fund would cover remaining costs.

Shippers are part of the polluter pays equation, requiring them to share in the liabilities associated with the transport of their goods, and reflects the fact that the qualities of their product contribute to the risks and costs associated with an accident.

The proposed fund will be financed through a levy on shippers of crude oil. This levy will be set at $1.65 per tonne of oil in the first year. Following this, it will be adjusted annually for inflation based on the consumer price index.

The levy will be collected by federally regulated railways, remitted to the government and deposited in a special account in the consolidated revenue fund. Railways will be required to keep records on the collection of levies.

The Minister of Transport will have the authority to turn the levy off once it has been capitalized sufficiently. We are targeting an amount of $250 million, which we expect will be collected in approximately five years. This estimate is based on a reasonable projection of oil-by-rail traffic growth in the coming years. The minister may then turn the levy on again as necessary.

The shipper-financed fund will be managed by an administrator appointed by the Governor in Council. The administrator will be responsible for establishing and paying out claims once the railway's liability limit is reached.

To ensure transparency, the administrator will report to Parliament, through the Minister of Transport, on the fund's management. There must also be a special examination of the fund at least once every five years.

In the unlikely event of damages from a rail accident exceeding both the railway's insurance and the amount being held in the supplementary compensation fund, the federal government's consolidated revenue fund will cover the remaining costs. The government will then be reimbursed through the levy. A special levy could even be imposed on federally regulated railways in order to accelerate repayment of the amount charged to the consolidated revenue fund.

The two-tier regime for crude oil accidents will provide broad coverage of the cost of crude oil accidents. It will cover all actual loss or damage incurred as well as costs incurred by the federal or provincial crown in responding to the accident. The crown may also seek compensation for the impairment of the non-use value of public resources.

Oil is being transported in growing volumes over long distances across our country and we know that accidents involving crude oil can cause significant harm to people, property and the environment. Creating this second tier of compensation for large-scale accidents involving crude oil is another way that we are adapting to this phenomenon, recognizing the valid concerns of Canadians about the movement of oil by rail.

Enhancing compensation for rail accidents involving crude oil will complement efforts we have taken recently to strengthen rail safety and the transportation of dangerous goods, for example, by improving tank car standards. However, recognizing that crude is not the only product that could cause significant damage if involved in a rail accident, there is flexibility in this regime to include by regulation other dangerous goods in the future. The two-tier approach brought forward in Bill C-52 will ensure that enough resources will be available to cover all damages stemming from a rail accident. The increased insurance requirements will hold railways accountable and provide sufficient compensation for the majority of potential accidents. The supplementary fund will provide an additional source of compensation for crude oil accidents and share liability more broadly with shippers.

Robust oversight and enforcement mechanisms are key to ensuring that the strengthened liability and compensation regime functions as intended. The Transportation Safety Board found that the regulatory requirements in place at the time of the Lac-Mégantic derailment did not ensure that an increase in operational risk was reflected in railways' insurance coverage. Therefore, this bill also establishes more robust oversight and enforcement mechanisms to ensure that railways comply with the requirements of the new regime. Railways will continue to be obligated to notify the agency of any changes to their operation that may affect their insurance coverage. Under the new regime, however, the agency is empowered to make inquiries to determine compliance and must suspend or cancel the certificate of fitness of a railway that fails to maintain the minimum mandatory level of insurance.

We have also introduced administrative monetary penalties, AMPs, as an additional means of ensuring compliance. The agency may apply AMPs up to $100,000 to a railway that fails to maintain the correct amount of insurance, or fails to notify the agency of a change affecting its insurance coverage. An AMP of up to $100,000 per violation would also ensure the compliance of railways for collecting and remitting the shipper levies and for keeping records concerning the levies. The Minister of Transport may designate a person to be responsible for assessing compliance and applying these penalties.

Finally, the agency will have clear authority to make regulations concerning the information it needs to verify compliance.

These strong enforcement mechanisms support greater accountability and are critical to ensuring the benefits of the strengthened liability and compensation regime are realized.

Another advantage of the changes brought forward under Bill C-52 is that they bring the liability and compensation regime for rail into step with regimes in other modes and sectors. The polluter pays principle, which is the concept that those responsible for causing damage as a result of their operations should pay for their liabilities, guides the proposed changes to the regime for rail. It is also at the heart of the regimes for marine tankers, the nuclear sector, pipelines, and offshore oil and gas.

There are particularly strong links between the proposed regime for rail and the marine tanker regime, both of which have two tiers: an insurance tier and an industry-financed fund. They share responsibility between different participants in the supply chain. The administration of the rail regime's shipper-financed fund is also modelled on that of the marine regime's ship-source oil pollution fund.

More important, the regime for accidents involving crude oil, including a shipper-financed fund, reflects our government's responsible resource development agenda.

I cannot emphasize enough the importance of the measures put forward in Bill C-52. In addition to further improving rail safety and the transportation of dangerous goods in Canada, this legislation addresses gaps in the liability and compensation regime for rail that were brought to light following the Lac-Mégantic tragedy.

The primary goal of the bill's strengthened liability and compensation regime for rail is to make sure that in the future, should a rail accident occur, victims will be fully compensated and the environment will be remediated. It does this by holding railways and shippers accountable, not by burdening the taxpayer.

I therefore hope that all of my colleagues will join me in supporting the safe and accountable rail act, and help pass it quickly.

[Safe and Accountable Rail Act, March 31st, 2015]

Mr. Speaker, I listened with intent to the member opposite's expressed support on behalf of the New Democrats, the official opposition, for the swift passage of Bill C-52, and I welcome that.

I know the opposition House leader is close at hand. Will the member ask his House leader to let this bill pass as quickly as possible rather than talk the clock out on it? I know it is in the interest of everyone that we move this swiftly, at least to committee for the next stage.

Will the member help secure a swift passage of the bill so we can move on to studying it at committee?

[Canada Post, March 27th, 2015]

Mr. Speaker, I remind the member that in 2014, Canada Post delivered nearly 1.4 billion fewer pieces of letter mail than it did in 2006. That is a further and continued decline in that business.

Canada Post has decided it needs to continue to take action. That is why it has a five-point plan. For the remaining third of Canadians who do not receive mail at their mailbox, that will proceed so they will have daily mail on the same terms as two-thirds of Canadians currently receive it right now.

[Canada Post, March 27th, 2015]

Mr. Speaker, Canada Post delivered about 1.4 billion fewer pieces of letter mail in 2014 than in 2006. Two-thirds of Canadians do not receive mail at home.

Canada Post must balance its books without being a burden on Canadian taxpayers, and we would expect nothing less.