Mr. Chairman, honourable members, I want to thank you for inviting the Transportation Safety Board of Canada to appear here today.
I bring with me three colleagues who offer a wealth of experience. Mr. Jean Laporte is our chief operating officer. He has been with us since our inception in 1990 and possesses a deep understanding of the mandate and the processes we follow. Kathy Fox has been a member of the board since 2007. She has over four decades of aviation experience and is an expert in safety management systems. Mr. Kirby Jang is our director for rail and pipeline investigations. He's well placed to provide greater context and information on TSB rail investigations, as well as the statistics we hold and why we hold them.
We are here today because you're conducting a review on the transportation of dangerous goods in Canada and the role of safety management systems.
A number of high-profile accidents here and south of the border have shone a spotlight on rail safety and the transportation of crude oil. They have forced us to re-examine whether our operations are safe enough, and if not, what needs to be done to improve matters.
Today there is a heightened fear. There has been, and there is no other way to put this, an erosion of public trust. Five years ago, the amount of oil moved by rail across Canada filled 500 cars, maybe five or six long trains. but last year, that figure rose to 160,000, and it is projected to go higher in the coming years. Canadians know that much of this oil is volatile.
No accident speaks more profoundly to the risks than that in Lac-Mégantic, where last July a train carrying crude oil derailed and caught fire, killing 47 people. In this investigation, we still have months ahead of us, months in which we will complete our investigation and report to Canadians.
That being said, early on in this investigation we identified important safety issues and communicated them to regulators. Then in late January, in an unprecedented move, the National Transportation Safety Board, NTSB, and the TSB made parallel recommendations aimed at making the transportation of crude oil safer across North America.
In Canada, we called for tougher standards for class 111 tank cars. That's because in Lac-Mégantic the entire train was made up of older unprotected tank cars, and almost every tank car was breached, fuelling the fire.
I want to show you an animation. This car was in the middle of the train, and you can see how very badly damaged it was. As you can see from this photo, even the cars at the end of the train, which are the cars on the right of the photo, these are the cars that were moving relatively slowly when they derailed. Even those cars were very badly damaged. That has taught us something.
Today, the rail industry is moving toward a new standard for general service class 111 tank cars, and that's a good thing. But a long and gradual phase-out of older model cars simply isn't good enough. It leaves too much risk in the system. That's why we were crystal clear that commodities posing significant risk must be shipped in containers that are safe, and the sooner, the better.
Our second recommendation dealt with the way railways plan their transportation, how they choose the routes on which oil and other dangerous goods are carried, and how they ensure train operations over those routes are safe. This involves a comprehensive system-wide review of many variables. It's about looking at what lies ahead along each route, identifying alternative routes, and choosing the ones with the least risk. It means, for example, ensuring that the track is maintained to the highest standard, that speeds are appropriate, and that wayside detection systems are in all the right places. This needs to be followed up with risk assessments in order to ensure the steps being taken will keep our communities safe.
Our final recommendation to emerge early from the Lac-Mégantic investigation was about making sure that when something does go wrong even in the face of advance planning, that the right resources are in place to reduce the severity and impact of a spill. We therefore called for emergency response assistance plans where large volumes of liquid hydrocarbons, like oil, are being shipped.
An answer to our recommendations is due later this month. We are encouraged by the minister's response to our early communications on Lac-Mégantic. It signals an understanding of the risks of carrying more and more oil by rail, what is at stake, and the need to address the risks that the TSB finds. In responding to our recommendations, it is my hope that the minister will lead with initiatives to squarely deal with these three important safety issues.
Now l'd like to discuss one of the other ways of ensuring our transportation network is as safe as it can be. That's the second topic you have been tasked with addressing: safety management systems, or SMS. As my colleague Kathy Fox so aptly put it, safety management systems help companies find trouble before trouble finds them. Let's be clear: an SMS is not a panacea, nor should it be mistaken for one. However, it is a very good tool, one that helps to find the biggest risks so that mitigating steps can be taken.
At the Transportation Safety Board, we think SMS is so important that we put it on our inaugural safety watch list in 2010. To be fair, Canada's major railways and a number of short lines have been working to implement SMS, and they've taken significant steps. However, 12 years later, many of the systems they've implemented are not yet mature. That means they are not netting all the safety benefits that they should. l'm talking about the need for audits and for strong regulatory oversight. l'm talking about risk-based inspections and, where appropriate, enforcement to ensure compliance. The Auditor General's report reaffirms the importance of all these things, and we strongly agree.
Before I close, I would like to note that we've recently updated our own regulations, modernizing reporting requirements, and harmonizing thresholds for dangerous goods with the TDG, transportation of dangerous goods, regulations. That will mean more notifications about trains that go off the rails. For example, all one- and two-wheel derailments must now be reported to the TSB. It will also mean that when a release of dangerous goods leads to consequences, such as death, injury, collision, derailment, fire or explosion, or any other threat to the safety of Canadians, railways must report these spills, no matter how small.
That's where we are today. None of the safety issues are about to disappear anytime soon. This committee has an enormous task ahead, not just to examine the issues of SMS and the transportation of dangerous goods, not just to hold hearings and find out ways to ensure that our railways, our waterways, our pipelines, and our skies are as safe as they can be, but also to make recommendations that will lead to real action, concrete measures to shore up and restore shaken public confidence. In all of this, we at the TSB share your goals. Advancement of transportation safety is our mandate. We've spent more than two decades working at it, and you will find us committed, informed, dedicated, and very cooperative.
Thank you, Mr. Chairman.
Transport Action Canada is a national volunteer-based organization and a registered charity. We were created back in 1976 in response to an invitation from the government for public participation in planning the future of transcontinental rail travel. At that time we were known as Transport 2000. We later extended our area of interest to all public transportation modes—intercity bus, ferries, urban transit. We have had a long-standing interest in transportation safety and are frequently called on by the media for comment on safety matters.
We have affiliate organizations across Canada. One of our affiliates, le Groupe TRAQ, organizes the annual colloquium on railway safety in Quebec City, which I attended last week, along with many industry and government experts. We also have a strong involvement with airline passenger safety. This dates back to the Swissair flight 111 crash in 1998 when, with other groups, we founded an air passenger safety group that continues to consult with Transport Canada on an ongoing basis on air safety matters.
We do believe that statistically air and rail, which are generally federally regulated transportation modes, are very safe. However, accidents, particularly those with multiple fatalities, dangerous goods spills, or major fires do attract considerable media attention and raise public concern. We note that highway rail collisions or pedestrian accidents at rail crossings or on railway lines are actually a very small number when compared to the accident statistics for the highway mode. Nevertheless, we believe that rail crossing safety should be a continuing major concern of the federal government and particularly here in Ottawa where, in September of last year, there were six passenger fatalities on a double-decker transitway bus, an accident that should have been avoidable. Hopefully, we'll find out precisely why that accident happened before too long.
We are strongly supportive of the expertise and independence of the Transportation Safety Board and particularly of its openness about ongoing investigations. We understand the importance of not trying to second-guess the reasons for an accident before the TSB's investigations are complete. We note the items that have already been discussed today on the TSB watch list, and one which we feel particularly strongly about is the need for positive train control. Ms. Tadros mentioned to you the progress that's being made because of legislative action in the United States. Certainly in many other parts of the world, positive train control is the standard rather than something to think about sometime in the future. The TSB has been recommending it strongly, particularly since the VIA Rail accident at Saint-Charles-de-Bellechasse, Quebec, in February 2010, and the Burlington accident in 2012.
I will say as an aside on positive train control that I personally was involved in Ottawa with the planning of our O-Train here, which is the only federally regulated railway that does operate with positive train control. The O-Train has one-man operation. There is a German-based system that ensures the train cannot exceed allowable speeds at stations or cannot pass signals that are at stop. That technology has permitted that system to achieve a complete absence of fatalities or injuries among passengers over its more than 12 years of operation. Today it carries more than 14,000 passengers a day. It would be good if that kind of technology had been extended to other railways in Canada.
We're also concerned, very much, about the issue of misinterpretation of rail signals, which was mentioned also by Ms. Tadros. Modern signal indications, particularly on high-speed lines, such as in Burlington, are purely visual; there is no backup and they're very complex for the train crews to interpret and react to correctly. In this context, the recommendations from the TSB regarding video and audio monitoring of locomotive engineers in the cab, as well as the monitoring of what is in front of the train, which involves cameras looking forward, are very important.
We participated in a number of railway safety events. We submitted to the Railway Safety Act review panel, which reported back in 2007. We've appeared before the House of Commons, before this committee, on air safety. We've appeared before the Senate committee on the amendments to the Railway Safety Act, where we strongly supported the introduction of safety management systems.
In May last year we spoke at a conference of the International System Safety Society of Canada on system safety in rail transportation. We attended the Canadian Transportation Research Forum seminar in January of this year on rail safety and transporting dangerous goods in Canada and, as I mentioned also, the TRAQ conference in Quebec City last week.
Looking at another recommendation of the TSB that relates to alternate routes for dangerous goods transport, we have a strong concern right now about the abandonment of historical main railway lines which is putting our national rail system at risk. For example, when Canadian Pacific sold its line that used to operate through northern Maine to Saint John, New Brunswick, this essentially reduced our rail network to a single route east of Quebec City, which totally disrupted train transport between the port of Halifax and central Canada when a major derailment occurred in Montmagny a few years ago.
In the last two years we've seen abandonment of the historic transcontinental railway lines in the Ottawa Valley, leaving only trackage through the greater Toronto area to connect eastern and western Canada, with no alternate routes that avoid that populated area. This year we're about to see the abandonment of the historic Intercolonial Railway segment in New Brunswick between Newcastle and Bathurst, which will leave only one railway route into New Brunswick. We think that's an area which the federal government and Parliament should be concerned about.
Looking back at passenger transportation safety, which is our main concern, obviously, since the disastrous Hinton crash in 1986 when 23 people died, we've had a very good record with VIA Rail. VIA has actually only had three passenger fatalities in accidents since then: two at Coteau, Quebec, in 1992, and one at Biggar, Saskatchewan, in 1997. It has of course had accidents causing the deaths of train crews: the tragic loss of three lives in Burlington in 2012 and of two engineers in Kemptville, Ontario in 1999, but essentially travel by train in Canada is extremely safe.
With respect to technology investment, the railways must continue to invest in technology as well as in their processes for safety management systems. An example of the failure to do that was the Toronto subway accident in 1995 where 40-year-old automatic train-stop technology failed to operate correctly and there were three fatalities. That, of course, was not a federally regulated rail system, but it's still an example of what happens when you fail to go with the latest technology.
In fact, in other countries that do have modern technology for automatic train control, there have still been serious accidents where there were gaps or flaws in the system. The two most serious accidents were in Britain: at Ladbroke Grove in 1999, with 31 deaths when two trains collided head on because of a failure to observe signals and a failure to use the existing positive train control on that system; and an earlier accident in 1988 with 35 deaths, again involving a failure of an outdated signalling system. In Spain, the crash at Santiago de Compostela with a high number of fatalities last year was a result of a bad design interface on completely new track between two different and incompatible signalling systems. Investment in technology is important.
To wrap up, again, Transport Action supported the safety management systems in the Railway Safety Act. We did express in the past some concern about the resources of short-line railways particularly to afford the implementation of these measures, though the major railways clearly have been making the appropriate investments in introducing that safety culture. The Lac-Mégantic accident may in fact show a failure of the application of SMS, but we await the TSB report on that.
I will point out that those concerns, particularly about the ability of smaller companies to implement SMS, were previously raised by Mr. Justice Virgil Moshansky, who led the inquiry into the Air Ontario crash in Dryden, Ontario, in 1989, obviously long before this. Mr. Justice Moshansky expressed concerns to the Railway Safety Act review panel back in 2007 and more recently about whether the safety regime can be effectively implemented everywhere.
I think those are my main points, and I'd be happy to answer any questions.
I was invited to appear, but not told why. I will therefore be perceptive. Given that I am a specialist in liability, insurance and assessment of damages, I suppose I am here to speak about compensation rather than prevention.
Since this morning, we have heard a great deal about safety and prevention. Those are extremely important and must be seen to. That being said, we will never be able to reduce the risk of railway accidents to zero, anymore than we can with highway accidents or airline accidents. We must therefore consider, following the Lac-Mégantic disaster, creating a better compensation system than the one we presently have.
The evidence will no doubt be painful for the families of the 47 deceased victims. The compensation process will take over a decade and will provide extremely disheartening results. In fact, I predict that whatever compensation is offered to the victims, if there is a commitment with respect to liability, will not amount to anything by the end of the process as there is inadequate insurance coverage.
Let us set out a fundamental rule. So-called adequate insurance coverage is not a panacea. Even if we replaced MMA in the Lac-Mégantic accident by CN or CP, who both have insurance coverage of $1 billion or $1.5 billion depending on the type of disaster, we would still find ourselves with the same problem. The problem is one of liability. Insurance, as the word indicates, is liability insurance.
Therefore, what must be changed and has not changed to this date in terms of railway transportation, are liability rules. Railway transportation is the last major system that has not been updated when it comes to compensation rules. This has now been done in air transportation and of course, in road transportation—which generally comes under provincial jurisdiction—as well as marine transportation. Railway transportation is the only area in which this has not yet been done. It took a disaster of the magnitude of Lac-Mégantic to awaken people's minds to this issue.
I prepared a page and a half summary for you which I translated myself. I take responsibility for any errors it contains. The proposals in the summary could be implemented fairly easily.
There are all kinds of possible solutions. We could introduce, as they have in some Australian states, an automatic compensation system for railway accident victims. This would require changing certain structures. I could discuss this further with you if you wish, but I would like to be more pragmatic and as efficient as possible. Under the current structure, it is possible to improve the compensation system for victims of railway accidents fairly easily by using rules that have been in place since 2003 in air transportation.
I say this would be fairly easy to implement, since the Canadian Transportation Agency, which is responsible for railway transportation, also supervises air transportation. The same organization would therefore be responsible for supervising these new compensation rules, which it already knows quite well.
How would this work? Essentially, in air transportation, we had the Montreal Convention. It was signed in 1999 and implemented in 2003. Over 100 countries signed the convention, including the United States and Canada, obviously. That convention stipulates a two-stage liability regime for the carrier. As you will see, it is easy to draw parallels with a railway carrier.
First of all, because this is an international convention, we do not speak of dollars, but rather Special Drawing Rights, or SDR. In the Montreal Convention, there is a first level of compensation set at 100,000 SDR, which is equivalent to $175,000 Canadian today. Obviously, this varies from country to country.
In this first level of compensation, the carrier's liability is automatic. The only way the air carrier can avoid having to pay—or rather having its insurer pay—is to prove that the victim was at fault. If we transpose this to the railway transportation context, we could point to the example of trespassing on railway tracks. In such a case, the carrier would have the right to invoke the trespasser's faulty behaviour and avoid having to compensate anyone following injury or death.
That first level provides quasi-automatic compensation, unless there is evidence that the victim was at fault.
Beyond that first level, the carrier may still be liable, but has more means at its disposal for exoneration. I am talking about what currently happens in the case of air carriers. The carrier may invoke the victim's faulty behaviour and its own lack of faulty behaviour. It may claim to have taken all reasonable measures to avoid the accident or claim that the accident was caused by a third party.
We therefore see that it is still presumably at fault, but not liable. Compensation may still be granted without a ceiling since the Montreal Convention abolished previous ceilings for compensation in the case of airline accidents. Compensation remains possible, but the carrier has more means at its disposal to exonerate itself.
Ladies and gentlemen, this is easily transferable to the railway sector. All that would be necessary would be separating, on one hand, personal injury, cases of bodily harm and fatalities and, on the other hand, property damage. The current problem is that the system deals with personal injury and property damage under the same liability insurance coverage.
This is my deeply held opinion. It seems to me that the motto “people before property” should be applied to our way of viewing compensation issues for victims of accidents. It is all very well to pay for environmental damages and to rebuild destroyed property, but the priority should be first and foremost to compensate people. That is why we must set up a liability insurance regime for railway carriers based on bodily harm to ensure it does not go beyond the limit, so that victims do not end up with nothing. The goal is also drawing attention, above all else, to the victims.
With respect to the terrible accident in Lac-Mégantic, let us imagine the money is found and those responsible identified and that in 15 years, for example, the whole thing is finally settled and victims are compensated. Unfortunately, it would be too late because orphans will have grown up and people will have passed on or moved on to something else. People need the money now, immediately.
You all know the English proverb which goes as follows:
Justice delayed is justice denied.
It applies perfectly to accidents involving bodily harm and fatalities. We must change the system and ensure that attention is given to people first and, afterwards, to property. If we do that, we will realize that not only is it feasible, but it is probably also what costs the least money.
It is terrible to say, but in the case of a disaster like the one in Lac-Mégantic, the worst damage was done to the environment and will probably cost well over half a billion dollars. Then, there is the damage to buildings and vehicles that were located in Lac-Mégantic's downtown core. The last item is compensation for the families of the 47 deceased victims.
As you know, I am a specialist on bodily harm and have made some quick calculations. Even though I am not familiar with the specific circumstances of the 47 victims, I guarantee you that if, tomorrow morning, full reparation was paid out, as happens before the regular courts, and the families of the 47 victims were compensated, it would all add up to less than $25 million. It would probably be less than $15 million. That is a drop in the ocean of costs following an accident like the one in Lac-Mégantic.
I would like to emphasize the economic feasibility of changing such a system. It could be done very quickly. The proof is that with a similar system, things have been working very well for the last 10 years in air transportation. Insurance premiums are predictable, fixed and accepted by insurance companies. Unfortunately, as they say, human life does not have a price, but it does have a cost which in legal terms is limited.
Thank you, Mr. Chairman.
Professor Gardner, I would like to discuss your proposal. You mentioned the importance of placing people above all else and, in that perspective, you are proposing a new compensation regime for people who are victims of accidents. However, in today's study, we are mostly discussing railway safety to avoid having accidents. I understand what you are proposing quite well in terms of compensation, but I would prefer the issue not be addressed after the fact, but rather avoided altogether, so that a tragedy such as the one in Lac-Mégantic does not reoccur.
In Canada, railway companies have to transport all the products they are presented with, including dangerous goods. It is therefore understandable that Canadian National and Canadian Pacific each carry liability insurance of over $1 billion. What do you think of the idea that owners of dangerous goods should also have to share the liability?
In the case of Lac-Mégantic, the Irving company owned the goods being transported. From what I understand, that company had absolutely no responsibility. In other words, it was not up to Irving to pay for the clean up in Lac-Mégantic. It was not responsible for compensating local residents. Finally, it did not have to pay for the environmental remediation.
Is it your opinion that the time has come for the owners of such goods to assume some responsibility? What do you think about this issue?
This may surprise you, but that already exists in Quebec, and has been there since 1978. That is not recent. Since 1978, the Environment Quality Act stipulates that all owners of contaminants — and of course the act lists contaminants, including the oil that was being transported through Lac-Mégantic —, even if they are not in their control at the time of the accident, are responsible for the clean-up costs. Furthermore, the order was issued by the Minister of the Environment.
You say that Irving owned the oil, on July 6, the day of the tragedy. However, according to certain statements made in the context of the current class action suit , it would seem that that issue is in dispute. Did World Fuel Services, the company who initially owned the oil, remain its owner until the oil arrived in the port of Saint John, New Brunswick? Or did Irving own it? To my knowledge, the notice was sent to both presumed owners.
As you can see, such measures already exist, but unfortunately, the Department of the Environment is the only beneficiary. This only has a bearing on environmental damages. That provision cannot be invoked for anything to do with victims' compensation, including under a class action suit.
Would it be feasible? Certainly. Will this provision, which triggered an order, be challenged by the owner, probably all the way to the Supreme Court, so it can be deemed unconstitutional? Most probably. Will these people succeed? In my opinion, no, as was the case for tobacco companies who lost before the courts when legislation specifically allowing them to be sued was enacted.
The fact remains that for this particular issue, things will drag on for 10 years. That is how long it would take for a constitutional challenge of this provision. I do not know if such a provision already exists in other provinces, but this particular one has existed in Quebec since 1978.
I appreciate that. I'm actually writing down what the interpreters were just saying because that latter point was an important one about—if I understood correctly—victims being compensated apart from the question of shared liability between the carrier and a third party. That was the point made at the end.
Let me thank, of course, our witnesses for appearing here today. We appreciate your contributions. Obviously we are undertaking at the minister's request an important study into how we make improvements both to safety management systems and the regime around the transportation of dangerous goods as well.
On issues of liability, I know we're looking more at what we're doing to improve liability regimes for the marine sector, for example, with a major panel report that has already come due. Their recommendations are under consideration and review, if you will, in an expedited fashion by the government and our officials. I suspect we'll be hearing more about the crude oil regime in particular. There's an additional element where we're looking at our preparedness for hazardous materials by the marine mode of transport as well, so these are very timely.
Your contributions, Mr. Gardner, on the issue of liability are important to this committee.
I have a question, Mr. Gardner, about the Canadian Transportation Agency's consultation, the railway third party liability insurance coverage regulations. Have you contributed or made a submission to that particular effort by the CTA?
The problem is that PTC, depending on where you are in the world, is really a generic term and has different meanings. There are very specific implementations of different kinds of positive train control.
The Japanese bullet trains, shinkansen, have had complete automated train control in the cab, not dependent on signals beside the railway lines, since 1964, when those trains started running. As I mentioned, even American steam railways back in the 1920s, the Pennsylvania Railroad, for example, had mechanisms for positive train control, as did the Great Western Railway and other railways in the United Kingdom.
The technology has many forms and has evolved in many ways. You have situations like the one in Santiago de Compostela, Spain, where there was an older system interfacing to a more modern system, and the interface itself between the two systems was part of the cause of that accident.
The situation in Canada is that we only have the visual indications and the two engineers in the cab as the way of checking that. In the case of Burlington, that didn't work. There was a third qualified engineer in the cab. Although in training, he was a qualified and experienced engineer. That still did not prevent the misinterpretation of the signals there.
When I say positive train control, I mean a system that provides the second line of defence so that if there is a mistake made, or if a signal malfunctions, as it did at Saint-Charles-de-Bellechasse when the VIA Rail train derailed when the signal was partly obscured, there will be a second line of defence. That is the recommendation of the TSB.
In answer to your first question about a moral obligation, I will simply remind you of what happened in Canada approximately 20 years ago with the tainted blood scandal. In that specific case, civil liability on the part of the Department of Health was never established in the federal government court.
However, at the same time, there was a collective realization after political pressure that it was unacceptable that the victims of contaminated blood be left to deal with complex legal procedures that would never reach their conclusion because the victims would die before that happened. In the end, moral obligation and national solidarity dictated the implementation of a compensation regime that, without necessarily fully compensating victims because of the thresholds set out in legislation, provided for at least faster payments of reasonable compensation.
I feel, without wanting to imply federal responsibility in this catastrophe, that the Lac-Mégantic tragedy was a wake-up call for everyone. We realized just how much railway transportation had evolved and how necessary it was that insurance limits, and monitoring and other measures, be updated. This tragedy happened and it led to 47 deaths.
As I already stated, compensation costs would not be particularly high for government if, on the grounds of national solidarity, it provided partial, not full compensation for the victims, as civil courts do. The government could ensure that these individuals not have to wait 15 years before they receive any compensation. That is my answer to your first question.
The second question is an interesting one because the Transportation Agency was the last to be added to the list of respondents in the class action suit in Quebec brought by representatives of the victims. Is the Transportation Agency legally liable for what happened?
Obviously one cannot accuse the Transportation Agency on the grounds that there were insufficient regulations. That is a political issue and, fortunately, judges do not get involved in political issues, in other words, which regulations should be adopted.
Did the agency improperly enforce current regulations? That was the argument in the amendment put forward regarding the CTA's liability. I see absolutely no evidence on one side or the other that would indicate to me that the CTA wilfully turned a blind eye to how the regulations were enforced, that they were complacent and that that was the cause of the derailment in question.
We can certainly agree that the legislation was insufficient with respect to the current liability insurance coverage regulations that provide for sufficient coverage, when we know that some of these companies were insured for less than $100 million and even considerably less than $50 million. Now that we know the potential consequences of these accidents given how dangerous these products are, obviously the law is inadequate. The problem is that this still does not deal with the civil liability of the state.