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TRAN Committee Report

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Mr. Larry Miller
Standing Committee on Transport, Infrastructure and Communities
House of Commons
Ottawa, Ontario
K1A 0A6

Dear Mr. Miller:

Pursuant to Section 109 of the Standing Orders of the House of Commons, please accept this as the Government of Canada’s Response to the Third Report of the Standing Committee on Transport, Infrastructure and Communities, “Interim Report on Rail Safety Review.”

At the outset, I would like to thank the Committee for all its work to date on this study on the transportation of dangerous goods by rail and railway safety management systems, and express my appreciation to all who took the time to appear before the Committee to share their views.

Following the July 6, 2013, derailment and explosion in Lac-Mégantic, Transport Canada developed targeted actions to further strengthen rail safety and the transportation of dangerous goods. On November 18, 2013, I requested that the Committee review and report on the Canadian regime for the safe transportation of dangerous goods and the role of safety management systems across all modes of transportation.

I appreciate the important issues and observations that witnesses have raised to date that will inform the Committee’s final recommendations. It is important to recognize that many of these issues align with those raised in other fora, including the Transportation Safety Board’s recommendations and findings regarding its investigation into the Lac-Mégantic train derailment, the Office of the Auditor General Fall 2013 Report Chapter 7: Oversight of Rail Safety, rail safety priorities developed by Federation of Canadian Municipalities, and in ongoing dialogue between the federal Government and other key stakeholders.

Since the Lac-Mégantic accident, Transport Canada has already identified and began implementing a series of immediate and longer-term targeted actions. My Department’s work has been driven by three key objectives prevention, effective response, and accountability. Under Prevention, measures focus on keeping the trains on the track and higher-risk transportation of dangerous goods operations. Activities focus on safe people, safe operations, and a safe track system; as well as knowing who is regulated and who is moving what types of dangerous goods. Thus, resources for regulations and oversight will continue to be focused on higher risk areas and identify emerging trends. Under Effective Response, measures focus on minimizing damages and responding effectively in case of a spill. Activities include measures to reduce impacts of incidents; enhance emergency response requirements for shippers; and support firefighters and first responders’ need for information, communication, and coordination. Under Accountability, the liability and compensation regime is being strengthened to hold polluters accountable in the event of a spill.

Accordingly, my Department has taken action to further strengthen railway and transportation of dangerous goods safety that will benefit communities across Canada. I am pleased to report on these actions that are addressing, or will address, the observations and concerns noted by witnesses under the categories of transportation of dangerous goods by rail and safety management systems in rail, as presented in the Committee’s Third Report:

On Transport Canada policy, including rule-making, minimum operating crew requirements, train speeds, and testing and classification:

While the Railway Safety Act provides flexibility for companies to formulate rules that take into account unique operating conditions and promote safety innovation, Transport Canada encourages companies to become signatory to the same safety rules in order to promote a uniform regulatory regime. As such, I have the authority to approve or reject industry proposals and rules on the grounds that they are, or are not, conducive to safe railway operations. My Department also intends to work with stakeholders through a more active Advisory Council on Railway Safety forum to better foster collaborative rulemaking.

As of July 23, 2013, the minimum operating crew requirement for trains carrying one or more loaded tank cars of dangerous goods is two crew members. The rules in place at the time of the Lac-Mégantic accident allowed for single person train operations.

The maximum allowable train operating speeds are determined by the class of track. If a specific track does not meet requirements for its class, companies must immediately bring the track back into compliance, halt operations, or lower speed to a lower class of track. Companies generally lower operating speeds until repairs are completed, but those with fewer resources sometimes opt for a permanent speed reduction. Transport Canada monitors all federally-regulated railways to ensure the companies take appropriate safety actions with respect to federal requirements. As of April 23, 2014, the Department is requiring that railways carrying dangerous goods implement operating practices on speed restrictions. My officials are also currently conducting research related to track conditions. Results from this analysis will help industry be more proactive in upgrading their track infrastructure, thus avoiding speed reduction issues in the future.

On October 17, 2013, Transport Canada took action on testing and classification by issuing a Protective Direction requiring any person who imports or offers for transport crude oil to retest or re-classify it prior to shipment, and, in the interim, ship it at the highest packing group level until testing is completed. The Department continues to work with our counterparts in the United States (US) and through its Transportation of Dangerous Goods oversight regime to assess the classification of dangerous goods for shipment. The Department has also launched a national research program for sampling and analysis for crude oil to obtain data on the properties of Canadian crudes and support risk analyses. Results will also inform future policy-making and discussions on regulatory changes.

On means of containment and DOT-111 tank cars, including time requirements:

On April 23, 2014, Transport Canada took action to advance safer means of containment and TC/DOT-111 tank cars, issuing a Protective Direction removing the least crash-resistant DOT-111 tank cars from dangerous goods service, and requiring TC/DOT-111 tank cars used to transport crude oil and ethanol that do not meet the standard published in July in Canada Gazette, Part II, or any other future standard, to be phased out or retrofitted within three years. On July 18, 2014, we also began formal consultation on the new proposed TC-140 tank car standard that would require thicker steel and other reinforcements to reduce the risk of spills on impact.

The US has also proposed similar standards and timelines and I will continue to work with US regulators to harmonize standards and align timelines.

On emergency response:

On April 23, 2014, I announced the creation of a task force that brings stakeholders such as municipalities, first responders, railways and shippers together to strengthen emergency response capacity. This task force will examine the effectiveness of the current regime and how it could be successfully expanded to encompass additional flammable liquids transported by rail. This examination will encompass the regime’s structure, functionality, and potential effectiveness when addressing an incident involving flammable liquids by rail. The Task Force will also provide recommendations on authorities in activating Emergency Response Assistance Plans and on strengthening the Incident Command Systems by better identifying jurisdictional issues and possible conflicting priorities as well as defining our role when attending an incident.

On route planning and risk assessments, including information sharing:

On April 23, 2014, Transport Canada took action on risk assessments and speed restrictions by issuing an Emergency Directive that requires, among other things, risk assessments of key routes used to transport dangerous goods. I also issued a Ministerial Order that requires railway companies transporting dangerous goods to develop new permanent rules on operating practices and risk assessments of key routes. The Order also requires railway companies to develop rules that include a process to consult with the Federation of Canadian Municipalities on how to incorporate municipal input on safety and security concerns in risk assessments. Railways have until October 20, 2014 to submit rules for approval. Additionally, on July 5, 2014, Transport Canada pre-published new Railway Safety Management System Regulations in Canada Gazette, Part I, which include requirements for companies to conduct risk assessments of significant changes to their operations and to submit them to Transport Canada.

On November 20, 2013 the Department issued a Protective Direction requiring rail companies to share information with municipalities.

Transport Canada is accelerating the revision of regulations to expand the scope of railway safety related information from federal railway companies. Once the regulations are in place, the Department will use this information to help inform its annual risk-based planning and oversight plans. Proposed amendments to the Transportation Information Regulations were pre-published in Canada Gazette, Part I on July 5, 2014.

On third party liability:

In response to the Government’s Speech from the Throne commitment to “require shippers and railways to carry additional insurance so they are held accountable”, I launched a review of the liability and compensation regime for federal railways in January 2014. The stakeholder consultation process ended on March 21, 2014. The Department heard from over 25 stakeholders, including large and small railways, a range of commodity shippers, the Federation of Canadian Municipalities, and several provinces. These consultations led to the development of a framework for a strengthened liability and compensation regime for rail.

I launched a second round of consultations on August 1, 2014 on the precise parameters of a strengthened regime. Informed by these consultations, Transport Canada is currently developing options to strengthen the regime. The goal is to align the regime with the “polluter pays” principle present in the liability regimes of other modes, and ensure that sufficient funds are available to adequately compensate potential victims, pay for clean-up costs, and ensure taxpayers are protected in the event of an incident.

On transload facilities:

Since Lac-Mégantic, the Department has increased inspections at crude transload facilities and oil tank cars and is increasing compliance monitoring. The higher risks associated with transloading facilities and crude oil have been taken into consideration with our current inspection planning. Inspections are carried out every one to three years for higher risk crude oil loading facilities, with intensive follow-up at non-compliant operations. Transport Canada will continue to monitor these sites and collect data to address any need for future regulatory amendments.

On harmonization with the United States:

Transport Canada works closely with the US through the Regulatory Cooperation Council and through the United Nations Sub-Committee on the Transportation of Dangerous Goods. These fora are used to align and harmonise dangerous goods regulations across North America and the world, with a focus on international trade and commodity movement. Additionally, Transport Canada has initiated research projects in collaboration with the US. The results of these projects have and will inform decision-making on subjects such as tank cars and classification. The Department recognizes that it is vital that both countries continue to coordinate regulatory and policy actions to the greatest degree possible. Continued Canada-US collaboration will remain essential in developing more stringent regulations and standards governing the shipment of crude oil by rail, and reflects the integrated nature of the North American rail network and energy industries. Given the unprecedented scale and negative impacts of the Lac-Mégantic accident, Canada will need to remain aggressive regarding the pace and scope of changes going forward.

On safety management systems legislative framework, oversight and enforcement, and the Department’s response to the Auditor General:

In addition to the Railway Safety Act’s suite of regulations, there are also rules and engineering standards that support Canada’s railway safety regime. On July 5, 2014, Transport Canada pre-published new Railway Safety Management System Regulations in Canada Gazette, Part I, which include proposed requirements for railway companies to conduct risk assessments of significant changes to their operations and to submit them to Transport Canada. The proposed Safety Management System Regulations will also improve how railway companies develop, implement and assess their safety management systems. The proposed changes include new or updated process to: encourage employees to report contraventions or safety concerns to the railway company without fear of reprisal; analyze data and trends to identify safety concerns; manage organizational knowledge so that employees can perform their duties more safely; improve work scheduling to prevent employee fatigue; and create annual safety targets and select appropriate initiatives to reach those targets. In addition, Transport Canada has also published proposed Railway Safety Administrative Monetary Penalties Regulations in Canada Gazette, Part I, to introduce penalties as an additional enforcement tool to improve railway safety.

Transport Canada has also been working to develop a tool to measure and improve the safety culture of Canadian railways. This project is being undertaken in collaboration with the Railway Association of Canada and New Brunswick Southern Railway, and is expected to be completed by Fall 2014. Expected results of the project include an enhanced safety culture perception survey and implementation guide. A working group on safety culture improvement, including representatives from the railways and the Department, will be assembled to share best practices on safety culture improvement.

I am pleased to report that Transport Canada has accepted all of the Office of the Auditor General’s recommendations on rail safety oversight and is on track to fully implement the Department’s Management Action Plan by the 2016 deadline. As recommended by the Office of the Auditor General, the Department has conducted a review of its risk-based oversight program to assess the number of audits and inspections required. Based on the results of the review, we have revised our risk-based business planning process using an updated formula to establish appropriate inspection and audit numbers.

On on-board voice and video recorders:

Following a VIA Rail train derailment in Burlington, Ontario in February 2012, the Transportation Safety Board recommended that locomotive video and voice recorders be installed. Transport Canada plans to work with stakeholders to develop new requirements to make locomotive video and voice recorders mandatory.

Once again, I thank the Committee for its efforts and look forward to receiving the final Report and recommendations. Let me assure you that Transport Canada will continue to take steps that further strengthen railway and transportation of dangerous goods safety in Canada. We remain committed to working with industry, municipalities, provinces, the US, and other key stakeholders to protect the health and safety of Canadians.



The Honourable Lisa Raitt, P.C., M.P.
Minister of Transport