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TRAN Committee Report

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Mr. Larry Miller
Chair
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 Fourth Report of the Standing Committee on Transport, Infrastructure and Communities, “Review of the Canadian Transportation Safety Regime: Transportation of Dangerous Goods and Safety Management Systems.”

I would like to thank the Committee for this thorough study and express my thanks to all who took the time to appear before the Committee to share their views. I appreciate the important issues and observations that witnesses have raised to help inform the final recommendations.

The Government of Canada recognizes the importance of ensuring the safe transportation of dangerous goods by rail throughout the country. As such, the Government’s comprehensive response to the July 2013 Lac-Mégantic accident has addressed each of three main pillars: Prevention, Effective Response, and Accountability. Under Prevention, measures centre on keeping trains on their track and keeping people safe. In terms of Effective Response, measures focus on minimizing damages and responding effectively in the case of an incident. With respect to Accountability, the liability and compensation regime is being strengthened to hold polluters accountable in the event of an incident. These pillars continue to guide our efforts going forward.

In my October 10, 2014, response to the Committee’s Interim Report, I outlined in detail the many targeted policy and regulatory actions taken by this Government in response to the Lac‑Mégantic accident. This included the development and implementation of several Emergency Directives, Protective Directions, Ministerial Orders, and making changes to both the Transportation of Dangerous Goods Regulations and the development and amendment of various regulations under the Railway Safety Act (Railway Operating Certificate Regulations, Railway Safety Administrative Monetary Penalties Regulations, Railway Safety Management Systems Regulations). Since then, the Government of Canada has continued to advance initiatives that will further strengthen the safety of our transportation system for all Canadians by, for example:

•   Regularly reviewing the composition of Transport Canada’s railway safety and transportation of dangerous goods oversight workforce in conjunction with the annual inspection plans to help ensure proper risk-based analysis, budgets, and staffing levels;

•   Study the use of voice and video recorders in locomotive cabs, and explore the parameters for their use;

•   Moving forward on a more robust tank car standard (TC/DOT-117) specifically designed for transporting flammable liquids that includes even thicker steel plates for the tank, full head shields to protect the ends of the tank against puncture, a steel jacket and thermal insulation to protect against fire and puncture, top fittings protection, and other improvements, including establishing the retrofit schedule for older tank cars; and

•   Introducing the Safe and Accountable Rail Act on February 20, 2015, that outlines a new rail liability and compensation regime that clearly defines and shares liability for rail accidents between railways and shippers, includes risk-based minimum insurance requirements for federally regulated railways, and a supplementary, shipper-financed

compensation fund for accidents involving crude oil or other designated dangerous goods. The bill also proposes amendments to the Railway Safety Act which have as a goal to include or broaden authorities to strengthen rail safety oversight, improve transparency, and strengthen Safety Management Systems.

For additional information on these and other related measures, an extensive summary of federal actions taken since July 2013 to enhance railway safety and the safe transportation of dangerous goods is included at Annex A.

With respect to the marine mode, as part of the World-Class Tanker Safety System Initiative, the Government of Canada committed to making legislative amendments to modernize the Ship-Source Oil Pollution Fund (SOPF), Canada’s domestic compensation fund. The amendments would include, among others things, making an unlimited amount of compensation available from the SOPF in the event of an oil spill. Should compensation exceed the amount available in the SOPF, the federal government would temporarily supplement the SOPF to ensure that compensation is provided to eligible claimants. Any amounts provided by the Government would then be recovered from the industry through a modernized levy.

I would also like to clarify the Committee’s reference on page 17 of the Report to the current marine liability and compensation regime. The Committee states that if the costs associated with an incident go above and beyond the liability of the shipowner, that shipowners may access an international fund and then a domestic fund, the SOPF. In fact, all claimants that have suffered a loss or damage related to an oil spill can make a claim to two international funds, known collectively as the International Oil Pollution Compensation Funds, as well as to the SOPF. In addition, I would like to underscore that while the SOPF is a fund of last resort for claimants after other sources of compensation are exhausted, the SOPF can also act as a fund of first resort. Accordingly, claimants can choose to submit their claims first with the SOPF, which is particularly important in cases where the shipowner is not able to meet their liability. However, it is important to note that as soon as a claimant is compensated by the SOPF, its right to pursue the shipowner is subrogated to the Administrator of the SOPF.

At present, the Government of Canada is piloting the development of risk-based Area Response Plans in four areas of high vessel traffic, including the southern portion of British Columbia; Saint John and the Bay of Fundy; Port Hawkesbury; and the St. Lawrence River (from Montreal to Anticosti Island). The first step of this project involves performing risk assessments in each of the four pilot areas. These risk assessments will be completed by early spring 2016 and the results will inform the Area Response Planning process. The Area Response Plan initiative is expected to take approximately two years to complete.  The results will be used to inform a potential national roll-out of the risk-based process.

Regarding the trucking sector, the Committee noted the importance of Electronic Logging Devices (ELDs), devices used to monitor truck driver’s hours of service, and stability control systems, systems that work to automatically reduce engine torque and apply brakes to assist in maintaining control of a truck when a loss of directional control is detected. Following the Minister’s March 19, 2015 announcement expressing support for ELDs, the Government is committed to mandating the use of ELDs through regulation for federally-regulated motor carriers, which has the potential to strengthen the safety on Canada’s roads and improve compliance with hours of service regulations. The Government encourages working with provincial and territorial colleagues to develop the business case for introducing ELDs and looks forward to continued collaboration on developing a standardized national approach. The Government of Canada is committed to working towards an aligned approach with the United States on developing new vehicle requirements as they are developed, including ELD technologies, in order to support enhanced safety, economic growth and trade.

The Government also recognizes the important safety benefits of stability control systems for heavy trucks and buses. In developing requirements for heavy vehicle stability control systems, the Government of Canada would be consistent with aligned North American vehicle regulations. In the interim, heavy truck and bus purchasers are free to specify the fitment of a stability control system as a vehicle option, a practice supported by Transport Canada.

Once again, I wish to express my thanks to the Committee for its extensive work on this Report. The Government of Canada remains committed to continually improving the safe and secure transportation of dangerous goods, the safety of our extensive and continentally-integrated rail network, and ensuring that the transportation industry is held to a high standard in terms of prevention, response, and ensuring adequate compensation should an accident occur.

Sincerely,

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


ANNEX A: Summary of Actions Taken to Enhance Railway Safety and the Safe Transportation of Dangerous Goods

July 23, 2013: Issued an Emergency Directive under the Railway Safety Act that required the securement of unattended locomotives and established the number of crew members required for operating a locomotive carrying dangerous goods;

July 23, 2013: Issued a Ministerial Order requiring railway companies to formulate new rules, or revise existing rules, to ensure that the safety issues identified in the July 23, 2013 Emergency Directive are addressed on a long-term basis;

July 23, 2013: Transport Canada began to conduct additional inspections to monitor compliance to the July 23rd Emergency Directive;

October 16, 2013: Speech from the Throne emphasized the importance of transportation safety, and noted two important actions: 1) shippers and railways companies would be required to carry additional insurance so they are held accountable, and 2) Transport Canada take targeted action to make the transportation of dangerous goods safer;

October 17, 2013: Issued Protective Direction No. 31 under the Transportation of Dangerous Goods Act requiring any person who imports or offers for transport crude oil to retest, or classify, their crude oil prior to shipment, and, in the interim, ship it at the highest packing group level until testing is completed;

November 18, 2013: The Minister of Transport requested that the House of Commons Standing Committee on Transport, Infrastructure and Communities 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;

November 20, 2013: Issued Protective Direction No. 32 under the Transportation of Dangerous Goods Act requiring railway companies to share information with municipalities to support emergency planners and first responders;

November 21, 2013: The Minister of Transport engaged technical and industry experts (Transportation of Dangerous Goods General Policy Advisory Council) to make recommendations regarding emergency response, means of containment, and classification;

December 26, 2013: Approved updated Canadian Rail Operating Rules, for most railways, that expanded on the July 23, 2013 Emergency Directive, and encompass more stringent operational safety requirements for railway companies;

January 1, 2014: Issued a new Emergency Directive under the Railway Safety Act to non-Railway Association of Canada companies to continue to enhance the safety and security of railway operations until all companies have permanent rules in place;

January 11, 2014: Published proposed regulatory changes in Canada Gazette, Part I, to adopt new standards for Class 111 tank cars, including thicker steel requirements and top fitting and head shield protection;

January 22, 2014: Launched the review of the liability and compensation regime for rail and initial stakeholder consultations;

January 31, 2014: The three TDG Policy Advisory Committee Working Groups submitted their recommendations on classification, means of containment, and emergency response;

February 7, 2014: Published proposed Grade Crossings Regulations in Canada Gazette, Part I, that would establish new safety standards for federally regulated grade crossings;

March 14, 2014: Published proposed Railways Operating Certificate Regulations in Canada Gazette, Part I, that would require railway companies to hold a valid Railway Operating Certificate in order to operate on federally regulated railways in Canada;

March 21, 2014: Completed initial stakeholder consultations regarding a comprehensive review of the liability and compensation regime for rail which informed the development of options for strengthening the regime;

April 23, 2014: Responded to the Transportation Safety Board’s interim recommendations by announcing a suite of actions;

April 23, 2014: Issued Protective Direction No. 33 under the Transportation of Dangerous Goods Act requiring emergency response assistance plans for crude oil, gasoline, diesel, aviation fuel, and ethanol;

April 23, 2014: Issued Protective Direction No. 34 under the Transportation of Dangerous Goods Act removing least crash-resistant Class 111 tank cars from dangerous goods service;

April 23, 2014: Announced three year phase out requirements for legacy Class 111 tank cars used for crude oil and ethanol transport;

April 23, 2014: Issued an Emergency Directive under the Railway Safety Act requiring railway companies to immediately implement key operating practices, including reducing the speed of trains transporting dangerous goods;

April 23, 2014: Announced the creation of a task force that brings stakeholders such as municipalities, first responders, railways and shippers together to strengthen emergency response capacity across the country;

May 17, 2014: Published proposed Railway Safety Administrative Monetary Penalties Regulations in Canada Gazette, Part I, that would introduce penalties as an additional enforcement tool to improve railway safety;

July 2, 2014: Published in Canada Gazette, Part II, Transportation of Dangerous Goods Regulations that update the Class 111 tank car standard and require proof of classification of dangerous goods (came into force July 15, 2014);

July 2, 2014: Published in Canada Gazette, Part II amendments to the Transportation of Dangerous Goods Regulations on safety marks. These came into effect on July 14, 2014;

July 5, 2014: Published proposed Railway Safety Management System Regulations in Canada Gazette, Part I, that would modernize existing requirements and help railways better identify and manage safety risks;

July 18, 2014: Initiated informal consultation on proposed amendments to the Transportation of Dangerous Goods Regulations regarding a new class TC-117 tank car standard for the transport of flammable liquids;

August 1, 2014: Announced that the government is enhancing insurance requirements for federally regulated railways and establishing supplementary compensation for incidents involving dangerous goods. Launched a second stage of consultations on the rail liability and compensation regime;

October 10, 2014: Government Response to the Standing Committee on Transport, Infrastructure and Communities Interim Report is tabled in the House of Commons;

October 22, 2014: Published Railway Safety Administrative Monetary Penalties Regulations in Canada Gazette, Part II (came into force April 1, 2015);

October 29, 2014: Responded to the Transportation Safety Board’s final report and announced a suite of actions;

October 29, 2014: Issued an Emergency Directive under the Railway Safety Act establishing a standardized minimum for hand break applications and specific testing requirements, and additional physical defences for unattended trains;

October 29, 2014: Issued a Ministerial Order under the Railway Safety Act requiring railway companies to develop and enhance rules on train securement;

October 29, 2014: Issued a Ministerial Order under the Railway Safety Act, requiring certain railways (including short lines) to submit training plans to Transport Canada for review;

October 29, 2014: Amended the Safety Management Systems audit cycle to a three-to-five cycle;

November 19, 2014: Published the Railway Operating Certificate Regulations in Canada Gazette, Part II (came into force January 1, 2015), requiring railways to hold a valid Railway Operating Certificate in order to operate on federally regulated railways in Canada;

December 4, 2014: Initiated crude oil sampling as part of a research project to assess properties, behaviour and hazards of crude oil transported in Canada through sampling, testing and analysis of a variety of crude oils from different regions;

December 17, 2014: Published the Transportation Information Regulations in Canada Gazette, Part II, which will require Class I and Class II rail carriers to report leading indicator data to Transport Canada (came into force April 1, 2015);

December 17, 2014: Published the Grade Crossings Regulations in Canada Gazette, Part II, which will establish new safety standards for federally regulated grade crossings;

December 31, 2014: Published amendments to the Transportation of Dangerous Goods Regulations (Lithium Metal Batteries, Emergency Response Assistance Plans and Updates to Schedules) in Canada Gazette, Part II;

January 1, 2015: Coming into force of Railway Operating Certificates Regulations;

February 20, 2015: The Minister of Transport introduced the Safe and Accountable Rail Act, Bill C-52, in the House of Commons to strengthen railway safety requirements and enhance the liability and compensation regime for federally regulated railways;

February 25, 2015: Published Safety Management System Regulations in Canada Gazette, Part II;

March 11, 2015: Published, as a regulatory proposal under development, additional details on the new TC/DOT-117 tank car standard and risk-based phase out approach;

April 1, 2015: Coming into force of Railway Safety Administrative Monetary Penalty Regulations, Railway Safety Management Systems Regulations, and amended Transportation Information Regulations;

April 30, 2015: Announced that Transport Canada will begin working with the Transportation Safety Board of Canada to conduct a joint safety study on locomotive voice and video recorders; and

May 1, 2015: Announced a new class of stronger rail tank car (TC-117) for flammable liquids. The new standard is the result of collaboration on both sides of the border, with a joint goal of strengthening the safety of the two countries’ inter-connected rail networks.