Changes include minimum insurance requirements for railroads and a fund financed by levies on crude oil shippers.
The Canadian government on Friday introduced legislation in the House of Commons which it says will enhance rail safety and hold crude oil shippers and their rail transportation providers to a higher standard.
The Safe and Accountable Rail Act proposes amendments to the Canada Transportation Act and Railway Safety Act. Changes include a new liability and compensation regime for federally regulated railroads, including minimum insurance requirements, a compensation fund financed by levies on crude oil shippers, increased information sharing, and stronger oversight powers for Transport Canada inspectors.
Canadian Transport Minister Lisa Raitt said the new liability and compensation measures will be consistent with those the government has introduced for other transport modes, such as marine tankers and oil pipelines. It is based on the “polluter pays” principle and makes railways and shippers responsible for the cost of accidents, she said.
According to the legislation, federal railway companies must obtain and maintain legislated minimum levels of insurance based on the type and volume of dangerous goods they carry. Minimum insurance levels will vary from C$25 million for no or low quantities of dangerous goods up to a maximum of C$1 billion for substantial quantities.
Shippers of crude oil will be required to pay a levy per ton of C$1.65 (or $1.32) crude oil shipped to build a supplementary fund to pay for damages exceeding a railroad’s minimum insurance level if an accident involving crude oil occurs.
The Canadian government also announced the new Railway Safety Management System (SMS) Regulations, which require companies to develop and implement a formal framework that integrates safety into their day-to-day operations. The regulations will take effect April 1.
Canada’s railways generally support the government’s proposal to have more stakeholders share in the costs associated with rail accidents involving dangerous goods.
The Railway Association of Canada said “This approach will ensure that there are sufficient funds available to compensate those who suffer damages, and to cover clean-up costs in the event of an incident. Unfortunately, the regime does not apply to those dangerous goods [such as chlorine] that could have the most severe impacts.”
Canada has implemented a number of rail safety regulations related to crude oil transport since July 2013, when a runaway crude-oil train crashed into the Quebec town of Lac-Mégantic, killing 47 people in a massive explosion. Other rail accidents involving crude oil shipments have occurred in Canada and the United States since then, heightening public and environmental concerns with the overland transport of this commodity.
Canada introduces rail safety legislation for crude
