The Canadian Rail Industry: Legal Landscape and Recent Developments

Transcription

1 The Canadian Rail Industry: Legal Landscape and Recent Developments By Anne Drost and Enrico Forlini Fasken Martineau DuMoulin LLP UK Rail Mission to Montreal - March 17, 2014

2 Canadian Rail Industry Some facts: Canadian rail is the 3 rd largest rail network in the world. Rail in Canada handles the 4 th largest volume of goods in the world. Two thirds of Canada's rail traffic moves trans-border and involves overseas trade. On a tonnage basis, 50 per cent of Canada's exports rely on rail transportation. Intercity passenger rail traffic totalled 4.5 million passengers and approximately 1.4 billion passenger-kilometres. VIA Rail Canada, a Crown corporation established in 1977, operates close to 500 trains weekly serving more than 450 communities across 12,500 kilometres of rail network, from coast to coast and north to Hudson Bay. Source: Railway Association of Canada

3 Legislation Canada Transportation Act, (S.C. 1996, c. 10) Canadian Transportation Accident Investigation and Safety Board Act, (S.C. 1989, c. 3) Railway Safety Act, (R.S.C., 1985, c. 32 (4th Supp.)) Transportation of Dangerous Goods Act, 1992, (1992, c. 34)

4 Canada - USA The North American rail industry is highly integrated and seamless. Companies operating on integrated rail networks build track to a standard gauge, and tracks are maintained to similar standards. Loaded rail cars are usually pulled by locomotives owned and operated by the track owner, but North American integration and shippers needs allows railways to interchange or hand off traffic to other railways to complete a journey.

5 Canada - USA Association of American Railroads: Operating over a 140,000 mile network stretching across the far reaches of North America, AAR members include the major freight railroads in the United States, Canada and Mexico, as well as Amtrak. Standard setting for North American railroads. Interline Settlement System (ISS): AAR sibsidiary. The ISS is the centralized process for the rail industry used to negotiate and agree upon for the sharing of revenue generated for a movement when two or more roads are involved in the shipment route.

6 Canadian Rail Mainlines Source: Transport Canada <

7 Transport Canada Government department: Rail Safety Canadian Rail Operating Rules Administers and enforces Railway Safety Act Transportation of Dangerous Goods

8 Canadian Transportation Agency The Agency's role in Canada's Rail Transportation System: determining railway costs; processing applications (certificates of fitness for the proposed construction and operation of railways, approvals for railway line construction); auditing railway companies accounting and statisticsgenerating systems; determining regulated railway interswitching rates, the Net Salvage Value of rail lines, and the railway revenue cap for the movement of western grain; and handling complaints related to the rail industry, including: railway infrastructure matters and noise and vibration caused by a railway company when constructing or operating a railway.

9 Transportation Safety Board (TSB) The TSB's mandate: To advance transportation safety in the rail transportation by: conducting independent investigations, including public inquiries when necessary; identifying safety deficiencies; making recommendations; and reporting publicly on its investigations. To review developments in transportation safety and identifies safety risks that it believes government and the transportation industry should address to reduce injury and loss.

10 Railway Association of Canada Represents some 50 goods, tourist, commuter and intercity rail businesses in Canada and has over 45 associate suppliers and partners. RAC acts to inform officials, develop programs, policies and resources and respectfully communicate with the public and media to strengthen the role and capacity of Rail to deliver services that are economically viable, socially cohesive, future focused and environmentally sustainable.

11 Recent and foreseeable changes in the railway legislation Context : In Canada: in 2009, there were only 500 carloads of crude oil shipped by rail; in 2013, there were 160,000 carloads. In the U.S.: in 2009, there were 10,800 carloads of crude oil shipped by rail in 2013, there were 400,000 carloads. On July 6, 2013, a train carrying petroleum crude oil derailed in Lac-Mégantic, Quebec, causing explosions and fire and killing 47 people.

12 Recent and foreseeable changes in the railway legislation The Canadian Transportation Agency is currently undertaking a review of insurance coverage requirements for the issuance of certificates of fitness required by federally regulated railways as prescribed by its regulations. Transport Canada is now conducting a comprehensive review of the liability and compensation regime for rail, with a view to ensuring that sufficient funds are available to adequately compensate potential victims, pay for any cleanup costs, and protect taxpayers in the event of an incident.

13 Recent and foreseeable changes in the railway legislation Protective Direction No. 31 Any person who imports or offers for transport crude oil must: Conduct classification testing of any crude oil being classified as UN 1267 or UN 1993, which has not undergone classification testing since July 7, 2013; Make those tests results available to Transport Canada upon request.

14 Recent and foreseeable changes in the railway legislation Protective Direction No. 32 All Canadian railway operators will be required to provide municipal emergency planners and first responders with annual information on the nature and volume of dangerous goods being transported through their communities; Large Canadian railway companies, such as Canadian National (CN) and Canadian Pacific (CP), will be required to include in their annual reports a quarterly breakdown of the nature and volume of dangerous goods shipped through Canadian communities; Smaller railways will be required to notify municipalities of any significant changes to the information provided in their annual reporting.

15 Recent and foreseeable changes in the railway legislation Proposed regulations: Regulations Amending the Transportation of Dangerous Goods Regulations (Safety Standard TP14877: Containers for Transport of Dangerous Goods by Rail) introduce a new standard for rail tank cars; introduce new requirements for documentation relating to the procedures and processes for classification of dangerous goods and sampling methods used by the consignors and carriers of petroleum crude oil; proposes to include a consignor s certification on the shipping document.

16 Recent and foreseeable changes in the Railway legislation

17 Recent and foreseeable changes in the Railway legislation Proposed regulations: Railway Operating Certificate Regulations Safety requirements met before operating Entering into force: Transportation Safety Board Regulations Mandatory reporting

18 For more information: Enrico Forlini eforlini@fasken.com Anne Drost adrost@fasken.com

19 Recent and foreseeable changes in the Railway legislation