Legislation approved to strengthen rail safety in Canada

Legislation aimed at improving railroad safety and crude-by-rail practices in Canada has become law, Minister of Transport Lisa Raitt announced yesterday.

The Safe and Accountable Rail Act amends the Canada Transportation Act to strengthen the liability and compensation regime for federally regulated railways through enhanced insurance requirements and a compensation fund that will be financed by levies on crude-oil shippers, Raitt said.

The legislation also amends the Railway Safety Act to increase information sharing provisions and provide Canada's transportation regulators with stronger oversight.

The new legislation includes:
• a requirement that federally regulated railroads obtain and maintain minimum levels of insurance, based on the type and volume of dangerous goods they carry, ranging from $25 million to $1 billion (all figures in Canadian dollars);
• a supplementary shipper-financed fund to provide compensation to victims and pay for environmental clean-up in the event that a rail accident involving crude oil exceeds the amount of insurance held by the railroad. Companies will need to pay $1.65 per ton of crude oil they ship by rail; and
• amendments to the Railway Safety Act that will broaden the powers of the minister and inspectors to order railroads to take specified measures or stop any activity in the interest of safe rail operations.

The new liability and compensation elements of the legislation will go into force on June 18, 2016.