Proposed rail safety laws to make oil carriers responsible for accidents

Proposed rail safety laws introduced today will make railways and crude oil shippers responsible for the cost of accidents, federal Transport Minister Lisa Raitt says.

The Safe and Accountable Rail Act will bring in minimum insurance requirements for railway crude oil shippers using federallyregulated railways,from $25 million for carriers of minimally dangerous goods to $1 billion for substantial quantities of them,Raitt said at a news conference.

Two new liability insurance levels$100 million and $250 million will be phased in during the two years after the bill receives royalassent. Companies will be required to come up with half that amount in the first year and the full amount the year after that.

Companies that ship crude oil will also have to pay a fee per tonneshipped that will go into a $250-millionbackup fund to cover costs abovewhat their insurance covers if they're involved in an accident involving crude oil.

Raitt said thechanges bring railway crude oil shippers in line with other transporters of oil such as pipelines and tankersand were related to the 2013 Lac-Mgantic derailment and explosion and the general increase in moving oil by rail.

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"How stunned were we all to learn there was only $25 million of insurance for that railway at the time, and there wasn't enough to even come close to compensating what happened to the families in that community and what happened environmentally," she said.

"Today is a huge step forward on that."

Raitt said CN and CPwould be required have $1 billion in liability insurance.

In an email, CP spokesman Jeremy Berrysaid the railway has received the details about theproposed changes and is reviewing them.

CN spokesmanMarkHallmansaid in an email the company is reviewing the proposals and hasno comment at this time.

Latest proposed changes after Lac-Mgantic

The government is also proposing more powers for the minister of transportation and inspectors to order railway companies to take specific measures or stop activities they deem necessary for safety reasons, plus new regulations requiring companies to "integrate safety into their day-to-day operations," according to a news release.

As an example, Raitt said,railway companies would be required to follow "principles of fatigue science" when scheduling employees to make sure they're properly rested.

She said Transport Canada and counterparts in the United States arealso in the final stagesof developing "new, next-generation tank car standards for flammable liquids" to reduce the chance of leaks after a derailment and are working to have those in place by 2017.

Raitt said these changes were mentioned inthe speech from the throne and would affect the Railway Safety Act and Canada TransportationAct.

Some of the other changes put in place since the Lac-Mganticexplosion left 47 people deadinclude requiring trains carrying dangerous cargo to have at least a two-person crew, removing the least crash-resistantDOT-111 tanker cars from circulation and minimum requirements for hand brakes and other equipment that could protect from similar incidents.

However, liability insurance was one of the issues raised after the crash that hadnot been addressed untilthis point.

The company involved in the Lac-Mgantic explosion, Montreal, Maine and Atlantic Railway, was banned from operating in Canada because it didn't have the required third-party liability insurance or enough money to cover the self-insured portion of its coverage.