Lisa Raitt, Minister of Transport, launched a second stage of consultations with a view to strengthen the liability and compensation regime and ensure railways and shippers are held accountable in the event of an incident.

The government of Canada is enhancing insurance requirements for federally regulated railways and establishing supplementary compensation for incidents involving dangerous goods. Consultations began last winter and this second stage of consultations will involve discussions with key stakeholders to help define specifics of the new regime.

Once finalized, the new regime will ensure that sufficient funds are available to compensate potential victims and pay for clean-up costs in the event of a catastrophic incident. The railway disaster in Lac-Mégantic, and the insurance coverage carried by Montreal, Maine and Atlantic (MM&A) Railway at the time of the accident, highlighted the importance of strengthening the current regime.

Federally regulated railways includes two large Class I railway companies, the Canadian National Railway and the Canadian Pacific Railway, and 18 smaller Class II railway companies, also known as short-line railways. Under current legislation, a railway is required to carry adequate third-party liability insurance as a condition for receiving a certificate of fitness which allows it to operate. Whether a railway’s insurance is “adequate” is determined on a case-by-case basis, in accordance with the Railway Third Party Liability Insurance Coverage Regulations.