ARCHIVED — Vol. 148, No. 11 — March 15, 2014

Warning This Web page has been archived on the Web.

Archived Content

Information identified as archived is provided for reference, research or recordkeeping purposes. It is not subject to the Government of Canada Web Standards and has not been altered or updated since it was archived. Please contact us to request a format other than those available.

Railway Operating Certificate Regulations

Statutory authority

Railway Safety Act

Sponsoring department

Department of Transport

REGULATORY IMPACT ANALYSIS STATEMENT

(This statement is not part of the Regulations.)

Issues

While railway companies under federal jurisdiction are currently required to obtain a Certificate of Fitness (COF) from the Canadian Transportation Agency based on having sufficient insurance to operate, there are no requirements to ensure that baseline safety standards are in place prior to companies beginning operation.

Background

Based on recommendations from the 2008 Railway Safety Act Review, the Railway Safety Act was amended on May 1, 2013, to improve rail safety in Canada. The amended Act includes several new powers of authority to further strengthen Transport Canada’s rail safety oversight and enforcement regime.

Among the new powers introduced in the Act is the authority for the Minister of Transport to issue all companies subject to the Railway Safety Act, which includes both railway companies (federally regulated companies) and local railway companies (provincially regulated companies operating on federal tracks), a Railway Operating Certificate (ROC) on the condition that prescribed safety requirements have been met. The ROC-related provisions in the Railway Safety Act, including subsection 17.9(1) under which the proposed Regulations would be made, are not yet in force. Transport Canada will bring these provisions into force if and when the proposed Regulations are published in the Canada Gazette, Part II.

The ROC would be a condition precedent to a railway company operating and maintaining a railway or a local railway company operating railway equipment on a railway. The Act also provides the Minister with the authority to suspend or cancel the ROC if the prescribed conditions of issuance cease to be met, or if any provision of the Act or its instruments is contravened by a company.

Objectives

The objective of the proposed Railway Operating Certificate Regulations is to establish baseline safety requirements that must be met before companies begin operations. The proposed Regulations address the Railway Safety Act Review recommendation that Transport Canada further ensure that companies that are subject to the Railway Safety Act are certified as safe to operate.

Description

The proposed Railway Operating Certificate Regulations prescribe the contents of an application by a railway company and local railway company for a ROC, the conditions of issuance they must meet to be issued a ROC, and the contents of an application for a variance to a ROC. The proposed Regulations will apply to both new and existing companies. The Railway Safety Act provides existing companies with a two-year grace period to obtain a ROC. A new company will require a ROC immediately in order to operate.

In the application, companies would provide core company information (e.g. legal name, type and location of operations) and proof that the conditions of issuance have been met — i.e. a list of all the rail safety rules, as filed by the company or approved by the Minister of Transport, that the company has or intends to have in place, that are or will be applicable to that company. The application would also include an attestation by the chief executive officer that the application is complete and accurate, that the railway has the human and financial resources to operate and maintain the railway at the highest level of safety, and in the case of a railway company (but not a local railway company), that it has or will have a safety management system (SMS), as required by the Railway Safety Management System Regulations (SMS Regulations), in place. The attestation by the chief executive officer of a local railway company will include the SMS provision once the SMS Regulations are amended to include local railway companies in their application. Amendments to the SMS Regulations, which include an expansion of the Regulations’ application to local railway companies, are presented in a separate regulatory proposal.

The conditions of issuance for the ROC would be the essential rail safety rule or rules that a company would need to follow so that the company’s operation is conducive to safe railway operations. Currently, the bulk of the federal rail safety regulatory regime comprises a series of rail safety rules, which carry the same force as a regulation, governing the safety of railway operations, equipment, infrastructure, and employees. Current railway companies and local railway companies have rules applicable to their operation in place. A new company would need to have those rules applicable to their operation in place once they started operating.

Finally, a term or condition may be placed on a company’s ROC. Transport Canada, for example, may issue a ROC to a new company that is awaiting approval of a new rule, with the condition that the ROC only becomes valid once that rule is approved by Transport Canada for the company’s operation. Under the Railway Safety Act, the company may apply for a variation to change or remove the term or condition. The proposed Regulations prescribe the requirements regarding making such an application.

Consultation

In developing the Railway Operating Certificate Regulations, Transport Canada consulted with

  • — the Canadian railway industry, including all railway companies under federal jurisdiction and the Railway Association of Canada;
  • — labour organizations including, but not limited to, Unifor, the Teamsters Canada Rail Conference, the United Transportation Union, and the Brotherhood of Locomotive Engineers; and
  • — representatives of provincial governments.

Industry has been aware of the proposed Railway Operating Certificate Regulations since they were discussed during the Railway Safety Act Review and became a recommendation in 2008.

In November 2013, stakeholders were consulted on this regulatory proposal and no major concerns were raised. In addition, a teleconference with the Advisory Council on Railway Safety’s Regulatory Development Working Group was held on December 6, 2013, and again no significant concerns were raised.

Issues deriving from the consultations included general application questions, terminology and program issues. Stakeholder comments were taken into account in the development and drafting of the proposed Regulations.

“One-for-One” Rule

The “One-for-One” Rule applies to these Regulations with an annualized “IN” value of $221 and an “IN” of one regulatory title.

In order to ensure that railway companies and local railway companies meet an acceptable level of safety, the proposed Regulations would require railway companies to obtain a ROC. Transport Canada estimates that 66 companies would need to complete a form and submit it to Transport Canada in order to obtain a ROC. It was estimated that the preparation and submission of the ROC would take approximately one hour for each company to complete, with time spent divided between clerical and managerial staff (90% and 10%, respectively). The weighted average wage rate per hour is estimated to be $30. Therefore, the total administrative burden on companies is estimated to have a present value of $1,553 over a 10-year period, which corresponds to an annualized value of $221 and an average increased cost per railway of $30.

There is no charge to companies to apply for a ROC.

Small business lens

The small business lens does not apply to this proposal. However, the proposed Regulations are designed to ensure minimal administrative burden on both railway companies and local railway companies, and that disproportionate burden would not be carried by small businesses. Of the 66 companies that would be impacted by the proposed Regulations, Transport Canada estimates that 5 are small businesses. Flexibility has been provided for all businesses in that existing companies would be given two years to obtain their ROC.

Rationale

The proposed Regulations are proportionate to the degree and type of risk presented by this issue. The coming into force of the proposed Railway Operating Certificate Regulations will not only meet the stated objective of ensuring railway companies and local railway companies meet baseline safety requirements prior to operating or maintaining a railway or operating railway equipment on a railway, but will also support Transport Canada’s compliance and enforcement efforts.

Currently, the Rail Safety Compliance and Enforcement Program monitors compliance with rail safety rules, regulations and the Railway Safety Act. Both railway companies and local railway companies must comply with the provisions that apply to them in those instruments. In the event of non-compliance, a railway safety inspector may issue a letter of non-compliance which provides a company 14 days to address the non-compliance. Currently, Transport Canada’s only option in cases of persistent non-compliance is prosecution.

The proposed Railway Operating Certificate Regulations and associated legislative provisions expand Transport Canada’s enforcement continuum and provide the Minister of Transport with the ability to remove a ROC, thereby stopping a company from operating in a case where there are extreme safety issues.

Once the proposed Railway Operating Certificate Regulations are in force, Transport Canada will be able to use the authority provided in the Railway Safety Act to suspend or cancel the ROC if the prescribed conditions for issuance are not met or in the face of any non-compliance with the Act or its instruments. If a company, for example, does not comply with a ministerial order issued pursuant to section 19 of the Act, Transport Canada could suspend the company’s ROC; however, a company does have the right to appeal the suspension or cancellation by requesting a review by the Transportation Appeal Tribunal of Canada.

The proposed Regulations will not place undue burden on companies subject to the Railway Safety Act. The application is brief and requires applicants to confirm compliance with a list of existing rail safety rules that apply to their respective operation. There are no anticipated undue impacts on other areas or sectors.

The anticipated benefit of the proposed Regulations is improved rail safety which takes into account Canada’s economic well-being.

Implementation, enforcement and service standards

Transport Canada will create a certificate issuance program to facilitate the processing of applications and to minimize the administrative burden on companies. The program will include support throughout the application process and the development of templates for companies to use. A company will submit its application for a ROC to Transport Canada’s Rail Safety Program which, once satisfied that all applicable requirements have been met, will, on behalf of the Minister, issue a ROC to the company. This program and process have been designed to be quick and efficient and to avoid undue burden on applicants.

Contact

Any questions related to the Railway Operating Certificate Regulations should be directed to

Susan Archer
Director, Regulatory Affairs
Transport Canada
Telephone: 613-990-8690
Email: susan.archer@tc.gc.ca

PROPOSED REGULATORY TEXT

Notice is given that the Governor in Council, pursuant to section 17.9 (see footnote a) of the Railway Safety Act (see footnote b), proposes to make the annexed Railway Operating Certificate Regulations.

Interested persons may make representations concerning the proposed Regulations within 30 days after the date of publication of this notice. All such representations must cite the Canada Gazette, Part I, and the date of publication of this notice, and be addressed to Susan Archer, Director, Regulatory Affairs, Rail Safety, Transport Canada, 427 Laurier Avenue West, 14th Floor, Ottawa, Ontario K1A 0N5.

Ottawa, March 6, 2014

JURICA ČAPKUN
Assistant Clerk of the Privy Council

RAILWAY OPERATING CERTIFICATE REGULATIONS

INTERPRETATION

Definition of “rule”

1. In these Regulations, “rule” means a rule that, under section 19 or 20 of the Railway Safety Act, has been formulated or approved or has been filed with the Minister for approval.

SUBMISSION OF AN APPLICATION

Email or registered mail

2. An application for the issuance or variation of a railway operating certificate must be submitted to the Minister by email or registered mail.

APPLICATION BY A RAILWAY COMPANY FOR THE ISSUANCE OF A RAILWAY OPERATING CERTIFICATE

Application of sections 4 and 5

3. Sections 4 and 5 apply in respect of an application by a railway company for the issuance of a railway operating certificate authorizing the railway company to operate and maintain a railway.

Contents of an application

4. An application must contain all of the following:

  • (a) the applicant’s legal name;
  • (b) a description of the applicant’s railway by province and territory;
  • (c) a description of the applicant’s operations;
  • (d) a list of the rules that the applicant has in order to meet the conditions of issuance; and
  • (e) an attestation by the applicant’s chief executive officer or most senior officer that the application is complete and accurate and that the applicant
    • (i) has the human and financial resources to operate and maintain its railway at the highest level of safety, and
    • (ii) has or will have a safety management system that meets the requirements of the Railway Safety Management System Regulations.

Conditions of issuance

5. The conditions of issuance are as follows:

  • (a) the applicant has rules that reproduce the Canadian Rail Operating Rules or that provide an equivalent level of safety to them;
  • (b) the applicant has rules respecting the management of fatigue for operating employees;
  • (c) the applicant has rules respecting the medical fitness for duty of employees who hold positions that are critical to safe railway operations;
  • (d) the applicant has rules respecting employee qualifications;
  • (e) if the applicant’s operations involve the operation and maintenance of line work, the applicant has rules that set out minimum safety standards for track;
  • (f) if the applicant’s operations involve the transport of passengers, the applicant has rules respecting the safe handling of passengers and rules that set out minimum safety standards for
    • (i) passenger cars,
    • (ii) train brakes, and
    • (iii) locomotives;
  • (g) if the applicant’s operations involve the transport of freight, the applicant has rules that set out minimum safety standards for
    • (i) freight cars,
    • (ii) train brakes,
    • (iii) locomotives, and
    • (iv) retroreflective materials and their application on railway equipment; and
  • (h) the applicant has the human and financial resources to operate and maintain its railway at the highest level of safety.

APPLICATION BY A LOCAL RAILWAY COMPANY FOR THE ISSUANCE OF A RAILWAY OPERATING CERTIFICATE

Application of sections 7 and 8

6. Sections 7 and 8 apply in respect of an application by a local railway company for the issuance of a railway operating certificate authorizing the local railway company to operate railway equipment on a railway.

Contents of an application

7. (1) An application must contain all of the following:

  • (a) the applicant’s legal name;
  • (b) a description of the railways, by province and territory, on which the applicant’s railway equipment will be operated;
  • (c) a description of the applicant’s operations;
  • (d) a list of the rules that the applicant has in order to meet the conditions of issuance; and
  • (e) an attestation by the applicant’s chief executive officer or most senior officer that the application is complete and accurate and that the applicant has the human and financial resources to operate its railway equipment at the highest level of safety.

Agreements

(2) The application must also contain both of the following:

  • (a) a list of each agreement that the applicant has entered into with a railway company respecting the operation of railway equipment on the railway company’s railway; and
  • (b) a description of any provisions that deal with railway safety in each agreement.

Conditions of issuance

8. The conditions of issuance are as follows:

  • (a) the applicant has rules that reproduce the Canadian Rail Operating Rules or that provide an equivalent level of safety to them;
  • (b) if the applicant’s operations involve the transport of passengers, the applicant has rules respecting the safe handling of passengers and rules that set out minimum safety standards for
    • (i) passenger cars,
    • (ii) train brakes, and
    • (iii) locomotives;
  • (c) if the applicant’s operations involve the transport of freight, the applicant has rules that set out minimum safety standards for
    • (i) freight cars,
    • (ii) train brakes,
    • (iii) locomotives, and
    • (iv) retroreflective materials and their application on railway equipment; and
  • (d) the applicant has the human and financial resources to operate its railway equipment at the highest level of safety.

APPLICATION FOR THE VARIATION OF A RAILWAY OPERATING CERTIFICATE

Contents of an application

9. An application for the variation of a railway operating certificate must contain all of the following:

  • (a) the applicant’s legal name;
  • (b) the certificate number;
  • (c) a description of the variation applied for and the reasons for it; and
  • (d) an attestation by the applicant’s chief executive officer or most senior officer that the application is complete and accurate and that the conditions of issuance for the certificate continue to be met.

COMING INTO FORCE

S.C. 2012, c. 7

10. These Regulations come into force on the day on which section 12 of the Safer Railways Act comes into force.

[11-1-o]