ARCHIVED — Vol. 148, No. 20 — May 17, 2014

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Railway Safety Administrative Monetary Penalties Regulations

Statutory authority

Railway Safety Act

Sponsoring department

Department of Transport

REGULATORY IMPACT ANALYSIS STATEMENT

(This statement is not part of the Regulations.)

Issues

The Minister of Transport’s rail safety enforcement powers under the Railway Safety Act (the Act) need to be strengthened. The Act has been modernized and enhanced through the introduction of a regulation-making authority to provide for administrative monetary penalties (AMPs). This would complement the existing railway safety oversight regime, providing a full set of tools to the Minister to effectively deal with safety enforcement. Currently, the strongest enforcement action available to the Minister of Transport in cases of non-compliance is prosecution. Administrative monetary penalties would provide the Minister with an additional enforcement option and an alternative to prosecution. An administrative monetary penalty scheme is a more efficient and less costly means of enforcing legislative requirements than prosecution, because it uses administrative, rather than criminal, processes. Moreover, this is consistent with the principles of minimizing the regulatory burden on Canadians, while promoting regulatory compliance.

The proposed Railway Safety Administrative Monetary Penalties Regulations (the proposed Regulations) are needed to designate provisions and set out maximum payable penalties for each designated provision, in cases of non-compliance.

Background

In its 2008 report “Stronger Ties,” the advisory panel for the Railway Safety Act review recommended provisions to strengthen the Minister’s enforcement powers by introducing administrative monetary penalties. Similarly, the 2008 report of the Standing Committee on Transport, Infrastructure and Communities (SCOTIC) supported the recommendation that the Department adopt administrative penalties for companies that violate safety rules.

Based on these recommendations, the Act was amended on May 17, 2012, to provide the Governor in Council with the authority to make regulations respecting the application of administrative monetary penalties. The amendments, which came into force on May 1, 2013, enable the making of regulations designating provisions of the Act, and any regulations or other instruments made under the Act, the contravention of which could lead to the issuance of an administrative monetary penalty, and setting the maximum amount payable for any penalty. The decision to issue a penalty and the amount of a penalty would be reviewable by the Transportation Appeal Tribunal of Canada (TATC).

Objectives

The objective of the proposed Regulations is to provide the Minister of Transport with necessary enforcement tools.

The contravention of designated provisions or other instruments would subject the regulated stakeholder to administrative monetary penalties. This authority would not only provide the Minister with more effective enforcement tools, it would also align enforcement of the Act and its subordinate legislation with the enforcement regimes currently granted and exercised by the Minister under such regimes as the Aeronautics Act, the Canada Shipping Act, 2001, the Marine Transportation Security Act, the Canada Marine Act, the Canada Transportation Act, and the International Bridges and Tunnels Act.

Description

The proposed Regulations would establish schedules that set out which provisions of the Act and its subordinate instruments would be designated. There would be one schedule for each of the following: the Railway Safety Act, the Mining Near Lines of Railways Regulations, the Railway Prevention of Electric Sparks Regulations, and the current Railway Safety Management System Regulations.

The schedules would prescribe the maximum payable amount for each designated provision. There would be three distinct maximum payable amounts reflecting the level of significance of each designated provision measured by the seriousness of the consequences or potential consequences of the contravention. The three maximum payable amounts would reflect low-risk violations of administrative-type provisions, medium-risk safety violations, and major safety violations that pose the highest risk to safety (see table below).

Rules in force under section 19 or 20 of the Act would be designated as a whole, because they are of considerable regulatory significance. The maximum payable amount for a violation of a rule made under these sections would be $125,000 for a corporation and $25,000 for an individual.

The penalties for a violation are as follows:

Column 1 Column 2 Column 3
  Maximum Penalty /Amount Payable ($) Maximum Penalty /Amount Payable ($)
Level of Risk Individual Corporation
Category A
If violation is low-level risk
5,000 25,000
Category B
If violation is medium-level risk
25,000 125,000
Category C
If violation is high-level risk
50,000 250,000

Examples of designated provisions of the Act and the maximum payable amounts prescribed in the proposed Regulations include

  • Subsection 23.1(1), which prohibits the use of a whistle on any railway equipment in prescribed areas within a municipality: maximum payable amount — $5,000/$25,000.
  • Subsection 8(1), which prohibits railway work of a prescribed kind without proper notice: maximum payable amount — $25,000/$125,000.
  • Subsection 11(2), which requires railway work to be approved by a professional engineer: maximum payable amount — $50,000/$250,000.
  • Section 38, which prohibits knowingly making false statements to the Minister or to a railway safety inspector: maximum payable amount — $50,000/$250,000.

Examples of designated provisions of the Mining Near Lines of Railways Regulations include

  • Subsection 5(1), which prohibits the construction, alteration, or operation of non-railway works without at least 60 days’ notice in writing to the railway company that owns the line of railway at the location of the works: maximum payable amount — $25,000/$125,000.
  • Section 4, which prohibits an owner, operator or lessee of non-railway works from constructing, altering or operating a non-railway work that constitutes a threat to safe railway operations: maximum payable amount — $50,000/$250,000.

Examples of designated provisions of the Railway Prevention of Electric Sparks Regulations include

  • Subsection 5(2), which prohibits piping systems that interfere with cathodic protection: maximum payable amount — $25,000/$125,000.
  • Section 3, which prohibits a railway company from transferring flammable liquids or compressed flammable gases between a unit of railway rolling stock and a stationary bulk storage facility, except as permitted: maximum payable amount — $50,000/$250,000.

Examples of designated provisions of the current Railway Safety Management System Regulations include

  • Subsection 4(1), which requires a railway company to submit to the Minister prescribed information in respect of its safety management system: maximum payable amount — $5,000/ $25,000.
  • Subsection 3(1), which requires accident and incident investigation reports and related corrective actions: maximum payable amount — $25,000/$125,000.
  • Section 2, which requires railway companies to implement and maintain a safety management system with the minimal prescribed elements: maximum payable amount — $50,000/ $250,000.

Under the Act, any recipient of an AMP may request from the TATC a review of an alleged violation or the amount of the penalty. Transport Canada or the recipient of an AMP may appeal the results of the initial review to the TATC for final determination. The TATC review process is less formal than court proceedings. Thus, an AMP regime is relatively inexpensive to administer within an existing compliance program, and it normally results in more timely and effective enforcement than prosecution.

Consultation

In February 2014, Transport Canada consulted with the following stakeholders on the proposed Regulations:

  • — Canadian railway industry, including all companies under federal jurisdiction and the Railway Association of Canada;
  • — Labour organizations including, but not limited to, Unifor, Teamsters Canada Rail Conference, and United Steelworkers; and
  • — Representatives of provincial governments.

Industry has been aware of the proposed Regulations since they were recommended in the 2008 Railway Safety Act Review.

Comments and questions from stakeholders touched on what regulatory instruments would be included in the proposed Regulations, use of the terms “individual” and “person” in the proposed Regulations, whether an AMP could be withdrawn after having been issued, and the categorization of provisions into low, medium, and high risk.

Stakeholders said they may provide further comments during the Canada Gazette, Part I, publication on the categorization, i.e. maximum payable amount, of certain designated provisions. Any such comments will be considered by reassessing the policy objective and regulatory significance of the provision questioned by stakeholders. This reassessment will require further measurement of the seriousness of the consequences or potential consequences of any contravention.

“One-for-One” Rule

The “One-for-One” Rule does not apply to this proposal, as there is no change in administrative burden.

Small business lens

The small business lens does not apply to this proposal, as no incremental costs will be imposed on small businesses that comply with the Act and its related instruments.

Rationale

The introduction of the proposed Regulations would benefit the Canadian public by allowing Transport Canada to enforce requirements using an administrative process rather than resorting to prosecution in the courts. Criminal proceedings often result in considerable costs to the federal government and to the individual and/or corporation involved, and may be too harsh a tool to utilize except in extreme circumstances. The proposed Regulations would supplement enforcement tools available to the Minister of Transport, increasing rail safety and public confidence in Canada.

All government departments, and more specifically Transport Canada, have adopted what is termed a progressive or graduated approach to the compliance or enforcement activities under their authority. Where AMPs are proposed, they are invariably suggested as a complement or supplement to other compliance and enforcement tools. They can be used as an alternative to prosecution, which would be a significant cost saving to both government and regulated stakeholders, depending on the gravity of the circumstances, the character of the offender or other considerations particular to the specific event.

Transport Canada’s Rail Safety Program would continue to apply the principles of proactive compliance with a graduated enforcement regime, and the introduction of AMPs would be the most effective tool to enhance and complete the compliance continuum.

The objectives of the Act include the promotion and provision of safety and security to the public and personnel, the protection of property and the environment in railway operations, the recognition of the responsibility of companies to demonstrate that they continuously manage risks related to safety matters, and the facilitation of a modern, flexible and efficient regulatory scheme that will ensure the continuing enhancement of railway safety and security.

The AMP regime is an additional enforcement tool to promote and ensure compliance with the legislative framework of the Act, and is an alternative to prosecution.

Implementation, enforcement and service standards

The proposed Regulations would not add any new requirements; they simply create an additional tool for enforcing the Act and its associated instruments. The AMPs would therefore be integrated into the existing graduated enforcement policy of Transport Canada’s Rail Safety Program.

To ensure that AMPs would be applied in a fair, impartial, predictable and nationally consistent manner, appropriate training programs will be developed and implemented. This training will ensure that rail safety officials take a similar approach in similar circumstances to achieve similar results. For initial implementation of the proposed Regulations, AMPs would be recommended to management following an established process developed by the Rail Safety Program, with several layers of management endorsement and approval to ensure fairness, predictability, and national consistency.

Contact

Any questions related to the Railway Safety Administrative Monetary Penalties 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 40.1 (see footnote a) of the Railway Safety Act (see footnote b), proposes to make the annexed Railway Safety Administrative Monetary Penalties Regulations.

Interested persons may make representations with respect to the proposed Regulations within 30 days after the date of publication of this notice. All such representations must be in writing and 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, Department of Transport, Place de Ville, Tower C, 330 Sparks Street, Ottawa, Ontario K1A 0N5 (tel.: 613-990-8690; fax: 613-990-7767; email: susan.archer@tc.gc.ca).

Ottawa, May 1, 2014

JURICA ČAPKUN
Assistant Clerk of the Privy Council

RAILWAY SAFETY ADMINISTRATIVE MONETARY PENALTIES REGULATIONS

INTERPRETATION

1. The following definitions apply in these Regulations.

“Act” means the Railway Safety Act. (Loi)

“Minister” means the Minister of Transport. (ministre)

DESIGNATED PROVISIONS

2. (1) A provision of the Act or its regulations that is set out in column 1 of a Part of the schedule is designated as a provision the contravention of which may be proceeded with as a violation in accordance with sections 40.13 to 40.22 of the Act.

(2) The amount set out in column 2 of a Part of the schedule is the maximum amount payable by an individual in respect of a violation of the designated provision set out in column 1.

(3) The amount set out in column 3 of a Part of the schedule is the maximum amount payable by a corporation in respect of a violation of the designated provision set out in column 1.

3. (1) The following instruments are designated as provisions the contravention of which may be proceeded with as a violation in accordance with sections 40.13 to 40.22 of the Act:

  • (a) an order made under subsection 7(2) or 19(1) of the Act;
  • (b) a rule in force under section 19 or 20 of the Act.

(2) The maximum amount payable for a violation referred to in subsection (1) is $125,000 in the case of a corporation and $25,000 in the case of an individual.

COMING INTO FORCE

4. These Regulations come into force six months after the day on which they are published in the Canada Gazette, Part II.

SCHEDULE
(Section 2)

PART 1

DESIGNATED PROVISIONS OF THE ACT

Item Column 1



Designated Provision
Column 2

Maximum Amount Payable ($)

Individual
Column 3

Maximum Amount Payable ($)

Corporation
1. Subsection 7(2.1) 25,000 125,000
2. Subsection 8(1) 25,000 125,000
3. Subsection 10(1) 25,000 125,000
4. Subsection 11(1) 50,000 250,000
5. Subsection 11(2) 50,000 250,000
6. Section 17.2 50,000 250,000
7. Section 17.3 50,000 250,000
8. Subsection 19(2) 5,000 25,000
9. Subsection 20(1) 5,000 25,000
10. Subsection 20(2) 5,000 25,000
11. Subsection 23.1(1) 5,000 25,000
12. Subsection 30(1) 25,000 125,000
13. Subsection 30(2) 25,000 125,000
14. Section 31 50,000 250,000
15. Subsection 32(1) 50,000 250,000
16. Subsection 32(3) 50,000 250,000
17. Subsection 33(1) 50,000 250,000
18. Subsection 35(1) 25,000 125,000
19. Subsection 35(3) 25,000 125,000
20. Section 36 50,000 250,000
21. Section 38 50,000 250,000
22. Subsection 44.1(1) 5,000 25,000
23. Subsection 44.1(2) 5,000 25,000

PART 2

DESIGNATED PROVISIONS OF THE RAILWAY SAFETY MANAGEMENT SYSTEM REGULATIONS

Item Column 1



Designated Provisions
Column 2

Maximum Amount Payable ($)

Individual
Column 3

Maximum Amount Payable ($)

Corporation
1. Section 2 50,000 250,000
2. Subsection 3(1) 25,000 125,000
3. Subsection 3(2) 25,000 125,000
4. Subsection 4(1) 5,000 25,000
5. Paragraph 4(2)b) 5,000 25,000
6. Subsection 5(1) 5,000 25,000
7. Section 6 25,000 125,000

PART 3

DESIGNATED PROVISIONS OF THE MINING NEAR LINES OF RAILWAYS REGULATIONS

Item Column 1



Designated Provision
Column 2

Maximum Amount Payable ($)

Individual
Column 3

Maximum Amount Payable ($)

Corporation
1. Section 4 50,000 250,000
2. Subsection 5(1) 25,000 125,000
3. Subsection 5(2) 25,000 125,000
4. Section 6 25,000 125,000
5. Section 8 50,000 250,000

PART 4

DESIGNATED PROVISIONS OF THE RAILWAY PREVENTION OF ELECTRIC SPARKS REGULATIONS

Item Column 1



Designated Provision
Column 2

Maximum Amount Payable ($)

Individual
Column 3

Maximum Amount Payable ($)

Corporation
1. Section 3 50,000 250,000
2. Subsection 5(1) 25,000 125,000
3. Subsection 5(2) 25,000 125,000
4. Subsection 5(3) 25,000 125,000
5. Section 6 25,000 125,000

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