OTTAWA — Companies that ship dangerous cargo may soon require better insurance coverage so taxpayers don’t foot the bill for disasters such as the Lac-Megantic derailment, Transport Minister Lisa Raitt warned Monday.
Speaking to a lunchtime crowd of government officials, business people and lobbyists, Raitt said her department was reviewing existing conditions to deliver on a commitment — made by Prime Minister Stephen Harper last fall in Parliament — to make polluters pay for the damage they cause.
“It builds on the principle that I strongly, strongly support that polluters will be held accountable and that the government does not have to turn to the taxpayer to fund the costs of damages,” Raitt said at the Canadian Club of Ottawa.
Raitt said the Montreal, Maine and Atlantic Railway company had just $25 million in insurance coverage for damage to third-party property when one of its trains was left unattended and crashed in Lac-Megantic, Que., last July, killing 47 people in a fiery explosion that destroyed buildings and released about six million litres of oil into the air, water and soil.
The railway had additional insurance that appeared to cover only its own property and equipment.
“As we know, self-insurance means nothing when you’re bankrupt,” Raitt said.
Canadian cities have been lobbying the federal government for months to beef up its oversight of rail safety by requiring operators to disclose more information about dangerous cargo, as well as cracking down on weaknesses in insurance liability.
“Today’s speech is the clearest proof yet that Minister Raitt sees just how important it is that railways and shippers pay their own cleanup costs and don’t stick local taxpayers with the bill,” said Claude Dauphin, president of the Federation of Canadian Municipalities.
Raitt also offered a conditional endorsement of recommendations made in January by the Transportation Safety Board Board of Canada. The agency, which continues an investigation into the Lac-Megantic disaster, has recommended requiring safer railway tank cars, better emergency-response planning, and improved analysis of shipping routes to prevent disasters. Raitt said officials in her department “have been tasked to review these recommendations in the report on an urgent basis.”
She also highlighted recent regulations adopted to improve disclosure of dangerous cargo to cities the goods pass through and to crack down on unattended trains.
But when reporters asked later about implementing tougher standards for tank cars, Raitt said that recommendations still need to be reviewed, in consultation with the United States, to ensure common North American regulations that apply to shipments that cross the border.
“This is really a North American issue,” Raitt said. “There’s no timeline, so I haven’t made a decision one way or another and I haven’t brought it to cabinet for a discussion.”
The railway industry in Canada has said it “fully” supports recent recommendations of the safety agency, but American and Canadian oil-industry lobby groups have expressed concerns about new regulations driving up shipping costs and eroding their competitiveness.
Raitt also noted that it makes sense for shipping companies to pay more for adequate third-party insurance coverage, just as motorists do. She explained the government has also looked at this issue for marine transportation and pipelines.
But she said the largest railway companies do a “great job” at cleaning up after accidents. “If they have a derailment in Canada, they actually are there to clean up the site to compensate,” she said.
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What are the three committees advising Transport Lisa Raitt on rail safety?
Three committees have submitted reports on the classification or labelling of products, emergency response to disasters, and the means of containment of dangerous cargo, Transport Minister Lisa Raitt said Monday.
Two industry lobby groups — the Canadian Association of Petroleum Producers and the Railway Association of Canada — are represented on all three committees, as is the Federation of Canadian Municipalities, which represents cities across the country. The oil and gas industry lobby group was leading the committee that examined labelling; the railway group led the committee reviewing containment; and firefighting chiefs led the committee that reviewed emergency response.
Raitt said Monday that these reports were being reviewed and would be released after the government ensures they’re available in both official languages.
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