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Federal government wants more insurance for railways


March 31, 2015   by


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A bill proposing to mandate specific levels of insurance for Canadian railway operators – of $1 billion in some cases – was tabled March 30 in Ottawa for second reading in the House of Commons. MPs debated Bill C-52, the Safe and Accountable Railway Act, introduced by Conservative Transport Minister Lisa Raitt.

Currently, Canada’s Railway Third Party Liability Insurance Coverage Regulations stipulate that railway operators must be covered for third-party liability, third-party bodily injury or death. However those regulations do not mandate a specific coverage limit. The Canadian Transportation Agency – which has the authority to issue and suspend certificates of fitness – currently reviews each railway’s insurance coverage on a case-by-case basis.

Montreal Maine and Atlantic Railway – whose crude oil train derailed July 6, 2013 in Lac-Mégantic, Quebec, killing 63 – filed for protection in 2013 under the Companies Creditors Arrangement Act.

“Under the Canada Transportation Act, federally regulated railways must carry insurance, but the Lac-Mégantic tragedy has proven that the measures now in place are simply not sufficient,” Raitt said in the House of Commons.

After the Lac-Mégantic derailment, “we realized that MMA had $25 million in liability insurance,” said Hoang Mai, NDP MP for the Montreal area riding of Brossard-La Prairie, Quebec. “That amount does not even begin to cover the $400 million that has been spent to date on cleaning up and rebuilding, and that cost may still go up.”

Bill C-52 “identifies specific levels of insurance that must be carried, depending upon the type and volume of dangerous goods that the railway transports,” Raitt said.