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New regulations designed to quickly punish unsafe railways

The site of a train derailment near the hamlet of Gainford, west of Edmonton, is seen in an aerial photo October 20, 2013.


Railways could be fined as much as $250,000 per violation for operating unsafely under new regulations aimed at letting Ottawa punish companies caught flouting the rules faster.

Transport Canada is seeking financial penalties similar to those that exist in the airline and marine sectors. In those industries, such fines "provide a faster alternative to prosecution," the federal government said Friday.

If passed, the new regulations would see railways fined up to $250,000 for violations of the Railway Safety Act, while individuals could be penalized up to $50,000, depending on the severity of the offence. The proposed regulations will be published in the Canada Gazette and put out to industry and public comment for the next 30 days.

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"The proposed regulations introduce penalties as an additional enforcement tool to improve railway safety," Transport Minister Lisa Raitt said in a statement. "These monetary penalties will help crack down on rule-breakers and improve the safety of the Canadian railway system."

However, it is unclear whether the new regulations will be effective in policing the industry. An Auditor-General's report last year called into question the ability of Transport Canada to enforce its existing rules. The report highlighted several concerns, including a shortage of safety inspectors to catch rule violations in the field, and a slow response to safety concerns raised in the past.

Ms. Raitt has pledged to remedy the Auditor-General's concerns. The changes come as Transport Canada awaits the results of an investigation into the country's worst rail disaster – the explosion of an oil train in Lac-Mégantic, Que., last July that killed 47 people.

The Transportation Safety Board's findings are expected in the next few months, and could see the watchdog call for tougher rules for shipping oil and tighter controls on how hazardous materials are handled while in transit.

Much of Lac-Mégantic was destroyed after a train carrying 72 tanker cars of oil rolled down a hill and derailed in the centre of town. The train was left unattended and not enough brakes had been set to hold it in place. Preliminary investigations of the oil, which came from the Bakken fields in North Dakota, show that it was lighter and more volatile than other forms of crude, which contributed to the size of the explosions.

It's unlikely that financial penalties for operating unsafely would have changed how the train's conductor acted on the night of the Lac-Mégantic disaster, since Ottawa had no clear regulations in place at the time specifying how many brakes needed to be set on each car before leaving the train unattended. The TSB has since told Transport Canada to tighten such rules, and the ability to introduce swift fines for railways caught not following regulations is part of that process.

Montreal, Maine & Atlantic, the railway involved in the Lac-Mégantic tragedy, has since filed for bankruptcy protection and was not carrying enough insurance to cover the cleanup costs of the town, nor the billions of dollars of lawsuits expected to stem from the accident. MM&A's assets are being sold to Central Maine and Quebec Railway, which has said it intends to begin shipping oil through the town again, possibly in 2016, after track safety improvements are made.

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