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Workers stand before mangled tanker cars at the crash site of a train derailment and fire in Lac-Megantic, Quebec, in this Tuesday, July 16, 2013 file photo.

Ryan Remiorz/THE CANADIAN PRESS

A sweeping Senate report is calling on the federal government to force railways to retire tank cars that have been criticized as unsafe for hazardous goods – even if that means cutting back on the volume of crude shipments from Western Canada.

The country's pipeline and rail systems face an enormous challenge in transporting growing volumes of crude oil and petroleum products around the country, and Ottawa needs to move aggressively to ensure that it is done safely, the Senate energy committee said in a report tabled Thursday.

In the wake of the deadly accident in Lac-Mégantic, Que., this summer, the committee urged the government to launch an independent review of the transportation of hazardous goods by rail. The committee called for an acceleration in retiring old CTC/DOT-111 tank cars, which experts warn are prone to the leakage in derailments.

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Senator Richard Neufeld, the committee's chair, acknowledged it will be difficult to take the cars out of service when the oil industry is clamouring for more capacity from rail companies to ship crude to markets in North America by pipelines. "There might be some [cars] that are 30 years old that they just need to take out of service," Mr. Neufeld said in an interview.

"The government needs to work that out with the U.S. … If we have those concerns, then look at it and let's not wait forever. … And it may curtail some [crude oil] shipments by rail," Mr. Neufeld added.

Transport Minister Lisa Raitt issued a statement through her office, saying she thanks the committee for its report and "will be looking at the recommendations." Ms. Raitt did, however, signal that she is not worried with the status quo, adding in the written statement that "oil and gas are routinely shipped safely across the country every day" by rail, and that dangerous goods shipped by rail are delivered safely "99.999 per cent" of the time.

Growing rail capacity has been a boon for the Canadian oil industry, which has seen long delays in planned pipeline construction contribute to steep discounts in the prices producers received for their crude, compared with international prices. Canadian National Railway and Canadian Pacific Railway expect to move 140,000 carloads of crude this year, up from just 500 in all of North America four years ago.

But Mr. Neufeld said the producers may have to accept a reduction in service to ensure the shipments are carried safely. "There can be no doubt that the [Lac-Mégantic] accident underscored concerns many Canadians already had about the safety of transporting hydrocarbons and the risk to the public and the environment, particularly as North America is expanding its oil and natural gas production," the committee's report said.

In early July, a 72-car train loaded with crude oil rolled unattended down an incline in the middle of the night and slammed into Lac-Mégantic's downtown, causing an explosion and fire that killed 47 people and levelled several buildings. In the aftermath, Ottawa imposed a series of new rules, including prohibitions against one-man crews.

Mr. Neufeld, a former energy minister in British Columbia, said all modes of transport – pipeline, rail and marine tanker – will be needed to move Canadian oil and natural gas around the country and to expand access to foreign markets. He said those modes are all safe, but more can be done to improve safety and reassure the public.

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The National Transportation Safety Board has been warning about deficiencies in the CTC/DOT-111 cars since a derailment in 1994, while U.S. safety officials have called for them to be retrofitted or barred from carrying hazardous materials. All cars made after October, 2011, meet more stringent standards, but the Railway Association of Canada says roughly half the tank cars used to move crude today were built to the lower specifications.

Spokesmen for CN and CP refused to comment on the Senate report, referring questions to the railway association. Officials there did not respond to requests for comment.

The Senate committee noted that both pipeline and rail remain safe means of transporting crude oil and other hazardous goods. For pipelines, 99.9996 per cent of the oil reaches its destination without spill, while for rail, the success rate is 99.9 per cent.

New Democratic Party MP Peter Julian said the government needs to move immediately and aggressively to respond to the safety concerns on rail and pipelines, though it shows no signs of being willing to do so. "There has been a reckless cutting of public safety funding – whether food safety or transport," Mr. Julian said. "The government simply seems to be hoping it will die out in terms of public interest, but I don't think it will."

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