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Smoke rises from railway cars carrying crude oil after derailing in downtown Lac Megantic, Que., in 2013.Paul Chiasson/The Canadian Press

Here is what Transport Canada knows:

That the average train derailment in Canada and the United States involving crude oil costs the rail industry $13.2-million;

That the most expensive such derailment to date, the one in Lac-Mégantic, Que., in 2013, with its loss of 47 lives and the annihilation of the heart of a small town, cost the industry $1.5-billion (or would have, if industry had to pay all the costs);

That new Transport Canada regulations on tank-car construction that phase in over 10 long years will cost the rail industry a tad more than $1-billion;

Therefore, if the regulations prevent 3.8 "average" spills per year for the next 20 years, or one "high-consequence incident" like Lac-Mégantic, then, by golly, the industry is going to come out ahead.

This breakdown is available in a regulatory impact analysis prepared by Transport Canada. The report categorically states that Canada will experience more derailments, explosions and spills involving crude oil, because the business of transporting crude by rail is booming.

The boom is also why Transport Canada, simultaneously with the U.S. Department of Transport, is phasing in its new tank-car regulations over 10 years. There are 80,000 of the notoriously unsafe tank cars that crashed in Lac-Mégantic still in service in the U.S. and Canada, and they will continue to carry crude until they are phased out in May 2017.

By 2025, after more phase-outs of older designs, all tank cars carrying crude oil will meet the latest crash standards. The U.S. will also require enhanced brakes on tank cars by 2021, a regulation Canada is not matching at this point.

What does this mean for Canadians? It means that they have to share the cost of making the rail industry safer over the next 10 years. Their share will likely be paid in environmental damage, evacuations and possibly worse.

Is it a fair trade-off? No. The slow progress of the regulations only benefits industry. Transport Canada and its U.S. counterpart should have demanded quicker change.

Instead, they have told the rail industry that there is an acceptable amount of loss and mayhem that will be borne by everyone else. And that's not good enough.

Editor's note: An earlier version of this story incorrectly said that the railway companies have said they cannot afford to upgrade their rolling stock quickly, much of which is old. In fact, the railways do not own the vast majority of the stock.

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