On June 24, 2017, the federal government proposed new regulations under the Transportation of Dangerous Goods Act, entitled the Transportation of Dangerous Goods by Rail Security Regulations (Rail Security Regulations). The Rail Security Regulations are intended to strengthen the security of Canada’s rail system from potential sabotage or terrorist attack. Once enacted, the Rail Security Regulations will also bring Canada’s security requirements for the transportation of dangerous goods by rail into better alignment with international standards, especially those of the United States.

Many of the proposed measures under the Rail Security Regulations are applicable to the transportation of all dangerous goods by rail (subject only to certain exceptions listed in the Regulations). Further enhanced provisions are only applicable to the transportation of certain security-sensitive goods, including oil, gasoline and other petroleum products.

The Rail Security Regulations are open for public comment until July 24, 2017.

KEY PROVISIONS

Below is a brief overview of the key provisions under the Rail Security Regulations, which will affect both rail carriers and consignors. For carriers, each of the provisions is proposed to come into force nine months after the registration of the Regulations. For consignors (often the shippers), each of the provisions is proposed to come into force 12 months after the registration of the Regulations. The key provisions are:

  • Security Awareness Training: Any rail carrier or consignor involved in the transportation of any dangerous goods by rail (subject to limited exceptions) will be required to provide security awareness training to all employees and persons acting directly or indirectly on their behalf.
  • Development of Security Plans Based on Assessed Risks: Any rail carrier or consignor involved in the transportation of “security-sensitive dangerous goods” will be required to:
  1. Conduct a security risk assessment to identify, analyze and prioritize the security risks associated with handling or transporting the dangerous goods, and
  2. Develop and implement a security plan that includes appropriate measures to address those assessed risks. In particular, the security plan must conform with the requirements set out in subsections 4(1) and 4(2) of the Rail Security Regulations.
  • Training Regarding Organizational Security Plans: Rail carriers and consignors that have developed a security plan will further be required to provide training on the security plan for all employees and persons acting directly or indirectly on their behalf with duties related to the security plan or security-sensitive dangerous goods.

In addition, certain aspects of the Rail Security Regulations are only directed at rail carriers:

  • Security Inspections on Placarded Railway Vehicles: Rail carriers will be required to conduct visual inspections for signs of tampering or a suspicious item on railway vehicles containing dangerous goods for which a placard is required, whenever they accept those vehicles for transport and place them in a train. Should any such tampering or suspicious items be discovered, the carrier must determine whether it compromises the security of the train, and if so, address the situation before transporting the goods.
  • New Reporting Requirements: Rail carriers involved in the transportation of any dangerous goods (subject to the exceptions listed in the Rail Security Regulations) will be required to immediately report any potential threat or security concern to the Canadian Transport Emergency Centre. Potential security threats and other security concerns include issues ranging from any sign of tampering with a railway vehicle to bomb threats.
  • Rail Security Coordinator: Rail carriers involved in the transportation of any dangerous goods (subject to limited exceptions) will be required to have a rail security coordinator on staff at all times. That person will be responsible for coordinating security practices and procedures within the carrier’s organization and serving as the primary contact on security-related matters with law enforcement, emergency response agencies and other government bodies and agencies such as Transport Canada.

Non-compliance with the Rail Security Regulations can result in criminal sanctions, which may include fines of up to C$50,000 for a first offence and C$100,000 for subsequent offences.

KEY TAKEAWAYS AND POTENTIAL EFFECTS

Several key takeaways and potential effects of the Rail Security Regulations are notable:

  1. The Rail Security Regulations will apply only to the transportation of dangerous goods by rail, and not to other modes of transportation.
  2. The impact of the Rail Security Regulations will have a much broader impact than just to railway companies. The Regulations not only apply to rail carriers, but also to consignors, a term that includes persons and companies named in shipping documents, who import dangerous goods into Canada, or who have possession of dangerous goods immediately before they are in transport.
  3. The definition of “security-sensitive goods” includes many petroleum hydrocarbons such as diesel fuel, gasoline, crude oil, jet fuel and petroleum distillates when those products are shipped in bulk quantities. As such, any rail carriers or consignors who ship these products will be required to develop and implement security plans and train employees accordingly, in addition to the other requirements under the Rail Security Regulations.
  4. While implementation costs will likely be relatively low for certain rail carriers, they are likely to be higher for other affected parties. This will be particularly true when it comes to training, given the requirement that companies provide security awareness training to all employees, and all persons acting directly or indirectly on the company’s behalf, and not just those directly involved in the shipment of the goods by rail.
  5. It is possible that rail security requirements will become stricter over time, particularly if the federal government continues to move towards greater harmonization with the requirements already in place in the United States.