Canada: Bill C-33: Proposed New Legislation For The Rail & Marine Industries

On November 17, 2022, the federal government introduced Bill C-33 for first reading in the House of Commons, with the short title Strengthening the Port System and Railway Safety in Canada Act.¹ The proposed new legislation would address governance, safety, national security, investment, and the environment.

In his press conference held the same day, the Minister of Transport, Omar Alghabra, also emphasized policy goals of alleviating supply chain disruptions, and encouraging competitiveness.²

The legislative overhaul would make omnibus amendments to various existing federal legislation, including the Transportation of Dangerous Goods Act, 1992, the Customs Act, the Railway Safety Act, the Canada Transportation Act, the Canada Marine Act, and the Marine Transportation Security Act.

The proposed legislation has not yet received committee study; and no draft regulations have been published. Thus, there is still room for details to be augmented.

The following is an overview of the proposed reforms.

Transportation of Dangerous Goods Act, 1992

Bill C-33 makes several changes to the Transportation of Dangerous Goods Act, 1992. At a high level, these amendments include (1) requiring persons who import, offer for transport, handle or transport dangerous goods to register with the Minister of Transport (the "Minister"), (2) providing to the Minister powers relating to the management of safety risks, and (3) establishing an administrative monetary penalty regime. Registration of dangerous goods with the Minister will involve an application for a certificate of registration and an assigned registration number. Any registration numbers that were assigned before the amendments come into force will not need to be reassigned. The amendments allow the Minister to designate enforcement officers who may enter any place, including a means of transport, to investigate violations such as dangerous goods being offered for transport, handled or transported. The newly introduced administrative monetary penalties involve fines of $50,000 maximum in the case of an individual and $250,000 maximum in the case of an organization.

Customs Act

Bill C-33 amends the Customs Act by adding a section that, on the request of an officer, requires any person in possession or control of imported goods to make those goods available for examination. This obligation to make goods available for examination on request includes the obligation to deliver those goods, or cause them to be delivered, to a secure area that meets the requirements set out in the regulation.

Railway Safety Act

Under Bill C-33, the Minister may prohibit the following: (1) interference with any railway work, railway equipment or railway operation, or damage or destruction of any railway work or railway equipment, without lawful excuse, in a manner that threatens the safety of railway operations; and (2) behavior that endangers or risks endangering the safety of a station, railway equipment or individuals who are at the station or on board the railway equipment and unruly behavior towards employees, agents or mandataries of a company.

Additionally, the Minister is authorized to order a company to take necessary corrective measures if the Minister believes that: (1) a measure taken by the company in relation to a requirement of a railway transportation security regulation has deficiencies; (2) the security management system developed by a company has deficiencies that risk compromising railway security, or (3) the implementation of the company's security management system has deficiencies that risk compromising railway security.

The Minister may also grant, refuse, suspend or cancel transportations security clearances. The Minister is also authorized to negotiate assurances of compliance and enter into compliance agreements before or after the issuance of a notice of violation. Lastly, the bill allows the Minister to consult broadly when approving rules filed by a company, use any relevant information when assessing rule exemption requests and requires a review of the Railway Safety Act on a five-year cycle.

Canada Transportation Act

Under Bill C-33, the Minister may use electronic systems in decision making and its power of entry into a place under the Canada Transportation Act may be exercised remotely by means of telecommunications.

The bill also reduces the Investment Notification and Review thresholds. If the existing requirements for notice do not apply to a party but it meets the following conditions, it must nevertheless give notice to the Minister: (1) the transaction does not meet the exemption for notice under the Competition Act; (2) it involves a transportation undertaking situated in a port, within the meaning of the Canada Marine Act; and (3) the aggregate value of the assets in Canada that are the subject of the transaction, or the gross revenues from the sales in or from Canada generated from those assets, exceed $10 million, as calculated under the Competition Act.

Canada Marine Act

Bill C-33 amends the Canada Marine Act to expand the ability of Canada Port Authorities to govern traffic management, which is hoped to ease supply chain inefficiencies. Other amendments would authorize the development of inland port activities such as warehousing and logistics. Thirdly, Bill C-33 proposes to alter the port-authority governance, including changes concerning security clearances, board composition, financial reporting, and borrowing plans.

Bill C-33 also requires new, robust engagement with local and Indigenous stakeholders, though advisory committees.

Additionally, port authorities will need to make new five-year climate change plans, to address the environment, climate change, and adaptation. These plans will need to be published and the port authorities will need to report on their progress annually.

Marine Transportation Security Act

Bill C-33 significantly amends the Marine Transportation Security Act by expanding ministerial discretion to delegate administration and enforcement by entering into agreements or arrangements with third parties. It would also expand ministerial powers to make interim orders and give directions, including emergency directions. Finally, it would authorize the government to make new regulations concerning fees, health and safety issues, and to set-up restricted areas or vessel exclusion zones.

The government would also be entitled to make regulations respecting the disclosure of information collected for the purpose of the Act, to federal, provincial, or municipal departments or agencies. It is not yet clear what the scope of the disclosure would be, or what safeguards would be put in place to protect it.

Finally, there would be new and increased penalties, including fines for individuals up to $1,000,000 per occurrence, and fines for corporations up to $2,000,000 per occurrence. Also, the minister would be authorized to create, by regulation, a new system of administrative monetary penalties, up to $50,000 for individuals and up to $250,000 for organizations.

Footnotes

1. Online: https://www.parl.ca/DocumentViewer/en/44-1/bill/C-33/first-reading.

2. Online: https://www.youtube.com/watch?v=8jk6FfNHi3o.