Regulations Amending the Railway Safety Administrative Monetary Penalties Regulations: SOR/2021-228

Canada Gazette, Part II, Volume 155, Number 24

Registration
SOR/2021-228 November 12, 2021

RAILWAY SAFETY ACT

P.C. 2021-954 November 12, 2021

Her Excellency the Governor General in Council, on the recommendation of the Minister of Transport, pursuant to section 40.1 footnote a of the Railway Safety Act footnote b, makes the annexed Regulations Amending the Railway Safety Administrative Monetary Penalties Regulations.

Regulations Amending the Railway Safety Administrative Monetary Penalties Regulations

Amendments

1 (1) Subsection 3(1) of the Railway Safety Administrative Monetary Penalties Regulations footnote 1 is amended by adding the following after paragraph (b):

(2) Subsection 3(3) of the Regulations is replaced by the following:

Maximum amounts

(3) The maximum amount payable for a violation referred to in paragraph (1)(b.1), (c) or (d) is $50,000 in the case of an individual and $250,000 in the case of a corporation.

Coming into Force

2 These Regulations come into force on the day on which they are registered.

REGULATORY IMPACT ANALYSIS STATEMENT

(This statement is not part of the Regulations.)

Issues

On October 6, Prime Minister Justin Trudeau and Deputy Prime Minister Chrystia Freeland announced that, as of October 30, the Government of Canada will require employers in the federally regulated air, rail, and marine transportation sectors to establish vaccination policies for their employees.

This vaccination mandate is needed to ensure ongoing safety in the federal transportation sector. In order to ensure that these measures are effective, it is essential to have a complete and agile enforcement scheme that will allow Transport Canada (TC) to take action quickly and effectively in cases of non-compliance. Having the ability to issue administrative monetary penalties (AMPs) is key to send a strong message that there will be consequences for those who fail to comply with vaccination requirements in federally regulated transportation sectors.

Under the existing legislative framework, it would not be possible to use AMPs to enforce the vaccination mandate in the rail sector because orders made on October 29, 2021, which require railway companies to ensure, at a minimum, that all operating employees have received their first dosage of an approved COVID-19 vaccine by November 15, 2021, and that all travellers be fully vaccinated or provide proof of a negative COVID-19 test at the time of boarding starting on October 30, 2021, were made under the authority of section 32.01 of the Railway Safety Act (the Act), and section 32.01 is not a provision designated as enforceable through AMPs. Without regulatory amendments, the only options for enforcing the vaccination mandate in the rail sector would be to issue warnings or to recommend prosecution. Having only these two options would not provide TC’s enforcement officers the flexibility to tailor their enforcement response to the relative seriousness of a potential violation of the vaccine requirements and, as a result, the vaccine requirements could end up being over enforced, under enforced, or not enforced at all. Furthermore, the enforcement of the vaccination requirements in the rail sector would be inconsistent with enforcement in the air and marine sectors, where AMPs are available as an enforcement option.

Amendments to the Railway Safety Administrative Monetary Penalties Regulations (AMPs Regulations) are required to designate section 32.01 so that TC may use AMPs to enforce the Government of Canada’s vaccination mandate in the rail sector. AMPs allow TC to take a measured and efficient approach, which tailors the enforcement response to the seriousness of the violation. AMPs also ensure that TC has enforcement tools in the rail sector that are consistent with the tools available in the air and marine sectors to enforce the vaccination mandate.

Background

Administrative monetary penalties

The Act provides for the making of regulations designating provisions of the Act, and any regulations or other instruments made under the Act, the contravention of which could lead to the issuance of an AMP, and setting the maximum amount payable for any penalty.

The AMPs Regulations, which came into force on April 1, 2015, designate provisions and set out maximum payable penalties for the enforcement of specific safety requirements in rail transportation. The AMPs Regulations are designed to encourage regulatory compliance and deter safety contraventions by having a monetary cost for contraventions of the Railway Safety Act, and regulations and rules made under the Act.

AMPs are a tool for enforcing federal offences of a regulatory nature by means of a monetary penalty, which the offender can choose to pay or appeal to a tribunal, making it less expensive to follow rules rather than break them by providing incentive for good behaviour. Imposed through an administrative (not penal) process through which violators are issued a notice of violation which outlines the violation and the monetary penalty that the violator must pay, AMPs are considered a more efficient and less costly means of enforcing requirements than prosecution. AMPs are designed to bring regulated entities into compliance without the legal ramifications of a criminal record or imprisonment. AMPs are a flexible enforcement tool, designed to be proportionate to the nature of the violation in question. AMPs regimes often use graduated penalty structures, which provide for increasing penalty amounts for repeat violations by the same entity.

AMPs allow TC to take a graduated approach to enforcement that aims to match the enforcement response to the severity of the non-compliant behaviour, and considers the gravity of the contravention, the harm or potential harm occasioned by the action, and the characteristics of the contravener. A graduated approach provides TC with the flexibility to apply the least intrusive enforcement measures necessary to address and correct non-compliant behaviour, and to escalate those measures, when needed, to address with more serious and/or repeated violations.

Under the AMPs Regulations, there are three distinct maximum payable amounts reflecting the level of significance of each designated provision measured by the seriousness of the consequences or potential consequences of the contravention. The three maximum payable amounts reflect low-risk violations of administrative-type provisions, medium-risk safety violations, and major safety violations that pose the highest risk to safety.

Table 1: Maximum amounts depending on type of violation
  Maximum payable amount ($) Maximum payable amount ($)
Level of risk Individual Corporation
Category A (if violation is low-level risk) 5,000 25,000
Category B (if violation is medium-level risk) 25,000 125,000
Category C (if violation is high-level risk) 50,000 250,000

Under the Act, any person served with a notice of violation may request from the Transportation Appeal Tribunal of Canada (TATC) a review of an alleged violation or the amount of the penalty. The Minister or the person served with a notice of violation may appeal the results of the determination to the TATC for final determination. As a quasi-judicial body, the TATC review process is less formal than court proceedings.

Section 32.01 of the Railway Safety Act

Section 32.01 of the Act allows the Minister to order a company, road authority or municipality to stop an activity, to follow procedures, or to take corrective measures (including constructing, altering, operating or maintaining a railway work) in the interests of safe railway operations.

Section 32.01 was added to the Act after the coming into force of the AMPs Regulations; however, the AMPs Regulations were never amended to include orders made under section 32.01 as a designated provision. As a result, an AMP could not be imposed on a railway for a violation of an order under section 32.01. The strongest enforcement option available to the Minister of Transport in cases of non-compliance to an order made under section 32.01 was prosecution.

Pandemic response

COVID-19 is a serious respiratory disease caused by the SARS-CoV-2 coronavirus, first identified in 2019. The World Health Organization declared COVID-19 a pandemic in March 2020. COVID-19 is predominantly spread through human-to-human transmission. Evidence indicates that vaccines are very effective at preventing severe illness, hospitalization and death from COVID-19, including against Alpha and Delta variants of concern and that the impact of vaccination on the frequency of outbreaks and the reduction of death rates and hospitalizations has been striking compared to the impact of other tools used prior to vaccination, including physical distancing.

On October 6, 2021, the Government of Canada announced that, as of October 30, it will require employers in the federally regulated air, rail, and marine transportation sectors to establish vaccination policies for their employees. In addition, travellers departing from Canadian airports, and travellers on VIA Rail and Rocky Mountaineer trains, are required to be fully vaccinated in order to travel. It was also indicated that non-compliance with vaccine requirements could lead to the issuance of AMPs. To be considered fully vaccinated, a person would have to have completed a COVID-19 vaccine dosage regimen that uses a COVID-19 vaccine that is authorized for sale in Canada, footnote 2 or a COVID-19 vaccine dosage regimen that the Minister of Health determines as being suitable.

The Government of Canada’s priority to keep the transportation sector safe and secure by requiring mandatory vaccination for the federally regulated rail sector is being implemented through ministerial orders requiring railway companies to take specific measures to ensure operating employees and all passengers are fully vaccinated, unless they are unable to do so for specific reasons. Transport Canada will oversee the compliance of railway companies with the vaccination mandate described in the ministerial orders through inspections and enforcement — including AMPs, which are essential to support this commitment.

Current ministerial orders

Since the addition of section 32.01 in the Act, 29 ministerial orders footnote 3 have been issued, either to a specific company or to a group of companies in the interests of safe railway operations. Many of these orders were issued with respect to safety measures to mitigate the transmission of COVID-19. For example, this was the tool used to require railway companies transporting passengers to perform health checks. In addition to the two ministerial orders issued to support the vaccination mandate, six others are still in effect:

While these amendments to the AMPs Regulations have been developed to provide for the enforcement of vaccination requirements through AMPs in the rail sector in the immediate term, it should be noted that the amendments also permit the use of AMPs for violations of any order made pursuant to section 32.01 of the Act. As such, the regulatory amendments permit the use of AMPs to enforce the above six orders, and any future orders made pursuant to section 32.01.

Objective

The objective of these amendments is to provide the Minister of Transport with a broader range of enforcement options to enforce compliance with orders made pursuant to section 32.01 of the Act. In particular, the objective of these amendments is to ensure that the enforcement of the Government’s vaccination mandate in the rail sector, through the establishment of an AMPs regime, is flexible, predictable, efficient, and consistent with the enforcement of similar requirements in the air and marine transportation sectors.

Description

These amendments will modify subsection 3(1) of the AMPs Regulations to include an order made under section 32.01 of the Act as a designated provision, with maximum payable amounts of $50,000 for an individual and $250,000 for a corporation. For example, should a railway company fail to comply with a requirement of a ministerial order (such as failing to conduct a health check of every person prior to boarding), then it could be subject to an AMP of up to $250,000.

The two ministerial orders issued to support the vaccination mandate require, among other things that (i) federally regulated railway companies ensure, at a minimum, they have established vaccination policies by October 30, 2021, and that all operating employees have received their first dosage of an approved COVID-19 vaccine by November 15, 2021; and (ii) interprovincial passenger railway companies ensure that, as of October 30, 2021, all travellers are fully vaccinated, or provide proof of a negative COVID-19 test, at the time of boarding. The option to provide a negative COVID-19 test is temporary and meant to provide a transition period for travellers. A new ministerial order will be issued by the end of November requiring that, after November 30, 2021, all travellers have to be fully vaccinated (unless specifically exempted). All orders include accommodation measures by way of testing for individuals that cannot be vaccinated for very specific reasons, such as medical or religious reasons. The orders also include specific data collection, filing and reporting requirements that railway companies must follow, as well as privacy requirements that must be met to protect all personal information handled in relation to the vaccination requirements.

The contravention of orders made pursuant to section 32.01 is considered to be a major violation, subject to the highest payable amounts permitted under paragraph 40.1(b) of the Act, which is $50,000 for individuals and $250,000 for corporations. These amounts are consistent with other similar safety-related authorities found in the Act, such as emergency directives issued by the Minister under section 33 of the Act and orders issued by a railway safety inspector under section 31 of the Act.

Given that the authority to issue AMPs is different in each mode of transportation (i.e. rail, marine, air), and given the fact that each mode is using a different tool to support the vaccination mandate, the maximum amounts for violations of the orders differ. In the air sector, individuals (either travellers or employees) could be fined up to $5,000 per violation under the Aeronautics Act, and operators could be fined up to $25,000 per violation. In the marine sector, employees and travellers could be fined up to $250,000 per violation, per day, and operators could be fined up to $250,000 per violation per day for non-compliance to an interim order made pursuant to the Canada Shipping Act, 2001.

Regulatory development

Consultation

On October 9, 2021, Transport Canada shared an engagement document with railway companies and unions representing employees of railway companies. In addition to outlining the proposed approach of Transport Canada to implement the vaccination mandate, it provided stakeholders with details on the intention of the Department to add orders made under section 32.01 as a designated provision under the AMPs Regulations, as well as informing them of the proposed maximum payable penalties.

In subsequent meetings, discussions and written comments on the engagement documents, no issues were raised by the stakeholders on the proposed amendments to the AMPs Regulations.

These regulatory amendments were not prepublished in the Canada Gazette, Part I, to ensure that AMPs would be available immediately to support the implementation of the vaccination mandate. The ongoing spread of COVID-19 in Canada necessitates swift and immediate action. Prepublishing these regulatory amendments would have delayed the Government’s ability to enforce the new vaccination requirements in the rail sector through AMPs.

Modern treaty obligations and Indigenous engagement and consultation

In accordance with the Cabinet Directive on the Federal Approach to Modern Treaty Implementation, an analysis was undertaken to determine whether the proposal is likely to give rise to modern treaty obligations. This assessment examined the geographic scope and subject matter of the proposal in relation to modern treaties in effect, and no modern treaty obligations were identified at this stage.

Given that the regulatory amendments do not create any new requirements, but rather provide an additional enforcement tool to support the vaccination mandate, TC did not find any specific clause relevant to the proposal that would give rise to modern treaty obligations.

The vaccination mandate touches employees of all federally regulated railway companies, including Transport Ferroviaire Tshiuetin (TFT), the rail company owned and operated by the Naskapi Nation of Kawawachikamach, which is a signatory to the Northeastern Quebec Agreement. TC will inform the Naskapi Nation of Kawawachikamach of the amendments as part of the normal engagement process.

Instrument choice

The Act requires regulations to be made in order to issue AMPs for the contravention of certain requirements. In the absence of these amendments, non-compliance to orders made under section 32.01 could only be dealt with through warnings or recommending prosecution. Having only these two options would mean that enforcement officers would be unable to tailor their enforcement response to the relative seriousness of a potential violation of the vaccine requirements — or any other requirements established in orders made under section 32.01. Warnings may not sufficiently reflect the potential risk and damage of a given violation; however, on the other hand, recommending prosecutions can be impractical, time consuming and costly for both TC and offenders. Without the option of AMPs, rail safety requirements established in ministerial orders under section 32.01 — including the vaccination requirements — could end up being over-enforced, under-enforced, or not enforced at all. Furthermore, the enforcement of the vaccination requirements in the rail sector would be inconsistent with enforcement in the air and marine sectors, where AMPs are available as an enforcement option. No non-regulatory options were considered.

Regulatory analysis

These amendments will provide for the use of AMPs for violations of orders made under the Railway Safety Act. For example, the amendments allow Transport Canada to issue fines relating to the Government’s vaccine mandate in the rail sector, which requires that all railway operators ensure that their employees and passengers boarding their trains (with rare exceptions) provide proof that they are fully vaccinated against COVID-19. These amendments will result in a one-time cost of $2,031 in 2021 to the Government of Canada (represented by Transport Canada), as enforcement officers will need to be informed and become familiarized with the new AMPs regime.

Benefits of these amendments include the introduction of a flexible tool to standardize the escalation of a violation, while promoting compliance and enforcement. The use of monetary penalties rather than prosecutions provides a more cost-effective method to enforce non-compliance and may serve as a deterrent, thereby reducing the likelihood of violations and the risk of transmission of COVID-19 in ongoing railway operations.

Analytical framework

The costs and benefits for these amendments have been assessed in accordance with the Treasury Board Secretariat (TBS) Policy on Cost-Benefit Analysis by comparing the baseline against the regulatory scenario. The baseline scenario depicts what is likely to happen in the future if the Government of Canada does not implement these amendments. The regulatory scenario provides information on the intended outcomes because of these amendments.

Taxes, fees, levies and other charges constitute transfers from one group to another and are therefore not considered to be compliance or administrative costs, whether they are intended as incentives to foster compliance and change behaviour or whether their purpose is to recover the costs of providing a service. Correspondingly, the costs to pay for AMPs, as well as the revenue to the Government of Canada generated through AMPs, are not considered costs nor benefits within the scope of the regulatory analysis since they are outside the normal course of business, occurring only in instances of non-compliance.

Unless otherwise stated, all costs are expressed in present value terms (2021 Canadian dollars, discounted to the base year of 2021 at a 7% discount rate) over a 10-year analytical period (2021–2030).

Stakeholder profile

These amendments will impact the Government of Canada, as enforcement officers need to be informed and become familiar with the new AMPs regime. Presently, there are 56 enforcement officers across Canada: 14 are located in the Quebec region, 13 in the Prairie and Northern region, 11 in the Ontario region, 11 in the Pacific region, and 7 in the Atlantic region.

Canadian railway operators would be subject to the new AMPs if they are found to have contravened orders made under section 32.01 of the Act. According to the Canadian Transportation Agency, there are currently 25 active federally regulated railway companies operating across Canada.

Baseline and regulatory scenarios

Under the baseline scenario, enforcement officers at Transport Canada would not be able to use AMPs to enforce vaccination requirements established in orders under section 32.01 of the Act. When encountering non-compliance, enforcement officers would have two options: recommend prosecution or issue a warning. As a result, in the baseline scenario, non-compliance would be over-enforced, under-enforced or not enforced at all.

Under the regulatory scenario, enforcement officers have an administrative option to use monetary penalties to deter and enforce non-compliance related to section 32.01 of the Act. AMPs are a flexible enforcement option that can be tailored to the relative risk and/or severity of a violation. These amendments will help ensure the safety and security of the Canadian rail sector can be consistently and efficiently enforced while underscoring the seriousness and importance of preventing the spread of COVID-19.

Benefits

These amendments will provide enforcement officers with the necessary tools required to enable a proportionate response to non-compliance, including the violation of Government’s vaccination mandate in the rail sector. The ability to issue penalties for non-compliance will also provide enforcement officers with a gradual and standardized approach for accountability. It is anticipated that due to the potential risk associated with receiving a monetary penalty, violators would be incentivized to comply with orders made under section 32.01 of the Act, including mandatory vaccination for railway employees. The use of monetary penalties to enforce non-compliance and the avoidance of prosecutions in court will provide affected railway stakeholders with cost savings and increased predictability surrounding enforcement. The increase in compliance will also benefit Canadians by enhancing their safety.

Costs

The payment of fines is not considered a cost since individuals whose activities are contrary to prevailing laws and regulations do not have standing (i.e. whether the costs should count) in this context.

These amendments will impose additional costs on Transport Canada (representing the Government of Canada), as enforcement officers will need to be informed and become familiar with these amendments through a notification that describes the new AMPs in detail.

It is assumed that one Transport Canada employee at the EC-05 level would take one hour to develop the notification, and another employee at the EC-06 level would take one hour to review and approve the notification. Among the 56 enforcement officers at Transport Canada, 5 are at the PM-06 level, 29 are at the TI-06 level, 7 are at the TI-07 level, and 15 are at the AO-CAI-02 level. These enforcement officers will spend 30 minutes to read through the notification and familiarize themselves with the new AMPs regime for violations.

Using the rates of pay for public service employees, footnote 4 it is estimated that Transport Canada will incur a one-time cost of $2,031 (2021 Canadian dollars) in 2021.

Small business lens

An analysis conducted under the small business lens concluded that these amendments will not impact Canadian small businesses.

One-for-one rule

The one-for-one rule does not apply to these Regulations, as the amendments do not introduce a change in administrative burden to business.

Regulatory cooperation and alignment

The regulatory amendments were not introduced to comply with an international agreement or obligation, nor do they have any impacts related to a work plan or commitment under a formal regulatory cooperation forum. The amendments have also not been introduced to align with another jurisdiction, standard-setting body, or international organization. However, AMP regimes are common in the Canadian federal regulatory landscape, and several AMPs regimes are already in place at TC. AMPs are also one of the tools available to enforce the vaccination mandate in other modes, such as air and marine transportation sectors.

Strategic environmental assessment

In accordance with the Cabinet Directive on the Environmental Assessment of Policy, Plan and Program Proposals and the TC Policy Statement on Strategic Environmental Assessment (2013), the strategic environmental assessment (SEA) process was followed for these regulatory amendments and a sustainable transportation assessment was completed. No impacts were identified, as the primary objective of this regulatory initiative was to complement the existing railway safety oversight regime by providing additional options to the Minister of Transport to enforce safety requirements.

Gender-based analysis plus

A gender-based analysis plus (GBA+) assessment was conducted to determine if these amendments would have any disparate impacts on diverse groups based on factors such as age, mobility, geographic location, language, ethnicity, culture, indigenous communities, sexual orientation, and income, etc.

Given that administrative monetary penalties will only be issued upon failure to comply with the requirements of an order made under section 32.01 of the Act, these amendments are not expected to have negative impacts on Canadians based on any of the factors listed above. As a result, no gender-based analysis plus impacts have been identified for these amendments.

Implementation, compliance and enforcement, and service standards

These amendments come into force on the day on which they are registered. The AMPs will be available for use to enforcement officers in cases of non-compliance with any orders made pursuant to section 32.01 of the Act. In the case of requirements with specific compliance deadlines established in the ministerial orders related to the vaccination mandate, AMPs will not be applied until the compliance deadlines have passed. For example, the requirement that railway companies ensure that all operating employees have received their first dosage of an approved COVID-19 vaccine will not be enforced until after the November 15, 2021, compliance deadline has passed. Despite the availability of the AMPs, it should be noted that enforcement officers will still have the option of issuing written warnings or pursuing prosecution for any violations of orders made pursuant to section 32.01 of the Act.

To ensure that AMPs in respect to the new designated provision are applied in a fair, impartial, predictable and nationally consistent manner, guidance materials will be developed to align with the Rail Safety Program’s compliance and enforcement regime. Training will be provided to the Rail Safety Program officials within existing programs. Adding this guidance to the existing training program will ensure that departmental officials take a standard approach in similar circumstances to achieve consistent results.

Payment of penalties, which must be made by credit card, or a certified cheque or money order, would need to be made, payable to the Receiver General for Canada, within 30 days after the day on which a notice of violation is served.

Anyone who is issued a monetary penalty can ask to have that decision reviewed and appealed by the Transportation Appeal Tribunal of Canada. The TATC will review the decision and then decide to either uphold, vary (change) or set aside the penalty.

Contact

Stéphanie Plouffe
Acting Director
Regulatory Affairs
Rail Safety
Transport Canada
Telephone: 613‑291‑1843
Email: stephanie.plouffe@tc.gc.ca