Regulations Amending the Railway Safety Administrative Monetary Penalties Regulations: SOR/2024-152

Canada Gazette, Part II, Volume 158, Number 14

Registration
SOR/2024-152 June 21, 2024

RAILWAY SAFETY ACT

P.C. 2024-807 June 21, 2024

Her Excellency the Governor General in Council, on the recommendation of the Minister of Transport, under 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 Part 1 of Schedule 1 to the Railway Safety Administrative Monetary Penalties Regulations ^{footnote 1} is amended by adding the following after item 11:

Item	Column 1 Designated Provision	Column 2 Maximum Amount Payable ($) Individual	Column 3 Maximum Amount Payable ($) Corporation
11.1	Section 26.1	25,000	125,000
11.2	Section 26.2	50,000	250,000

2 Part 1 of Schedule 1 to the Regulations is amended by adding the following after item 21:

Item	Column 1 Designated Provision	Column 2 Maximum Amount Payable ($) Individual	Column 3 Maximum Amount Payable ($) Corporation
21.1	Subsection 40.11(5)	25,000	125,000

3 Schedule 1 to the Regulations is amended by adding the following after Part 6:

PART 7

Designated Provisions of the Passenger Rail Transportation Security Regulations

Item	Column 1 Designated Provision	Column 2 Maximum Amount Payable ($) Individual	Column 3 Maximum Amount Payable ($) Corporation
1	Subsections 2(1) and (2)	50,000	250,000
2	Subsection 2(3)	25,000	125,000
3	Paragraph 2(4)(a)	50,000	250,000
4	Paragraph 2(4)(b)	50,000	250,000
5	Paragraph 2(4)(c)	50,000	250,000
6	Subsection 2(5)	25,000	125,000
7	Subsection 2(6)	5,000	25,000
8	Subsection 2(7)	5,000	25,000
9	Subsection 3(1)	25,000	125,000
10	Subsection 3(2)	5,000	25,000
11	Subsection 3(3)	25,000	125,000
12	Subsection 3(4)	25,000	125,000
13	Subsection 4(1)	50,000	250,000
14	Subsection 4(3)	50,000	250,000
15	Subsection 4(4)	50,000	250,000
16	Subsection 4(6)	25,000	125,000
17	Subsection 4(7)	25,000	125,000
18	Subsection 5(2)	25,000	125,000
19	Subsections 5(3) and (4)	50,000	250,000
20	Subsection 5(5)	25,000	125,000
21	Subsection 5(6)	50,000	250,000
22	Subsection 5(7)	50,000	250,000
23	Subsection 5(8)	50,000	250,000
24	Subsection 5(9)	5,000	25,000
25	Subsection 5(10)	5,000	25,000
26	Paragraph 6(1)(a)	50,000	250,000
27	Paragraph 6(1)(b)	50,000	250,000
28	Paragraph 6(1)(c)	50,000	250,000
29	Subsection 6(2)	25,000	125,000
30	Subsection 6(3)	50,000	250,000
31	Subsection 6(4)	25,000	125,000
32	Subsection 6(5)	25,000	125,000
33	Subsection 6(6)	25,000	125,000
34	Subsections 7(1) and (2)	50,000	250,000
35	Paragraph 7(3)(a)	50,000	250,000
36	Paragraph 7(3)(b)	50,000	250,000
37	Paragraph 7(3)(c)	50,000	250,000
38	Paragraph 7(3)(d)	50,000	250,000
39	Paragraph 7(3)(e)	50,000	250,000
40	Paragraph 7(3)(f)	50,000	250,000
41	Paragraph 7(3)(g)	50,000	250,000
42	Paragraph 7(3)(h)	50,000	250,000
43	Paragraph 7(3)(i)	50,000	250,000
44	Paragraph 7(3)(j)	50,000	250,000
45	Paragraph 7(3)(k)	50,000	250,000
46	Paragraph 7(3)(l)	50,000	250,000
47	Paragraph 7(3)(m)	50,000	250,000
48	Paragraph 7(3)(n)	50,000	250,000
49	Paragraph 7(3)(o)	50,000	250,000
50	Paragraph 7(3)(p)	50,000	250,000
51	Paragraph 7(3)(q)	50,000	250,000
52	Subsection 7(4)	50,000	250,000
53	Subsection 7(5)	25,000	125,000
54	Subsection 7(6)	25,000	125,000
55	Subsection 7(7)	25,000	125,000
56	Paragraph 7(8)(a)	25,000	125,000
57	Paragraph 7(8)(b)	25,000	125,000
58	Paragraph 7(8)(c)	25,000	125,000
59	Paragraph 7(8)(d)	25,000	125,000
60	Paragraph 7(8)(e)	25,000	125,000
61	Paragraph 7(8)(f)	25,000	125,000
62	Paragraph 7(8)(g)	5,000	25,000
63	Subsection 8(1)	50,000	250,000
64	Paragraph 8(2)(a)	50,000	250,000
65	Paragraph 8(2)(b)	50,000	250,000
66	Paragraph 8(2)(c)	50,000	250,000
67	Subsection 8(3)	25,000	125,000
68	Subsection 8(4)	25,000	125,000
69	Subsection 8(5)	25,000	125,000
70	Subsection 8(6)	5,000	25,000
71	Subsection 8(7)	5,000	25,000
72	Subsection 9(1)	50,000	250,000
73	Subsection 9(3)	5,000	25,000
74	Subsection 9(4)	25,000	125,000
75	Subsection 9(5)	5,000	25,000
76	Subsection 9(7)	5,000	25,000
77	Subsection 9(8)	5,000	25,000
78	Subsection 9(9)	5,000	25,000
79	Subsection 9(10)	50,000	250,000

Coming into Force

4 These Regulations come into force on the day on which they are published in the Canada Gazette, Part II.

REGULATORY IMPACT ANALYSIS STATEMENT

(This statement is not part of the Regulations.)

Executive summary

Issues

Securing the rail system in Canada is a difficult yet vital task. The inherent openness of the rail system, as well as the volume of goods and passengers that it carries, make it an attractive target for attacks and unlawful interference. Unlawful interference with railway property, systems, and infrastructure can have major impacts on public safety, the environment, and the economy. There has been a disturbing trend of increased levels of security incidents related to Canada’s rail infrastructure in recent years.

The number of incidents relating to trespassing, sabotage, tampering, vandalism, interference with rail operations, and suspicious activities, is of concern. For example, the number of rail security incidents that were reported in 2020 more than doubled those reported in 2019, and incidents reported in 2021 and 2022 show that the upward trend is continuing. While there have not been fatalities linked to these events, these incidents could create safety risks for the travelling public, critical infrastructure, surrounding neighbourhoods, railway staff and even to those persons committing the infractions.

The Government needs to take measures to implement a robust enforcement regime to deal with the rise in security breaches to the rail transportation system. Prior to the Regulations, the provisions in the RSA relating to trespassing, interference with railway operations, and cooperation with enforcement officers, were not designated under the existing Railway Safety Administrative Monetary Penalties Regulations, nor were any of the requirements of the PRTSR, which were implemented to increase the likelihood that potential security incidents would be detected and prevented, and the consequences of such incidents would be mitigated. In other words, AMPs were not previously available as an option to enforce these provisions of the RSA or any of the requirements of the PRTSR. Without AMPs, enforcement of these RSA provisions involved one of three options: (i) issuing a warning; (ii) issuing a ticket with a preset fine amount under the Contraventions Regulations (available only for the two currently designated violations); or (iii) pursuing prosecution under the RSA or the Criminal Code. The enforcement options to uphold the PRTSR were even more limited, with only options (i) and (iii), as noted above, available.

Having only these options can lead to inconsistent results: some offences may be under-enforced while other offences (enforced via prosecution) may appear over-enforced relative to their nature. The Contraventions Act ticketing regime, where offences are designated as contraventions under the Contraventions Regulations, is designed to deal with regulatory offences that are of a lesser degree of seriousness with preset fine amounts established at a level that is more proportionate and appropriate to the seriousness of the offence, based on the circumstances at hand ($500 and $750 respectively for contraventions of sections 26.1 and 26.2 of the RSA, the maximum of contraventions fine amounts being $5,000 in light of the parameters set out under the Contraventions Act). For more serious cases of non-compliance, there are options to pursue prosecutions under the RSA. However, going through the court system can be a lengthy and burdensome process and could result in a criminal record or stigma that may not be warranted.

Due to the increased levels of security incidents related to Canada’s rail infrastructure in the past years, it has become apparent that additional enforcement options are needed. The Contraventions Act ticketing regime with preset fine amounts may not be the most appropriate alternative enforcement option in certain circumstances where, for instance, gradual scales of fines are needed, and prosecutions are mainly reserved for the most severe cases. Transport Canada (TC) has identified a need for greater flexibility in the enforcement of the above-mentioned provisions of the RSA and the requirements of the PRTSR. In line with other modes of transportation that TC regulates and TC’s rail safety program, AMPs were identified as a suitable complement to TC’s current rail security enforcement tools under the RSA and the PRTSR.

Background

Railway Safety Act

The federal legislation that governs rail safety and security in Canada is the RSA, which applies to federally regulated companies and provincially regulated companies operating over the tracks of a federally regulated railway. The RSA also applies to road authorities and private authorities who share ownership of grade crossings across Canada. One of the primary objectives of the RSA is to promote and provide for the safety and security of the public, and the protection of property and the environment. In support of this objective, the RSA establishes the principle that railway companies are responsible for the safety and security of their own operations.

Transport Canada is responsible for administering the RSA and for developing and implementing related policies and regulations. Transport Canada has the mandate to protect people, property, and the environment by ensuring railways operate safely and securely within a national framework. In support of this mandate, TC conducts inspections and audits to verify that companies and road authorities are complying with requirements under the RSA and its associated regulations.

The previous enforcement options to deal with non-compliance under the RSA relating to trespassing, interference with railway operations, and cooperation with enforcement officers were limited to issuing contraventions tickets for the only two designated offences, namely section 26.1 and section 26.2 of the RSA, or to recommending prosecution through the criminal court system. Contraventions tickets do not always serve as an effective deterrent where fine amounts are warranted at a level higher than those preset under the Contraventions Regulations, and prosecutions can be lengthy and costly, so they tend to be used only in the most serious cases.

Passenger Rail Transportation Security Regulations

The PRTSR were introduced in fall 2020 to enhance the security of the passenger rail system in Canada. These security regulations apply to passenger companies (a company whose operations include the transport of passengers by railway) and host companies (a railway company that authorizes a passenger company to operate on its railway), and includes requirements to engage in security planning processes and risk management activities that will increase the likelihood that potential security incidents will be detected and prevented, and the consequences of such incidents will be mitigated. All the security requirements of the PRTSR came into force as of January 2022. Prior to the Regulations, TC enforcement officers had two options for enforcing compliance with the PRTSR: (i) issue a warning or (ii) recommend prosecution through the criminal court system. In some cases, warnings would not be sufficient or effective because they can be disregarded, and the court prosecutions could be lengthy and costly. The program, therefore, needed a medium-impact enforcement tool to fill the gap.

Administrative monetary penalties

Administrative monetary penalties offer a flexible tool for enforcing federal offences of a regulatory nature. AMPs use financial penalties to deter non-compliant behaviours and can be issued by a regulator, without court proceedings, for designated legislative and regulatory requirements. AMPs address non-compliance where simple warnings or contraventions tickets with preset fine amounts are not appropriate, but where prosecution, seizure, licence suspension or revocation are considered too harsh. AMPs are designed to bring regulated entities and individuals into compliance without entering the judicial system. They do not involve the legal ramifications of a criminal record or imprisonment and provide the required margin of manoeuver in terms of gradual scales and levels of fine amounts. AMPs are considered an effective medium-impact administrative enforcement tool as they allow for flexibility to consider factors such as recurring violations and the severity of the offence when determining the penalty amount.

The use of AMPs to enforce the RSA and the PRTSR is consistent with the enforcement approach used by TC in other modes of transportation and in other areas of the rail transportation system.

Objective

The objectives of the Regulations are to deter trespassing and other unlawful interferences with the railway network, to promote cooperation with TC enforcement officers, and to ensure the consistent and effective enforcement of Canada’s rail security regime.

Administrative monetary penalties are expected to serve as an effective deterrent to security incidents against the rail network and an incentive to cooperate with TC enforcement officers.

In addition, AMPs will fill a gap in the implementation of the PRTSR to enhance passenger rail security as they will provide the Minister of Transport (the Minister) with a tool to address security violations without relying on or burdening the criminal court system. AMPs will 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 the characteristics of the contravener (i.e. compliance history, cooperation, assistance, remediation). A graduated approach provides TC with the flexibility to apply the least intrusive enforcement measures necessary to correct non-compliant behaviour, and to escalate those measures, when needed, to deal with more serious and/or repeated violations.

It is anticipated that the Regulations will contribute to a strengthened rail security regime and to the Government’s objective of protecting the public, the environment, and the rail infrastructure from harm.

Description

The Regulations designate provisions of the RSA, and the PRTSR as enforceable via AMPs, so that the violation of any of these designated provisions may be proceeded with the imposition of a monetary penalty.

The Regulations amend Schedule 1 of the Railway Safety Administrative Monetary Penalties Regulations by designating

• three provisions of the RSA (sections 26.1, 26.2 and subsection 40.11(5)) that deal with trespassing, interference with railway operations, and cooperation with enforcement officers; and
• 79 provisions of the PRTSR, which set out specific security requirements that must be met by passenger rail and host rail companies.

Schedule 1 of the Railway Safety Administrative Monetary Penalties Regulations prescribes the maximum payable amount for an individual and a company for each violation of a designated provision. 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 violations, and major violations that pose the highest risk. A range exists for each category of risk and an AMP can be imposed for any amount as long as it does not exceed the maximum designated category. The RSA specifies that violations that continue on more than one day constitute a separate violation for each day.

Table 1: Maximum payable amounts for a violation

Level of risk	Maximum payable amount ($) Individual	Maximum payable amount ($) 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

There are several other RSA and regulatory provisions designated in the above-noted categories for rail safety violations. The 82 provisions designated in the Regulations are incorporated into this established framework, consistent with how rail safety provisions have been designated in the past, according to the seriousness of the consequences or potential consequences of their contravention. When imposing AMPs, TC enforcement officers determine the penalty amounts based on several factors such as the degree of harm caused, degree of negligence or deliberate conduct, compliance history, willingness to cooperate with officials, and detection.

Provisions under the RSA

The Regulations designate three RSA provisions under the following risk categories:

1. Category B: Medium-level risk
   • Section 26.1: No person shall, without lawful excuse, enter on land on which a line work is situated.
   • Subsection 40.11(5): Any person from whom documents or data are requested under subsection (4) shall provide all reasonable assistance in their power to enable the enforcement officer making the request to carry out the enforcement officer’s duties and shall furnish any information that the enforcement officer reasonably requires for the purposes of the RSA.
2. Category C: High-level risk
   • Section 26.2: The users of a road shall give way to railway equipment at a road crossing if adequate warning of its approach is given.

Provisions under the PRTSR

The Regulations designate 79 provisions of the PRTSR, which include requirements for security awareness training, security coordination and reporting, security inspections, security risk assessment, security plans, security plan training, and security exercises. As with the RSA provisions, these provisions are categorized according to the level of seriousness of the non-compliance. In general, violations of an administrative nature are considered low-risk non-compliance, while violations related to the development and implementation of security procedures are considered higher-risk non-compliance. Some illustrative examples are provided below:

1. Category A: Low-level risk
   • Subsection 3(2): The passenger company and host company must provide the Minister with (a) the name and job title of the rail security coordinator or acting rail security coordinator; and (b) the 24-hour contact information for the rail security coordinator or acting rail security coordinator.
   • Subsection 9(3): A passenger company, other than a small passenger company, must give the Minister 45 days’ notice of any operations-based security exercise that it plans to carry out.
2. Category B: Medium-level risk
   • Subsection 3(1): A passenger company and host company must have, at all times, a rail security coordinator or an acting rail security coordinator.
   • Subsection 5(2): A passenger company must establish and document a process with respect to security inspections, including (a) a procedure for conducting security inspections; (b) a method for determining whether security has been compromised; (c) a method for determining whether additional security inspections are necessary if, having regard to the circumstances, security could be compromised; (d) a method for addressing the situation, if security has been compromised, before the train enters into service; and (e) a method for preventing unauthorized interference with the train after the inspection and until passengers board the train.
3. Category C: High-level risk
   • Subsection 4(1): A passenger company or host company must report to the TC Situation Centre, by any direct means of communication established and communicated by the Centre, any threat or other security concern that results or may result in an unlawful interference with passenger rail transportation. The report must be made as soon as feasible but no later than 24 hours after the occurrence of the threat or other security concern.
   • Subsection 5(3): In order to ensure that there are no security concerns related to passenger rail transportation, a passenger company must ensure that security inspections consist of both a ground-level visual inspection of the exterior of the train and an inspection of the interior of each car and are carried out in accordance with the process set out in subsection (2).

Regulatory development

Consultation

Initial consultations

Impacted stakeholders were consulted on the proposed amendments. Rail stakeholders generally agreed that AMPs would be a more effective tool than ticketing to deal with security incidents and they expressed interest in working with TC on this initiative.

In January, February and March 2022, pre-consultations were held with the Rail Security Working Group, which includes representation from the Railway Association of Canada (RAC), railway and local police, and security representatives from passenger and freight rail companies. The focus of these consultations was on the proposed amendments to designate provisions of the RSA. The working group expressed general support for the regulatory proposal as a means of curbing unlawful interference with the railway system and enquired if railway police would also be able to use AMPs to deal with security incidents against the rail network. Transport Canada indicated that only enforcement officers designated by the Minister would be able to issue AMPs; however, it would require a cooperative effort between the railway police and TC enforcement officers to facilitate investigations.

In February 2022, a notice of TC’s intentions to pursue the amendments was sent to passenger companies and host companies regulated under the PRTSR, as well as their industry association, RAC. At the same time, a notice was also posted on TC’s rail security web page, which is open to the public. Stakeholders were invited to submit feedback and questions about the proposal to TC.

Follow-up consultations were held with stakeholders in March 2022. Stakeholders expressed concerns that, by designating provisions of the PRTSR, TC seemed to be moving away from the collaborative approach to improving passenger rail security that industry was accustomed to. Under the PRTSR, TC and the rail industry work together to develop proactive risk-based practices (including security inspections, training, and security reporting) to identify, prevent and mitigate security threats, and help to minimize the consequences (loss of life, property damage, environmental damage and reduced international trade flows) should an incident occur.

As well, some stakeholders raised concerns about the potential for inconsistent application and overuse of the AMPs. Transport Canada reassured stakeholders that while AMPs are being added to the enforcement toolbox, TC would continue to work with railway companies to develop and improve processes and procedures to proactively identify, prevent and mitigate threats. Transport Canada assured stakeholders that inspectors would continue to provide ongoing oversight, guidance and education to railway companies, and that TC enforcement officers would take a graduated approach to the use of AMPs in accordance with existing TC policy to ensure that penalties are applied in a fair, impartial, predictable, and nationally consistent manner.

Prepublication in the Canada Gazette, Part I

The proposed Regulations were prepublished in the Canada Gazette, Part I, on July 2, 2022, followed by a 30-day public comment period. One submission on the proposal was received from RAC on behalf of its members, including passenger rail companies and host companies.

In the submission, RAC reiterated concerns that TC was moving away from the collaborative approach, and about the likelihood of inconsistent interpretations of the PRTSR requirements and application of oversight, including enforcement actions, because of the nature of the requirements, which were recently established and are performance-based. Additionally, RAC suggested that the Regulatory Impact Analysis Statement lacked details on the planned approach for oversight and enforcement. Moreover, in RAC’s assessment, the costs of the proposal, to the rail industry and the Government, were underestimated because the analysis did not consider the potential time, resources and costs that would be incurred in the event of a review of an alleged violation or penalty amount by the Transportation Appeal Tribunal of Canada (TATC). Notwithstanding these concerns, RAC expressed support for designating RSA provisions 26.1 and 26.2 as enforceable via AMPs, in recognition that there was a need for TC to have the authority to deter and address trespassing and unlawful interferences with the railway network through AMPs.

Transport Canada met with RAC to discuss these comments and provide more information on the issues that were raised. Transport Canada appreciates the rail industry’s long-standing partnership and collaboration in enhancing rail security and affirms that this collaborative relationship is still fundamental to improving rail security and will be maintained through outreach and sharing guidance materials and best practices. Transport Canada will apply standardized departmental policies and procedures in the application of oversight and enforcement related to the Regulations. Details on these policies and procedures are available to the public upon request as indicated on TC’s website. Transport Canada acknowledges that additional costs would be incurred if an AMP was imposed and subsequently a railway company requested a TATC review of the violation or penalty amount. However, according to Treasury Board of Canada Secretariat (TBS)’s Policy on Cost-benefit Analysis, only costs associated with compliance of a regulatory proposal would be considered in a cost-benefit analysis. Therefore, since the cost associated with subsequent TATC review would result from non-compliance of TC regulations, they are not considered in the cost-benefit analysis.

No changes to the Regulations were made in response to stakeholder comments.

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. The assessment examined the geographic scope and subject matter of the proposal in relation to modern treaties in effect and after examination, no implications or impacts on modern treaties are identified.

In keeping with the obligation set out in section 5 of the United Nations Declaration on the Rights of Indigenous Peoples Act, TC sought Indigenous engagement on this regulatory proposal. A description of the proposal was sent out via email on November 23, 2022, to the Assembly of First Nations (AFN), Inuit Tapiriit Kanatami (ITK), Métis National Council (MNC), and Manitoba Métis Federation (MMF) as well as general distribution to all Indigenous communities and organizations across the country that TC works with. Recipients were invited to submit feedback on the proposal before December 20, 2022. No feedback was received.

Transport Canada also presented this proposal at the Métis Nation Technical Committee on Economic Development held in February 2023. No questions or concerns were raised about the proposal at this meeting.

Furthermore, in February 2023, TC followed up with AFN, ITK and MNC to see if they wanted more information and/or to meet with TC on this proposal. Subsequently, consultations with AFN representatives occurred in March and April of 2023. Questions were raised about the application of the proposal, the implementation of AMPs in First Nation communities, the usage of funds collected from the AMPs, and potential community outreach and engagement opportunities to promote rail safety and security.

Transport Canada has responded to these questions raised and has been actively following up on the conversation by organizing multiple engagement sessions with industry and affected stakeholders. In January 2024, TC presented the proposed amendments at the National Rail Forum, which brought together more than 50 Indigenous participants from over 30 communities and organizations from across Canada. In February 2024, TC presented the proposal at the Advisory Council on Rail Safety meeting with industry stakeholders. Stakeholders did not raise any issues or concerns during these meetings.

Information on the proposal has also been included in the Indigenous Relations Engagement Updates Bulletin in February 2024 and April 2024, which is sent to Indigenous communities, organizations, and governments across the country. No feedback was received following publication of the updates.

Due to the additional engagement carried out by TC, some delays were incurred between prepublication of the Regulations in the Canada Gazette, Part I, on July 2, 2022, and the final publication of the Regulations in the Canada Gazette, Part II.

Transport Canada remains committed to working collaboratively with stakeholders and will ensure that any issues or concerns that may arise are addressed to ensure fairness and consistency in the implementation of these AMPs.

Instrument choice

Transport Canada’s Rail Security program lacks a medium-impact administrative enforcement tool to address rail security violations. All violations under the RSA and the PRTSR cannot realistically be prosecuted. The resource costs and time frames for a prosecution would not be in the public interest for many instances of non-compliance. Likewise, contraventions tickets may not be the most appropriate enforcement tool in certain situations where for instance gradual scales of fines as well as distinctive fines depending on the status of offenders potentially involved are needed. In the absence of an enforcement tool to address offences that would not warrant a prosecution, but for which a warning or a contraventions ticket is not a sufficient response, under-enforcement of the RSA and the PRTSR would continue.

An AMPs regime offers an effective option to improve the enforcement of the RSA and the PRTSR. To achieve this, TC must pursue regulatory action. Regulations are the prescribed instrument for designating provisions of the RSA and any regulations under the RSA for the purpose of issuing AMPs; this is set out in section 40.1 of the RSA. Therefore, no non-regulatory options were considered.

Regulatory analysis

Even though stakeholder comments did not necessitate any changes to the Regulations or the cost-benefit analysis presented at prepublication, the cost-benefit analysis was revised by removing the initial training cost to the Government of Canada, as the initial training will occur prior to the registration of the Regulations. As such, the cost of initial training is considered a sunk cost. Additionally, since prepublication, the analysis now includes fewer inspectors (24 to 22) in the training calculations. Finally, due to delays since prepublication, the analytical time frame has been shifted to 2024–2033 from 2023 to 2032. Taking these adjustments into account, the total present value cost was updated from $25,015 to $11,561.

Analytical framework

The costs and benefits for the amendments have been assessed in accordance with TBS’s Policy on Cost-Benefit Analysis. Where possible, impacts are quantified and monetized, with only the direct costs and benefits for stakeholders being considered in the cost-benefit analysis.

Benefits and costs associated with the Regulations are assessed based on comparing the baseline scenario against the regulatory scenario. The baseline scenario depicts what would be likely to happen in the future if the Government did not implement the Regulations. The regulatory scenario provides information on the expected outcomes of the Regulations.

In accordance with the TBS’s Policy on Cost-Benefit Analysis, taxes, levies, and other charges constitute transfers from one group to another and are therefore not considered to be compliance or administrative costs, including if intended as incentives to foster compliance and change behaviour. Correspondingly, the costs to pay for AMPs, as well as the revenue to the Government 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.

The analysis estimated the impact of the Regulations over a 10-year period from 2024 to 2033, with the year 2024 being when the Regulations are registered. Unless otherwise stated, all costs are expressed in present value in 2021 Canadian dollars, discounted to the year of 2024 at a 7% discount rate.

Affected stakeholders

The Regulations will impact the Government, specifically 22 existing Rail Security Inspectors at TC who will be required to complete training to familiarize with new monetary penalties. The number of Rail Security Inspectors is not expected to grow over the analytical time frame.

Individuals, rail passenger companies, and host companies who contravene the designated provisions will be subject to the AMPs regime. The Regulations are expected to incentivize these stakeholders to change or avoid non-compliant behaviour.

Baseline and regulatory scenarios

Under the baseline scenario, Rail Security Inspectors do not have the option to use AMPs as an enforcement tool when encountering non-compliance with provisions of the RSA and the PRTSR.

Under the regulatory scenario, the Regulations designate 82 provisions of the RSA and the PRTSR into the AMPs regime. The AMPs regime will provide TC enforcement officials the option to issue proportional penalties for non-compliance.

Under the regulatory scenario, rail security inspectors at TC will need to complete initial and refresher training to familiarize themselves with the AMPs.

Benefits and costs

The Regulations designate 82 provisions of the RSA and the PRTSR so that contravention of these provisions may be proceeded with as a violation, and consequently, a monetary penalty. As a result, the Regulations are expected to impose $11,561 in costs on the Government, between 2024 and 2033.

Benefits

The Regulations are expected to contribute to a strengthened rail security regime and assist in the Government’s efforts to deal with the rise in dangerous and unlawful conduct and curb the trend without burdening the criminal court system, by offering an additional enforcement tool to enforce these provisions.

Specifically, designating section 26.1 is expected to deter trespassing and follow-on incidents such as tampering; designating section 26.2 is expected to deter interference with railway operations; and designating subsection 40.11(5) is expected to promote cooperation with enforcement officers. AMPs are a productive enforcement tool that promote regulated parties to comply with the Regulations and deter repeated non-compliance without the possible legal ramifications of a criminal record. AMPs also help ensure that violators are subject to a process that can be more appropriate and proportionate to the nature of the violation. Ultimately, it is anticipated that AMPs will deter violations or repeated violations and help promote compliance with the Act and the PRTSR.

While there is a lack of data to monetize these benefits, it is believed the benefits will outweigh the costs associated with the Regulations.

Costs

The costs associated with the Regulations will involve 22 existing rail security inspectors taking an initial AMPs training course and refresher training to familiarize themselves with new violations and the penalty amounts. The development of both the initial and refresher training is already completed, and the initial training will occur prior to the registration of the Regulations. As a result, the costs associated with the development of training and the initial training^{footnote 2} are considered sunk and, therefore, are excluded from the analysis.

Refresher training

The 22 rail security inspectors^{footnote 3} will also need to participate in a half-day (3.75 hours) refresher training once every three years, following the initial training in 2024. This analysis estimated the opportunity cost, defined as the value of reduced productivity of TC inspectors due to their absence from work to take part in such trainings. The opportunity cost is estimated by multiplying hourly wage rate for TC inspectors and the hours of training. This will result in an incremental cost of $11,561 to the Government, between 2024 and 2033.

Cost-benefit statement

• Number of years: 10 (2024–2033)
• Base year for costing: 2021
• Present value base year: 2024
• Discount rate: 7%

Table 2: Monetized costs (in present value)

Impacted stakeholder	Description of cost	Base year (2024)	Other relevant years (sum over 2025–2032)	Final year (2033)	Total (present value)	Annualized value
Government	Refresher training	$0	$8,458	$3,103	$11,561	$1,646
All stakeholders	Total costs	$0	$8,458	$3,103	$11,561	$1,646

Qualitative benefit

By offering an additional enforcement tool to enforce the designated provisions of the RSA and the PRTSR, the Regulations will contribute to a strengthened rail security regime and deter dangerous and unlawful conduct without burdening the criminal court system.

Small business lens

Analysis under the small business lens concluded that the Regulations will not impact Canadian small businesses as AMPs are not considered to be an administrative or compliance burden for the purposes of the small business lens.

One-for-one rule

The one-for-one rule does not apply as the amendments will not result in an incremental change in administrative burden. AMPs are not considered to be an administrative burden as per the Policy on Limiting Regulatory Burden on Business.

Regulatory cooperation and alignment

The Regulations are not being introduced to comply with an international agreement or obligation, nor do they relate to a work plan or commitment under a formal regulatory cooperation forum. There is no indication of any direct or indirect discrimination or competitive advantages provided to Canadian versus foreign entities, and the Regulations are not expected to trigger the disciplines in Canada’s trade agreements.

Administrative monetary penalties regimes are common in the Canadian federal regulatory landscape, and several AMPs regimes are already in place at TC. The decision-making processes contained in TC’s oversight policy and associated operating procedures are aligned with those in place within other modes at TC. The United States also uses monetary penalties to enforce requirements related to rail security.

Strategic environmental assessment

In accordance with the Cabinet Directive on the Environmental Assessment of Policy, Plan and Program Proposals, a preliminary scan concluded that a strategic environmental assessment is not required.

Gender-based analysis plus

The Regulations are not expected to negatively or disproportionately impact any group of persons based on identity factors such as gender, race, ethnicity, sexuality, religion, age, etc. Moreover, during consultations with stakeholders, no concerns were raised about disproportionate impacts based on identity factors.

By enhancing rail security in Canada, this proposal is expected to benefit the rail sector (including those working in the rail industry, rail passengers, and rail infrastructure), people living in communities near rail infrastructure, and Canadians in general.

Implementation, compliance and enforcement, and service standards

The Regulations come into force upon their publication in the Canada Gazette, Part II.

An AMP regime under the RSA has existed since 2015. The Regulations do not add any new requirements; they simply expand options for enforcing the RSA and the PRTSR by designating existing provisions and setting out maximum penalties for each designated provision.

Companies and persons that comply with the requirements of the RSA and the PRTSR are not expected to be impacted.

Training on AMP oversight and enforcement procedures has been provided to TC rail security officials prior to coming into force to ensure that oversight and any related enforcement activities will be applied in a fair, impartial, predictable, and nationally consistent manner. Costs associated with refresher training will be managed within existing TC resources.

In accordance with its Departmental Enforcement Policy, TC will take a graduated and proportionate approach to enforcement to educate, deter, and, when necessary, penalize those who contravene the RSA and the PRTSR.

Transport Canada officials are required to use the most effective enforcement instrument through the graduated and proportional approach to bring the regulated entity back into compliance. This means matching the enforcement response to the gravity of the non-compliant behaviour and history of the regulated party in a way that most effectively ensures compliance and/or that discourages future non-compliance. Repeated non-compliances are typically addressed by an increase in the severity of the enforcement response.

Enforcement tools are authorized by policy or legislation, and the approach to their selection is always based on the graduated and proportional approach to enforcement.

The five most common enforcement tools are described below:

• Informal verbal counselling (verbal warning): encouraging the alleged regulated party to comply with the requirements and providing information and assistance to facilitate compliance.
• Written warning: where the attention of the alleged regulated party is drawn to the specific non-compliant behaviour and the regulated party is advised that failure to comply with the requirements may result in even more serious penalties.
• AMP: where the regulated party is served with a formal Notice of Violation advising of the occurrence of a non-compliance and in respect of which a monetary penalty has been assessed. The penalty may be disputed with the TATC.
• Suspension or cancellation of Operating Certificate: where the regulated party is served with a Notice that the Minister is amending, suspending, or cancelling the regulated party’s permission to operate.
• Prosecution: where the regulated party is served with criminal proceedings in the form of a summary conviction or indictment subjecting the regulated party to a criminal trial and potentially a fine or imprisonment.

Prior to the issuance of an AMP, TC will consider lower severity enforcement options, including verbal warnings or written warnings, for less severe findings of non-compliance. Verbal warnings and written warnings may be the appropriate tool where the non-compliance is low-risk and does not pose an immediate threat to safety and/or security.

If there is an assessment of non-compliance, where elevated enforcement action is being considered, TC’s National Enforcement Program (NEP) and its Regional Enforcement Units (REUs) will conduct an investigation. Transport Canada’s NEP has functional responsibility for the conduct of any enforcement activity and investigation that could result in an AMP or the initiation of a criminal prosecution. The REUs are enforcement and investigation specialists that operate out of each of the five regions (Atlantic, Ontario, Quebec, Prairie and Northern, and Pacific).

With respect to the enforcement of the RSA provisions, cooperation and coordination between TC enforcement officials, railway police and police of jurisdiction will be maintained to ensure an effective and consistent implementation of the AMPs regime.

No service standards are planned for the AMPs; however, in accordance with section 40.22 of the RSA, TC must issue an AMP no later than 12 months after the time when the subject matter of the proceedings arose.

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

Review mechanism

Under the RSA and regulations pursuant to the RSA, any person served with a Notice of Violation may request from the 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. Thus, an AMP regime is relatively inexpensive to administer within an existing compliance and enforcement program, and it normally results in more timely and effective enforcement than prosecution.

Contact

Stephen Larkin
Director
Policy, Programs and Operations
Rail Security
Transport Canada
Tower B, 112 Kent Street, 14th floor
Ottawa, Ontario
K1A 0W8
Email: tc.railsecurity-sureteferroviaire.tc@tc.gc.ca