CTLA Feature Articles and Case Notes

disruptions. If passed, the amendments provide more tools for addressing disruptions, and, accordingly, reduce uncertainty and increase reliability relating to humancaused railway disruptions.

(b) Expansion of the AMP Regime

The amendments represent an expansion of the previous AMP regime, introducing new concepts: Assurances of Compliance (section 40.131) and Compliance Agreements (sections 40.151-40.152).

If Bill C-33 is passed, under section 40.131 of the RSA, the Minister could enter into an Assurance of Compliance with a person that has allegedly committed a violation under the Act but has not been served with a notice of violation under the Act. A person who enters into an Assurance of Compliance is deemed to have committed the violation in respect of which the assurance was entered into. The Assurance of Compliance would identify the alleged violation and stipulate that the person will comply in the future and be subject to the terms and conditions specified in the Assurance. The Assurance of Compliance may also require the person to deposit monetary or other security with the Minister. In the event of default of the Assurance of Compliance, the person is liable to pay twice the amount of the penalty set out in the Assurance without regard to the statutory limits prescribed in section 40.1(b), that is, $50,000 in the case of an individual, and $250,000 in the case of a corporation. Further, a person deemed to be in default of an Assurance of Compliance has no right to set-off or compensation against any amount spent under the Assurance prior to the alleged default. Review mechanisms are also available.

Under sections 40.151-40.152 of the RSA , a person served with a notice of violation under the Act may request to enter into a Compliance Agreement with the Minister instead of paying a monetary penalty that “ensures the person’s compliance with the provision to which the violation relates”. Like Assurances of Compliance, Compliance Agreements may include the payment of “reasonable security…as a guarantee that the person will comply with the compliance agreement” and to provide for the reduction, in whole or in part, of the penalty for the violation. Anyone entering into a Compliance Agreement is deemed to have committed the violation, and default of the Agreement will trigger payment of twice the amount of the maximum penalty. Such a penalty cannot be set-off against amounts previously paid under the Compliance Agreement. As with Assurances of Compliance, review mechanisms are available.

These proposed amendments appear to have been adopted directly in response to the RSA Review, which recommended integrating Assurances of Compliance and Compliance Agreements into the RSA ’s AMP regime. The stated basis for the proposal was to allow more flexibility with respect to enforcement options with the intention of improving safety outcomes and mirroring other regulatory regimes in Canada.26 In some respects, it is arguable that they provide a more flexible AMP scheme to address alleged violations compared to the previous scheme, which only allowed for the application of AMPs (and an associated appeal mechanism). However, as drafted, they also represent a significantly increased risk to anyone entering into such arrangements. In the event of a default of either an Assurance of Compliance or Compliance Agreement, the person faces doubled financial penalties: from $50,000 to $100,000 in the case of an individual, and from $250,000 to $500,000 in the case of a corporation. As such, they may represent a less attractive or “flexible” alternative.

(c) Automatic RSA Review Every Five (5) Years

The proposed amendments introduce a mandatory comprehensive review of the operation of the RSA every five years.27 This is a change from the current RSA , which requires a review five (5) years after the current version came into force.

This amendment appears to address the RSA Review recommendation that mandatory RSA reviews occur at least once every ten (10) years, ensuring the Act can “continuously evolve to adapt to new developments”.28 It appears that Parliament may be attempting to create a railway regulatory regime that is more fluid and responsive to challenges in a changing transportation industry, as described in the Task Force Report.29

(d) Expanded Consultation Process

Bill C-33 proposes to expand powers of the Minister under section 19(5) of the RSA to seek advice or engage with “any other relevant party” when formulating or accepting rules under section 19 of the RSA respecting regulations under the Act. Currently, the Minister can only seek advice or engage with those with “expertise” in safe railway operations.30 Notably, the term “relevant person” is undefined. Accordingly, the proposed amendment would expand the scope of persons with whom the Minister can consult before implementing rules to an indefinite class of individuals who may, or may not, have a direct or relevant connection to the safe operations of railways in Canada.

It appears that this proposed amendment is based on the RSA Review, which specifically recommended this change to the RSA , citing challenges regarding increasing transparency and engagement opportunities for “relevant parties” in the rules-making process under the RSA 31 Rule-making is described as “governmentindustry ‘co-regulation’”, wherein the Minister relies on companies with expertise to help determine rules before they are applied. However, provinces, unions, and community groups complained that the rules process prevented their participation in the rules-making process. Broadly defined, the amendment will broaden the scope of “engagement” by the Minister prior to approving rules. However, without a clear definition of who is considered to be a “relevant person”, the amendment creates uncertainty regarding the process that must be followed before a rule will be approved, as well as the scope of persons or organizations who will be invited to join the process. If the scope of such consultations is not focused on those with direct knowledge of and an interest in railway operations, there exists the potential for the process to become unduly time-consuming for railways, and to be influenced by matters beyond those which are reasonably and properly connected to railway operations.

2. The Canada Transportation Act (“CTA”)

Proposed amendments to the CTA would enable the use of remote telecommunications systems to “enter” a place to conduct inspections to verify compliance or prevent non-compliance (CTA , section 6.41). In addition, the proposed amendments introduce the use of “electronic systems”, including an “automated system”, to “make a decision or determination” (CTA, section 6.2(4)).

Little detail has been provided as to how telecommunication systems are to be employed to carry out remote powers of entry and inspection, or how “electronic systems” or “automated systems” will be used to make decisions or determinations. Neither term is defined.

It is also unclear what types of decisions or determinations the Federal Government considers to be capable of being made by such (undefined) technology. As drafted, the amendment considers the use of artificial intelligence (“AI”) to render decisions. If that is the intention, it may be designed to assist in determinations of issues such as baggage claims made pursuant to the Air Passenger Protection Regulations 32 However, as drafted, and without further explanation, this ability is capable of being broadly applied to any matter concerning the administration or enforcement of the CTA or related legislation.

These proposed amendments appear to denote expanded powers of inspection and enforcement and potentially automated decision making relating to as-yet unknown elements of a railway’s compliance with the CTA and related acts under the Minister’s power. Unfortunately, it is difficult to know how the Minister intends to implement these changes until the Government tables further CTA amendments and/or companion regulations for consideration. This topic likely merits close attention going forward.

3. The Transportation of Dangerous Goods Act (“TDGA”)

(a) Registration by Those Who Deal With Dangerous Goods

Bill C-33 implements a proposed registration system under the TDGA for all persons who import, offer for transport, handle, or transport (“Transport”) any dangerous goods. Under the proposed amendments, the general prohibition on Transporting dangerous goods under