Critics say Ottawa is lowballing its demands for railway insurance and oil industry payments to a disaster fund.
By: Jessica McDiarmid News reporter, Published on Wed Mar 11 2015
New federal legislation to boost insurance requirements for railroads and create a disaster compensation fund may fall far short of the estimated costs of a catastrophic incident in a densely populated region like Toronto.
The federal government last month introduced a bill to increase the amount of insurance railways must carry to cover costs in the event of a derailment.
The bill relies on information from Transport Canada, which says the amounts for insurance and compensation are based on analyses of historical accident costs and risks.
Transport Canada officials say those analyses must be secret.
But a U.S. government study of trains carrying crude oil and ethanol sheds light on potential costs, predicting the financial toll of a major derailment in a densely populated area could go far higher than the amounts set out in the federal bill. Toronto, and much of the urbanized GTA, would be considered a densely populated area.
Transport Minister Lisa Raitt introduced the bill in February, which requires railroads carrying high volumes of dangerous goods to have at least $1 billion in liability coverage — a requirement that Canada’s two largest carriers, Canadian National and Canadian Pacific, already meet or exceed.
Smaller companies will need between $25 million and $250 million in insurance, depending on the dangerous goods they move.
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