Bill C-33: Canada’s new marine and rail transportation bill to strengthen supply chain

The federal government recently began a process to address concerns related to supply chain efficiency. On Nov. 17, 2022, the Minister of Transport introduced Bill C-33, the Marine and Rail Transportation Modernization Act (MRTMA), in the House of Commons. MRTMA will cause amendments in five statutes related to transportation, including the (i) Railway Safety Act, (ii) Canada Marine Act, Canada Transportation Act, (iii) Marine Transportation Security Act, (iv) Customs Act and the(v) Transportation of Dangerous Goods Act, 1992. It is expected that these reforms will overall lead to:

• Better governance of port authorities.
• Increased safety for transportation of dangerous goods.
• Better competitiveness of rail companies.
• Strengthened relationship and reconciliation with Indigenous Peoples to enable port development.
• Efficient railway and marine security measures that support smooth supply chain management.

In this article, we provide a summary of the rail sector and marine sector reforms, and how these amendments can strengthen the supply chain.

Rail sector reforms

The Railway Safety Act (RSA) empowers Transport Canada to oversee rail safety. The proposed reforms in the RSA will fill gaps in the current railway safety regime and ensure its review every five years¹. Amendments in the RSA will provide for:

• Inclusive definition of safety². Definitions of ‘safety’ within the Act will be amended to include ‘security’.
• Prohibition on endangering safety of railway operations. The reforms prohibit three kinds of acts³ that endanger railway safety, including:
  1. Interference, damage or destruction of any railway work, equipment, or operation without reasonable cause.
  2. Unruly or dangerous behavior that endangers the safety of railway stations or equipment without lawful excuse.
  3. Obstruction of enforcement officers who are carrying their functions under the RSA.

• Expansion of ministerial powers. The reform expands the scope of ministerial powers in certain cases, including:
  1. When a railway company has sought exemptions from rules and regulations enacted under the RSA. In this case, the Minister will be empowered to sanction renewal, cancellation or amendment of such exemptions based on the public interest and safety of railway operations.⁴
  2. When a railway company has not complied with regulations under the RSA and risks compromising rail security. In this case, the Minister may send a notice to the company to inform the company of the Minister’s opinion and reasons, and to order the company to take necessary corrective measures. Deficient compliance includes the adoption and implementation of a security management system by the railway company.⁵
  3. Where approval of rules filed by a railway company require consultation from non-experts. Currently, the Minister can seek advice from experts in rail safety operations. These reforms will also allow the Minister to consult with any other relevant party.⁶
  4. Where a person has violated RSA regulations pending notice of such violation. There may be a case where a Notice of Violation has not been served, but the Minister has reasonable grounds to believe that the person has violated RSA regulations. The Minister in this case is allowed to seek assurance of compliance from the person. Such an assurance will likely come with a security deposit and a monetary penalty for noncompliance. Default on the assurance comes with tough measures, such as doubling of monetary penalties levied on the person.⁷

Marine sector reforms

The Canada Marine Act (CMA) guides the development, maintenance and operations of Canadian ports. The proposed reforms in the CMA address concerns related to national security, Indigenous peoples, environment and port authorities. Some of the amendments in CMA are:

• Change in purpose. CMA will see the addition of three new purposes for effective management of marine infrastructure and services. These three purposes are:
  1. Participation of Indigenous peoples.
  2. Maintenance of national security.
  3. Management of marine traffic for supply chain efficiency.⁸
• Change in land usage and borrowing powers of port authorities.⁹ The reforms expand the scope of letters patent for port authorities on two counts. First, the scope will be increased to include a schedule within which a port authority can develop land-use plans.¹⁰  Second, the scope will include the ability to cap the power of a port authority to borrow money for port purposes.
• Ministerial order when there is a risk of imminent harm to national security. The Minister will be able to order a port authority to take corrective action in two situations. First, when there is a risk of imminent harm to national security, national economic security or competition. Second, when such a situation also constitutes a significant threat to the safety and security of persons, supply chain, goods, ships or port facilities.¹¹
• New regulations related to environment and climate change. Reforms will permit regulations connected with the impact of climate change on port operations and vice versa.¹²

The Marine Transportation Security Act (MTSA) provides the legislative framework for the security of the marine transportation system in Canada. It applies to vessels and marine facilities in Canada, Canadian vessels outside of Canada and marine installations and structures. The key reforms¹³ being made are:

• An expansion in the Minister’s power to: (i) enter into agreements or arrangements for enforcement of the MTSA, (ii) make interim orders and give emergency directions, and (iii) give directions to vessels when they pose risks to marine transportation.
• An expansion of the government’s power to:
  1. Make regulations related to fees and charges for enforcing MTSA.
  2. Make regulations related to threats and risks to the health of persons involved in the marine transportation system.
  3. Disclose information within government departments at federal, provincial and municipal levels.
  4. Establish vessel exclusion zones.
• Creation of new offences, increased penalties and extension of the application of certain offences and the administrative monetary penalty regime to vessels.¹⁴

Additional reforms

Reforms in other transportation related legislation include:

• Customs Act: The requirement to make goods available for examination at the request of an officer in a secure area when asked¹⁵
• Transportation of Dangerous Goods Act: The requirement for importers, transporters and handlers of dangerous goods to register with the Minister¹⁶ and comply with safety requirements.¹⁷

Conclusions

Overall, the said reforms appear timely in that they are aimed at increasing the safety of the ports, railway, and other parts of the supply chain. A safe and secure transportation system will offer stability in disruptive times such as those of recent years.

If you have any questions about Bill C-33 or how the reforms may affect your business, please reach out to any key contacts listed below.