Guide to Certificates of Fitness
Sections 90 to 94 of the Canada Transportation Act require a person proposing to construct or operate a freight or passenger railway under federal jurisdiction to apply to the Agency for a certificate of fitness. The Agency issues such certificates if it is satisfied that there will be adequate third party liability insurance coverage for the proposed construction or operation.
This guide is designed to assist parties in obtaining and maintaining such a certificate and should be used in conjunction with sections 90 to 94 of the Act and with the Railway Third Party Liability Insurance Coverage Regulations (Regulations). In the event of a conflict between this guide and the CTA or the Regulations, the CTA and the Regulations will prevail.
The guide applies only to federally-regulated railways, which are those meeting one of the following criteria:
- operates across provincial/territorial or international boundaries;
- is owned, controlled, operated or leased by a federal railway;
- has been declared by Parliament to be for the general advantage of Canada; or
- is an integral part of an existing federal undertaking.
An application for a certificate of fitness must include a completed certificate of insurance form (see Appendix I), and must indicate the termini and route of each operation. In addition, a railway company may apply to the Agency to vary an existing certificate of fitness, so that it reflects an additional route, a change in the termini or route, or a change in railway construction or operations. You may mail an application to:
Canadian Transportation Agency
Ottawa, Ontario K1A 0N9
You may also deliver an application by hand or by courier to:
Canadian Transportation Agency
15 Eddy Street
17th Floor Mailroom
Gatineau, Quebec J8X 4B3
- (819) 997-6727
The Agency strives to deal with all of its cases within 120 days. However, the Agency may take more than 120 days to issue a decision due to the complexity or the particular circumstances of a case.
Certificate of Insurance (Appendix I)
Sections 1 to 6 of the certificate of insurance form require your name, the name of your insurance broker or agent, the type of insurance, details of each insurance contract and a confirmation that the operating risks listed in section 7 of the form are known to the insurer. The authorized representative of the insurance company must endorse these sections.
Sections 7 and 8 of the certificate of insurance form require information related to the risks associated with the proposed construction or operation of the railway. It also asks you to confirm that you have fully disclosed these risks to the insurance company. As the applicant, you must endorse these sections.
Please note that, for reasons of authenticity, the Agency will accept only the original back-to-back certificate of insurance form provided in this guide.
The Agency will assess your ability to hold a specific amount of self-insurance, either deductible or self-insured retention. If you file complete annual financial reports with the Minister of Transport or the Agency, there is no further requirement. Otherwise, you have to give the Agency audited financial statements for the three most recent complete fiscal years or provide other financial information that shows you are financially capable of carrying the proposed amount of self-insurance.
If, for any reason, the Agency believes that the insurance company may not have the financial ability to pay its contractual level of insurance coverage, you may have to provide the Agency with the last three years of the insurance company's audited financial statements and/or the insurance company's solvency rating, as determined by recognized rating agencies.
You must have third party liability insurance coverage for any proposed temporary construction or operation of a railway as a result of exceptional or unforeseen circumstances.
You must notify the Agency in writing, without delay, whenever you renew, cancel or alter your liability insurance coverage, or whenever a change in construction or operation may mean that your liability insurance coverage is no longer adequate.
You also must notify the Agency in writing of any potential erosion that may cause your liability insurance coverage to be no longer adequate, or when there is any change in deductible or self-insured retention that would affect the level of insurance.
You must ensure that the insurance contract includes a provision that requires the insurer or its authorized representative to give the Agency at least 30 days' prior written notification of renewal, cancellation, expiration or material alteration of the insurance coverage.
Pursuant to subsection 94(2) of the Act, the Agency may suspend or cancel a certificate of fitness if it determines that your insurance coverage is no longer adequate. You may have to send information to the Agency to assure it that your insurance is still adequate.
Also, section 174 of the Act provides, in part, that anyone who contravenes a provision of the Act, or a regulation or order made under the Act, is guilty of an offence punishable on summary conviction and subject to fines as set out in the Act.
All documents filed with the Agency become part of the public record and may be made available for public viewing. However, in accordance with the Agency's General Rules, a claim for confidentiality can be made.
All railways holding a certificate of fitness are subject to the Railway Safety Act and all the requirements (such as regulations, rules, standards, etc.) pursuant to that Act.
The Railway Safety Management System Regulations require all federally-regulated railways to have a safety management system. New railway companies must send specific information on their system to the Minister of Transport sixty (60) days before beginning their operation.
You can obtain information on the Railway Safety Act from the Transport Canada Web site at www.tc.gc.ca.
Any Agency decision is subject to the following conditions:
- it is binding upon the parties and remains in effect until it is amended or rescinded;
- it may be reviewed by the Agency, if there has been a change in the facts or circumstances;
- it may be appealed to the Federal Court of Appeal on a question of law or jurisdiction, within one month after the date of the order or decision; and
- it may be appealed to the Governor in Council at any time.
For more information on the Canada Transportation Act, the Agency and its responsibilities, or Agency decisions and orders, please contact the Canadian Transportation Agency.
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