Rail certificates of fitness (licences)

If a person wants to construct or operate a freight or passenger railway under federal jurisdiction, they must apply to the Agency for a certificate of fitness.

The Agency must be satisfied that there will be adequate liability insurance in place before it will issue a certificate of fitness. 

Insurance requirements for federal rail freight carriers under the Safe and Accountable Rail Act

The Safe and Accountable Rail Act which was passed in 2015 introduced new legislative provisions that relate to how federally-regulated, rail freight carriers obtain, modify and maintain their certificates of fitness (COF). The new legislative provisions come into effect on June 18, 2016.

The new legislation prescribes minimum insurance coverage which carriers must maintain at all times. The minimum coverage is determined based on the type and volume of certain prescribed goods (such as crude oil or toxic inhalation hazard (TIH) materials) a carrier transports in a calendar year.

Minimum liability insurance requirements

The legislated minimum liability insurance levels are as follows:

Volumes per calendar year Amount per occurrence ($ million)
None of the situations described below $25
Less than 4,000 tonnes of TIH materials, less than 100,000 tonnes of crude oil, or at least 40,000 tonnes of other dangerous goods $100
At least 4,000 tonnes but less than 50,000 tonnes of TIH materials, or at least 100,000 tonnes but less than 1.5 million tonnes of crude oil $250
At least 50,000 tonnes of TIH materials or at least 1.5 million tonnes of crude oil $1,000

Note: The transitional insurance levels apply to the one-year transition period from the date on which the legislation becomes effective (i.e. June 18, 2016 to June 18, 2017).

A carrier's coverage can include self-insurance, but the amount of self-insurance must not exceed the maximum amount of self-insurance that the person who will be responsible for the proposed operation can sustain, based on their financial capability.

Requirements for rail freight carriers

As a result of these new legislative measures, certificate of fitness holders will need to demonstrate to the Agency that they meet the new liability insurance requirements in order to remain eligible to hold their certificate of fitness.

They will also need to confirm, on an annual basis, that they continue to meet those requirements.

Passenger rail service

These new insurance requirements don't apply to passenger rail service. The insurance requirements that apply to passenger rail services and to the construction of a railway have not changed.

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