Frequently Asked Questions

The information below is meant to provide Canadians with general information about the Fund.

GENERAL INFORMATION

  1. What is the purpose and function of the Fund?

The Fund compensates victims of damages caused by a major crude-by-rail accident. Compensation starts after federally regulated railway companies have paid damages up to the amount required by law. They must have insurance coverage, based on the risk, type, and volume of crude oil they transport. It ranges from $100 million to $1 billion.

The Fund is a specified purpose account in the accounts of Canada, established under the Canada Transportation Act.

The Fund was created as a response to the Lac-Mégantic tragedy. Now, in the event of a railway accident involving crude oil, the Fund protects Canadians from bearing the cost of damages.

 

  1. What does “designated goods” mean?

Currently, only crude oil has been designated under the Fund. This means the Fund can only be activated in the case of a railway accident involving crude oil.

The government, not the Fund, determines whether other goods are added to the list of designated goods.

 

  1. Where can I find the list of federally regulated railway companies who can carry crude oil?

The list can be found on the Canadian Transportation Agency website at https://forms.otc-cta.gc.ca/en/federal-railway-companies. However, only a few hold a certificate of fitness allowing them to carry crude oil.

 

FINANCES

  1. How is the Fund financed?

The Fund is financed through a levy, which is a per-tonne fee charged to shippers. The levy is collected and remitted by the first federally regulated railway company to carry the crude oil in Canada.

 

  1. How much was collected by the Fund through levies in 2022-2023?

The Fund collected $5.8 million in levies.

 

  1. What is the Fund’s balance?

As of March 31, 2023, the Fund had an accumulated balance of over $101 million from the collection of levies and interest payments.

 

  1. What is the maximum amount the Fund can use to pay claims caused by a major crude-by-rail accident?

In the event of a major accident, the Fund has no limit to how much it can compensate. The Fund has access to additional federal money through the Consolidated Revenue Fund if needed.

 

  1. What is the amount of the levy on shipments of crude oil by rail?

In 2022-2023, the levy was set at $1.86 per tonne.

For the fiscal year starting April 1, 2023, the levy is $1.99.

    • The levy is indexed to inflation and adjusted based on changes to the Consumer Price Index.

 

  1. How long has the levy been in existence?

Seven years. The levies have been collected since 2016.

 

ACCIDENTS AND CLAIMS PROCESSING

  1. How much money was paid to claimants in 2022-2023?

No accident activated the Fund since 2016. We have therefore not receive any claims. Consequently, no money was paid out of the Fund for this purpose.

 

  1. Who can submit a claim with the Fund?

Any person in Canada impacted by the accident may submit a claim, such as:

    • Individuals
    • All levels of government
    • Indigenous peoples
    • First responders
    • Corporations and businesses
    • Landowners

ACCIDENT MONITORING

  1. How many accidents are we monitoring?

Six accidents. None of these accidents reached the railway companies’ limit of insurance coverage. It is unlikely that the Fund will be activated by any of these accidents.

See the Map of Accidents Monitored in the 2022-2023 annual report for more details.

 

 PREPAREDNESS TO HANDLE A HIGH VOLUME OF CLAIMS

  1. What progress was made in 2022-2023 towards our preparation to handle a high volume of claims?

We made steady progress towards strong preparedness. It included:

  • Negotiating with railway companies for the transition of claims. We are about to secure a Memorandum of Understanding (MOU) with VIA Rail Canada.
    • Facilitating two tabletop exercises to test our readiness:
      • the first was an internal exercise, and
      • the second was with our government communication partners.
    • Improving our legal preparedness.
    • More than doubling our engagement levels from last year with regard to outreach activities. We resumed in-person meetings and events across the country.
    • Updating our MOU with TC to act on the recommendations from our special examination; and
    • Collaborating with TC’s Transportation of Dangerous Goods Secretariat on the sharing of crude-by-rail data.

 

  1. What engagement activities did the Fund participate in or organize in 2022-2023?

This year, our team has been successful in achieving our goal to get back to pre-pandemic engagement levels. We have more than doubled our outreach results from last year. We also engaged a greater variety of stakeholders by reconnecting with:

    • local governments, municipalities and related associations;
    • provincial and territorial governments; and,
    • the Canadian Transport Lawyers Association.

While most meetings were held virtually, we resumed in-person events. They allowed us to network, gain immediate feedback and receive recognition from participants across the country. This included:

    • A booth at two well-attended municipal and local governments trade shows.
      • As part of a joint initiative with the Ship Fund.
    • Participation at two conferences on catastrophe management and one on transportation law.
    • Participation at a Railway Association of Canada (RAC) event.

 

OPERATIONS AND STAFFING

  1. What were the Fund’s operating costs in 2022-2023?

The Fund’s operating costs in 2022-2023 were $1,108,193. These expenses include :

    • staff salaries;
    • consulting fees for legal and professional advisory costs;
    • office expenses and rent (shared with the Ship Fund);
    • fees paid to the Auditors; and
    • costs for outreach efforts and related communications, translation and travel costs.

 

  1. How many staff work for the Fund?

In addition to the Administrator and the Deputy Administrator, our team is managed by a director and three employees (two lawyers and an analyst). The Fund is also supported by the administrative and professional staff shared with the Ship Fund. This year, we also employed six students who worked on legal, policy and communication files.