Decisions

TATC File No. H-4192-41
MoT File No. 11270080

TRANSPORTATION APPEAL TRIBUNAL OF CANADA

BETWEEN:

Canadian National Railway Company , Applicant

- and -

Minister of Transport , Respondent

LEGISLATION:
Railway Safety Act, R.S.C., 1985, c. 32 (4th Supp.)
Rule 103.1(e) of the Canadian Rail Operating Rules


Review Determination
Gary Drouin


Decision: March 28, 2017

Citation: Canadian National Railway Company v. Canada (Minister of Transport), 2017 TATCE 9 (Review)

Heard in: Winnipeg, Manitoba, on September 21 and 22, 2016

REVIEW DETERMINATION AND REASONS

Held: The Minister of Transport has proven, on the balance of probabilities, that the applicant, Canadian National Railway Company, contravened rule 103.1(e) of the Canadian Rail Operating Rules and that the imposition of an administrative monetary penalty of $45,833.04 was justified.

The total amount of $45,833.04 is payable to the Receiver General for Canada and must be received by the Transportation Appeal Tribunal of Canada within 35 days of service of this determination.

I. BACKGROUND

[1] On December 8, 2015, Transport Canada issued a Notice of Violation (Notice) to the Canadian National Railway Company (CN) for an alleged contravention of rule 103.1(e) of the Canadian Rail Operating Rules (CROR).

[2] Schedule A of the Notice stated the following:

On or about September 22, 2015, at the road-railway public grade crossing located at Mile 144.60 on the Rivers Subdivision at Highway 25 in Rivers, Province of Manitoba, Canadian National Railway Company allowed equipment to stand as to cause the unnecessary operation of warning devices, thereby violating Rule 103.1(e) of the Canadian Rail Operating Rules.

[3] The Notice also assessed a monetary penalty in the amount of $45,833.04 for the contravention.

[4] On December 23, 2015, CN applied for a review by the Transportation Appeal Tribunal of Canada (Tribunal) of the Minister of Transport's decision to issue it the Notice and monetary penalty.

II. STATUTES AND REGULATIONS

[5] Rule 103.1(e) of the CROR reads as follows:

103.1(e) Equipment must not be allowed to stand so as to cause the unnecessary operation of warning devices.

[6] Subsection 40.13(1) of the Railway Safety Act, R.S.C., 1985, c. 32 (4th Supp.), reads as follows:

40.13 (1) Every person who contravenes a provision designated under paragraph 40.1(a) commits a violation and is liable to a penalty not exceeding the maximum amount prescribed under paragraph 40.1(b).

[7] Paragraph 3(1)(b) of the Railway Safety Administrative Monetary Penalties Regulations, SOR/2014‑233, reads as follows:

3 (1) The following instruments are designated as provisions the contravention of which may be proceeded with as a violation in accordance with sections 40.13 to 40.22 of the Act: […]

(b) a rule in force under section 19 or 20 of the Act;

[...]

III. EVIDENCE

A. Minister

(1) Examination-in-chief of Mr. Larry Rea

[8] Mr. Rea has nine years' experience as a railway safety inspector and 30 years with CN. Mr. Rea explained that his role as a railway safety inspector is to monitor federally regulated railways for compliance with the Railway Safety Act and its regulations, standards and rules, and to conduct follow-up investigations on accidents from time to time. Mr. Rea also stated that he was responsible for inspections and audits, in addition to some responsibilities for onboard train employees with regard to the Canada Labour Code.

[9] Mr. Rea added that his 30 years of service with CN consisted of 17 years as a running trade employee, 13 years in management as a transportation training supervisor, an operating practices officer, a train master and an assistant superintendent of operations.

[10] The witness introduced two Google maps of the area near Rivers, Manitoba, where the alleged contravention occurred, confirming that they provide an accurate depiction of the lay of the land (Exhibit M‑1).

[11] Mr. Rea identified and marked on Map 1 the town of Rivers, Highway 25, the CN tracks and the grade crossing. Mr. Rea then turned to Map 2, a smaller-scale map centered on the intersection of the CN tracks and Highway 25. On this map, he marked the location of the alleged non-compliance observed on September 22, 2015 and the location of train 739 at the time.

[12] Mr. Rae explained that the grade crossing is primarily used for vehicle traffic, with very little pedestrian use. It is a single-track crossing equipped with automatic warning devices: lights, bells and gates.

[13] Mr. Rea provided explanations and identified various tracks on the Rivers subdivision track profile, a diagram used primarily by operating crews (Exhibit M‑2). This provides information such as track gradient, sidings and signal systems in place. Mr. Rea identified the main track and two sidings referred to as track 1 or RZ41 and track 2 or RZ42.

[14] Mr. Rea highlighted the special instructions with regard to mile 144.60 found on page 20 of the CN Rivers Subdivision timetable (Exhibit M‑3):

Track RZ41 - Crossing circuit sign located 900 ft east of switch. Protection activates departing from RZ41 when a portion of the movement is on the crossing circuit and Signal 1445-1 displays an indication other than STOP.

To prevent unnecessary operation of AWD [automatic warning devices] following is applicable: If occupying the crossing circuit when east of Signal 1445-1, contact RTC [rail traffic controller] to cancel the permissive signal. During switching operations if any portion of the movement is west of Signal 1445-1, then the movement must pull clear of the crossing Circuit sign.

[15] Mr. Rea explained some of the observations he made during his inspection of September 22, 2015. The inspector was able to listen to the radio communications between the train crew and the rail traffic controller (RTC). He heard that a train (number 739) was coming in for a crew trade-off. Mr. Rea explained that they would observe the trade-off to ensure that the crew was in compliance with rule 103(d) considering the location the train usually stops for such maneuvers.

[16] The RTC instructed the crew to set off the trailing locomotive on track RZ42 for an eastbound train with a failed unit. Mr. Rea drove down the yard to ensure the crew complied with CROR rule 112 during the locomotive set-off. The crew contacted the RTC to offer to set the locomotive off to the east end of the yard on RZ42 to facilitate the incoming train's pick-up. By doing so, the crew left their train in RZ41 beyond the crossing circuit sign.

[17] The crew received a permissive signal out of the west end of Rivers and permission for a reverse movement to back their movement into RZ42. The RTC also informed the crew that she would set up the signal for the crew to come back out after they detached their trailing locomotive in RZ42 as they would require this signal to come back out the west end to reattach their train.

[18] Mr. Rea confirmed that these maneuvers and the procedures required under the CROR to properly secure the train took the crew approximately 35 minutes, and that during all this time, the gates were down, lights were flashing and traffic was stopped or going around the gates. Mr. Rea continued to explain the remaining maneuvers done prior to leaving the yard.

[19] Mr. Rea testified that he observed about 25 cars go around the gates. He also observed that approximately 10 vehicles turned around, backed up, drove away to an alternative route and that others waited at the crossing for the entire time. Mr. Rea confirmed that according to his own observations and the information received from CN, the gates and flashing lights were active for over 45 minutes.

[20] Mr. Rea when asked if the crew was operationally required to leave the train where they did, he made the following statement: “In my opinion, no. Their train was short enough that it would have easily fit in RZ41 when they yarded. They could have left it further east than they did leave it.”

[21] Mr. Rea also testified that, in his opinion, when the RTC told the train crew that she was going to set up the signal to come out, the crew could have advised her that their train was beyond the marker and that if she did, it would cause the activation of the warning devices as indicated in the timetable. Mr. Rea added that even if that exchange had occurred between the two parties, the RTC would not have been allowed to deactivate the signals. Nevertheless, in Mr. Rea opinion, the warning devices would have deactivated once the train had backed off the bond.

[22] Mr. Rea heard a conversation between the train crew and the RTC with regard to bringing in the eastbound train from Myra into Rivers. It was at this point that the crew realized that the crossing was activated and there was a considerable lineup of cars. They requested to leave the yard in order to clear the crossing while it was still activated, which the RTC allowed.

[23] Mr. Rea indicated that he spoke to his manager regarding the situation and called Mr. Pulak, a superintendent at CN, to advise him of the non-compliance and the intent to issue an administrative monetary penalty (AMP) and issued a letter of advance notification requesting information from Mr. Pulak (Exhibit M‑4).

[24] The Minister's representative, Mr. Villemure, played the RTC recordings (M‑5) that Mr. Pulak provided to Mr. Rea in response to the advance notification letter. The three recordings confirmed Mr. Rea's testimony.

[25] Mr. Rea stated that he had not received any information regarding a malfunction with the warning devices at this crossing.

[26] Mr. Rea identified and explained the sections of a decision-making checklist with respect to AMPs that he had completed (Exhibit M‑6). He continued to explain that a letter of warning was sent from the Transport Canada Railway Safety Directorate in Ottawa to CN, informing the company of its non-compliance with rule 103.1(e). That letter was introduced later in the hearing as Exhibit M‑11.

[27] Mr. Rea acknowledged he received a copy of CN's reply to that letter. In Mr. Rea's opinion, CN had not addressed the issue of the violation, therefore an AMP was issued by the Railway Safety Directorate in Ottawa.

(2) Cross-examination of Mr. Rea

[28] During cross-examination by the applicant's representative, Mr. Landry, the witness explained once again that they had driven down the gravel road and parked to observe CN's yard operations (Exhibit M‑1).

[29] Presenting the witness with a photograph of the main track and yard tracks RZ41 and RZ42 (Exhibit A‑1), Mr. Landry asked Mr. Rea if this reflected the location where he did the inspection. Mr. Rea answered that it did, but that one of the signs visible on the picture was not present during his inspection of September 22, 2015.

[30] Mr. Landry then produced a photograph of tracks RZ41 and RZ42 (Exhibit A‑2). Mr. Rea confirmed that he recognized both tracks, that he saw the circuit sign on the side of RZ42 and that the other sign was not present during his inspection.

[31] Asked to explain the difference between rules 103(d) and 103.1(e), Mr. Rea explained that 103(d) requires trains not to stand so as to block a crossing for more than five minutes and 103.1(e) has to do with the unnecessary activation of warning devices by standing equipment.

[32] Asked whether they constitute two separate rules, Mr. Rea answered: “Yes and no. 103(d) basically refers to when a train is blocking a crossing…103.1(e) refers to when the warning devices are activated and there's no equipment blocking the crossing. The result to the general public is the same. The crossing is blocked, whether there's equipment there or not.”

[33] When Mr. Landry, in his questioning, referred to the fact that rule 103(d) was part of the decision-making process for the issuance of the AMP, Mr. Villemure objected, saying it was only part of the historical background relating to this crossing. The member ruled that past non-compliance with 103(d) was not tabled as a contributing factor by the Minister and added that if evidence introduced later in the hearing by the Minister included non-compliance with 103(d), then the applicant would be allowed to continue to cross-examine Mr. Rea.  

[34] Mr. Rea confirmed that the train was short enough to fit on track RZ41 and that the crew had left the train 20 feet beyond the bond, therefore activating the crossing's warning devices. Mr. Rea also confirmed that the train was 4,500 feet in length and that the length of RZ41 was 8,000 feet, therefore providing ample room to fit the train. When asked by Mr. Landry if “leaving the equipment at the specific location on the bond was an error in judgment from the crew”, Mr. Rea agreed with the statement.

[35] Mr. Landry read out part of an e-mail from Mr. Rea to Ms. Suzanne Madaire-Poisson from the Transport Canada Ottawa office (Exhibit A‑3, Tab K of CN's Compendium of Evidence) where he described the alleged violation and stated that the situation had resulted in “encouraging the dangerous practice [of] drivers (25 motor vehicles in this case) driving around the activated gates”.

[36] Asked what potential harm was present on that day, Mr. Rea stated that there was no immediate danger because drivers could clearly see that no train was approaching the crossing. However, the situation encouraged a dangerous practice by normalizing the act of driving around the gates at an activated crossing, which in another situation could result in a serious accident.

[37] Mr. Landry presented the witness with two sets of handwritten notes dated September 22, 2015 (Exhibit A‑4, Tab E of CN's Compendium of Evidence). Mr. Landry quoted information such as the number of vehicles waiting at the crossing and asked Mr. Rea where in his notes he could find that he had called CN to alert them of the dangerous situation at the crossing. Mr. Rea explained that he did not feel there was a danger at the crossing as there was no immediate threat considering that the signals were set up in such a way that no trains could come in. He did mention that the situation created a dangerous practice.

[38] Mr. Rea confirmed that he had received the names of the train crew. When asked by Mr. Landry why he had not contacted the crew members to obtain their version of the story, Mr. Rea stated: “I could have called, but I didn't believe that there was any more information to be gathered or anything to be gained by speaking with the crew members. I was there. I witnessed. I saw what happened. I didn't need them to confirm what I already knew.”

[39] Mr. Rea confirmed that during his conversation with his supervisor, Mr. Lance Smith at the Transport Canada Winnipeg office, they had not discussed rule 103(d) as the situation at hand pertained to rule 103.1(e).

(3) Examination-in-chief of Mr. Ryan Code

[40] Mr. Code informed the Tribunal that as a Transport Canada Railway Safety Inspector (RSI), his role is to monitor the railway industry to ensure compliance with the rules and regulations that fall under the Railway Safety Act. He follows up on public complaints, inquiries, certain accidents and incidents, and attends health and safety meetings. Prior to his employment with Transport Canada, he was employed with CN, where he held several positions, first in engineering, then as a switchman, conductor, and then in management as a power planner, train master and production coordinator. Following his employment with CN, he worked for VIA Rail as a manager of train operations.

[41] Mr. Code confirmed that he was not in Rivers on September 22, 2015 but had conducted an inspection at the same crossing on August 12, 2015. Mr. Code testified that on that day he witnessed two instances of non-compliance with rule 103.1(e). He observed train 105 westbound coming into Rivers to set out three cars into the yard. By the time the crew had secured the cars in place and pulled clear, the crossing gates had been down for 15 minutes, of which 7 were non-compliant.

[42] Mr. Code then observed the train crew making the join into RZ41. During the time it took for the crew to tie their train back on, proceed to the RTC to get their paperwork, get track warrant to proceed, change off the crew and leave the yard, the gates were down for a total of 18 minutes, of which 10 were in non-compliance with rule 103.1(e) with the train not using the crossing.

[43] Mr. Code played two videos (Exhibit M‑7) demonstrating what he observed during his inspection. The video also captured driver behaviour at the crossing while it was activated: vehicles making U-turns, going around the gates and others waiting for the crossing signs to be deactivated. The time on the video clearly showed when, during of the activation of the crossing, the train was occupying the crossing and when the gates were down without any rail movement.

[44] Mr. Code read a section of the Operations Inspection Summary Report he sent to Mr. Pulak of CN (Exhibit M‑8): “August 12  105 failed to clear the bond circuit for hi-way 25 twice, first one was for 7 minutes, second time was for 10 minutes.”

[45] Mr. Code read CN's response addressing the rule 103.1(e) non-compliance (Exhibit M‑9): “Response to Transport Canada: Locomotive Engineer investigation completed August 31, and discipline pending completion of investigation [of the] Conductor. Note during the TC observation period there were two (2) CROR 42 and 11 ETOP in effect. Effective As Of: ‑August 07 2015. Divisional Notice PRN 5013/15 issued reinforcing procedures to ensure [Highway 25] is not unduly affected.” Mr. Code stated that he was not satisfied with the divisional notice issued by CN as it did not address directly the issue of non-compliance with rule 103.1(e).

(4) Cross-examination of Mr. Code

[46] Mr. Landry asked the witness to read a section of his e-mail of September 11, 2015 to Mr. Pulak acknowledging CN's response to his inspection report: “I received your corrective actions in regards to the Operations Inspection/Non-compliance letter I sent you dated August 14, 2015 regarding Hi-way 25 crossing in Rivers MB. Thank you for your cooperation. We will continue to monitor Hi-way 25 crossing and advise of the results.” Mr. Code confirmed that he was satisfied with CN's response to the incident despite the divisional notice not specifically addressing non-compliance with rule 103.1(e).

(5) Re-direct examination of Mr. Code

[47] Mr. Code agreed with the Minister's representative that if the crossing signals had malfunctioned, it would not be justified to discipline the train crew.

(6) Examination-in-chief of Ms. Suzanne Madaire-Poisson

[48] Ms. Madaire-Poisson is the chief of compliance and safety with the Railway Safety Directorate of Transport Canada in Ottawa. Her role in that capacity is to implement the new AMP program. Ms. Madaire-Poisson previously held several positions in the Directorate such as chief of policy and regulatory affairs and analyst of the reports of the Transportation Safety Board.

[49] Ms. Madaire-Poisson provided examples of the tools available to the inspector when non‑compliance is identified, such as issuing a Letter of Non-Compliance, a Notice and Order or an AMP. In the case at hand, the inspector populated a file with the key elements of his observations and investigation, gathered evidence, completed the checklist and submitted this to the regional manager, who also completed a section of the form prior to sending it to Transport Canada headquarters in Ottawa for action to be taken. Ms. Madaire-Poisson provided details of her analysis and conclusions in the form of a memorandum to Ms. Brigitte Diogo, the director general of rail safety, recommending the issuance of a Letter of Warning to CN (Exhibit M‑10).

[50] Ms. Madaire-Poison confirmed she had drafted the Letter of Warning addressed to Mr. Sam Berrada, the vice-president of Safety and Sustainability at CN (Exhibit M‑11) on behalf of Ms. Diogo. The letter was not read during the hearing.

[51] Ms. Madaire-Poison confirmed that she was aware of the response letter from Mr. Berrada, dated November 2, 2015 (Exhibit M‑12), and read the following excerpt:

With respect to the incident on September 22, 2015 that is referenced in your letter, this was an isolated situation in which a westbound train had to set off a locomotive in Rivers yard for another train on account of a locomotive failure on that train. The crew on U73981-21 stopped on the bond for the warning system for the crossing at mile 144.6, and when they began to setoff the locomotive to be supplied as a replacement, the crew erred and left equipment on the activation bond.

Instructions for train crews at this crossing are clear in the timetable and signage is in place indicating the limit of the crossing circuit. The train crew involved in this occurrence is being dealt with in accordance with CN's investigation and discipline process. It must be emphasized, however, that the situation was unplanned, and this type of switching does not form part of the normal operations at Rivers MB.

[52] Ms. Madaire-Poisson explained that she had forwarded the letter to the inspector for his assessment. In her words, “what the Region came back with was that this was the same type of response that had been provided by CN in previous events similar to this one”. According to Ms. Madaire-Poisson, these previous events included instances of non-compliance with rules 103.1(e) and 103(d). She indicated that CN did not specify any measures specifically addressing non‑compliance with rule 103.1(e).

[53] On November 5, 2015, CN provided an additional response to the Letter of Warning (Exhibit M‑13). Ms. Madaire-Poisson acknowledged having read the letter and received comments from the Region according to which this additional response still did not address the rule 103.1(e) non-compliance. At that point, Ms. Madaire-Poisson had drafted a memorandum recommending the issuance of a Notice of Violation for approval and signature by Ms. Diogo (Exhibit M‑14).

[54] Ms. Madaire-Poisson explained how she calculated the amount of $45,833.04 for the monetary penalty in accordance with the Transport Canada policy document entitled Guidance on Calculating AMP Amount (Exhibit M‑15). Ms. Madaire-Poisson started with the basic amount for a first B-level violation occurring at a particular location, which amounts to $37,500 (30% of the legislated maximum penalty of $125,000 for a B‑level violation by a corporation). She then added $14,583 (one-sixth of the difference between the basic amount and the maximum) to account for only one aggravating factor, the most important one in her opinion, i.e. the potential danger resulting from the violation. Finally, she reduced the total amount by 12% (two times 6%) to account for two mitigating factors: the fact that CN had cooperated in providing all reasonable assistance to the Minister and the fact that the company had not disputed the violation.

[55] Ms. Madaire-Poisson specified that the calculations and amounts found in the Rail Safety Directorate's guidelines on AMPs were modelled on those applicable to other modes of transportation within Transport Canada's purview.

(7) Cross-examination of Ms. Madaire-Poisson

[56] Mr. Landry questioned Ms. Madaire-Poisson on who she had discussions with in the Region pertaining to operations. Ms. Madaire-Poisson answered that she had not specifically talked to anyone but instead that the discussions normally take place within the Region and the observations and conclusion are then sent to her by the regional director.

[57] In reply to Mr. Landry's questions pertaining to the development of the AMP checklist and the ranking of violations, Ms. Madaire-Poisson replied that they were developed in consultation with Transport Canada rail safety experts in the regions and in headquarters.

[58] Asked whether the history of non-compliance was taken into account when calculating the AMP, Ms. Madaire-Poisson explained that the inspector is asked to populate the checklist and this includes the company's non-compliance history related to the alleged contravention of the designated provision. Ms. Madaire-Poisson did stress two important factors: first, if the non-compliance history is prior to April 1, 2015, it can be identified on the checklist but it is not applicable for the assessment of the AMP since the AMP regime was not in force; second, any non-compliance with another provision is not taken into consideration with respect to the AMP.

[59] Mr. Landry raised several questions pertaining to various rules other than rule 103.1(e) in force at the crossing. Ms. Madaire-Poisson clarified that although there was no long history of non-compliance with rule 103.1(e), there was a long history of the crossing being blocked contrary to other rules and that in the public's perspective, the effect of being stopped at the crossing was the same.

[60] Mr. Landry asked the witness if she had considered that the violation was the result of an error in judgment on the part of the CN crew. Ms. Madaire-Poisson responded that there had been two occurrences of non-compliance with rule 103.1(e) by different crew members in the same month. Considering that the company is a signatory to the rules, it is responsible to find out why the non-compliance is occurring and to resolve the situation.

[61] Mr. Landry also asked Ms. Madaire-Poisson if she had considered issuing the AMP to the employees rather than to the company. She replied that she always looks at that possibility, adding that in this case, the reasoning behind issuing the notice of violation to the company was again that the non-compliance had happened twice in a very short period of time with two different crews.

[62] Asked by Mr. Landry why she had not deemed Mr. Berrada's reply of November 2, 2015 (Exhibit M‑12) to be satisfactory, Ms. Madaire-Poisson replied that she had found it not to address the violation of rule 103.1(e) but rather to focus on rule 103(d). The witness added that she did not believe that disciplining the employees would necessarily be a measure that would ensure compliance with rule 103.1(e).

[63] Mr. Landry asked Ms. Madaire-Poisson to explain the comment “you've made my day” found in an e‑mail dated November 12, 2015 from Mr. Mark Conrad, the regional director for the Prairie and Northern Region at Transport Canada, to Ms. Madaire-Poisson (Exhibit A‑5, Tab H of CN's Compendium of Evidence). She explained that the comment indicated that he was pleased to learn that the file was progressing. She added that she had asked Mr. Conrad if the proposed measures were unreasonable and if any other measures could have been taken by CN in order to ensure that Transport Canada was not holding CN to an unreasonable standard.

[64] Mr. Landry asked Ms. Madaire-Poisson to clarify what information she took into account for the Letter of Warning, to which the witness answered “everything that was provided, meaning the emails, the letters, the inspection reports, the covering letters, the letters of non-compliance, responses from CN, e-mails that went between CN and Transport Canada”.

B. Applicant

(1) Examination-in-chief of Mr. Tim Pulak

[65] Confirming the information found in his résumé (Exhibit A‑6), Mr. Pulak stated that he is employed at CN as superintendent of transportation on the Prairie sub-region, which entails overseeing all transportation and operation crews and ensuring that CN's service plan is executed safely and within the rules.

[66] Mr. Pulak testified that on August 12, 2015, train 105 had to set out an overloaded car and the decision was made to do this at Rivers. The crew pulled up and set out the car, returned to their train and departed. Mr. Pulak continued by explaining that train 105 was categorized as a “premium train”, which means that it runs on a very tight schedule and is treated as a priority in terms of dispatching and operations, and that it is given a minimal workload in order to keep it moving as quickly as possible across western Canada. According to the witness, the stop at Rivers was an extraordinary and unplanned event.

[67] When asked by Mr. Landry if he had any comments pertaining to Mr. Code's video (Exhibit M‑7), Mr. Pulak stated: “Mr. Code made reference that 105 was on track 41 and that's not correct. We would not have put Q105 into the siding. The train was 9,700 feet long. RZ41 is a little over 8,000 feet. So we would not have done that. There was no reason to do that.”

[68] Mr. Pulak explained that once he was made aware of the violation of rule 103.1(e), he brought both the locomotive engineer and the conductor in for a formal employee investigation and disciplinary action commensurate with the violation was determined.

[69] Mr. Pulak then mentioned that Mr. Code's video brought to light certain factors that CN, and the investigating officer in particular, were not aware of relative to that crew. Mr. Pulak continued to say that the crew had switched out a car from the main track into the Rivers yard, which is a switching procedure that has happened in the past and will continue to happen at this location.

[70] Mr. Pulak stated that part of his mandate is to ensure that employees understand the direction that CN is taking with rule compliance and are aware of specific concerns with regard to the company's operations. He added that he personally had discussions following this event with the health and safety committee in both Winnipeg, Manitoba, and Melville, Saskatchewan, which is where the crew responsible for the September 22, 2015 incident was based.

[71] Mr. Pulak confirmed that the crew members involved in the September 22, 2015 violation of rule 103.1(e) were experienced employees on the Rivers subdivision. Mr. Pulak added that in his opinion, the audio file (Exhibit M‑5) demonstrates that the RTC was aware of the situation and took steps to expedite the departure of the train.

[72] Mr. Pulak stated that the rule violation resulted from a lack of judgement on the part of the crew, considering the signs in the field indicating where the bond is located, the fact that the train was relatively short and the written instruction in the timetable footnote.

[73] Mr. Pulak read the third paragraph of the e-mail of November 6, 2015 from Mr. Conrad to Ms. Madaire-Poisson (Exhibit A‑5), which commented on the inadequacy of CN's response. Mr. Pulak disagreed with Mr. Conrad's suggestion that having a vehicle in position to assist with the movement of train crews would not help in addressing the situation.

(2) Cross-examination of Mr. Pulak

[74] Mr. Pulak confirmed that he normally does not get involved in all investigations, nevertheless, considering the nature of the information he received and taking into account the concerns raised by Transport Canada, he had elected to proceed with a formal investigation.

[75] Mr. Pulak mentioned that the two collective agreements applicable to the train crew provide the opportunity to initiate an investigation but require the company to state the offence with regard to which it is seeking to gather facts and evidence. Mr. Pulak added that the investigation into the August 12 incident moved quickly and was completed within two weeks. Mr. Pulak stated that after seeing the Transport Canada video (Exhibit M‑7) he believed that during what appeared to him to be a switching move handled off the main track, the crossing warning system had activated as it was intended to do.

[76] Mr. Pulak confirmed that the investigation of the crew of train 739 with regard to the September 22 incident may have started after the issuance of the monitory penalty. He also added that the investigation had been delayed in part due to the fact that the crew members were based in Melville but were working that day in Rivers. The information was communicated to the adjoining zone and an administrative delay had occurred. Mr. Pulak added that the zones under his responsibility do not extend to Saskatchewan.

[77] When asked if the crew of train 739 were disciplined due to the issuance of a monetary penalty, Mr. Pulak denied that this was the case. He went on to say that CN had been conducting discussions with several stakeholders such as union representatives, health and safety committee members and the Department of Highways and Infrastructure of Manitoba regarding the Highway 25 crossing and steps had been taken with regard to operations, particularly at the west end of the track, in addition to extensive communications with train crew members. CN had determined the amount of discipline necessary to ensure the behaviour was addressed.

[78] When asked by Mr. Villemure if any attempt had been made to find the root cause of the non-compliance, Mr. Pulak replied that this was part of the investigation process as CN wants to understand the mindset of the employees involved at the time of the occurrence, namely whether the tasks and workload gave rise to the situation or a lack of concentration, whether they knew the rule, and whether the situation resulted from a flagrant abuse in how they operate or from a simple mistake. Asked about the timetable, Mr. Pulak replied that he believed it was clear enough for employees to understand, adding that he believed it comes down to communication and preparation.

[79] Mr. Pulak stated that the train 739 crew members from Melville, who were responsible for the violation, were notified by the RTC that they needed to set off a locomotive. Had they stopped at the appropriate location, no violation would have occurred. Mr. Pulak added that it was not that the crew did not want to stop at the correct location, it was simply that they had not. Had they acted without any regard, they would not be working for CN anymore.

[80] Mr. Pulak added that CN, as a class I railway, strives to remove any uncertainty within work processes to ensure safety. In his opinion, communication is a key element. When asked about the RTC's involvement in the non-compliance, Mr. Pulak indicated that the RTC on duty during the non-compliance was investigated and disciplinary action was taken as part of CN's problem-solving process.

[81] Mr. Pulak explained that RTCs have rules and procedures to follow. In addition, in Rivers, they have specific instructions that include crew change locations. Mr. Pulak added that planning and communication is an important role also for the RTC. Mr. Pulak went into details regarding the length of the train, the car overload and how the decision of putting the train on one track rather than another was part of the miscommunication and gap in planning.

[82] Mr. Pulak expressed his disappointment that considering the efforts undertaken with internal managers, operating crews, the Department of Highways and community representatives, and given the high workload on the Rivers Subdivision at the time, the incident had still occurred.

(3) Re-direct examination of Mr. Pulak

[83] Mr. Pulak explained that the investigation was handled by CN's terminal in Saskatchewan. He added that the issue of location, combined with the availability of the train crew (accounting for vacations, hours of work, schedules, etc.), can make scheduling the investigation complicated. He also added that CN has a process to ensure fairness in disciplinary action.

(4) Examination-in-chief of Mr. Brandon Lepp

[84] Mr. Lepp provided details of his résumé (Exhibit A‑7). As the senior manager for signals and communication in CN's engineering department for Western Canada, he is responsible for regulating safety compliance amongst unionized employees, supervisors and managers trough the Western region, as well as capital planning, operating, cost control, rehabilitation planning, upgrades and safety initiatives. He has occupied this position since April 2016. Prior to this, he was the signals and communication manager for Manitoba for over a year, and before that he was a maintenance supervisor for Northern British Columbia.

[85] Relying on a series of plans and diagrams relating to the crossing at mile 144.60 (Exhibits A‑8 A to D), Mr. Lepp provided a detailed technical explanation of how the warning devices at that location work, including the effect of the various sensors as well as warning times and reactivation times. Mr. Lepp then discussed the process for obtaining Transport Canada's approval of the plans for a crossing's circuits and design. The witness went on to describe the hierarchy of signals and the systems that are in place to ensure that safety is maintained should any malfunction occur.

[86] With respect to the August 12, 2015 incident, Mr. Lepp explained the principle of the “premium train” and the importance to ensure this type of train is not unnecessarily delayed. In this case, a car on a premium train was overloaded and, as mentioned earlier in the proceedings, had to be cut off so the remaining cars could continue to their destination. Mr. Lepp went into great details explaining the procedures the crew had to follow, the location of the train and the bond, as well as the necessary manoeuvres to ensure the premium train was on its way. He also explained some of the safety features that had to be maintained during the lifting of the cars.

[87] Mr. Lepp confirmed that after viewing Mr. Code's video (Exhibit M‑7), he believed that the crew had not left anything foul of the bond because as they backed the train up to clear the equipment, one could see the crossing recover. If cars had been left on the bond, the crossing would not have recovered. In addition, Mr. Lepp added that even if the train was on the bond, as soon as the crew cleared the on station track (OST), the signal went to red, which means the crossing stopped ringing.

[88] Mr. Lepp testified that an educational notice was put out to rail traffic controllers instructing them not to line a signal out of the OST track or out of the siding while equipment is foul on that track.

[89] Finally, Mr. Lepp addressed CN's Crossing Call Handling Procedures (Exhibit A‑9). Mr. Lepp explained that if someone had called the 1‑800 number displayed at the crossing to report the incident as it was occurring, the Edmonton office would have immediately alerted the local RTC and protection at the crossing would have been dispatched immediately.

(5) Cross-examination of Mr. Lepp

[90] Mr. Lepp confirmed that he had not attended the health and safety committee meeting pertaining to the September 22 incident. He stated that he had been made aware of the September 22 incident by Mr. Pulak and many others.

[91] Mr. Lepp also confirmed that although he was not directly involved in the investigation, he had responded to questions during a teleconference call pertaining to this incident with regard to the crossing's signals functionalities.

IV. ARGUMENTS

A. Minister

[92] Mr. Villemure stated that since September 22, 2015, Transport Canada has not been made aware of any issues pertaining to rule 103.1; nevertheless, the Minister is still under the impression that CN needed to do more in order to address this situation.

[93] Quoting section 15 of the Transportation Appeal Tribunal of Canada Act, S.C. 2001, c. 29, which states that “the Tribunal is not bound by any legal or technical rules of evidence in conducting any matter that comes before it”, Mr. Villemure pointed out that this informal quality of the Tribunal does not entail that the law does not apply in the administrative setting. Rather, this provision simply speaks to rules of evidence, more specifically to establish that hearsay evidence is admissible.

[94] Mr. Villemure then outlined the statutory and regulatory provisions that apply in the case at hand. Referring to section 17.2 of the Railway Safety Act (“[n]o railway company shall operate…railway equipment…otherwise that in accordance with…the regulations and the rules made under section 19 and 20 that apply to the company”), he submitted that when the rules are breached, they are necessarily breached by operating crews and not by the company itself. However, the intent of Parliament in enacting section 17.2 was to clearly require that railway companies ensure their operations are conducted within the ambit of the rules.

[95] Mr. Villemure then discussed the legal framework allowing for the imposition of an AMP, which establishes a maximum penalty of $50,000 for an individual and $250,000 in the case of a corporation. Mr. Villemure also mentioned the policy-based calculations explained by Ms. Madaire-Poisson in her testimony. He then quoted rule 103.1(e), according to which “equipment must not be allowed to stand so as to cause the unnecessary operation of warning devices”.

[96] Mr. Villemure submitted that all the technical evidence heard during Mr. Lepp's testimony with regard to the electrical circuits had nothing to do with rule 103.1(e), making the argument that as long as equipment is allowed to stand so as to cause the unnecessary operation of warning devices, then the violation has been committed.

[97] In support of the notion of CN's responsibility for the actions of its employees, Mr. Villemure submitted the Supreme Court of Canada case of R. v. Sault Ste. Marie, [1978] 2 SCR 1299. The Court in that case examined what factors should be considered in assessing a due diligence defence where the offence resulted from the actions of a company hired by the City of Sault Ste. Marie. These factors included “whether the accused exercised all reasonable care by establishing a proper system to prevent commission of the offence and by taking reasonable steps to ensure the effective operation of the system”.

[98] Mr. Villemure also brought to the attention of the Tribunal the more recent case of R. v. Weyerhaeuser Canada Ltd., 2000 BCPC 0227, from the Provincial Court of British Columbia in order to demonstrate the ongoing currency of the Supreme Court judgement and further make the case for CN's responsibility for the breach of a rule by its employees.

[99] Mr. Villemure provided an overview of the evidence provided by the Minister to demonstrate the alleged non-compliance. He added that although CN indicated that it would apply disciplinary action following an initial incident, this action did not prevent a second occurrence only five weeks after the first one. Mr. Villemure also explained the assessment of the penalty in the amount of $45,883.04, reiterating that this was based on clear guidelines and policies in place at Transport Canada.

B. Applicant

[100] Mr. Landry submitted that Mr. Pulak provided a strong testimony and that he was clear on the process in place at CN to avoid this type of violation. In addition to the disciplinary action and the investigation, measures were in place before, during and after the August event to prevent re‑occurrence.

[101] Mr. Landry quoted section 42 of the Railway Safety Act, which reads as follows:

42 In any prosecution for an offence under this Act, it is sufficient proof of the offence to establish that it was committed by an employee or agent of the accused, whether or not the employee or agent has been prosecuted for the offence, unless the accused establishes that the offence was committed without the knowledge or consent of the accused and that the accused exercised all due diligence to prevent its commission.

Mr. Landry then added that this section of the Act gives effect to vicarious liability and due diligence as described in Sault Ste. Marie and referenced by Mr. Villemure in relation to an offence, whereas the case at hand concerns a violation under section 40.13 of the Act.

[102] Mr. Landry further argued that section 17.2, which Mr. Villemure invoked in support of CN's liability in this case, does not authorize the Minister of Transport to issue an AMP against CN for the actions or inactions of its employees. Transport Canada would only have been able to do so if the contravention had been proceeded with as an offence, in which case the vicarious liability regime provided by section 42 would have applied, and the defence of due diligence would then have been available to the company.

[103] Mr. Landry added that according to the expressio unius est exclusio alterius canon of statutory interpretation (the expression of one thing excludes all others), the stated application of vicarious liability to offences in section 42 of the Act excludes its application to violations.

[104] Mr. Landry then submitted that CN should only be found liable if it was complicit or if it had approved or ordered the employees' commission of the violation. Mr. Landry argued that CN instead had put in place measures and procedures, provided a specific footnote on the relevant timetable, installed adequate signage and engaged in extensive discussions and communications in order to prevent the violation. The crew members involved were experienced employees whom the company could reasonably trust to apply its directions. The incident had resulted from an unplanned event that gave rise to an error in judgement by the crew.

[105] Mr. Landry concluded this argument by stating that “Transport Canada had the onus to show [the Tribunal] that CN, as a corporation, was complicit, ordered the employees to commit the violation and condoned the action of the crew of train 739 on September 22, 2015”, adding that in the event the Tribunal disagrees with that position, then CN's defence of due diligence should be considered.

[106] Mr. Landry then brought forward several references from case law in support of the applicant's arguments. He started by stating that the factor outlined in Sault Ste. Marie as to whether “the act took place without the accused's direction or approval” is indeed applicable in the case at hand, contrary to the Minister's submission.

[107] Turning then to the 2003 decision by the Manitoba Provincial Court in the case of R. v. Canadian National Railway Company, 172 Mar R (2d), Mr. Landry highlighted the judge's conclusions that “there is no duty imposed on an employer by health and safety laws to anticipate every possible failure” and that “[t]he court cannot attribute the conduct of employees to the employer” where training and procedures were in place and the employee involved had considerable experience.

[108] Mr. Landry referred to this Tribunal's decision is the case of Independence Air Ambulance Corporation v. Canada (Minister of Transport), 2013 TATCE 5, which quoted Air Mikisew Ltd. v. Canada (Minister of Transport), 2009 TATCE 21, in stating that employees cannot be supervised at all times and “[o]nce they have been trained, and management is satisfied that they understand their function at the company, they must be trusted to do their job”.

[109] After having gone over the evidence introduced by the applicant showing CN's due diligence in trying to prevent non-compliance with rule 103.1(e), Mr. Landry argued that the case background presented by the Minister to the Tribunal was heavily based on non-compliance with rule 103(d) instead of 103.1(e) as 103(d) appeared prominently on the decision-making checklist (Exhibit M‑6).

[110] Mr. Landry also mentioned that in the event the Tribunal member was not satisfied with the arguments presented to him, he should consider reducing the amount of the monetary penalty by removing the aggravating factor given the fact that Mr. Rea, as he witnessed the violation, had not contacted CN for the crossing to be manually protected.

C. Minister in Reply

[111] Mr. Villemure argued that when interpreting legislation, the golden rule is that the text of particular sections are not to be read in isolation such as Mr. Landry appeared to have done in quoting section 42 of the Railway Safety Act. In support of this submission, he quoted Driedger's principle that “the words of an Act are to be read in their entire context and in their grammatical and ordinary sense harmoniously with the scheme of the Act, the object of the Act, and the intention of Parliament”.

V. ANALYSIS

[112] As per the charge in the Notice of Violation and the designated provision, the elements of the alleged violation are:

  • On September 22, 2015, at the road-railway public grade crossing located at mile 144.60 on the Rivers Subdivision in Rivers, Manitoba;
  • CN allowed equipment to stand so as to cause the unnecessary operation of warning devices in violation of rule 103.1(e) of the CROR.

[113] If the Minister proves the elements of the violation, the burden is then on the applicant to prove that all due diligence was exercised to prevent the violation. The testimony of Mr. Rea, supported by Exhibits M‑1, M‑2 and M‑5, establishes that on September 22, 2015, CN failed to comply with rule 103.1(e) by allowing equipment to stand so as to cause the unnecessary operation of warning devices. The applicant did not dispute the facts resulting in the violation; therefore, the Minister has proven the elements of the violation.

[114] Before turning to the due diligence defence, the Tribunal will address the applicant's argument that CN is not responsible for the actions of its employees.

[115] The rail industry is a complex and efficient method of ground transportation for people and goods. Members of the industry are governed by their management organizations and oversight is provided by government. Rule 103.1(e) and the other rules forming the CROR were drafted and approved by the rail industry before they were submitted to Transport Canada for final approval to ensure safe railway operations. This was done in accordance with section 19 of the Railway Safety Act, which states that the Minister may, by order, require companies to formulate such rules and section 17.2 of the Act states that a railway company shall operate in accordance with those rules. The railway companies are therefore responsible for ensuring that those rules they have themselves formulated are respected. They cannot simply exculpate themselves by shifting that responsibility onto their employees. Therefore, I do not accept the argument that the company, in this case, is not responsible for the breach of rule 103.1(e).

[116] Furthermore, the Tribunal cannot subscribe to the argument that section 42 of the Railway Safety Act frees the employer of its responsibility for the actions of its employees in the case of a violation like the one at hand. The applicant is right to say that section 42 applies exclusively to offenses but there is a reason for that. This provision is to be interpreted in light of its wording, context and purpose: Rizzo & Rizzo Shoes Ltd. (Re), [1998] 1 SCR 27; Bell ExpressVu Limited Partnership v. Rex, 2002 SCC 42. In the case of a contravention to the Railway Safety Act, its regulations or the CROR, the Minister has the choice to proceed with the contravention as a violation or as an offense, and the Act, in subsection 40.13(4), specifies that a violation is not an offence. Section 42 of the Act applies in the prosecution of an offense which engages penal liability.

[117] In a context of penal prosecution an element of state of mind or mens rea is required, as it can be appreciated in section 126 of the Criminal Code (“wilfully doing anything that [an Act of Parliament] forbids or…wilfully omitting to do anything that it requires to be done”), which is referred to in subsection 40.13(4) of the Act precisely to highlight the difference between a violation and an offence.

[118] In the context of a violation, no element of mens rea is required. Therefore, determining the penal liability of a corporation or proving that such corporation had the state of mind to commit a prohibited act requires provisions such as section 42 of the Railway Safety Act to reflect the complexity of criminal and penal corporate liability and account for the fact that corporations can only act through their employees, agents or officers. But this does not mean that the legislator intended to exclude vicarious liability for violations; in fact, the legislator specifies in subsection 3(2) of the Railway Safety Administrative Monetary Penalties Regulations that a corporation can be liable for up to $125 000 in penalties for a violation of a CROR rule.

[119] While section 42 of the Railway Safety Act engages the liability of an employer in the prosecution of an offense, section 17.2 specifies that a railway company shall operate in accordance with the regulations and rules (such as the CROR) made under sections 19 and 20 that apply to the company. Those rules are designated provisions that can be proceeded with as violations according to paragraph 3(1)(b) of the Railway Safety Administrative Monetary Penalties Regulations. Rule 103.1(e) was, at the time of its existence, a designated provision and a railway company cannot simply exonerate itself from the application of section 17.2 by saying that the actions leading to the violation where taken not by the company but rather by its employees. I therefore conclude on this point, in light of the text of the mentioned provisions, their context and purpose, that CN could indeed be held responsible for the violation and be issued an AMP.

[120] In Sault Ste. Marie, the Supreme Court found that the ability of a corporation to use the due diligence defence in relation to the fault of an employee depends on its ability to demonstrate that it exercised all reasonable care by establishing a proper system to prevent commission of the offence and by taking reasonable steps to ensure the effective operation of the system. The unfortunate event at issue in this case resulted from a sequence of several errors by CN. Although the company made efforts by implementing measures and procedures, as well as having a specific footnote in the timetable, the violation of rule 103.1(e) cannot be justified under the due diligence defence as CN did not demonstrate having taken all reasonable steps through either training or supervision to prevent the violation and the measures taken were clearly insufficient to ensure compliance with the rules established by the industry and approved by Transport Canada. Following the incident of August 12, 2015, CN could have provided all train crews working in the Rivers Subdivision with adequate training specific to rule 103.1(e) as it applies at that location. Then, on September 22, 2015, the train crew would have had increased awareness of the potential problems and their possible solutions. For example, one option would have been to notify the RTC to cancel the permissive signal while letting the equipment stand 20 feet beyond the crossing circuit sign.

[121] Having reviewed the past decisions of this Tribunal presented by the parties such as Independence Air Ambulance Corporation and Air Mikisew, I find that the situation in the present case appears to be substantially different. In Independence Air Ambulance Corporation, a newly formed company was refused an AOC certificate due to the aviation record of another defunct company. In the case of Air Mikisew, the company was found to have exercised its due diligence.

[122] The applicant raised the argument that a reduction of the AMP should apply considering the Transport Canada inspector did not call CN to have the crossing manually protected. It is not the role of the inspector to intervene in an instance where a company is failing to assume its responsibilities unless there is an immediate threat, which was not the case in the situation at issue considering it was single track. After analysis of the amount of the AMP ($45,833.04) based on the evidence presented by Ms. Madaire-Poisson, it appears that all of the elements and calculations were reasonable and accurate. No additional aggravating or mitigating factors for this violation are warranted.

VI. DETERMINATION

[123] The Minister of Transport has proven, on the balance of probabilities, that the applicant, Canadian National Railway Company, contravened rule 103.1(e) of the Canadian Rail Operating Rules and that the imposition of an administrative monetary penalty of $45,833.04 was justified.

[124] The total amount of $45,833.04 is payable to the Receiver General for Canada and must be received by the Transportation Appeal Tribunal of Canada within 35 days of service of this determination.

March 28, 2017

(Original signed)

Gary Drouin

Member