The Fund for Railway Accidents Involving Designated Goods

The July 2013 derailment in Lac-Mégantic highlighted the need to strengthen the liability and compensation regime for rail in Canada. The railway involved – the Montreal, Maine and Atlantic Railway (MMA) – did not have enough insurance to cover damages, and went bankrupt.

Stronger liability and compensation requirements came into force on June 18, 2016, under the Safe and Accountable Rail Act (the Act). The Act amends the Canada Transportation Act. It ensures that more resources are available, if a rail accident occurs, to:

  • compensate victims
  • pay for clean-up costs
  • protect taxpayers

New measures under the Act:

  • require federally regulated freight railways to hold a minimum insurance of $25 million to $1 billion, based on risk
  • define railway liability, including liability without proof of fault or negligence for crude oil accidents
  • create the Fund for Railway Accidents Involving Designated Goods, which:
    • is financed by crude oil shippers
    • pays compensation when the a railway's mandatory insurance level is not enough to cover the full cost of damages from a crude oil accident

Read more on this page about the Fund and its levies.

On this page …

About the Fund for Railway Accidents Involving Designated Goods (the Fund)

The Fund is financed by a levy on shipments of crude oil by rail. All shippers of crude oil carried by a federally regulated railway in Canada must pay a per-tonne levy on crude oil.

The Fund provides additional compensation for crude oil accidents involving a federally regulated railway. If the damages are higher than the railway's minimum required insurance, the Fund covers all remaining costs.

The Fund is a specified purpose account within the Government of Canada's Consolidated Revenue Fund. The Minister of Transport is able to discontinue and re-impose the levy as needed, for any specified time period.

There is no limit on claims to the Fund. In the unlikely event that accident damages are more than the railway's insurance coverage and the amount in the Fund combined, the Consolidated Revenue Fund would act as a backstop. Any public money loaned from the Consolidated Revenue Fund would be repaid with interest through levies.

The Governor in Council will appoint an Administrator to manage the Fund. The Administrator is responsible for:

  • establishing and paying out claims
  • ensuring records are properly maintained
  • submitting an annual report to Parliament

Levy amounts

The levy is indexed to inflation and adjusted based on changes to the Consumer Price Index. For the fiscal year starting April 1, 2019, the inflation-adjusted amount is $1.76 per tonne.

Responsibility for paying and collecting the levy

Shippers pay the levy. The levy applies to crude oil transported by federally regulated railway in Canada.

Railway companies collect and remit the levy amounts to the Fund. Every railway company that is the first to carry traffic to which the levy applies (at a rate other than an interswitching rate) must collect the levy and remit it.

Deadlines for remitting the levy

The levy must be remitted by the railway company on a quarterly basis in each calendar year. It must be remitted within 30 days after the end of the calendar quarter in which the levy became due. Therefore, the deadlines for remittance are:

  • January 30
  • April 30
  • July 30
  • October 30

How to remit the levy

  1. Submit a cheque - address a cheque to "Receiver General for Canada" and send to the following address:

    Director, Financial Controls and Accounting Services,
    Transport Canada
    Place de Ville, Tower C, 22nd Floor, Mailstop AFFA
    330 Sparks Street
    Ottawa, Ontario K1A 0N5


    Send an electronic transfer – contact the Director of Financial Controls and Accounting Services, Transport Canada, to arrange payment by electronic transfer:

    Telephone: (613) 998-5067

  2. Provide the following information with the payment:
    • the rail origin and destination points for each movement for which a levy was due
    • the shipper associated with each movement for which a levy was due
    • the volume of designated goods carried in each movement for which a levy was due
  3. Use the form letter provided to submit the payment and information:

    Sample payment submission letter

  4. To keep your data safe, contact Amélie Bélanger (; 613-991-6798) and find out how to submit your information on movements for which a levy was due, through Transport Canada's Secure File Transfer process.

Contact us for questions about the Fund

Transport Canada
Rail Policy
Telephone: (613) 991-9344

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