Background. The transportation sector in Canada generated 56.0% of all NO_x emissions and 9.2% of all PM emissions in the country in 2013. Of these amounts, rail transportation was responsible for 11.1% of NO_x and 4.6% of PM emissions.

The rail industry has been working with the Government of Canada through a series of Memoranda of Understanding (MOU) to reduce emissions since 1995. These voluntary agreements have resulted in railway companies adopting commercially viable and feasible technologies and adjusting operations to reduce emissions.

According to the 2013 Locomotive Emissions Monitoring Program report, the Railway Association of Canada reported that NO_x emissions intensity from total railway operations decreased by 56.1% from 1990, while railway freight traffic increased by 69.6% over the same time period.

In October 2006, the Government of Canada issued a Notice of intent to develop and implement regulations and other measures to reduce air emissions to regulate air emissions, including those from the rail sector. As a bridge to the regulations, the government and industry signed additional MOUs.

The United States started regulating CAC emissions from locomotives in 2000. These regulations were updated in 2008. The US regulations set emission standards for NO_x, PM, HC, CO and standards for smoke opacity which become increasingly stringent over time. Current Tier 4 regulations apply to locomotives manufactured in 2015 or later.

The proposed regulations. The proposed regulations would be aligned with the existing US regulations. The US regulations set emission standards that vary according to the type of locomotive and its year of original manufacture. The proposed Regulations would incorporate the U.S. emission standards and associated testing procedures by reference.

Based on the type of locomotive and the year of original manufacture, new locomotives would be required to meet the increasingly stringent tier level standards for NO_x, PM, HC and CO emissions, as well as smoke opacity. These standards would be incorporated by reference to the US regulations.

Locomotives would be required to meet the applicable tier level standards for their entire useful life and, in certain cases, for their entire service life. The useful life is the period during which the locomotive is designed to properly function in terms of reliability and fuel consumption without being remanufactured, and during which a locomotive is required to comply with all applicable emission standards. The minimum useful life of a locomotive is 10 years. Service life is the total life of a locomotive and ends when the locomotive is permanently removed from service. The typical service life of a locomotive is 40 years.

Line-haul locomotive emission standards
Year of manufacture	Tier	Standards (g/bhp-h)
		NOx	PM	HC	CO
1973–1992	0	8.0	0.22	1.00	5.0
1993–2004	1	7.4	0.22	0.55	2.2
2005–2011	2	5.5	0.10	0.30	1.5
2012–2014	3	5.5	0.10	0.30	1.5
2015 or later	4	1.3	0.03	0.14	1.5

Switch locomotive emission standards
Year of manufacture	Tier	Standards (g/bhp-h)
		NOx	PM	HC	CO
1973–2001	0	11.8	0.26	2.10	8.0
2002–2004	1	11.0	0.26	1.20	2.5
2005–2010	2	8.1	0.13	0.60	2.4
2011–2014	3	5.0	0.10	0.60	2.4
2015 or later	4	1.3	0.03	0.14	2.4

The cost-benefit analysis estimates that the proposed regulations will cost approximately $162.3 million over 10 years, assuming a 7% discount rate and including costs to the railway companies and to the federal government.

It is expected that the proposed regulations would result in a reduction of locomotive emissions of approximately 79.6 kilotonnes and 1.4 kilotonnes of NO_x and PM emissions, respectively (or a reduction of 9.3% and 8.0% of NOx and PM, respectively), over a 10-year analysis period.

The total quantifiable benefits are monetized at approximately $244.9 million over 10 years, assuming a 7% discount rate. This does not include a valuation of the health benefits due to limitations on the availability of the geographic density of these emissions. The net benefits are estimated at approximately $82.7 million over the first 10 years of implementation of the proposed Regulations. Overall, benefits exceed costs by a ratio of approximately 1.5:1, according to the government analysis.

Stakeholders and the public will have until 15 September 2016 to provide feedback. After considering all comments received, Transport Canada will finalize the regulations and publish them in the Canada Gazette, Part II.