1. Industrial Railways: An Emerging Sector Presentation to the Industrial Railway Safety Conference Michael Bourque President and C.E.O. of the Railway Association of Canada April, 28, 2015 1

2. Canada’s rail franchise

3. Market reach is highly diversified Source: CN, CP Annual Reports and Investor Fact Books, 2013. We enable domestic and international markets

4. Touching exporters, manufacturers, retailers, and farmers Source: RAC, Rail Trends 2014. We move well over $280 B worth of goods each year in Canada

5. Industrial railways are critical partners to the supply chain Typically operate under provincial jurisdiction Operate their own assets and on their own property Move products specific to the company they serve Are not subject to common carrier obligations 5 Nova Chemicals, Joffre, AB. Campotex, Lanigan, SK.

6. We have common issues Noise & vibration Derailments & releases Operating practices Safety Culture Safety Management Systems 6 Class I Shortline carriers Passenger rail Industrial rail

7. Railway challenges are becoming more complex 7 Regardless of the issue, or the type of railway, the reputation of all railways is a shared risk. Rail safety oversight is increasing New regulatory requirements have been introduced: Safety Management Systems Regulations Railway Operating Certificate Regulations Other issues growing in importance All railways face complex issues related to: Community engagement and public perception Land use planning Environmental issues

8. Working together to provide long-term solutions 8 The RAC is a community of railroads Some 60 freight, commuter, intercity and tourist railways. Class 1: CN, CP and US carriers Short line: over 40 across Canada Passenger: Commuter, Intercity, Tourist An affiliation with more than 500 rail industry suppliers. Growing associate membership. Our mission is to: dialogue effectively with all governments and relevant stakeholders: on critical issues relating to the transportations system; and to ensure rail continues to be safe, secure, competitive and accessible.

9. We enable effective partnerships through meaningful dialogue 9 Board of Directors Policy & Advocacy Safety & Operations Management Finance & Audit Short Line Taxation Passenger Human Resources Wireless Communications Dangerous Goods Environment Mechanical Security Medical Safety Culture NEW!

10. There are immediate opportunities to work together 10 Managing dangerous goods safely Developing and updating operating rules Addressing new requirements Member plant and transload facility inspections Emergency response planning and assistance Dangerous goods compliance audits Community engagement and TransCAER ® Modern legislation in place that allows for the efficient review and update of rules Input from relevant stakeholders is critical RAC serves as the industry conduit working with members, labour groups and regulators Increasing and evolving Safety Management Systems Local railway operating requirements Industrial railways can play a critical role in rules, training programs, and best practices.

11. Our open invitation to industrial railways 11 We all have a mutual interest in promoting, maintaining, and enhancing rail safety. Management of the railway sector’s reputation is a responsibility shared by all railways. Industrial railways can make a meaningful contribution to the regulatory and rule development process. The RAC provides the platform to an extensive network of committees and working groups that develop, maintain and update best practices and guidance material. It is in the best interest of railway carriers and industrial railways to work together and develop long-term sustainable solutions to their issues and challenges.