In May 2013, two Canadian Pacific Railway trains collided near Medicine Hat, derailing two locomotives and four rail cars and slightly injuring a conductor.
The Transportation Safety Board report released Tuesday says a crew member on one train misread a signal thinking the tracks ahead were clear and other crew didn't pick up on the mistake.
The TSB says the crash shows that traffic control systems need to be upgraded with fail-safe technology to ensure signal recognition errors are detected.
The board also says lead locomotives should be equipped with in-cab video and voice recorders to ensure investigators have more information about the sequence of events leading up to accidents, including operational issues and human factors.
The TSB has made similar recommendations to Transport Canada, the federal regulator, in the past.
"The accident highlights the need for action on two of the TSB's Watchlist issues: following railway signal indications and on-board video and voice recorders," the board said in a release.
"If existing centralized traffic control systems are not enhanced to include physical fail-safe capabilities, signal recognition errors will remain undetected, increasing the risk of train collisions and derailments."
On Nov. 26, the TSB included these concerns on its watch-list of eight key issues it says pose the greatest risk to Canada's transportation system.
At the time, the TSB said it has determined that action taken to date is insufficient and more needs to be done to eliminate the risks.
Canadian Pacific President Keith Creel said the company fully supports the TSB's call for locomotive cab monitoring technology.
"The technology has proven effective in analyzing the cause of railroad accidents, but it's true value is in preventing incidents in the first place," Creel said in a release.
"We reiterate our call for the correct implementation of this tool, which has lowered the frequency of collisions by almost half in similar industries."
Creel said U.S. transit agencies that use such equipment have reported a significant drop in train collisions, injuries and unsafe driving events.
Transport Canada said it supports the voluntary use by companies of voice recorders, and recognizes the safety value of video recorders.
But under the Canadian Transportation Accident Investigation and Safety Board Act recordings can only be used as part of a TSB investigation.
Last year, Transport Canada’s Advisory Council on Rail Safety released a report that said unions oppose locomotive voice and video recorders if they are used for compliance monitoring and disciplinary action by the railways.
Ben Stanford, a Transport Canada spokesman, said the department is discussing recorders with the rail industry and railway unions, but didn't provide any details.
The TSB said the voluntary approach falls short of a clear plan of action to fully address safety and legislative changes are needed.
Canadian Pacific said the safety improvements in the U.S. can't be ignored.
"When the technology can be implemented elsewhere and lead to such remarkable improvements in public safety, the key question is why it wouldn't be put in locomotives as well," Creel said.
— By John Cotter in Edmonton