Derailed locomotive CN 9606 came to rest about 240 metres down the canyon embankment. (TSB)

A Canadian National train derailment that killed two people near Lillooet, B.C., in 2006 was caused by an inadequate braking system used in the steep mountain canyon, according to a federal report released Thursday.

The report from the Transportation Safety Board also found CN employees had concerns about the brakes immediately before the derailment in B.C.'s southern Interior.

The report pegged the cause of the derailment on the train's braking system and the fact that risk assessments required by the company's safety management system were not always being performed.

On June 29, 2006, the brakes gave way and the train derailed on a steep descent in the Fraser Canyon heading into Lillooet, sliding hundreds of metres down a mountain.

The conductor and the trainman died, while the locomotive engineer was taken to hospital with serious injuries.

According to the report, the train should have been equipped with a particular type of braking system called dynamic brakes, but wasn't.

BC Rail had used proper brakes

The report also pointed out that when the line was operated by its previous owner, BC Rail, the Crown corporation did use locomotives equipped with dynamic brakes in the steep mountain terrain.

When CN took over the line after buying BC Rail from the provincial government in 2004, it did not use the dynamic brakes.

The TSB also learned that "no risk assessment was done before removing locomotives with dynamic braking from this extreme mountain territory."

The report also found employees were worried about the braking system, but that those concerns were never relayed to management, either formally or informally, and a chance to resolve the issue was lost.

The report called on CN to conduct the required risk assessments.

A representative of CN said the company has already made some changes in its operations and is using dynamic braking systems in all southbound trains in the area.