Deputy Minister’s Keenan appearance at PACP on the Report 1, Follow-up Audit on the Transportation of Dangerous Goods, of the Commissioner of the Environment and Sustainable Development held on November 5, 2020

Deputy Minister’s Keenan appearance before the Standing Committee on Public Accounts (PACP) on the Report 1, Follow-up Audit on the Transportation of Dangerous Goods, of the 2020 Fall Reports of the Commissioner of the Environment and Sustainable Development held on November 5, 2020.

On this page

Opening remarks

CESD 2019 Audit Follow-up on Recommendations Standing Committee on Public Accounts

November 5, 2020

Ottawa (Ontario)

Michael Keenan, DM, Transport Canada

Thank you for the invitation to appear before the Standing Committee on Public Accounts today. My name is Michael Keenan and I am the Deputy Minister at Transport Canada. 

As part of the audit of Transport Canada's Transportation of Dangerous Goods Program, the Commissioner for the Environment and Sustainable Development (CESD) issued five recommendations. As the department responsible for overseeing the safe transportation of dangerous goods, we take the findings and recommendations of this audit very seriously and have begun aggressively implementing the recommendations.

As noted in the audit, Transport Canada has made important progress in terms of oversight by:

  • implementing agreements with all provinces and one territory to share data related to the transportation of dangerous goods;
  • clarifying requirements for the review and approval of Emergency Response and Assistance Plans (ERAPs); and
  • adopting a risk-based process to target inspections

Of the approximately 30 million shipments of dangerous goods every year, 99.998% arrive without serious incident, but obviously it's the 0.002% that concerns us the most, which represents about 300 to 400 incidents a year that we're trying to reduce. As we know, the consequences of such incidents can be very tragic indeed.

Following the Lac-Mégantic tragedy, TC began a series of immediate and longer-term actions to further strengthen federal rail safety and the transportation of dangerous goods. Actions were taken under the pillars of reinforcing regulations; reinforcing the oversight regime; promoting open transparent government and community engagement; and enhancing international collaboration.

In terms of reinforcing regulations, TC:

  • introduced a new tank car standard (TC-117), jointly developed with the U.S. to ensure the strength and safety of the next generation of rail tank cars (TC-117);
  • established timelines for the phasing out of less crash resistant tank cars, such as the DOT-111, and accelerated the phase out schedule on three separate occasions; and,
  • introduced emergency response assistance plan requirements for a number of flammable liquids transported by rail, such as for gasoline, ethanol and crude oil.

TC also amended regulations to impose stricter requirements on the securement of unattended trains and to require that railway companies carrying large volumes of dangerous goods reduce the speed of their trains.

Regarding oversight, TC has overseen the implementation of a more robust oversight regime in recent years. The number of oversight personnel employed by the Transportation of Dangerous Goods program has quadrupled from 30 to over 127, and approximately 5900 inspections are planned in the 2020-21, compared to 2300 in 2012-2013.

TC has also improved emergency response by providing greater assistance to first responders and incident command across Canada through the allocation of additional resources to CANUTEC, TC's 24/7 Canadian Transport Emergency Centre operated by TDG.

Furthermore, an Emergency Response Task Force was created.  In 2016, the Task Force provided their final report to Transport Canada, which contained 40 recommendations to improve the emergency response assistance plan program and enhance emergency response, preparedness and training. Transport Canada accepted and implemented all 40 of the Task Force recommendations.

While all these actions represent tremendous progress in improving rail safety and the transportation of dangerous goods, we accept the finding of the CESD and have already implemented important changes to address two of the five recommendations. The first relates to new procedures and training for our inspectors to ensure follow-up on violations are undertaken by companies found to be in non-compliance. The second involves a more rigorous oversight process for ensuring that facilities do not operate with expired registrations.

The other three recommendations will be addressed, over a two-year period, through continued improvements in implementing a national risk-based oversight system, by refining and modernizing data collection efforts to better understand the national rate of regulatory compliance and emerging risks for the transportation of dangerous goods, and by addressing delays in the final approval of emergency response assistance plans. While the completion date for addressing these recommendations is set for Spring 2022, we anticipate that most will be completed sooner.

It is the significant shift to digitizing Transport Canada's programs and taking a more service-oriented approach that I would like to discuss with you.

A couple years ago, Transport Canada embarked on an aggressive transformation plan to revamp and modernize all that it does. As digital technologies and processes are increasingly having an impact on every aspect of work, the shift towards digital government affects how we develop programs and services, and deliver change. To respond to rapid advancements in the transportation sector and the need to continually improve as a regulator, the department's Transformation Agenda will help address findings of the CESD highlighted in this audit and bring improvements to other programs within the department. This agenda will see the department modernize its legislation to be responsive and risk-based, adopt common oversight processes, bolster data sharing and analysis capability, and use digital platforms to improve risk-based oversight to become a more efficient and effective regulator. This work is well underway.

The transformation of the TDG Program is an important element of this overarching plan, which will modernize its information systems and allow it to better capture, analyze and conduct more comprehensive risk-based oversight of regulated companies.  For example, the new TDG Inspector Information System, currently undergoing testing and that will be rolled-out in Spring 2021, will not allow inspections to be closed-off/completed until follow-up confirmations of non-compliances have been addressed and properly documented.

In closing, I trust I have given you a sense of the aggressive actions we have taken over the last several years to make substantial improvements to the TDG safety program.  We are firmly committed to continuing this work based on the recommendations of the- Commissioner for the Environment and Sustainable Development along with our own Transformation Plan.  So we are absolutely committed to improving how we document compliance monitoring, how we hold a company accountable for returning to compliance and how we administer and track emergency response assistance plans.  Underlying all of these efforts is our unwavering commitment to ensuring the safe transportation of dangerous goods in all modes of transport in Canada.

Standing Committee on Public Accounts (PACP)

Date: Thursday, November 5, 2020

Time: 11:00AM – 1:00-PM

Location: Webcast through Zoom (videoconference)

Subject: Study of Report 1—Follow-up Audit on the Transportation of Dangerous Goods of the 2020 Fall Reports of the Commissioner of the Environment and Sustainable Development

Witnesses:

  • Andrew Hayes, Interim Commissioner of the Environment and Sustainable Development
  • Michael Keenan, Deputy Minister of Transport
  • Aaron McCrorie, Associate Assistant Deputy Minister, Safety & Security
  • Benoît Turcotte, Director General, Transportation of Dangerous Goods

Opening Remarks: Deputy Minister to deliver remarks (5 mins)

Question of witnesses:

For the first round of questioning, six (6) minutes (for both question and answer) to a representative of each party in the following order (24 mins):

  1. Conservative Party
  2. Liberal Party
  3. Bloc Québécois
  4. New Democratic Party

For the second and subsequent rounds, time allocation is as follows (25 mins):

  1. Conservative (5 mins);
  2. Liberal (5 mins);
  3. Bloc Québécois (2.5 mins);
  4. New Democratic Party (2.5 mins);
  5. Conservative (5 mins);
  6. Liberal (5 mins).

About PACP:

When the Speaker tables a report by the Auditor General in the House of Commons, it is automatically referred to the Public Accounts Committee. The Committee selects the chapters of the report it wants to study and calls the Auditor General and senior public servants from the audited organizations to appear before it to respond to the Office of the Auditor General's findings. The Committee also reviews the federal government's consolidated financial statements – the Public Accounts of Canada – and examines financial and/or accounting shortcomings raised by the Auditor General. At the conclusion of a study, the Committee may present a report to the House of Commons that includes recommendations to the government for improvements in administrative and financial practices and controls of federal departments and agencies.

Government policy, and the extent to which policy objectives are achieved, are generally not examined by the Public Accounts Committee. Instead, the Committee focuses on government administration – the economy and efficiency of program delivery as well as the adherence to government policies, directives and standards. The Committee seeks to hold the government to account for effective public administration and due regard for public funds. 

Pursuant to Standing Order 108(3) of the House of Commons, the mandate of the Standing Committee on Public Accounts is to review and report on: 

  • The Public Accounts of Canada; 
  • All reports of the Auditor General of Canada; 
  • The Office of the Auditor General's Departmental Plan and Departmental Results Report; and, 
  • Any other matter that the House of Commons shall, from time to time, refer to the Committee.   

Reason for inviting Transport Canada:

The House of Commons' Standing Committee on Public Accounts is inviting the Deputy Minister of Transport Canada to appear in view of its study of Report 1—Follow-up Audit on the Transportation of Dangerous Goods of the 2020 Fall Reports of the Commissioner of the Environment and Sustainable Development.

Master Overview of the Committee

Standing Committee on Public Accounts (PACP)

Mandate of the Committee

When the Speaker tables a report by the Auditor General in the House of Commons, it is automatically referred to the Public Accounts Committee. The Committee selects the chapters of the report it wants to study and calls the Auditor General and senior public servants from the audited organizations to appear before it to respond to the Office of the Auditor General's findings. The Committee also reviews the federal government's consolidated financial statements – the Public Accounts of Canada – and examines financial and/or accounting shortcomings raised by the Auditor General. At the conclusion of a study, the Committee may present a report to the House of Commons that includes recommendations to the government for improvements in administrative and financial practices and controls of federal departments and agencies.

Government policy, and the extent to which policy objectives are achieved, are generally not examined by the Public Accounts Committee. Instead, the Committee focuses on government administration – the economy and efficiency of program delivery as well as the adherence to government policies, directives and standards. The Committee seeks to hold the government to account for effective public administration and due regard for public funds.

Pursuant to Standing Order 108(3) of the House of Commons, the mandate of the Standing Committee on Public Accounts is to review and report on:

  • The Public Accounts of Canada;
  • All reports of the Auditor General of Canada;
  • The Office of the Auditor General's Departmental Plan and Departmental Results Report; and,
  • Any other matter that the House of Commons shall, from time to time, refer to the Committee.

The Committee also reviews:

  • The federal government's consolidated financial statements;
  • The Public Accounts of Canada;
  • Makes recommendations to the government for improvements in spending practices;
  • Considers the Estimates of the Office of the Auditor General.

Other Responsibilities:

  • The economy, efficiency and effectiveness of government administration;
  • The quality of administrative practices in the delivery of federal programs; and,
  • Government's accountability to Parliament with regard to federal spending.

TBS-Related Committee Activity from the end of the 42nd Parliament

Report:

  • Call Centres, of the 2019 Spring Reports of the Auditor General of Canada (tabled: June 19, 2019)
    • GR requested, but cancelled by Parliamentary dissolution Recommendations made to TBS:
      • (#4) Provide the Committee a report on progress made in clarifying direction so that service standards follow TB policy, that standards are published, and that performance results and transparent and verified.
      • (#5) Provide the Committee a report on progress in integrating call centres as part of the government-wide approach to client services.

Recommendations made to SSC:

  • (#6) Provide the Committee a report outlining progress made in modernizing call centres.

(SSC sent an update to the Committee in July and could be called to provide a response)

Committee Members
Chair
Kelly Block Conservative Carlton Trail—Eagle Creek New Member
Vice-chair
Lloyd Longfield Liberal Guelph Returning Member
Maxime Blanchette- Joncas Bloc Québécois Rimouski-Neigette— Témiscouata—Les
Basques
Returning Member
Public Accounts Critic
Members
Luc Berthold Conservative Mégantic—L'Érable New Member
TBS Critic  
Phillip Lawrence Conservative Northumberland— Peterborough South New Member
National Revenue
Critic
Len Webber Conservative Calgary Confederation New Member
Matthew Green New Democratic Party Hamilton Centre Returning Member
TBS Critic
Kody Blois Liberal Kings—Hants New Member
Greg Fergus Liberal Hull—Alymer Returning Member (Non-voting - 42nd Parliament)
Parliamentary Secretary TBS and
Digital Government
Francesco Sorbara Liberal Vaughan—
Woodbridge
Returning Member
(43rd-1 Parliament)
Jean Yip Liberal Scarborough—
Agincourt
Returning Member
(42nd Parliament)

TBS Related Committee Activity – 43rd Parliament, 2nd Session

Anticipated Business

  • Public Accounts of Canada 2020
  • Spring 2020 Reports of the Auditor General of Canada

Meeting Summaries

Thursday, October 22, 2020 - Orientation Briefing (CAAF & Past Chairs)

The Canadian Audit and Accountability Foundation (CAAF) appeared for the first hour. The CAAF explained the role of the PACP Committee and made suggestions on how the Committee conduct its business in order to be most effective.

The four former PACP chairs appeared in the second hour. The witnesses emphasized the role of PACP in holding departmental officials accountable and encouraged the members adopt a non- partisan, collaborative approach to their work.

Thursday, October 15, 2020 – Election of Chair

The Committee held the first meeting of the second session of the 43rd Parliament. Ms. Kelly Bloc  (CPC) was named the Chair of the Committee, and Mr. Lloyd Longfield (LPC) and M. Maxime Blanchette Joncas (BQ) were re-instated as first and second Vice-Chairs.

The Committee passed several routine motions, including a motion that was adopted at several other committees to have the witnesses provide opening remarks 72 hours in advance whenever possible, opening remarks from witnesses will also be limited to 5 minutes. Additionally, a series of motions requiring the organizations under performance audits by the Office of the Auditor General to provide action plans to the Committee were also adopted.

The Committee moved into regular business to consider motions proposed by all parties for the future studies of the Committee.

The NDP moved a motion to invite the past Chairs to do an orientation session for the current Committee. The LPC suggested an amendment, which was accepted by the NDP, to include the Canadian Audit and Accountability Foundation (CAAF) in the orientation session. The motion was  adopted with the amendment. The Committee agreed this meeting should be a priority.

The CPC moved a motion to invite the Auditor General for the next meeting of the Committee for  one hour in cameraand one hour in public. The motion was amended to allow for scheduling flexibility for the Auditor General to appear for the next or subsequent meeting. The motion was adopted with the amendment.

The first meeting between Members was cordial, productive and was adjourned an hour earlier than scheduled.

TBS Related Committee Activity – 43rd Parliament, 1st Session

Anticipated Business

  • Public Accounts of Canada 2019
  • Fall 2019 and Spring 2020 Reports of the Auditor General of Canada

Meeting Summaries

Thursday, February 27, 2020 – Briefing with the Office of the Auditor General

The Committee met to receive a 90-minute introductory briefing from the Office of the Auditor General of Canada (OAG) and to discuss future Committee business in camera. The issue of adequate funding for the OAG figured most prominently in exchanges between Committee members and witnesses. The interim Auditor General echoed comments made during the previous Parliament suggesting his Office's current funding has not allowed it to effectively deliver on its mandate or to keep pace with increases in Government spending. There was also discussion on the potential establishment of a separate independent funding process or mechanism through which the OAG could make funding requests, instead of having to make the request through the Department of Finance's budget exercise.

Tuesday, February 25, 2020 – Election of Chair

Dean Allison (CPC) was elected Chair of the Committee. Mr. Allison was a member of PACP in the first session of the 38th Parliament. Lloyd Longfield (LPC) was elected first vice-chair; Maxime Blanchette-Joncas (BQ) was elected second vice-chair by secret ballot. The Committee adopted a number of standard routine motions. Of note, the Committee adopted a motion requiring that organizations invited to appear on the topic of an OAG report submit their action plans to the Committee no later than 48 hours before their appearance (in the 42nd Parliament, this submission was required prior to an appearance, “when feasible.”) During discussion on future Committee business, Pat Kelly (CPC) raised the issue of perceived inadequate government funding of the OAG. The matter received some attention during the 42nd Parliament and has been raised in the 43rd Parliament in the context of the CPC Opposition Motion calling on the AG to conduct an audit of the Government's “Investing in Canada Plan,” adopted by the House on

January 29, 2020.

Kelly Block (Saskatchewan - Carlton Trail—Eagle Creek)

Conservative
Chair

Kelly Block
  • Elected as the Member of Parliament in 2015 for Carlton Trail— Eagle Creek, previously for Saskatoon—Rosetown—Biggar from 2008-2015
  • Served as vice-chair on the Standing Committee on Trade, Infrastructure and Communities in the 42nd Parliament.
  • Member of the Liaison Standing Committee.
  • Previous member of the Standing Committee of Government Operations and Estimates in the 43rd and 41st Parliament, the Standing Committee of Finance in the 40th Parliament.
  • Served as the Opposition critic for Public Services and Procurement Canada (appointed by Andrew Scheer).
  • Prior to her election, Mrs. Block served two terms as the first female mayor of Waldheim, Saskatchewan, as chairperson of the Gabriel Springs Health District, and was awarded the Maclean's Parliamentarian of the Year – Rising Star – Award in June 2010.

Interest in TBS Portfolio

    • 43rd Parliament
      • Written Questions:
        • Topics included: the acquisition of government buildings for departments or agencies and rented space in government buildings
      • Committees (OGGO):
        • Questioned officials about how the government will prioritize the signed PPE manufacturer contracts. Showed concern that Finance, and the Government of Canada isn't preparing and releasing a budget for Canadians.
        • Questioned TBS officials on providing guidelines for sole-source government contracts.
      • Committees (COVI):
        • Requested that PSPC give the names of companies in sole-sourced PPE Contracts (and how many of those companies were Canadians).
      • Question Period:
        • Asked about PSPC missing its office modernization goal by 50% and if the minister and her cabinet colleagues would be cut off from further renovations.
    • 42nd Parliament
      • Written Questions:
        • Topics included: the sale of federally owned airports and budgets for  Minister's Offices

Lloyd Longfield (Ontario—Guelph)

Liberal
First Vice-Chair

Lloyd Longfield
  • Elected as the Member of Parliament for the riding of Guelph in 2015.
  • Former member of the Public Accounts Committee (PACP) in the 43rd Parliament and is a standing Member of the Environment and Sustainable Development Committee (ENVI).
  • Former Executive Director of the Guelph Chamber of Commerce, and former business executive.

Interest in TBS Portfolio

  • 43rd Parliament
    • Nothing to note.

Maxime Blanchette-Joncas (Québec—Rimouski-Neigette – Témiscouata – Les Basques)

Bloc Québécois
Second vice-chair

Maxime Blanchette-Joncas
  • Elected as the Member of Parliament for Rimouski-Neigette— Témiscouata—Les Basques in the 2019 federal election.
  • BQ Critic for Public Accounts
  • Preceded in his riding by Guy Caron who served as the leader of the NDP from 2017 to 2019.
  • Business Administration graduate from the University of Quebec in Rimouski and former administrative officer at the Business Development Bank of Canada.
  • Was regional president of the Youth Forum of the Bloc Québécois.

Interest in TBS Portfolio

  • 43rd Parliament
    • Written Questions:
      • Topic Included: Asked questions regarding Government services in the Lower St. Lawrence.
    • Committees (PACP):
      • Questioned officials about the reluctance to enforce recommendations made by the Auditor General. Showed concern for the lack of oversight of all processes involving the Phoenix pay system, including procurement, tendering and development.
    • Question Period:
      • Topics Included: Expressed concern regrading the share of contracts the Government gave to Davie shipyard under the national shipbuilding strategy and emphasized that the Bloc Québécois plans on promoting the Davie shipyard to ensure that it gets its fair share.

Luc Berthold (Mégantic—L'Érable)

Conservative
Member

Luc Berthold
  • Elected as the Member of Parliament for Mégantic—L'Érable in 2015.
  • Critic for TBS.
  • Previously the Vice-Chair of the Standing Committee on Transport, Infrastructure and Communities, and the Standing Committee on Agriculture and Agri-Food.
  • Prior to his election, Mr. Berthold was Nathalie Normandeau's Political Assistant, and communications advisor for the Leader of the Official Opposition in 1999, the Interim Director of communications for Quebec's Liberal Party in 2006, and worked as a speaker, coach and gave leadership training sessions.

Interest in TBS Portfolio

  • 43rd Parliament
    • Written Questions:
      • Topics Included: Asked questions regarding Infrastructure projects, and about the Building Canada Fund.
    • Committees (TRAN):
      • Questioned how many projects have been announced and funded under the Investing in Canada infrastructure plan, and showed concern that members of the Liberal Party voted against additional funding to the Auditor General.
    • Committees (AGRI):
      • Requested information regarding what repercussions opening up the Canadian market to the U.S. would have on supply managed producers?
    • Question Period:
      • Expressed concern that the Liberal government failed to spend 40% of the promised funding for infrastructure and asked the President of the Treasury Board to account for why.
      • Asked the President of the Treasury Board to explain why the federal government did not provide any compensation for egg and poultry producers?
      • Asked that with the additional funding in these supplementary estimates (2019-2020), how many aviation technicians and pilots would be hired to expand the defence team?
  • 42nd Parliament
    • Written Questions:
      • Asked question about Atlantic Canada Opportunities Agency contracts.
      • Asked about Infrastructure funding.
      • Proposed tax increases on small businesses.

Phillip Lawrence (Northumberland—Peterborough South)

Conservative
Member

Phillip Lawrence
  • Elected as the Member of Parliament for the riding of Northumberland—Peterborough South in the 2019 federal election.
  • Shadow Minister of National Revenue.
  • Former member of Standing Committee of Justice and Human Rights.
  • Prior to his election, Mr. Lawrence received his BA from Brock University in Political Science, he attended Osgoode Hall Law School and the Schulich School of business to obtain his law degree and MBA, and volunteered at the Financial Planning Standards Council.

Interest in TBS Portfolio

  • 43rd Parliament
    • Written Questions:
      • Topics Included: gave Notice regarding the contract given to Security Council Report.
    • Committees (AGRI):
      • Questioned officials about what the total cost of the carbon tax is to agriculture.
    • Committees (COVI):
      • Asked why the Prime Minister sole-sourced a contract for over $100 million to buy two brand new private jets to add to the government's fleet. Questioned why the military was given 40 year old F-18 planes while the Prime Minister sole-sourced $100 million dollar private jets?

Len Webber (Calgary Confederation)

Conservative
Member

Len Webber
  • Elected as the Member of Parliament for the riding of Calgary Confederation in 2015.
  • Former Vice-Chair of the Standing Committee on Health in the 42nd Parliament.
  • Previously a member on the Standing Committee on Health, the Subcommittee on Sports-Related Concussions in Canada of the Standing Committee on Health and the Subcommittee on Agenda and Procedure of the Standing Committee on Health.
  • Prior to his election, Mr. Webber was a Member of the Legislative Assembly of Alberta, representing the constituency of Calgary- Foothills from 2004 to 2014, work as an apprentice electrician and managed his own contracting company for 10 years, and served as vice president and director of the Webber Academy, a private, non-profit school in southwest Calgary for children from junior kindergarten to grade 12 founded by his father.

Interest in TBS Portfolio

  • 43rd Parliament
    • Written Questions:
      • Topics Included: questions regarding Canada First Defence Strategy projects, and government-issued credit cards.
    • Committees (HESA):
      • Questioned officials about the Supplementary estimates (B) 2019-2020 in regard to an approximate $5 million dollars of funding for the advisory committee on the charitable sector, the Canada workers benefit, and the organ and tissue donor registry. The member continued to ask whether the federal government had reached an agreement with the provinces and territories to create a national organ donor registry, and if that is what the money was for?

Matthew Green (Ontario—Hamilton Centre)

NDP
Member

Matthew Green
  • Elected as the Member of Parliament foe Hamilton Centre in the 2019 federal election in the riding formerly held by NDP MP David Christopherson.
  • NDP Critic for National Revenue/CRA, Public Services and Procurement.
  • Former Councilor for the City of Hamilton (2014 to 2018).
  • Member of the House of Commons Standing Committee on Public Accounts (PACP), the Standing Committee on Government Operations and Estimates (OGGO), and the Subcommittee on Agenda and Procedure of the Standing Committee on Government Operations and Estimates.
  • Member of the Canada-Africa Parliamentary Association (CAAF) and the Canadian Section of ParlAmericas (CPAM).

Interest in TBS Portfolio

  • 43rd Parliament
    • Written Questions:
      • Topics Included: questions regarding tax fairness motion, and a Large Employer Emergency Financing Facility.
    • Committees (ETHI):
      • Questioned how often Prime Minister, Justin Trudeau asked the Office of the Conflict of Interest and Ethics Commissioner for advice.
    • Committees (OGGO):
      • Asked if Deloitte was a procurement expert.
      • Asked the Procurement Ombudsman what mechanisms are in place to ensure that the businesses that have received funds and government contracts have actually used them for their intended purpose? Does this office play a role in mediating the results of the contracts that have been put in place, or is that left up to individual departments?
      • Expressed concern regarding whether compensation has been settled for all employees affected by Pheonix.
    • Question Period:
      • Topics Included: questions concerning outsourcing of government contracts & dismissal of a public servant for comments made about the Prime Minister. Expressed concern for Government Accountability.

Kody Blois (Kings—Hants)

Liberal
Member

Kody Blois
  • Elected as the Member of Parliament for the riding of Kings—Hants in the 2019 federal election, in the riding formerly held by former TBS President Scott Brison.
  • Current member of the Standing Committee for Agriculture and Agri-Food, and the Subcommittee on Agenda and Procedure of the Standing Committee on Agriculture and Agri-Food.
  • Former member of the Standing Committee for Agriculture and Agri-Food, and the Standing Committee on Public Accounts.
  • Blois completed degrees in commerce, law, and public administration - which sparked his interest in serving his community.

Interest in TBS Portfolio

  • 43rd Parliament
    • Committee (ARGI):
      • Made reference to his predecessor, Scott Brison, having been a part of an initiative under the Treasury Board to study how the government can lower GHG emissions for farmers. Asked what the government was doing to ensure green agriculture.

Greg Fergus (Hull—Alymer)

Liberal
Member
Parliamentary Secretary to the President of the Treasury Board and Minister of Digital Government

Greg Fergus
  • Elected as the Member of Parliament for the riding of Hull—Aylmer in 2015.
  • Member of the Standing Committee on Access to Information, Privacy and Ethics.
  • Former member of the Standing Committee on Finance, and the Standing Committee on Public Accounts.
  • Current and Former Parliamentary Secretary to the President of the Treasury Board and Minister of Digital Government. Former Parliamentary Secretary to the Minister of Innovation, Science and Economic Development.
  • Former National Director of the Liberal Party of Canada and former political staffer in various Ministerial offices.

Interest in TBS Portfolio

  • In the 43rd Parliament:
    • Signs Order Paper Question responses on behalf of the President of the Treasury Board and the Minister of Digital Government.
    • QP: Answered a question on the security and protection of Canadians' personal information.

Francesco Sorbara (Vaughn—Woodbridge)

Liberal
Member

Francesco Sorbara
  • Elected as the Member of Parliament for the riding of Vaughan— Woodbridge in 2015.
  • Member of the Standing Committee on Access to Information, Privacy and Ethics.
  • Former member of the Standing Committee on Finance, as well as the Subcommittee on Agenda and Procedure of the Standing Committee on Finance, and the Standing Committee on Public Accounts.
  • Parliamentary Secretary to the Minister of National Revenue.
  • Sorbara is a chartered financial analyst and worked in the global financial markets for nearly 20 years in both Canada and the United States for Scotiabank, JPMorgan Chase, and global credit rating agency DBRS.

Interest in TBS Portfolio

  • In the 43rd Parliament:
    • Committee (FINA):
      • Asked is Ms. Bahen believed it was appropriate for the government, for political parties, to mandate audits of charities.

Jean Yip (Scarborough—Agincourt)

Liberal
Member

Jean Yip
  • First elected in a by-election on December 11, 2017 as the Member of Parliament for the riding of Scarborough—Agincourt. Elected in 2019 as the Member of Parliament for the riding of Scarborough—Agincourt.
  • Current member of the Special Committee on Canada-China Relations.
  • Former member of the Public Accounts committee, and the Government Operations and Estimates Committee.

Interest in TBS Portfolio

  • 43rd Parliament
    • Nothing to note.

Fall 2020 - Reports of the Commissioner of the Environment and Sustainable Development to the Parliament of Canada

Independent Auditor's Report

Report 1

Follow-up Audit on the Transportation of Dangerous Goods

Performance audit reports

This report presents the results of a performance audit conducted by the Office of the Auditor General of Canada (OAG) under the authority of the Auditor General Act.

A performance audit is an independent, objective, and systematic assessment of how well government is managing its activities, responsibilities, and resources. Audit topics are selected on the basis of their significance. While the OAG may comment on policy implementation in a performance audit, it does not comment on the merits of a policy.

Performance audits are planned, performed, and reported in accordance with professional auditing standards and OAG policies. They are conducted by qualified auditors who

  • establish audit objectives and criteria for the assessment of performance
  • gather the evidence necessary to assess performance against the criteria
  • report both positive and negative findings
  • conclude against the established audit objectives
  • make recommendations for improvement when there are significant differences between criteria and assessed performance

Performance audits contribute to a public service that is ethical and effective and a government that is accountable to Parliament and Canadians.

The report is available on our website at www.oag-bvg.gc.ca.

Ce document est également publié en français.

© Her Majesty the Queen in Right of Canada, as represented by the Auditor General of Canada, 2020.

Cat. No. FA1-26/2020-1-1E-PDF ISBN 978-0-660-34138-5

ISSN 2561-1801

Table of Contents

  • Introduction
  • Background
  • Focus of the audit
  • Findings, Recommendations, and Responses
  • Transporting dangerous goods by rail, road, ship, and air
    • Transport Canada still had shortcomings in its oversight of dangerous goods, despite having made some progress
      • Incomplete information for the risk-based planning of inspections
      • Inadequate follow-up on violations
      • Clear roles and responsibilities for compliance oversight
      • Incomplete performance measurement
      • Incomplete reviews of emergency response assistance plans
  • Transporting dangerous goods by pipeline
    • The Canada Energy Regulator improved its compliance oversight
      • Improved information management for compliance oversight
      • Incomplete documentation on the analysis of pipeline approval conditions
      • Improved follow-up on non-compliance
  • Conclusion
  • About the Audit
  • List of Recommendations

Introduction

Background

Transportation of dangerous goods

A pipeline being prepared for underground installation
A pipeline being prepared for underground installation
Photo: Canada Energy Regulator
 

1.1 Dangerous goods are solids, liquids, or gases that when spilled or released have the potential to harm the health of Canadians and other living organisms, property, or the environment. These goods play a key part in Canada's economy and society. Dangerous goods are transported throughout Canada by rail, road, ship, air, and pipeline. Examples of dangerous goods are explosives, toxic gases, flammable liquids and solids, infectious substances, radioactive materials, and corrosive chemicals.

1.2 Dangerous goods also include the crude oil, petroleum products, natural gas liquids, and natural gas that move through the approximately 72,000 kilometres of federally regulated pipelines throughout Canada. According to the Canada Energy Regulator (formerly the National Energy Board), roughly $100 billion worth of

energy products were shipped in these pipelines during each of the last few years.

1.3 Spills and releases of dangerous goods can happen with any mode of transportation. Therefore, these goods require special precautions

to ensure their safe transportation. Both Transport Canada and the Canada Energy Regulator aim to prevent spills and releases of dangerous goods by monitoring and enforcing industry compliance with legislation and standards.

1.4 The Transportation of Dangerous Goods Act, 1992 and its regulations govern dangerous goods shipped by rail (Exhibit 1.1), road, ship, and air. Under the act and regulations, Transport Canada's responsibilities include

  • conducting inspections of facilities and sites that handle, offer for transport, transport, or import dangerous goods
  • carrying out investigations and enforcement actions, where required, to ensure immediate compliance and promote future compliance
  • approving emergency response assistance plans for companies regulated by the act
Exhibit 1.1 Volume of all dangerous goods shipped by rail across Canada
Exhibit 1.1 Volume of all dangerous goods shipped by rail across Canada
 

1.5 During our audit period, the National Energy Board became the Canada Energy Regulator. The regulator administers the Canadian Energy Regulator Act and its regulations, which replaced the National Energy Board Act. The act and its regulations apply to those pipelines that cross provincial, territorial, or national boundaries. The regulator's oversight applies to the entire life cycle of a pipeline (and related infrastructure), including planning and application, construction, operation, and decommissioning and abandonment. The regulator performs activities to verify that companies comply with regulatory requirements and meet their pipeline approval conditions.

What we found in our 2011 and 2015 audits

1.6 This audit follows up on selected recommendations from our 2011 and 2015 audit reports:

  • 2011 December Report of the Commissioner of the Environment and Sustainable Development, Chapter 1—Transportation of Dangerous Products
  • 2015 Fall Reports of the Commissioner of the Environment and Sustainable Development, Report 2—Oversight of Federally Regulated Pipelines

1.7 In our 2011 audit, we found that Transport Canada

  • had no national risk-based compliance inspection plan
  • failed to consistently follow up to ensure that companies took corrective action on instances of non-compliance
  • lacked clear roles and responsibilities for monitoring compliance with the act and regulations
  • could not report on the rate of regulatory compliance because of the limits of the department's performance measurement system
  • did not grant final approval for nearly half of the emergency response assistance plans in place for regulated companies

1.8 In our 2015 audit, we found that the National Energy Board (former name of the Canada Energy Regulator)

  • failed to adequately determine whether companies met pipeline approval conditions
  • did not systematically verify that companies took corrective actions to return to compliance
  • had inadequate information management systems to track and document company compliance and the board's compliance oversight activities

United Nations' Sustainable Development Goals

1.9 In September 2015, Canada committed to the United Nations' 2030 Agenda for Sustainable Development. In 2017, the Office of the Auditor General of Canada committed to examining through our audit work how federal organizations are contributing to the United Nations' Sustainable Development Goals. The matters examined in this audit relate to Goal 3: Good health and well-being. This goal has the associated target 3.9: “By 2030, substantially reduce the number of deaths and illnesses from hazardous chemicals and air, water and soil pollution and contamination.”

1.10 Transport Canada's sustainable development strategy states that the department's action to contribute to this target and goal is to prevent environmental emergencies or mitigate their impact in communities.

Focus of the audit

1.11 This audit focused on the extent to which Transport Canada and the Canada Energy Regulator implemented recommendations from our 2011 and 2015 reports regarding these organizations' compliance and enforcement responsibilities for the safe transportation of dangerous goods. This audit also focused on whether the organizations followed up with companies that had contravened regulations to ensure the companies returned to compliance, among other things.

1.12 This audit is important because accidents involving the transportation of dangerous goods can have tragic consequences, including loss of life and significant damage to property and the environment. For example, if released during transportation, chlorine used in purifying water supplies and anhydrous ammonia used in fertilizing crops could spread easily under certain conditions and pose a hazard to health.

1.13 More details about the audit objective, scope, approach, and criteria are in About the Audit at the end of this report (see pages 22–26).

Findings, Recommendations, and Responses

Overall message

1.14 Overall, we found that since our 2011 audit of the transportation of dangerous products, Transport Canada had made some improvements in the areas we followed up on, but we also found that there was still

important work to be done. For example, we found that the department still had not followed up on some violations or granted final approval to many emergency response assistance plans. We also found that, although Transport Canada implemented our recommendation to develop a national risk-based system to prioritize its inspections, the underlying data was incomplete and outdated. Transport Canada has more progress to make to address the problems we identified in order to support the safe transportation of dangerous goods.

1.15 We also found that since our 2015 audit of the oversight of federally regulated pipelines, the Canada Energy Regulator had largely implemented the 3 recommendations that we followed up on. For example, it implemented an information management system to improve the tracking and documenting of its compliance oversight activities, and it improved its verification that regulated companies had taken corrective action to address non-compliance.

Transporting dangerous goods by rail, road, ship, and air

Context

1.16 One of Transport Canada's functions in its oversight of dangerous goods is conducting inspections of companies that handle, offer for transport, transport, or import these materials. According

to the department, its Transportation of Dangerous Goods Program conducts more than 5,000 of these inspections every year, up from approximately 2,000 as we reported in 2011. The program's spending also rose from $13.9 million in the 2011–12 fiscal year to $36.2 million in the 2018–19 fiscal year. During that same period, the program's full-time-equivalent staff increased from 113 to 290.

1.17 Transportation of Dangerous Goods Program staff conduct inspections at rail, marine, road, and air facilities and buildings where dangerous goods are manufactured, stored, or received. These inspectors are responsible for monitoring companies' compliance with legislation. For example, if there are violations in documentation, training, labelling, or the packaging and containers used to transport dangerous goods, inspectors can require companies to take corrective actions. Inspectors are also expected to follow up to ensure that companies return to compliance, and if not, inspectors may take other enforcement measures, such as issuing orders to detain goods.

1.18 Another of Transport Canada's key oversight functions is reviewing emergency response assistance plans prepared by companies transporting dangerous goods to verify that the plans comply with the Transportation of Dangerous Goods Act, 1992 and its regulations. The act requires companies to have an approved emergency response assistance plan before handling, offering for transport, transporting, or importing certain quantities or concentrations of certain dangerous goods. These plans outline what is to be done to respond if dangerous goods that endanger, or could endanger, public safety are released while being handled or transported. These plans must demonstrate that specialized personnel and equipment are available in a timely manner to help first responders, such as firefighters.

Transport Canada still had shortcomings in its oversight of dangerous goods, despite having made some progress

What we found

1.19 We found that, despite having strengthened some policies, procedures, systems, and guidance, Transport Canada had not completed the work needed to address some of the problems identified in our 2011 audit. In particular, we found that the department did not always follow up on violations identified through inspections to ensure they had been addressed. In addition, the department had not finished its work to grant final approval of many companies' plans to respond to emergencies. We also found that, although the department developed and implemented a national risk-based process to target inspections, this system was based on incomplete and outdated information. Furthermore, we found that the department did not have enough information to know whether certain facilities that manufacture, test, or repair containers for transporting dangerous goods in Canada were operating with valid certifications.

Why this finding matters

1.21 This finding matters because Transport Canada is responsible for verifying that companies respect the regulatory requirements for the safe transportation of dangerous goods.

Recommendations

1.22 Our recommendations in this area of examination appear at paragraphs 1.27, 1.33, 1.34, 1.41, and 1.48.

Analysis to support this finding

Incomplete information for the risk-based planning of inspections

Dangerous goods transported by air may pose risks, such as lithium batteries that can overheat and catch fire.
Dangerous goods transported by air may pose risks, such as lithium batteries that can overheat and catch fire.
Photo: depaz/Shutterstock.com
 

1.23 In 2011, we recommended that Transport Canada implement a national risk-based inspection plan. In this follow-up audit, we found that the department had done so. It developed an annual national oversight plan that included the priority sites, modes of transportation, and goods for inspection. For example, for the 2018–19 fiscal year, the plan's key priorities focused on the air transportation of lithium batteries, recurring non-compliance in marine transportation, and the loading of crude oil from highway tanks to rail car tanks. The department implemented several tools in order to identify risks, including

  • a policy on inspection prioritization, planning, and reporting
  • a framework for prioritizing inspections
  • an integrated risk management framework
Marine port hubs are sites that can handle high volumes of dangerous goods
Marine port hubs are sites that can handle high volumes of dangerous goods. According to Transport Canada, inspections at these hubs are the most effective way to monitor compliance before dangerous goods enter the Canadian transportation network.
Photo: Office of the Auditor General of Canada
 

1.24 However, we found that some problems affected the assessment of risks used to develop the national inspection plan. We found that Transport Canada did not have a complete and accurate picture of the companies it was regulating (see paragraph 1.38). We made this same finding in 2011. According to Transport Canada, inaccurate data on regulated companies, such as duplicate sites, makes it difficult for the department to analyze trends using inspection data and to assess risk to identify the highest-priority sites for inspection.

1.25 We also found that information on many of the sites in the national risk-based inspection plan was out of date. For example, 29% of the sites included in the national inspection plan for the 2018–19 fiscal year turned out to be closed, had moved, were duplicates, or may no longer have been handling, offering for transport, transporting, or importing dangerous goods. Therefore, the inspection process was not as efficient as it could have been because inspectors spent time and resources determining whether these sites even existed or still handled dangerous goods, rather than detecting possible violations at active sites.

1.26 In addition, we found that there were some problems with the database used to assess the risks of violations identified during an inspection and to inform risk-based planning. For example, for each violation found under the Transportation of Dangerous Goods Act, 1992 and its regulations, a score is assigned that indicates the severity of the violation. We found, however, that this scoring system had 2 design flaws that understated risk levels:

  • We found that for 18 violations under the act and regulations, the system had erroneously assigned a score of 0, thereby understating the level of risk associated with these violations. One such violation is a failure to report a release of dangerous goods. We found that, overall, a score of 0 had been incorrectly assigned in 295 (6%) of the 5,189 violations that the department had found in the 2018–19 fiscal year.
  • An inspector may also identify the same violation at a site multiple times. However, because the violations relate to the same section of the act or regulations, the system allows the inspector to score only 1 of these incidents of non-compliance, thereby understating the risk score of the violations as well as the total number of violations. We observed this design flaw during a site visit (Exhibit 1.2).
Exhibit 1.2 Design flaws in Transport Canada's risk-scoring system for violations understate risk levels
Design flaws in Transport Canada's risk-scoring system for violations understate risk levels
 

1.27 Recommendation. Transport Canada should improve and update its tools and database to have more complete and accurate information on regulated companies and their compliance status and to better inform risk-based planning.

The department's response. Agreed. Transport Canada will undertake the following activities:

  • The policy approach to creating a registration requirement for transporters of dangerous goods was finalized in summer 2019. The department is developing legislative amendments to the Transportation of Dangerous Goods Act, 1992 and supporting regulations to implement the approach. Concurrently, the Client Identification Database will be developed to allow the public to register with Transport Canada. Full implementation is expected in late 2022.
  • By fall 2021, the department will modernize the policy and procedures for the Inspection Prioritization Tool to identify gaps and strengthen business requirements in the Transportation of Dangerous Goods Program's systems (for example, the Inspection Information System and “TDG‑Core” central database) for risk scoring of regulated sites and facilities, violations, and inspection follow‑ups.
  • The department will confirm that data quality control processes are in place to support the effective application of tools, guidance materials, and appropriate risk scoring for individual and multiple violations. Managers will ensure that this undertaking, as well as associated inspector training, is complete by fall 2020.
  • The department will further accelerate the work of the Data Quality Working Group to minimize to the extent possible, by fall 2020, the number of closed transportation of dangerous goods and means of containment sites currently in the transportation of dangerous goods databases.

Inadequate follow-up on violations

1.28 In 2011, we found that in the files we examined that identified

non-compliance, Transport Canada did not always verify that companies returned to compliance. We also found that the department lacked guidance for inspectors on how to conduct and document inspections and follow-up activities. In this follow-up audit, we found that the department developed or improved its manuals, user guides, and standards to provide such guidance for inspectors—for example, it updated or created

  • an inspector's manual
  • a user guide for its Inspection Information System database
  • a standard for inspectors on following up on violations

1.29 In this follow-up audit, to determine whether this improved guidance resulted in better oversight, we examined a sample of 60 violations identified in the 2018–19 fiscal year. Our sample included violations related to containers, safety labels, documentation, and training. Examples of violations that the department identified through the inspections included

  • the failure to prepare a shipping document for the dangerous goods being transported
  • a safety label on a shipment that indicated the wrong dangerous good contained inside
  • no evidence of adequate training for those handling, offering for transport, transporting, or importing dangerous goods

1.30 We found that in 18 (30%) of 60 violations, Transport Canada did not verify that companies took corrective actions to return to compliance. Among these cases, we found that the department

  • had no evidence to determine whether violations had been resolved, and that it did not follow up with companies to obtain the required evidence
  • did not conclude whether violations were resolved, despite companies having submitted the required evidence that they took corrective actions to address the violations
  • concluded that companies had returned to compliance without having received any documentation to support that conclusion

1.31 We also examined 10 cases in which violations required that a follow-up inspection be conducted within 90 days. We found that in 4 of these cases, no follow-up had been conducted. Following up to ensure that companies return to compliance when the department identifies violations is an important aspect of oversight. Proper containment, labelling, training, and documentation are required to protect the safety of the public, those who handle and transport dangerous goods, and first responders to an accident. Such practices are also aimed at preventing spills and releases of dangerous goods into the environment.

1.32 During the course of the audit, we also found problems with the department's verification of means of containment facilities—that is, those facilities that manufacture, test, or repair containers for the transportation of dangerous goods in Canada. Such facilities must obtain certification from Transport Canada that they meet safety design standards under federal legislation to protect the public and the environment. We found that of the 2,025 facilities registered with the department, 207 (10%) had expired certificates as of December 2019. The average length of time that these certificates had been expired was more than 2.5 years. We found that, while the department had procedures in place to notify companies that their certification was going to expire or had expired, the department had not used these procedures consistently.

We also found that the department did not have enough information to know whether any of these facilities continued operating without certification. According to the department's own assessment of risks, facilities operating with expired certification, or with no certification at all, pose a risk that the frequency and severity of incidents may increase.

1.33 Recommendation. Transport Canada should systematically track and document its verification that companies have returned to compliance after violations are found.

The department's response. Agreed. Transport Canada will strengthen the application of, and the supporting training on, oversight procedures for follow‑up activities conducted by inspectors after they detect non‑compliance by regulated entities. Management will ensure that inspectors are aware of updated procedures and are able to apply appropriate quality controls. This is to be completed by spring 2021.

1.34 Recommendation. Transport Canada should ensure that means of containment facilities with expired certificates are not conducting the activities for which the certificates were issued.

The department's response. Agreed. Transport Canada will strengthen its standard operating procedures to ensure that

  • a letter is sent  informing a registrant when the registration is about  to expire
  • following expiration, a letter is sent indicating the registration has expired and the registrant may no longer conduct such work
  • in cases where Transport Canada cannot verify whether a registrant has ceased to perform the functions following the expiry of the registration, a registrant will be the subject of an onsite verification under the Transportation of Dangerous Goods Program's National Oversight Plan

This work will be complete by spring 2021.

Clear roles and responsibilities for compliance oversight

1.35 In 2011, we found that the responsibilities within Transport Canada for monitoring compliance with legislation were unclear. We recommended that the department clarify its internal roles and responsibilities for monitoring compliance. In this follow-up audit, we found that the roles and responsibilities for conducting inspections of dangerous goods had been clarified. Since 2016, inspectors with the Transportation of Dangerous Goods Program have had authority to carry out inspections of dangerous goods at all marine and air sites.

1.36 At the time of our follow-up audit, officials in the Transportation of Dangerous Goods Program told us that they were continuing to work with both the Marine Safety and Security and the Civil Aviation directorates to determine whether formal agreements between the program and the directorates would still be required to coordinate oversight activities for the transportation of dangerous goods.

Incomplete performance measurement

1.37 In 2011, we found that Transport Canada needed to improve its methods for monitoring whether companies transporting dangerous goods were complying with regulations. A key element in the performance measurement of regulatory compliance is for the department to have a comprehensive picture of the nature and extent of compliance monitoring being conducted, which it did not have in 2011. In this follow-up audit, we found that, although the department improved its methods to measure company compliance resulting from its own inspections, it still did not have a comprehensive picture of compliance monitoring in Canada.

Provinces and territories share responsibility with Transport Canada for monitoring compliance for the transportation of dangerous goods by road
Provinces and territories share responsibility with Transport Canada for monitoring compliance for the transportation of dangerous goods by road.
Photo: ilmarinfoto/Shutterstock.com
 

1.38 We found that Transport Canada still did not know the extent of national compliance monitoring for the following reasons:

  • The department's database of companies it regulates was missing thousands of potential sites. In 2014 and 2016, the department identified more than 2,000 possible new sites to inspect, but these sites had yet to be confirmed and entered into its database. In addition, the list of sites in the database went back to the early 1990s, and it contained sites from other departmental databases. This meant that a large percentage of sites in the database either had no inspection history or had profile information that was considered out of date or incomplete. The database also contained duplicate sites, which, according to the department, made any analysis of trends using inspection data very difficult.
  • The department did not routinely collect data from provinces and territories, which share responsibility with Transport Canada for monitoring compliance for the transportation of dangerous goods by road. The department has agreements with all provinces and one territory to share data related to the transportation of dangerous goods, including on compliance monitoring.

1.39 We also looked at performance measurement by examining whether Transport Canada's activities were making progress toward Goal 3 of the United Nations' Sustainable Development Goals. Specifically, target 3.9 is to substantially reduce, by 2030, the number of deaths and illnesses from hazardous chemicals and air, water, and soil pollution and contamination. The department committed that its Transportation of Dangerous Goods Program would work to meet this target through its actions on emergency prevention, preparedness, and response.

1.40 In 2017, the program established a target to decrease by 2% from the previous year the rate of reportable releases of dangerous goods. We noted that the program did not achieve its target in 2017 and 2018, when the rate from the previous year increased by 23% and 13%, respectively. We found that this was partly because, in December 2016, the Transportation of Dangerous Goods Regulations were amended to change the types of releases of dangerous goods to be reported. However, despite the change in reporting, the actual number of incidents involving releases of dangerous goods was still higher in 2018 than it was in 2016 and 2017. Given the short time elapsed since the legislative change and the creation of this target, the department was still determining how its activities will achieve its target.

1.41 Recommendation. Transport Canada should strengthen its processes for collecting data from its partners to better identify the national rate of regulatory compliance in the transportation of dangerous goods.

The department's response. Agreed. Transport Canada will undertake the following activities:

  • By spring 2022, as part of the Transportation of Dangerous Goods Transformation Road Map, the department will implement a data‑driven oversight initiative that will include the implementation of the “TDG‑Core” central database initiative (revamping of the Inspection Information System, creation of the Client Identification Database, and integration into the Inspection Information System of the Facilities and Design Register database of registered facilities). This initiative will be supported by a renewal of information sharing agreements with provinces, territories, and other appropriate government programs and agencies, such as the Canadian Nuclear Safety Commission and Health Canada.
  • By spring 2021, the department will also further accelerate the quality control activities being conducted by the Data Quality Working Group, with the objective of strengthening transportation of dangerous goods oversight systems and data relevant to transportation of dangerous goods regulatory responsibilities to assess and verify compliance of regulated  entities  under the Transportation of Dangerous Goods Act, 1992 and the Transportation of Dangerous Goods Regulations.

Incomplete reviews of emergency response assistance plans

1.42 Transport Canada requires an emergency response assistance plan for companies transporting or importing certain dangerous goods representing a high risk to public safety. In 2011, we found that Transport Canada gave only interim approval to 453 of the 926 (49%) emergency response assistance plans submitted by regulated companies. As a result, dangerous goods had been shipped for years without the department having completed a detailed verification of these plans. We also found that the department's guidance for staff to review and approve these plans was inadequate.

1.43 In this follow-up audit, we found that the department had clarified requirements for the review and approval of emergency response assistance plans. It had also put in place processes to help staff conduct and document their reviews of companies' plans. The department also developed

  • an assessment framework for emergency response assistance plans
  • a new database for applicants to submit their plans and for departmental staff to track existing plans and review and make decisions on the approval of submitted applications

Interim approval — Approval for a specified period that may be granted by Transport Canada before it has completed its investigation of a company's preparedness to respond to an emergency and when it has no reason to suspect that the plan cannot be implemented or will be ineffective.

1.44 We also found that 194 of the department's 923 plans (21%) had interim approval as of November 2019. Of these, 22 had had interim approval for more than 10 years. Exhibit 1.3 provides a timeline for 1 plan that had interim approval for 20 years.

Exhibit 1.3 An emergency response assistance plan was granted multiple interim approvals over the past 20 years by Transport Canada

An emergency response assistance plan was granted multiple interim approvals over the past 20 years by Transport Canada
 

1.45 We also found that the department was not meeting its own timelines to finalize its approval of interim plans. In 2015, the department put in place a policy whereby certain emergency response assistance plans may have an interim status for no more than 3 years, as determined by a review of the initial information submitted. We found that as of November 2019, of the 194 interim plans, 70 (36%) had been interim for more than 3 years.

1.46 The department told us that 2 of the key reasons why plans were still interim were the following:

  • Some plans required the department to make an on-site visit to assess response capability, such as verifying emergency equipment. However, these visits had yet to be made. Such visits may be part of an investigation that is required before the plans receive final approval.
  • Other plans could not be finalized until Transport Canada developed national guidance and criteria for assessing the firefighting capacity for plans related to flammable liquids, such as petroleum products. Improving firefighting capability for flammable liquids was recommended by a task force the department created in response to the 2013 Lac-Mégantic rail disaster in Quebec.

Because of the unfinished investigations and guidance needed to give final approval to many of the interim plans, the department did not have all the information necessary to confirm that these regulated companies were fully prepared to respond to an emergency.

1.47 We also found that for these 70 interim plans, Transport Canada allowed the approval period to be reset 1 or more times on its 3-year timeline standard. For example, if in the second year of its interim plan a company submitted new information, such as additional dangerous goods it would be handling, then the department would often provide another full 3 years of interim approval.

Transport Canada recognizes that there are risks associated with large volumes of dangerous goods moving through communities by rail
Transport Canada recognizes that there are risks associated with large volumes of dangerous goods moving through communities by rail. Examples of dangerous goods shipped by rail include crude oil, gasoline, diesel, aviation fuel, and ethanol.
Photo: Office of the Auditor General of Canada
 

1.48 Recommendation. Transport Canada should finalize its approval of the interim emergency response assistance plans by completing the necessary investigations and by developing national guidance and criteria for assessing firefighting capacity for plans related to flammable liquids. The department should ensure that approvals for all future plans are finalized within its prescribed timelines.

The department's response. Agreed. Transport Canada will undertake the following activities:

  • By 31 December 2020, develop tools to identify, assign, and track necessary investigations for existing and future emergency response assistance plans.
  • By 1 January 2021, determine the necessary firefighting capacity for flammable liquids within an emergency response assistance plan and establish the related assessment criteria and guidelines.
  • By 1 January 2021, update policies, procedures, and guidelines related to the assessment of emergency response assistance plans.
  • By 1 December 2021, complete the necessary investigations for emergency response assistance plans that have been interim for 3 or more years.

Transporting dangerous goods by pipeline

Context

Welded sections of a pipeline
Welded sections of a pipeline
Photo: Canada Energy Regulator
 

1.49 The Canada Energy Regulator has the role of verifying that companies meet approval conditions for oil and gas pipelines. Pipeline approval conditions are project-specific requirements attached to the regulator's approval. These conditions may cover a range of topics, such as

  • protection of critical habitat
  • reporting on economic opportunities for Indigenous groups
  • safety and engineering requirements, such as pressure testing

Conditions are established when the project is initially approved but may apply at various stages of the pipeline life cycle.

1.50 The Canada Energy Regulator must also verify that companies are building and operating pipelines according to regulatory requirements intended to protect the safety of Canadians and the environment. The regulator's compliance verification work includes inspections, audits, meetings, emergency response exercise evaluations, and reviews of information filed by companies. It must effectively track and document its compliance activities and its follow-up of deficiencies.

The Canada Energy Regulator improved its compliance oversight

What we found

1.51 We found that since our 2015 audit, the Canada Energy Regulator improved its compliance oversight. It implemented an information and database management system to meet the needs of its compliance oversight activities, and it improved its follow-up to ensure that companies had taken corrective action to address non-compliance.

1.52 The analysis supporting this finding discusses the following topics:

  • Improved information management for compliance oversight
  • Incomplete documentation on the analysis of pipeline approval conditions
  • Improved follow-up on non-compliance

Why this finding matters

1.53 This finding matters because the Canada Energy Regulator is responsible for ensuring that companies return to compliance when violations have been identified and that they comply with all pipeline approval conditions in order to protect the safety of Canadians and the environment.

Recommendation

1.54 Our recommendation in this area of examination appears at paragraph 1.61.

Analysis to support this finding

Improved information management for compliance oversight

1.55 In 2015, we found that the National Energy Board (former name of the Canada Energy Regulator) had significant challenges with its information management system, including missing and out-of-date information on pipeline approvals and conditions. In this follow-up audit, we found that the Canada Energy Regulator improved its management of compliance-related information. Most notably, to resolve the problems we identified in 2015, the regulator developed and implemented the Operations Regulatory Compliance Application (ORCA) database to track and document its compliance verification activities and later added capabilities to track companies' completion of pipeline approval conditions.

1.56 We found that the Canada Energy Regulator also developed procedures and guidance for staff to use ORCA. The regulator provided training on ORCA to its compliance officers and to the project managers responsible for monitoring whether companies satisfied pipeline approval conditions.

1.57 In our examination of the ORCA database, we observed opportunities for improvement in 3 areas of its design:

  • The database did not routinely provide the regulator with reminders of due dates by when pipeline approval conditions should be verified or when companies should submit evidence that they took corrective actions. The database could be set up to provide automatic reminders for staff to ensure timely follow-up.
  • Documentation related to management system audits and enforcement actions such as warning letters were mostly kept outside of the ORCA database. This information could be tracked in ORCA to minimize the risk of regulatory oversight error.
  • In 5 of the 81 files we examined, a condition or a sub-component of a condition either was not uploaded or was only partially uploaded to the database, because the system allowed only manual input. Manual input poses a risk that a condition could be forgotten or not completed as required. The input of conditions into the ORCA database could be automated to remove the possibility of human error.

Incomplete documentation on the analysis of pipeline approval conditions

1.58 In 2015, we found that the National Energy Board (former name of the Canada Energy Regulator) did not systematically track compliance with pipeline approval conditions or adequately document this oversight work. In this follow-up audit, we examined a sample of conditions in effect during the 2018–19 fiscal year. We found that the regulator improved its tracking and documenting of its oversight of pipeline approval conditions in some areas. For example, in all 36 cases we examined, the regulator obtained and recorded submissions from the companies to support that they met a pipeline approval condition. We found that in 34 (94%) of 36 cases, the regulator documented its conclusion as to whether the condition had been implemented to its satisfaction.

1.59 However, the database was missing evidence in other areas. The regulator expects its staff to record their assessments of the documents submitted by companies in support of meeting pipeline approval conditions. The regulator also requires that these assessments explain and provide sufficient justification on how the submissions met or did not meet the requirements of the pipeline approval condition.

We found that in 15 (42%) of 36 cases, there was little or no evidence that the regulator analyzed how the companies' submissions met or did not meet the condition requirements (Exhibit 1.4). It is important that the regulator document its justification that a company has satisfied pipeline approval conditions in order to ensure that all requirements have been met.

Exhibit 1.4 The Canada Energy Regulator did not adequately document its analysis of how a company met the pipeline approval condition about crossing bodies of water

In 1 case we examined, the pipeline approval condition had 4 requirements regarding the pipeline's crossing of bodies of water. Two of the requirements were that the company file with the regulator

  • an updated inventory of all water bodies to be crossed, including details on the presence of fish and fish habitat
  • a discussion of the potential impact to commercial, recreational, and Aboriginal fisheries

The only analysis by the regulator of the company's filings that we found was an email on file stating that the condition was “acceptable.” There was no analysis of why the filings were considered acceptable or whether    each requirement was met. The regulator told us that “the Environmental Technical staff reviewed the filings and acknowledge that the company had met the intent of the condition…” However, the regulator could provide no additional documentation in support of its analysis.

1.60 We also found that in 7 (19%) of 36 cases, some of the required fields in the Operations Regulatory Compliance Application database were blank. The missing information included whether a condition had been met and the reviewer's justification for this conclusion. A summary of these findings is in Exhibit 1.5.

Exhibit 1.5 Tracking compliance with pipeline approval conditions in the 36 cases we examined

Improved oversight
The Canada Energy Regulator verified that companies provided the required documentation to support the completion of a pipeline approval condition. 36 of 36 (100%)
The Canada Energy Regulator documented its conclusion as to whether a condition had been satisfactorily implemented. 34 of 36 (94%)
Areas for improvement
The Canada Energy Regulator did not complete documentation of its analysis of how companies' submissions met or did not meet the condition requirements. 15 of 36 (42%)

The Operations Regulatory Compliance Application database had incomplete information in one or both of the following fields:

  • whether a condition had been met
  • the justification of this conclusion
7 of 36 (19%)

1.61 Recommendation. The Canada Energy Regulator should ensure that it has documented its analysis of companies' submissions about how pipeline approval conditions have been satisfied.

The regulator's response. Agreed. The Canada Energy Regulator monitors companies' pipeline approval conditions throughout  all phases  of  the pipeline life cycle. The Canada Energy Regulator is committed to more consistently documenting its analysis on how the company submissions met or did not meet the condition.

By May 2020, the Canada Energy Regulator will review its current procedures and quality controls and develop corrective actions to ensure a consistent approach to the documentation of the analysis of company submissions for pipeline approval conditions.

Improved follow-up on non-compliance

1.62 In 2015, we found that the National Energy Board (former name of the Canada Energy Regulator) did not systematically verify that companies took actions to correct non-compliance within the required timeline. In this follow-up audit, we found that the regulator had since done so in most of the cases we examined.

1.63 We examined a sample of 31 non-compliance cases the regulator identified in the 2018–19 fiscal year. We found the following:

  • In all 31 cases, companies submitted evidence that they took corrective actions to return to compliance.
  • In 27 cases (87%), inspectors analyzed the company's documentation to verify that corrective actions were taken that addressed the non-compliance.
  • In 29 cases (94%), the inspector's final conclusion on company compliance was clearly identified in the database.

Conclusion

1.64 We concluded that, despite making some progress on each of the findings from our 2011 audit of the transportation of dangerous products, Transport Canada did not complete all the actions needed to address key aspects of our 2011 recommendation, including

  • improving the quality of information for risk-based planning and inspections
  • improving follow-up to ensure that companies had taken corrective action on violations
  • improving its performance measurement system to be able to fully understand rates of regulatory compliance
  • completing the work needed to grant final approval to the emergency response assistance plans that had remained interim for more than 3 years

1.65 We also concluded that the Canada Energy Regulator had largely implemented the 3 recommendations that we examined from our 2015 report on the oversight of federally regulated pipelines.

The regulator implemented an information and data management system to meet the needs of its compliance oversight activities, and it improved its follow-up on non-compliance identified through its compliance verification activities. However, the regulator did not always document its analysis of how companies satisfied their pipeline approval conditions.

About the Audit

This independent assurance report was prepared by the Office of the Auditor General of Canada on the transportation of dangerous goods. Our responsibility was to provide objective information, advice, and assurance to assist Parliament in its scrutiny of the government's management of resources and programs, and to conclude on whether the management of the transportation of dangerous goods complied in all significant respects with the applicable criteria.

All work in this audit was performed to a reasonable level of assurance in accordance with the Canadian Standard on Assurance Engagements (CSAE) 3001—Direct Engagements, set out by the Chartered Professional Accountants of Canada (CPA Canada) in the CPA Canada Handbook—Assurance.

The Office of the Auditor General of Canada applies the Canadian Standard on Quality Control 1 and, accordingly, maintains a comprehensive system of quality control, including documented policies and procedures regarding compliance with ethical requirements, professional standards, and applicable legal and regulatory requirements.

In conducting the audit work, we complied with the independence and other ethical requirements of the relevant rules of professional conduct applicable to the practice of public accounting in Canada, which are founded on fundamental principles of integrity, objectivity, professional competence and due care, confidentiality, and professional behaviour.

In accordance with our regular audit process, we obtained the following from entity management:

  • confirmation of management's responsibility for the subject under audit
  • acknowledgement of the suitability of the criteria used in the audit
  • confirmation that all known information that has been requested, or that could affect the findings or audit conclusion, has been provided
  • confirmation that the audit report is factually accurate

Audit objective

The objective of this audit was to determine the extent to which Transport Canada and the Canada Energy Regulator implemented our 2011 and 2015 recommendations regarding their compliance and enforcement responsibilities to ensure that dangerous goods are transported safely.

Scope and approach

We examined whether Transport Canada had

  • put in place a national risk-based planning process that detailed how to consider risks, and how to prioritize inspections
  • put in place guidance for inspectors on how to conduct and document compliance monitoring and follow-up activities
  • clarified roles and responsibilities for monitoring compliance with the Transportation of Dangerous Goods Act, 1992 and its regulations
  • implemented a performance measurement system that allowed the department to understand the rate of regulatory compliance
  • developed guidance for the review and approval of emergency response assistance plans, and completed reviews according to its timeline standards

We examined whether the Canada Energy Regulator had

  • assessed and addressed its information and data management requirements to ensure that they aligned with its critical business processes for regulatory compliance oversight
  • put in place the procedures and tools to systematically track and document compliance with pipeline approval conditions
  • put in place the procedures and tools to systematically verify that companies took corrective actions on violations within required timelines

The first part of the audit approach was to examine the progress that Transport Canada made on each of the elements of recommendation 1.45 from our 2011 audit report on the transportation of dangerous products, and that the Canada Energy Regulator (formerly the National Energy Board) made on recommendations 2.33, 2.44, and 2.54 from our 2015 audit report on the oversight of federally regulated pipelines. Our assessment included determining whether controls were put in place to address the deficiencies that we had identified in our previous audits. Our assessment of controls included considering new regulations, policies, directives, frameworks, procedures, guidance and tools, operating manuals, action plans, agreements, information systems, and training sessions that had been developed or improved and implemented.

The second part of the audit approach was to determine whether selected regulatory oversight controls worked as designed by using representative sampling to examine files.

For Transport Canada, we used representative sampling to examine inspection files that identified non-compliance between 1 April 2018 and 31 March 2019. These samples were sufficient in size to project to the sampled population with a confidence level of 90% and a margin of error (confidence interval) of +10%. We examined whether follow-up compliance activities and enforcement actions (where required) were conducted according to regulatory requirements and Transport Canada's procedures to ensure that the regulated companies took corrective actions.

For the Canada Energy Regulator, we also used representative sampling to examine the controls related to the follow-up on compliance verification activities and to the oversight of pipeline approval conditions. These samples were sufficient in size to project to the sampled population with a confidence level of 90% and a margin of error (confidence interval) of +10%.

  • We took a sample of selected compliance verification activities, which identified non-compliance between 1 April 2018 and 31 March 2019. We examined whether follow-up compliance activities and enforcement actions (where required) were conducted according to regulatory requirements and the regulator's procedures to ensure that the regulated companies took corrective actions according to established timelines.
  • We also took a sample of pipeline approval conditions that were, or became, active between 1 April 2018 and 31 March 2019. We examined the regulator's tracking of pipeline approval conditions and whether it verified that regulated companies had complied with these conditions. Where any deficiencies were identified, we examined whether follow-up activities were conducted according to regulatory requirements and the regulator's procedures to ensure that the regulated companies corrected deficiencies within established timelines and that the regulator took enforcement actions (where required).

During our audit period, the National Energy Board became the Canada Energy Regulator on 28 August 2019.

In 2017, the Office of the Auditor General of Canada committed to examining through our audit work how federal organizations are contributing to the United Nations' Sustainable Development Goals. To this end, we examined whether Transport Canada's activities were making progress toward Goal 3. We specifically looked at target 3.9: “By 2030, substantially reduce the number of deaths and illnesses from hazardous chemicals and air, water, and soil pollution and contamination.” Transport Canada committed to having its Transportation of Dangerous Goods Program work to meet this target through its actions on emergency prevention, preparedness, and response. The Canada Energy Regulator had no applicable United Nations' Sustainable Development Goal or target that we could examine in this audit.

Criteria

Criteria Sources
We used the following criteria to determine the extent to which Transport Canada and the Canada Energy Regulator implemented our 2011 and 2015 recommendations regarding their compliance and enforcement responsibilities to ensure that dangerous goods are transported safely:
To determine whether controls have been put in place

Transport Canada has put in place the controls to address each of the elements of recommendation 1.45 from the 2011 audit, which are as follows:

  • developing and implementing a national risk-based inspection planning process
  • properly documenting compliance monitoring and follow-up activities
  • addressing gaps in guidance for compliance monitoring and follow-up activities
  • clarifying requirements for the review and approval of emergency response assistance plans
  • developing guidance to review emergency response assistance plans
  • developing and implementing a plan and timeline to complete emergency response assistance

plan reviews

  • clarifying roles and responsibilities for monitoring compliance with the Transportation of Dangerous Goods Act, 1992 and its regulations
  • implementing a performance measurement system that allows the department to report on the rate of regulatory compliance
  • 2011 December Report of the Commissioner of the Environment and Sustainable Development,

Chapter 1—Transportation of Dangerous Products, recommendation 1.45 and the related responses of Transport Canada, Office of the Auditor General of Canada

  • Management action plan in response to

the 2011 December Report of the Commissioner of the Environment and Sustainable Development, Chapter 1—Transportation of Dangerous Products, Transport Canada

  • Management action items in response to Transport Canada's 2014 internal audit, Transport Canada
We used the following criteria to determine the extent to which Transport Canada and the Canada Energy Regulator implemented our 2011 and 2015 recommendations regarding their compliance and enforcement responsibilities to ensure that dangerous goods are transported safely: (continued)

The Canada Energy Regulator has put in place the controls to address selected recommendations from the 2015 audit, which are as follows:

  • recommendation 2.33 on systematically tracking compliance with pipeline approval conditions, documenting this oversight work, and notifying companies on the status of achievement of

the condition

  • recommendation 2.44 on systematically verifying that companies implement corrective actions to non-compliance situations within the required timeline, notifying companies when the corrective action is satisfactory, and integrating this work with improvements to information management systems
  • recommendation 2.54 on assessing and addressing its information and data management needs to ensure that these needs are aligned with the needs of its critical business processes
  • 2015 Fall Reports of the Commissioner of the Environment and Sustainable Development, Report 2—Oversight of Federally Regulated

Pipelines, recommendations 2.33, 2.44, and 2.54 and the related responses of the National Energy Board, Office of the Auditor General of Canada

  • National Energy Board Corrective Actions in Response to Office of the Auditor General Audit—Tracking Table—Fall 2015 Report of the Commissioner of the Environment and Sustainable Development, Oversight of Federally Regulated Pipelines, Canada Energy Regulator
To determine whether controls have worked as designed
Transport Canada conducts follow-up activities and takes enforcement actions (where required), on identified non-compliance, according to regulatory requirements and departmental procedures to ensure that corrective actions are implemented by the regulatees.
  • Transportation of Dangerous Goods Act, 1992
  • Transportation of Dangerous Goods Regulations
  • Transportation of Dangerous Goods Inspector Manual, Transport Canada
  • Transportation of Dangerous Goods Inspector's Follow-up to Non-Compliance Standard, Transport Canada
  • Transportation of Dangerous Goods Policy on Inspection Prioritization, Planning and Reporting, Transport Canada
  • National Oversight Plan: Oversight Activities for the Fiscal Year 2018–19, Transport Canada
  • Departmental Enforcement Standards Desk Book, Transport Canada
The Canada Energy Regulator conducts follow-up activities and takes enforcement actions (where required), on identified non-compliance, according to regulatory requirements and the regulator's procedures to ensure that corrective actions are implemented by the regulated companies within established timelines.
  • National Energy Board Act (replaced in 2019 by the

Canadian Energy Regulator Act)

  • National Energy Board Onshore Pipeline Regulations
  • Inspection Procedure, National Energy Board
  • Operations Project Management Procedure, National Energy Board
We used the following criteria to determine the extent to which Transport Canada and the Canada Energy Regulator implemented our 2011 and 2015 recommendations regarding their compliance and enforcement responsibilities to ensure that dangerous goods are transported safely: (continued)
 
  • The National Energy Board's Enforcement Policy, National Energy Board
  • Operations Regulatory Compliance Application (ORCA) Internal User Guide, National Energy Board
  • Board Member Operating Model, National Energy Board
The Canada Energy Regulator tracks pipeline approval conditions and verifies that regulated companies comply with these conditions. Where any deficiencies are identified, the regulator conducts its follow-up activities according to regulatory requirements and regulator procedures to ensure that the deficiencies are corrected by the regulated companies within established timelines and that enforcement  actions are taken (where required).
  • National Energy Board Act (replaced in 2019 by the

Canadian Energy Regulator Act)

  • National Energy Board Onshore Pipeline Regulations
  • Pipeline project approval conditions stipulated as part of certificates of public convenience and necessity, National Energy Board
  • Operations Project Management Procedure, National Energy Board
  • Operations Regulatory Compliance Application (ORCA) Internal User Guide, National Energy Board
  • Board Member Operating Model, National Energy Board

Period covered by the audit

The audit covered the period from 1 April 2018 to 31 March 2019. This is the period to which the audit conclusion applies. However, to gain a more complete understanding of the subject matter of the audit, we also examined certain matters that preceded the start date of this period.

Date of the report

We obtained sufficient and appropriate audit evidence on which to base our conclusion on 9 March 2020, in Ottawa, Canada.

Audit team

Principal: Kimberley Leach
Lead Director: James Reinhart
Director: David Normand

Jean-Pascal Faubert
Kamila Karolinczak
Tristan Matthews

Francis Michaud

List of recommendations

The following table lists the recommendations and responses found in this report. The paragraph number preceding the recommendation indicates the location of the recommendation in the report, and the numbers in parentheses indicate the location of the related discussion.

Recommendation Response
Transporting dangerous goods by rail, road, ship, and air

1.27 Transport Canada should improve and update its tools and database to have more complete and accurate information on regulated companies and their compliance status and to better inform risk-based planning. (1.23–1.26)

The department's response. Agreed. Transport Canada will undertake improve and update its tools and  the following activities:

  • The policy approach to creating a registration requirement for transporters of dangerous goods was finalized in summer 2019. The department is developing legislative amendments to the Transportation of Dangerous Goods Act, 1992 and supporting regulations to implement the approach. Concurrently, the Client Identification Database will be developed to allow the public to register with Transport Canada. Full implementation is expected in late 2022.
  • By fall 2021, the department will modernize the policy and procedures for the Inspection Prioritization Tool to identify gaps and strengthen business requirements in the Transportation of Dangerous Goods Program's systems (for example, the Inspection Information System and “TDG-Core” central database) for risk scoring of regulated sites and facilities, violations, and inspection follow-ups.
  • The department will confirm that data quality control processes are in place to support the effective application of tools, guidance materials, and appropriate risk scoring for individual and multiple violations. Managers will ensure that this undertaking, as well as associated inspector training, is complete by fall 2020.
  • The department will further accelerate the work of the Data Quality Working Group to minimize to the extent possible, by fall 2020, the number of closed transportation of dangerous goods and means of containment sites currently in the transportation of dangerous goods databases.
1.33 Transport Canada should systematically track and document its verification that companies have returned to compliance after violations are found. (1. 28 –1. 32) The department’s response. Agreed. Transport Canada will strengthen the application of, and the supporting training on, oversight procedures for follow-up activities conducted by inspectors after they detect non-compliance by regulated entities. Management will ensure that inspectors are aware of updated procedures and are able to apply appropriate quality controls. This is to be completed by spring 2021.
1.34 Transport Canada should ensure that means of containment facilities with expired certificates are not conducting the activities for which the certificates were issued. (1.28 –1. 32)

The department’s response. Agreed. Transport Canada will strengthen its standard operating procedures to ensure that

  • a letter is sent informing a registrant when the registration is about to expire
  • following expiration, a letter is sent indicating the registration has expired and the registrant may no longer conduct such work
  • in cases where Transport Canada cannot verify whether a registrant has ceased to perform the functions following the expiry of the registration, a registrant will be the subject of an onsite verification under the Transportation of Dangerous Goods Program’s National Oversight PlanThis work will be complete by spring 2021.
1.41 Transport Canada should strengthen its processes for collecting data from its partners to better identify the national rate of regulatory compliance in the transportation of dangerous goods. (1.37–1.40)

The department’s response. Agreed. Transport Canada will undertake the following activities:

  • By spring 2022, as part of the Transportation of Dangerous Goods Transformation Road Map, the department will implement a data-driven oversight initiative that will include the implementation of the “TDG-Core” central database initiative (revamping of the Inspection Information System, creation of the Client Identification Database, and integration into the Inspection Information System of the Facilities and Design Register database of registered facilities). This initiative will be supported by a renewal of information sharing agreements with provinces, territories, and other appropriate government programs and agencies, such as the Canadian Nuclear Safety Commission and Health Canada.
  • By spring 2021, the department will also further accelerate the quality control activities being conducted by the Data Quality Working Group, with the objective of strengthening transportation of dangerous goods oversight systems and data relevant to transportation of dangerous goods regulatory responsibilities to assess and verify compliance of regulated entities under the Transportation of Dangerous Goods Act, 1992 and the Transportation of Dangerous Goods Regulations.
1.48 Transport Canada should finalize its approval of the interim emergency response assistance plans by completing the necessary investigations and by developing national guidance and criteria for assessing firefighting capacity for plans related to flammable liquids. The department should ensure that approvals for all future plans are finalized within its prescribed timelines. (1.42–1.47)

The department’s response. Agreed. Transport Canada will undertake the following activities:

  • By 31 December 2020, develop tools to identify, assign, and track necessary investigations for existing and future emergency response assistance plans.
  • By 1 January 2021, determine the necessary firefighting capacity for flammable liquids within an emergency response assistance plan and establish the related assessment criteria and guidelines.
  • By 1 January 2021, update policies, procedures, and guidelines related to the assessment of emergency response assistance plans.
  • By 1 December 2021, complete the necessary investigations for emergency response assistance plans that have been interim for 3 or more years.
Transporting dangerous goods by pipeline
1.61 The Canada Energy Regulator should ensure that it has documented its analysis of companies' submissions about how pipeline approval conditions have been satisfied. (1.58–1.60)

The regulator's response. Agreed. The Canada Energy Regulator monitors companies' pipeline approval conditions throughout all phases of the pipeline life cycle. The Canada Energy Regulator is committed to more consistently documenting its analysis on how the company submissions met or did not meet the condition.

By May 2020, the Canada Energy Regulator will review its current procedures and quality controls and develop corrective actions to ensure  a consistent approach to the documentation of the analysis of company submissions for pipeline approval conditions.

Fall 2020 Reports of the Commissioner of the Environment and Sustainable Development to the Parliament of Canada

  1. Follow-up Audit on the Transportation of Dangerous Goods
  2. Departmental Progress in Implementing Sustainable Development Strategies—Safe and Healthy Communities
  3. Environmental Petitions Annual Report

2019-20 CESD Follow-Up Audit of TDG Management Action Plan (MAP)

Status: Effective Date: 2020-03-13
Security Level: Unclassified
Document Type: Internal Record
Issue No.: 01
NDF Code: REC-MRS-QUA- 064
OPI: ASDAC
RDIMS #: (EN) 16183526
No SGDDI: (FR) 16988995
File Classification #: A 4050-20-2-2 P/A P/A

Table of contents

  • Introduction
  • 1.0 Recommendation #1: improvement and updating of tdg database tools
  • 2.0 Recommendation #2: systematic tracking and documenting of company compliance verifications after violations
  • 3.0 Recommendation #3: moc facilities with expired certificates
  • 4.0 Recommendation #4: strengthen processes for data collection for better national rate of regulatory compliance
  • 5.0 Recommendation #5: finalize the interim emergency response assistance plans

Introduction

The TDG Management Action Plan (MAP) is developed to guide the Program's response to the Audit findings, and is organized into five elements, each responding to a specific recommendation as outlined below:

(1) Transport Canada should improve and update its tools and database system to have more complete and accurate information on regulated companies and their compliance status, and to better inform risk-based planning. By Fall 2022, TC will undertake the following action:

  • Introduce legislative changes to the TDG Act to provide for a registration requirement (to obtain a comprehensive overview of its regulated community);
  • Modernize and update the way it assesses companies in terms of their risk rankings which determines how often they are inspected;
  • Revamp its antiquated Inspection information System (IIS); and,
  • Accelerate the work of the Data Quality Initiative to remove closed sites from IIS.

(2) Transport Canada should systematically track and document its verification that companies have returned to compliance after violations are found. By Spring 2021, TC will:

  • Strengthen the application, and supporting training, of oversight procedures for follow-up activities conducted by Inspectors after they detect non-compliance; and,
  • Management will ensure that Inspectors are aware of updated procedures, and are able to apply appropriate quality controls.

(3) Transport Canada should ensure that means of containment facilities with expired certificates are not conducting the activities for which the certificates were issued. In response, TC has strengthened its Standard Operating Procedures (SOPs) to ensure that:

  • A letter is sent informing a registrant when their registration is about to expire;
  • Following expiration, that a letter is sent indicating the registration has expired and that the registrant may no longer conduct such work; and,
  • In cases where Transport Canada cannot verify whether a registrant has ceased to perform the functions following the expiry of their registration, an on-site verification inspection undertaken.

(4) Transport Canada should strengthen its processes for the collection of data from its partners to better identify the national rate of regulatory compliance in the transportation of dangerous goods. By Spring 2022, TC will:

  • Develop and provide updated training on TDG oversight systems to support data analysis of electronic documentation for follow-up activities, including the evidence that non-compliant entities have returned to compliance.
  • Update and modernize the Facilities & Design Registry (Means of Containment facilities) database.
  • Through updated MOUs with the provinces and territories, will obtain more comprehensive and uniform compliance data from the P/Ts on TDG enforcement activities of roadside inspections.

(5) Transport Canada should finalize interim emergency response assistance plans, develop national guidance and criteria for assessing firefighting capacity for plans and ensure that all future plans are finalized within its prescribed timelines. By December 2021, TC will:

  • Develop tools to identify, assign better track necessary investigations for existing and future plans;
  • Determine the necessary firefighting capacity for flammable liquids within an ERAP;
  • Update policies, procedures and guidelines related to the assessment of ERAPs; and,
  • Complete the necessary investigations for Emergency Response Assistance Plans (ERAPs) that have been interim for 3 or more years.

1.0 Recommendation #1: Improvement and updating of TDG database tools

Status Legend:

On Track:
On track
To Monitor:
To monitor
Attention required:
Attention required
Completed: R
 
Recommendation Management action item Accountable manager Planned completion date Current status Last reviewed Progress update Evidence
  • Transport Canada should improve and update its tools and database system to have more complete and accurate information on regulated companies and their compliance status, and to better inform risk-based planning.
  • The Department is developing legislative amendments to the TDG Act, and supporting regulations to implement the approach. Concurrently, the Client Identification Database (CID) will be developed to allow the public to register with Transport Canada.
RAB – Madona Radi Fall 2022        
  • The Department will modernize the policy and procedures for the Inspection Prioritization Tool (RDIMS #12618558) to identify gaps and strengthen business requirements in TDG systems (e.g., the Inspection Information System and TDG-Core) for risk scoring of regulated sites and facilities, violations and inspection follow-ups.
SRA – Chris Blain Fall 2021        
  • Confirm that data quality control processes are in place to support the effective application of tools, guidance materials, and appropriate risk scoring for individual and multiple violations. Managers will ensure that this undertaking, as well as associated Inspector training, is complete.
C&R – Michel Béland Fall 2020
On track
October 2020
  • IIS User Guide updated to align with revised Procedure on Follow-Up to Non-Compliance, supported by new Quality Control Working Group to oversee implementation.
  • Developed data control processes; improved procedures to confirm compliance; and changed the process for review by Regional Managers of procedures (used to be formula, now one assessment per quarter involving physical site review).
  • Quality control process developed and included in Inspectors' Manual.
  • Risk scoring changes only apply to Part 3 (Documentation) violations (SRA reviewing risk scoring from IPT perspective).

Updated IIS User Guide:

Revised Procedures on Follow-Up to Non-Compliance:

Deck to PBC on quality assurance tools for inspections:

Monthly Reports Non-Compliance Inspections Exceeding Threshold Requiring Follow-up (2020/21)

  • Further accelerate the work of the Data Quality Working Group (DQWG) to minimize, to the extent possible, the number of closed TDG and MOC sites currently in TDG databases.
SRA – Chris Blain Fall 2020        

2.0 Recommendation #2: Systematic tracking and documenting of company compliance verifications after violations

Status Legend:

On Track:
On track
To Monitor:
To monitor
Attention required:
Attention required
Completed: R
 
Recommendation Management action item Accountable manager Planned completion date Current status Last reviewed Progress update Evidence
  • Transport Canada should systematically track and document its verification that companies have returned to compliance after violations are found; and
Strengthen the application, and supporting training, of oversight procedures for follow-up activities conducted by Inspectors after they detect non-compliance by regulated entities. Management will ensure that Inspectors are aware of updated procedures, and are able to apply appropriate quality controls. C&R – Michel Béland Spring 2021
On track
October 2020
  • Inspectors' Manual has been extensively revised, and awareness sessions developed to train Inspectors. Manual now aligned with CEE Desk Book; content clarified and reorganised for ease of use, and links to other key tools added (e.g., IIS User Guide, forms).
  • Awareness sessions held in all Regions and HQ in early October 2020.
  • Procedures for follow-ups in cases on non-compliance have been updated.
  • Remaining data quality issues to be worked out with SRA.

Revised Inspector's Manual:

Inspectors' Manual Awareness Session Training Deck:

Revised Procedures on Follow-Up to Non-Compliance:

Updates/notes

C&R notes that not all Inspectors will be required to re-take the Intro to Inspections course, as Inspectors' Manual Awareness Sessions are being offered to all Inspectors at this time to apprise them of key changes. However, Regional Managers have been advised to send all their Inspectors to the Intro to Inspections Course if they wish to (as it is usually offered to new Inspectors only). Some Regions have taken up C&R on this offer.

Remaining data quality issues are to be worked out with SRA – timelines unknown at this point.

Based on discussions with C&R, there appears to be a realization that it isn't feasible to expect 100% compliance among regulated parties across the board, all the time.  Instead, the focus will be on continuous improvement, in recognition of facts on the ground and a commitment to use our inspection resources more strategically to target subsets known to have lower levels of compliance.

3.0 Recommendation #3: MOC facilities with expired certificates

Status Legend:

On Track:
On track
To Monitor:
To monitor
Attention required:
Attention required
Completed: R
 
Recommendation Management action item Accountable manager Planned completion date Current status Last reviewed Progress update Evidence
  • Transport Canada should ensure that means of containment facilities with expired certificates are not conducting the activities for which the certificates were issued.

Transport Canada is strengthening its Standard Operating Procedures (SOPs) to ensure that:

  • a letter is sent informing a registrant when their registration is about to expire;
  • following expiration, that a letter is sent indicating the registration has expired and that the registrant may no longer conduct such work; and
  • in cases where Transport Canada cannot verify whether a registrant has ceased to perform the functions following the expiry of their registration, that registrant will be the subject of an on-site verification under our National Oversight Plan.
C&R – Michel Béland
&
RAB – Madona Radi
Spring 2021        

4.0 Recommendation #4: Strengthen processes for data collection for better national rate of regulatory compliance

Status Legend:

On Track:
On track
To Monitor:
To monitor
Attention required:
Attention required
Completed: R
 
Recommendation Management action item Accountable manager Planned completion date Current status Last reviewed Progress update Evidence
  • Transport Canada should strengthen its processes for the collection of data from its partners to better identify the national rate of regulatory compliance in the transportation of dangerous goods.
  • Ensure updated training on TDG oversight systems is implemented to support data analysis of electronic documentation for Follow-up activities, including the evidence that non-compliant entities have returned to compliance.
C&R – Michel Béland Spring 2022        
  • Ensure training is provided to the Inspectorate on the updated Follow-Up Standard, with an emphasis on appropriate confirmation that all MOC facilities are operating with valid certification.
C&R – Michel Béland Spring 2021        
  • Re-validate the Facilities & Design Registry (Means of Containment facilities) database.
RAB – Madona Radi Spring 2021        

5.0 Recommendation #5: Finalize the interim emergency response assistance plans

Status Legend:

On Track:
On track
To Monitor:
To monitor
Attention required:
Attention required
Completed: R
 
Recommendation Management action item Accountable manager Planned completion date Current status Last reviewed Progress update Evidence
  • Transport Canada should finalize the interim emergency response assistance plans by completing the necessary investigations, and by developing national guidance and criteria for assessing firefighting capacity for plans related to flammable liquids. The department should ensure that all future plans are finalized within its prescribed timelines
  • Develop tools to identify, assign and track necessary investigations for existing and future plans.
C&R – Michel Béland December 31, 2020   October 2020    
  • Determine the necessary firefighting capacity for flammable liquids within an ERAP and establish the related assessment criteria and guidelines.
C&R – Michel Béland January 1, 2021        
  • Update policies, procedures and guidelines related to the assessment of ERAPs.
C&R – Michel Béland January 1, 2021   October 2020    
  • Complete the necessary investigations for Emergency Response Assistance Plans (ERAPs) that have been interim for 3 or more years.
C&R – Michel Béland December 1, 2021   October 2020    
Updates/notes

5a) To be revisited this Fall; training has been delivered to Regional Managers.

5b) and 5c) are doable, but may not be ready by the December 31, 2020 deadline. It was agreed this would be acceptable so long as continued progress could be demonstrated.

TDG MAP in response to CESD Follow-up Audit

Recent Points to Kevin Brosseau

  • Transport Canada accepts the finding of the CESD and has already implemented important changes that address two of the five recommendations. The first relates to new procedures and training for our inspectors to ensure follow-up on violations are undertaken by companies found in non-compliance. The second involves a more rigorous oversight process for ensuring that facilities do not operate with expired registrations.
  • The other three recommendations will be addressed, over a two-year period, through continued improvements in implementing a national risk-based oversight system, by refining and modernizing data collection efforts to better understand the national rate of regulatory compliance and emerging risks for the transportation of dangerous goods and by addressing delays in the final approval of emergency response assistance plans.

1) Transport Canada should improve and update its tools and database system to have more complete and accurate information on regulated companies and their compliance status, and to better inform risk-based planning.

  • By Fall 2022, TC will undertake the following action:
    • Introduce legislative changes to the TDG Act to provide for a registration requirement (to obtain a comprehensive overview of its regulated community);
    • Modernize and update the way it assesses companies in terms of their risk rankings which determines how often they are inspected;
    • Revamp its antiquated Inspection information System (IIS); and,
    • Accelerate the work of the Data Quality Initiative to remove closed sites from IIS.

2) Transport Canada should systematically track and document its verification that companies have returned to compliance after violations are found  

  • By Spring 2021, TC will:
    • Strengthen the application, and supporting training, of oversight procedures for follow-up activities conducted by Inspectors after they detect non-compliance; and,
    • Management will ensure that Inspectors are aware of updated procedures, and are able to apply appropriate quality controls.

3) Transport Canada should ensure that means of containment facilities with expired certificates are not conducting the activities for which the certificates were issued

  • In response, TC has strengthened its Standard Operating Procedures (SOPs) to ensure that:
    • A letter is sent informing a registrant when their registration is about to expire;
    • Following expiration, that a letter is sent indicating the registration has expired and that the registrant may no longer conduct such work; and,
    • In cases where Transport Canada cannot verify whether a registrant has ceased to perform the functions following the expiry of their registration, an on-site verification inspection undertaken.

4) Transport Canada should strengthen its processes for the collection of data from its partners to better identify the national rate of regulatory compliance in the transportation of dangerous goods. 

  • By Spring 2022, TC will:
    • Develop and provide updated training on TDG oversight systems to support data analysis of electronic documentation for follow-up activities, including the evidence that non-compliant entities have returned to compliance.
    • Update and modernize the Facilities & Design Registry (Means of Containment facilities) database.
    • Through updated MOUs with the provinces and territories, will obtain more comprehensive and uniform compliance data from the P/Ts on TDG enforcement activities of roadside inspections.

5) Transport Canada should finalize interim emergency response assistance plans, develop national guidance and criteria for assessing firefighting capacity for plans and ensure that all future plans are finalized within its prescribed timelines

  • By December 2021, TC will:
    • Develop tools to identify, assign and better track necessary investigations for existing and future plans;
    • Determine the necessary firefighting capacity for flammable liquids within an ERAP;
    • Update policies, procedures and guidelines related to the assessment of ERAPs; and,
    • Complete the necessary investigations for Emergency Response Assistance Plans (ERAPs) that have been interim for 3 or more years.

Memorandum to the Deputy Minister

Commissioner of the Environment and Sustainable Development Follow-Up Audit of the Transportation of Dangerous Goods

For Approval

Purpose:

The purpose of this note is to seek your signature on the attached correspondence to the office of the Commissioner of the Environment and Sustainable Development (CESD) confirming that the final report is factually correct and submitting the Department's final responses to the audit recommendations.

Background:

This was a follow-up to the CESD's 2011 audit of Transport Canada and its 2015 audit of the National Energy Board now called the Canada Energy Regulator.

The audit covered the period between April 1, 2018, and March 31, 2019.

For Transport Canada the focus was on its national risk-based planning process for prioritizing inspections, conduct and documentation of follow-up activities for violations identified in inspections, performance measurement of the rate of national compliance, and the review and approval of emergency

Overall, the report found that improvements had been made in implementing a national risk-based system but there are still issues with following up on violations, understanding the national rate of regulatory compliance for the transportation of dangerous goods, and addressing delays in the final approval of ERAPs.

The CESD issued its final report on March 10.  The final version takes into account the substantial feedback and supporting documentation the Department provided in response to the initial draft.

As a result of further negotiation with the CESD following receipt of the final report, the Department reached consensus on one recommendation that it did not originally agree with in regards to the expiry of certificates for means of containment facilities.

This report was originally scheduled for tabling on May 19, 2020.  A revised tabling date is not known at this point.

Analysis and Considerations:

The audit found that Transport Canada has implemented a risk-based process to target inspections; however, the information that it is based on is either incomplete and/or outdated. For example, the information on some sites is outdated in that they may have closed, moved or no longer handle dangerous goods.

In 30% of a sample of violations the CESD reviewed, the Department had not verified that the companies took corrective action to return to compliance and there was either both a lack of documentation on file or evidence requested of the companies to support decisions made on compliance. The CESD also cited cases where follow-up was not done within the required 90 days.

With respect to understanding national regulatory compliance, Transport Canada does have agreements with all provinces and one territory to share data related to the transportation of dangerous goods but does not routinely collect that data. Thus, it does not have an overall picture of national compliance.

The Department has clarified the requirements for the review and approval of ERAPs, processes are in place for staff to review and document them, and there is a new database to track existing ones and decide on the approval of submitted applications.  However, the CESD found that the Department had not always respected its own internally prescribed timeline of three years to complete ERAP investigations so that interim approval plans could be finalized.  The report cites an example of an ERAP where the Department had granted multiple interim approvals over the past 20 years.  As was pointed out to the CESD, the ERAP in question was a very complex one that had undergone a number of changes over the years and posed a very low risk to public safety.  Each time the ERAP was reviewed, there was no reason to suspect that it would be ineffective in responding to a release or anticipated release of dangerous goods.

The CESD makes five recommendations for Transport Canada to:

  • update tools and its database to better inform risk-based planning;
  • track and document compliance verification;
  • confirm means of containment facilities that have expired certificates are not carrying out activities for the original certificate;
  • strengthen processes to collect data to identify regulatory compliance; and
  • track, prioritize and complete ERAP investigations within prescribed timelines so that interim ERAPs can be finalized when applicable.

Departmental officials have confirmed that the report is factually correct, they agree with the CESD's recommendations, they have finalized responses to each of these in both official languages, and are continuing to work on developing a management action plan that addresses the audit findings.

Next Steps:

We recommend that you sign the attached correspondence (see Annex A) confirming that the report is factually correct and submitting the Department's final responses to the recommendations (see Annex B).

Dave Leach

A/Chief Audit and Evaluation Officer

Signed by Leach ,Dave

_____ I approve _____I do not approve _____See Comments

Date:    

Deputy Minister of Transport

Attachments:

  • Annex A - Letter to the CESD
  • Annex B - Final responses to the audit recommendations

Ms. Kimberley Leach

Principal

Office of the Auditor General of Canada 240 Sparks Street

Ottawa ON K1A 0G6

Dear Ms. Leach:

Thank you for the flexibility you have given us for responding to your follow-up audit of the transportation of dangerous goods.

We appreciate your audit team's engagement with departmental staff and are pleased that the revised report and recommendations take into account their exchanges of written and verbal feedback.

In my capacity as Deputy Minister of Transport Canada, I have reviewed the report and confirm that it presents audit findings that are factually based.

I am enclosing the department's final responses to the audit recommendations in both official languages.

Yours sincerely,

Michael Keenan

Enclosures

c.c.

Mr. Kevin Brosseau, Assistant Deputy Minister, Safety and Security

Mr. Aaron McCrorie, Associate Assistant Deputy Minister, Safety and Security

Mr. Dave Leach, A/Chief Audit and Evaluation Executive

Transport Canada Response to the 2019-2020 Commissioner of the Environment and Sustainable Development (CESD) Follow-Up Audit of the TDG Program

Audit Recommendations Departmental Response
1. Transport Canada should improve and update its tools and database system to have more complete and accurate information on regulated companies and their compliance status, and to better inform risk-based planning.

Transport Canada agrees with this recommendation and will undertake the following to address the Audit findings:

  • The policy approach to create a registration requirement for transporters of dangerous goods was finalized in the summer of 2019. The Department is developing legislative amendments to the TDG Act, and supporting regulations to implement the approach. Concurrently, the Client Identification Database (CID) will be developed to allow the public to register with Transport Canada. Full implementation is expected in late 2022.
  • The Department will modernize, by Fall 2021, the policy and procedures for the Inspection Prioritization Tool to identify gaps and strengthen business requirements in TDG systems (e.g., the Inspection Information System and TDG-Core (central database) for risk scoring of regulated sites and facilities, violations and inspection follow-ups.
  • Confirm that data quality control processes are in place to support the effective application of tools, guidance materials, and appropriate risk scoring for individual and multiple violations. Managers will ensure that this undertaking, as well as associated Inspector training, is complete by Fall 2020.
  • Further accelerate the work of the Data Quality Working Group (DQWG) to minimize to the extent possible, by Fall 2020, the number of closed TDG and MOC sites currently in TDG databases.

 Words: 201

 2. Transport Canada should systematically track and document its verification that companies have returned to compliance after violations are found; and

 Transport Canada agrees with this recommendation and will undertake the following to address the Audit finding:

  • Strengthen the application, and supporting training, of oversight procedures for follow-up activities conducted by Inspectors after they detect non-compliance by regulated entities. Management will ensure that Inspectors are aware of updated procedures, and are able to apply appropriate quality controls. This is to be completed by Spring 2021.

 Words: 64

Audit Recommendations Departmental Response
3. Transport Canada should ensure that means of containment facilities with expired certificates are not conducting the activities for which the certificates were issued.

Transport Canada agrees with this recommendation and will undertake the following to address the Audit findings:

  • Transport Canada is strengthening its Standard Operating Procedures (SOPs) to ensure that:
    • a letter is sent informing a registrant when their registration is about to expire;
    • following expiration, that a letter is sent indicating the registration has expired and that the registrant may no longer conduct such work; and
    • in cases where Transport Canada cannot verify whether a registrant has ceased to perform the functions following the expiry of their registration, that registrant will be the subject of an on-site verification under our National Oversight Plan.
  • This work will be complete by Spring 2021.

Words: 114

4. Transport Canada should strengthen its processes for the collection of data from its partners to better identify the national rate of regulatory compliance in the transportation of dangerous goods

Transport Canada agrees with this recommendation and will undertake the following to address the Audit findings:

  • By Spring 2022, as part of the Transportation of Dangerous Goods Transformation Road Map, the Department will implement a Data-driven Oversight Initiative that will include the implementation of the TDG-CORE (central database) initiative (revamping of the Inspectors' Information System (IIS), creation of the Client Information Database (CID) and integration into IIS of the Facilities and Design Registration (FDR) database of registered facilities), supported by a renewal of information-sharing agreements with provinces, territories and other appropriate government programs and agencies such as the Canadian Nuclear Safety Commission and Health Canada.
  • The Department will also, by Spring 2021, further accelerate the quality control activities being conducted by the Data Quality Working Group, with the objective of strengthening TDG oversight systems and data relevant to TDG regulatory responsibilities to asses and verify compliance of regulated entities under the TDG Act and TDG Regulations.

Words: 157

Audit Recommendations Departmental Response
5. Transport Canada should finalize the interim emergency response assistance plans by completing the necessary investigations, and by developing national guidance and criteria for assessing firefighting capacity for plans related to flammable liquids. The department should ensure that all future plans are finalized within its prescribed timelines

Transport Canada agrees with this recommendation and will undertake the following to address the Audit findings:

  • Develop tools to identify, assign and track necessary investigations for existing and future plans by December 31, 2020.
  • Determine the necessary firefighting capacity for flammable liquids within an ERAP and establish the related assessment criteria and guidelines by January 1, 2021.
  • Update policies, procedures and guidelines related to the assessment of ERAPs by January 1, 2021.
  • Complete the necessary investigations for Emergency Response Assistance Plans (ERAPs) that have been interim for 3 or more years by December 1, 2021.

Words: 96

Media lines/questions and answers

Recent derailments, June 2020

Issue

In 2019, the Commissioner for the Environment and Sustainable Development (CESD) conducted an audit of Transport Canada's Transportation of Dangerous Goods (TDG) Program. The 2019 audit will follow-up on select recommendations made in a previous audit of TDG and the National Energy Board, now called the Canada Energy Regulator (CER) in 2011.

The report for the Office of the Auditor General of Canada, which is to be tabled in Parliament on October 27, 2020, contains five recommendations for the TDG Program:

  • Improve and update its tools and database system to have more complete and accurate information on regulated companies and their compliance status, and to better inform risk-based planning;
  • Systematically track and document its verification that companies have returned to compliance after violations are found;
  • Ensure that means of containment facilities with expired certificates are not conducting the activities for which the certificates were issued;
  • Strengthen its processes for the collection of data from its partners to better identify the national rate of regulatory compliance in the transportation of dangerous goods; and
  • Finalize the interim Emergency Response Assistance Plans by completing the necessary investigations, and by developing national guidance and criteria for assessing firefighting capacity for plans related to flammable liquids. The department should ensure that all future plans are finalized within its prescribed timelines.

Key messages

  • Transport Canada takes the recommendations and the findings of the CESD 2019 audit seriously and supports continuous improvement, taking all of the necessary steps to protect people, property and the environment during the transportation of dangerous goods. 
  • The 2019 audit challenged Transport Canada to build upon and refine what it has accomplished. The 2011 audit called upon Transport Canada to develop mechanisms and systems that did not yet exist, such as a national risk-based inspection planning process, guidance for reviewing emergency response assistance plans and strategies to complete them, as well as clarification of roles and responsibilities.
  • Transport Canada has addressed these issues, such as documenting when the department verifies that companies have returned to compliance, and developing national guidance and criteria for assessing firefighting capacity for emergency response plans related to flammable liquids.
  • Transport Canada recognizes through these audits that it must continue to improve how to document compliance monitoring, how to hold a company accountable to return to compliance and how to refine how it administers and tracks emergency response assistance plans.
  • In Canada, the transportation of dangerous goods is strictly regulated under the Transportation of Dangerous Goods Act, 1992, designed to promote public safety (people, property and the environment).
  • The TDG Program develops safety standards and regulations, provides oversight and gives expert advice on dangerous goods incidents to promote public safety in the transportation of dangerous goods by all modes of transport in Canada.
  • Transport Canada acted decisively in the wake of the Lac-Mégantic tragedy of 2013. For example, the department addressed the 40 recommendations made by members of the Emergency Response Task Force created by the Minister; amended its regulations to provide needed clarification on ERAP implementation and to introduce ERAP-related reporting requirements; hosted flammable liquids exercises with first responders; and developed an abundance of awareness materials such as videos, online resources and services, as well as handouts for First Responders, communities, municipalities, industry and the public.

Questions and answers

Q1. How does Transport Canada plan to improve the transportation of dangerous goods in Canada in the near future?

A1. Transport Canada continuously improves how it manages the transportation of dangerous goods in Canada. The department is integrating better risk management processes by enhancing and updating the Transportation of Dangerous Goods Risk Register, which tracks and manages known risks for the Transportation of Dangerous Goods Program.

Transport Canada will continue to monitor crude oil shipment as part of periodic environmental scanning and mitigate the risks associated with crude oil transload facilities by prioritizing these sites for inspection.

Transport Canada is also working to propose new regulatory requirements and enhance inspection tools, while continuing its education, outreach and awareness activities.

Transport Canada will enhance management oversight and quality control processes to ensure that inspectors are adhering to inspection and compliance procedures.

As part of its modernization or Transformation agenda, Transport Canada's TDG Directorate is putting forward 17 initiatives. These will result in more intelligent programs and policies, legislative and regulatory improvements, greater use of smart and agile technologies to provide more efficient and data-driven oversight, and improvements in its workforce, transparency and service delivery.

Q2. What are Means of Containment facilities and how will Transport Canada make sure that they do not conduct activities if they have an expired certificate?

 A2. A Means of Containment (MOC) facility is an establishment or service provider registered by Transport Canada to manufacture, assemble, retest or repair containers designated to transport dangerous goods.

The department has a Standard Operating Procedure to ensure that when a facility's registration is about to expire, they receive a renewal notice by email. If they do not act prior to the expiration, they will receive an expiry letter by email indicating that their registration has expired and that they can no longer conduct activities related to their certificate.  When a facility registration expires, Transport Canada follows up with the facility and performs physical or remote inspections if it cannot verify otherwise that activities have ceased.

Transport Canada is confident with the process in place to confirm that operating MOC facilities have valid certifications.

Q3. What is Canada's global standing with regards to the safe transportation of dangerous goods?

A3.The Transportation of Dangerous Goods Regulations are closely aligned with the United Nations Model Regulations for the transportation of dangerous goods, the International Civil Aviation Organization Technical Instructions, as well as the International Maritime Dangerous Goods Code.

Furthermore, Transport Canada is engaging and collaborating with the United States Department of Transportation's Pipeline and Hazardous Materials Safety Administration (PHMSA) to align new and existing regulations to the best extent possible.

Q4. What funding was given to improve the transportation of dangerous goods in Canada in recent years?

A4. Following the Lac-Mégantic tragedy in July 2013, the federal budget in 2016 provided temporary funding of $143 million over three years to improve rail safety and transportation of dangerous goods oversight, enforcement, prevention and response capabilities.

In the federal budget of 2019, $229 million was provided over up to four more years:

  • to continue making improvements to rail safety and the safe transportation of dangerous goods;
  • to provide funding for infrastructure, technology, and research projects; and
  • for projects to increase rail safety awareness under the Rail Safety Improvement Program. 

These actions have helped reduce risk to Canadian communities and those who live in them.

Q5. What actions will Transport Canada take in the near future to have better oversight and greater transparency of Means of Containment facilities?

A5. Transport Canada will introduce a standard of service to provide regulated entities with more accurate information regarding their application and status.

Transport Canada will review and update its Means of Containment Facility Inspection prioritization tool before the end of fiscal year 2020-2021.

Transport Canada will also increase training and develop more guidance material on means of containment facilities.

Q6. How is Transport Canada collecting and sharing data on regulatory compliance with regards to transportation of dangerous goods with the provinces and territories?

A6. Transport Canada collects data on regulatory compliance through its Compliance Estimation Program as part of the National Oversight Plan for the Transportation of Dangerous Goods. This data is shared with government and private sector stakeholders at regular General Policy Advisory Council and National Compliance Working Group meetings.

Transport Canada continues to improve its reporting regime for stakeholders that handle, offer for transport, transport, and/or import dangerous goods. The data that Transport Canada collects serves to strengthen the transportation of dangerous goods oversight regime.

While there are challenges with collecting and using compliance data from the provinces and territories due to multiple data formats and fields, as well as data gaps, Transport Canada is working to improve access to the national data sets. The department has recently been given access to the Canadian Council of Motor Transport Administrators database of compliance, which has some information regarding road transport of dangerous goods.

Additional questions based on the review of OAG material:

Q7. How many transportation of dangerous goods inspections – planned or reactive – has Transport Canada conducted recently? What were the findings?

A7. While performing planned or reactive inspections of Transportation of Dangerous Goods sites or means of containment facilities, Transport Canada can fine or prosecute companies for any violations found. Reactive inspections are unplanned or not set out in a work plan, and are conducted when risks or issues arise.

In 2019-20, Transport Canada's Transportation of Dangerous Goods inspectors conducted 5,309 inspections, of which 17% were reactive. In the last five years, Transport Canada has noted, on average, over 5,000 violations each year through its inspections. The types of violations included those related to documentation or training, as well as those related to safety marks or means of containment.

Q8. How will Transport Canada ensure accurate entry of data in its systems and timely enforcement follow-ups for companies who violate regulations?

A8.  Transport Canada has processes in place to address non-compliances promptly and appropriately, based on the level of risk posed.

Transport Canada continues to review, improve and enforce the current guidelines, procedures and guidance material, such as the Transportation of Dangerous Goods Inspectors Manual and the Inspection Information System Guide Book, through quality assurance and control.

Transport Canada will also create the Transportation of Dangerous Goods Inspectors Developmental Program, which will:

  • reinforce the Structured-on-the-Job Training Program that will provide a one-on-one approach to learning; and
  • ensure that inspectors are better equipped to accomplish their duties.

Q9. What defines an “interim” Emergency Response Assistance plan and how will Transport Canada treat the backlog of these plans?

A9. An Emergency Response Assistance plan will receive an “interim” approval if Transport Canada needs to investigate further to ensure that the plan can be implemented effectively, should there be a release or anticipated release of dangerous goods.

Types of investigations may include the assessments of response locations, or the evaluation of exercises or training. Transport Canada may grant interim approval of an Emergency Response Assistance plan for a specified period, if there is no reason to suspect that the plan cannot be implemented or would be ineffective in responding to a release of dangerous goods.

In 2011, the CESD audit identified that 227 Emergency Response Assistance plans of companies had had an interim status of approval for at least 5 years.

Transport Canada has made great progress in addressing the backlog since then. In 2020, the number of interim-approved Emergency Response Assistance plans that had this status for 3 years, rather than 5 years, is 70, which represents less than 10% of all valid Emergency Response Assistance plans held by companies.

The Office of the Auditor General's report on the 2019 CESD audit notes the evidence of measures already in place or being implemented by Transport Canada to complete the necessary investigations for Emergency Response Assistance plans that have had an interim approval status for 3 or more years. These recommended actions, which Transport Canada is already working towards, include:

  • developing and using tools to identify, assign and track necessary investigations for existing and future plans;
  • determining necessary firefighting capacity for flammable liquids within an Emergency Response Assistance plan and establishing related assessment criteria and guidelines; and
  • updating policies, procedures and guidelines related to the assessment of Emergency Response Assistance plans.

Transport Canada is committed to completing investigations related to interim-approved Emergency Response Assistance plans in a timely fashion and believes that these measures will address the Office of the Auditor General's recommendations.

Q10. How can Transport Canada explain that a number of Emergency Response Assistance Plans have been interim-approved for 3 or more years?

A10. There are two key reasons why some plans have remained interim for longer than 3 years:

  • Some plans still require a site visit to confirm response capability. This may include the verification of equipment and/or having discussions with response personnel on the response measure that could be used to when implementing the Emergency Response Assistance Plan (ERAP).
  • Transport Canada is in the process of determining the necessary firefighting capacity for flammable liquids within an ERAP.

Transport Canada's priorities dramatically shifted after the Lac-Mégantic tragedy. The department is now in a better position to continue progressing on meeting the CESD's recommendations on Emergency Response Assistance plans, although COVID-19 may impact the completion of some investigations for the foreseeable future because of travel restrictions.

Q11. In terms of selecting companies for inspections, how do you ensure that your system is based on complete and up-to-date information?

A11. TDG has a number of processes in place to ensure that our inspection system is based on complete and up-to-date information. TDG has developed a suite of tools to ensure that inspectors enter complete and accurate information into the system when they conduct their inspections. TDG has also established a quality control regime where inspectors are notified if there are any potential errors with their data entry and where managers will periodically review inspection reports. TDG's Data Quality Working Group also regularly reviews the list of sites to determine whether they are still operating. Those found to no longer be operating are removed from the system. In addition to these measures, TDG has implemented an inspection cycle that will result in every site being inspected at least once within the next eight years.

Summary of major actions and improvements for rail safety and transportation of dangerous goods

Overarching area(s) of focus:

Overview of safety actions taken since 2013-14 - Maintaining appropriate Rail Safety (RS) and Transportation of Dangerous Goods (TDG) programs to protect public safety.

Overview:

Since the Lac-Mégantic tragedy on July 6, 2013, Transport Canada has taken significant actions to further improve the safety of transporting dangerous goods by rail in terms of prevention, effective response, and accountability.

Context:

Under the Transportation of Dangerous Goods Act, 1992 (TDG Act), TC regulates the transportation of dangerous goods by rail, road, air, and marine (non-bulk marine shipments). However, rail transportation, in particular, represents a significant safety concern, given the ever-increasing volumes of flammable liquids and other dangerous goods being transported in this mode. Rail Safety (RS) oversees 70 federally regulated railways under the Railway Safety Act, with approximately 47,000 km of track and over 2,500 locomotives and 50,000 freight cars comprising the national rail transportation system.

Alongside increased volumes of oil and other dangerous goods by rail, a series of high profile incidents have heightened concerns related to rail safety, most significantly the accident in the town of Lac-Mégantic, Quebec, on July 6, 2013. The Transportation Safety Board (TSB) conducted a thorough accident investigation, issuing its final report in August 2014. The TSB issued 5 recommendations in total. Transport Canada has accepted, and has addressed, all the recommendations made by the TSB; however 1 of the 5 recommendations remain active.

Immediately following the tragedy, Transport Canada embarked on an aggressive and accelerated agenda to develop regulations that would enhance safe railway transportation and prevent accidents. The Department took concrete steps to respond to the TSB recommendations, but also to a series of recommendations from other sources such as the 2007 Railway Safety Act Review and the 2013 Report of the Office of the Auditor General on the Department's Rail Safety Oversight Program. Collectively, these reviews identified over 32 recommended actions to address safety issues and deficiencies in the programs.

Furthermore, an Emergency Response Task Force was created following the Lac-Mégantic tragedy. The Task Force was composed of industry, first responders, railways, municipalities, among other key partners, and met many times over the course of almost two years. In 2016, the Task Force provided their final report to Transport Canada, which contained 40 recommendations to improve the emergency response assistance plan program and enhance emergency response, preparedness and training. Transport Canada accepted and implemented all 40 of the Task Force recommendations.

In order to address these recommendations and strengthen the programs, TC gained authority to conduct 23 initiatives that aimed to improve railway safety and the transportation of dangerous goods.

Accomplishments (under TDG)

Following Lac-Mégantic, TC received funding to conduct a number of new initiatives, which centre on four main pillars:  

  • Reinforcing Regulations

Under this pillar, a new standard was introduced to ensure the strength and safety of next generation rail tank cars (TC-117), which was jointly developed with the U.S.

TDG also consulted on, and published major regulatory submissions and protective directives to improve transparency between railways, municipalities, and first responder, which in turn, facilitated emergency planning, risk assessments, and first responder training. The Directorate also completed numerous regulatory amendments to improve safety requirements for TDG.

  • Reinforcing the Oversight Regime

With additional funding, TDG has strengthened the quality and consistency of its oversight regime by improving TC's overall capacity for training, enforcement, audits, and inspections. For example, the number of oversight personnel employed by the Transportation of Dangerous Goods program has quadrupled from 30 to over 127,, allowing for inspections at identified high risk sites to take place at least every five years, and every one to three years at specific very high-risk sites. Overall, the significant increase in inspection frequency has contributed to greater oversight capacity and the prevention of future incidents.

TDG has also developed new resources to facilitate the identification and resolution of safety gaps as risks evolve. These include: an integrated plan of all departmentally available TDG data and a national risk-based inspection plan that captures details of newly identified operations and dangerous good routes.

  • Promoting Open Transparent Government and Community Engagement

Several TDG initiatives support and empower Canadian communities, and foster collaboration with industry and first responders. For example, TDG has established two fora to address areas of public/community concern: “Emergency Response” and “Classification of Dangerous Goods”.

Funding has also improved emergency response and provided assistance to first responders and incident command across Canada through the allocation of additional resources to CANUTEC, TDG's 24/7 Transportation Emergency Response Centre. TDG has updated Emergency Response Assistance Plans and lead two series of simulation exercises (Exercise Vulcan and Exercise Athéna) to improve Canada's response capabilities in the event of an incident involving a train carrying flammable liquids such as crude oil. 

TC engaged in 28 safety and awareness outreach sessions with first responders, communities, other government departments, and industry, to get a better understanding of stakeholders' needs. TC also improved and created awareness materials and tools for various audiences, such as the guide “You're Not Alone” for emergency response planning for rail incidents involving flammable liquids.

  • Enhancing International Collaboration

Through TDG initiatives, Canada has fostered collaborative relations with the U.S. and other international partners that are economically beneficial, as they enable the integration of rail and transportation systems. For example, TDG completed regulatory amendments that align Canadian and U.S. placarding requirements, and harmonize requirements for cylinders. We are also fully participating in international fora, such as the United Nations, where we can now influence discussions that impact dangerous goods activities and the Canadian economy.

Strengthened Rail Safety Program

Following the Lac-Mégantic derailment, TC began a series of immediate and longer-term actions to further strengthen the federal rail safety regime. Under the pillars of prevention, effective response and accountability, these safety actions included:

  • Hiring of More Inspectors: The number of rail safety inspectors increased from 107 to 152.
  • Reduced Operating Speeds: Under the Rules Respecting Key Trains and Key Routes, railway companies carrying large volumes of dangerous goods must reduce the speed of their trains, carry out additional and more frequent inspections of their tracks and conduct risk assessments (incorporating input from municipalities). 
  • Strengthened Mandatory Securement of Unattended Trains: Rule 112 of the Canadian Rail Operating Rules has been amended to impose stricter requirements on the securement of unattended trains, including rail companies must adhere to a chart on minimum handbrake requirements; before leaving any equipment in a given location, a railway employee must confirm with another employee the manner in which the equipment was secured; and, when railway equipment is left unattended in high risk locations, operators must take more measures to secure it.
  • More Stringent Regulations:
    • Safety Management Systems (SMS) Regulations, 2015: Since 2015, TC has increased the frequency of SMS audits to a three-to-five year cycle, utilizing a risk-based system to determine this. We have also recruited specialized auditors to enhance the effectiveness of the SMS audit program.
    • Railway Operating Certificate Regulations: A Railway Operating Certificate (ROC) is an official document issued by TC that authorizes a federal railway company or a local railway company to operate in Canada by meeting baseline safety requirements.
    • Railway Administrative Monetary Penalties (AMPs) Regulations: Since 2015, TC may now issue an AMP to a company found to be in non-compliance with rules and regulations. Maximum penalties are $250,000 for a corporation and $50,000 for an individual. We may impose them for each day of the contravention.
    • Strengthened Grade Crossings Regulations: Designed to help reduce the frequency and severity of accidents at Canada's approximately 23,000 federally-regulated grade crossings, therefore saving lives and preventing injuries and derailments.

Challenges

Rail Safety

Prior to 2013-14, there was no dedicated policy development capacity within the Rail Safety Program. Additional capacity was required not only to accelerate a response to the Lac‑Mégantic derailment, but to allow the Program to be more proactive, expeditious and nimble in strengthening its policy and regulatory framework. This added policy capacity is continuing to enable Rail Safety to tackle protracted issues including fatigue management of railway employees; railway employee qualification regulations; and, mandatory requirements for Locomotive Video and Voice Recorders (LVVR). These are complex issues that will take time to resolve.

The increase in inspector positions has allowed Rail Safety to ensure a more robust oversight regime, conducting on average, over 33,000 inspection activities per year. With the introduction of the 2015 RSA amendments and the Grade Crossings Regulations, the number of federally-regulated railways has gone from 30 in 2013-14 to 70 today (with the inclusion of local railways). In addition, Rail Safety deals with a broader range of regulated entities that now include private landowners and over 1460 municipal and provincial road authorities, who share in the responsibility for the safety of over 23, 000 federally-regulated grade crossings.

Rail Safety has also been able to address numerous oversight issues including augmenting SMS audit capacity in the regions and HQ; creating new audit expertise in the regions; and enhancing train securement. The new resources are also allowing the RS Program to address skills gaps such in human factor analysis and in risk management; all which are previously areas of weakness pointed out by the OAG.

The pace of innovation in the transportation sector is accelerating rapidly. New technologies like connectivity and automation, electrification, biofuel and remote sensing technologies are transforming the rail industry globally. Canada's rail industry is investigating greater use of technologies that could improve the quality of inspections. For example, Transport Canada supports the use of train control technologies, as they represent an innovative means for Canada to further improve rail safety. Implementing enhanced train control (ETC) is a long-standing recommendation of the Transportation Safety Board. To ensure successful ETC implementation in Canada, Transport Canada will require ongoing capacity to continue to lead work with industry partners and other government colleagues to chart a roadmap for ETC adoption in Canada.

Transportation of Dangerous Goods

Over the next 10 years, the transport of goods by rail, including dangerous goods, is expected to undergo its most significant changes since the 1970s. For example, in tandem with current major challenges associated with transporting crude oil and other flammable liquids by rail due to limited existing pipeline capacity, a number of new dangerous goods substances will be appearing on the market. This includes: explosives, gases, inflammable liquids, infectious substances, etc.

The intensification of spending directed towards new liquefied natural gas (LNG) facilities illustrates this point. For example, Royal Dutch Shell Plc and its partners are spearheading a $40 billion investment project to build a major liquefied natural gas terminal in Kitimat, British Columbia. In light of public outcry surrounding global plastics pollution, reusing plastic waste may become an important profitability driver for chemical companies, who will convert them into a range of products, including fuel.

Finally, advancements in technology are revolutionizing the methods of transporting dangerous goods. Notably, there is a steady shift toward using autonomous vehicles for freight transport, such as truck platooning, where an assembly of driverless trucks operate together as a convoy in order to improve safety and energy efficiency – much in the same manner as train cars. Likewise, the commercial use of remotely piloted aircraft systems is also being explored.

In order to adapt to such technological advancements and evolving industries, TDG must maintain the capacity to be agile and pro-active. Furthermore, we need to remain relevant to stakeholders and facilitate innovation and growth within the transportation sector.

Conclusion

With a more integrated global economy and rapidly advancing innovation, technology, and knowledge transfer, transportation is evolving quickly. Many trends, such as international trade patterns, are reshaping the nature of risks and vulnerabilities in the Canadian transportation system. The RS and TDG programs are continuously adapting to accommodate these changes and fulfill public expectations.

For a comprehensive lists of measures taken since the Lac-Mégantic tragedy, you may refer to:

Background on the phase out of tank cars

Since the Lac-Mégantic incident, the department has taken comprehensive rail safety and dangerous goods safety actions to enhance the transport of dangerous goods by rail in Canada.

This includes:

  • key routes/key train requirements;
  • lower train speeds;
  • increased rail and dangerous goods inspections;
  • new liability and insurance requirements;
  • new classification requirements;
  • new Emergency Response Assistance Plan requirements;
  • new sharing of dangerous goods information with municipalities; and
  • a new tank car standard specifically designed for the transport of flammable liquids by rail.

Specifically on tank cars, in April 2014, the Department issued Protective Direction 34 to remove DOT 111 tank cars from dangerous goods service. In May 2015, the Department published amendments to the Transportation of Dangerous Goods Regulations, which introduced a new class of tank cars (TC 117), a retrofit standard and a phase-out timeline for older tank cars. The TC 117 standard (also known as TC/DOT 117) was developed through bilateral collaboration between Canada and the U.S., with a joint goal of strengthening the safety of the rail networks. It introduced a new class of tank cars with several features that are designed for the transportation of flammable liquids.

In May 2016, the Department issued Protective Direction 37, establishing requirements for protective housings and pressure-relief devices for 117R tank cars

In July 2016, the Department issued Protective Direction 38 to accelerate the timelines introduced by regulations in 2015 to phase out jacketed and unjacketed legacy DOT 111 tank cars from crude oil service. November 1, 2016 marked the complete removal of all DOT 111 tank cars from crude oil service.

The new version of TP14877 is then published in January 2018 and incorporates the phase-out schedule of tank cars established in the original regulatory amendment, and also includes the requirements for Protective Directions 34, 37 and 38 in an effort to consolidate tank car selection and use requirements.

Finally, Protective Direction 39 is issued in August 2018. It accelerated the removal of unjacketed enhanced 111 tank cars (unjacketed CPC1232s) from crude oil service from the April 1, 2020 requirement to November 1, 2018 and also accelerated the removal of all legacy 111 tank cars and unjacketed enhanced 111 tank cars (unjacketed CPC1232s) from condensate service in Canada from the April 30, 2025 requirement to December 31, 2018.

The acceleration of the phase-out timelines enhanced public safety including people, property, health and the environment during the transport of crude oil by rail.

It also facilitated the removal of more legacy DOT 111 tank cars from carrying condensates and unjacketed CPC 1232 tank cars from service sooner than the current 2025 timeline.

The tank car market truly remains a North American market as tank cars cross the Canada-U.S. border daily. The current phase-out timelines for other flammable liquids are harmonized with the U.S. and reflect a realistic pace for retrofitting existing tank cars and building new ones. The timelines for different classes of products also reflect the relative risks for each, as well as the volumes being transported. Transport Canada is focusing on the highest risk flammable liquids transported by rail. PD 39 ensures that DOT 111 tank cars and unjacketed CPC 1232 tank cars used to carry higher risk flammable liquids are now completely removed earlier than what is prescribed in the Regulations.

The PD follows Transport Canada's review of the tank car supply and demand market. This acceleration is possible due to industry's aggressive move to transport flammable liquids in the most robust tank car available. The PD reflects current industry retrofit and new build capacity tied to North American tank car demand.

Transport Canada will continue to closely monitor tank car supply and demand, along with the number of retrofits and new TC 117 tank cars being added to the North American fleet. The TC 117 is a significantly more robust tank car than the general purpose DOT 111 tank car, and was specifically designed for the transport of flammable liquids. TC 117 cars have thermal protection, which greatly increases their ability to withstand fire. TC 117s are also constructed with thicker steel and full head shields to help protect the ends of the tank cars from being punctured by equipment, or collisions with adjacent rail cars. Top-fitting protection will cover the valves on top of the tank car, guarding against damage in an incident. A new bottom-outlet valve must remain closed so it does leak during an incident.

Annex A:  Phase-Out Schedule for TC/DOT-111 and CPC-1232 Tank Cars Used in North America

  Original Phase Out Date Accelerated Phase Out Date

Phase-out schedule for tank cars from ethanol service (UN1170, UN1987, UN1993 and UN3475)

Legacy Class 111 tank cars

May 1, 2023

N/A

Unjacketed enhanced 111 tank cars

July1, 2023

N/A

Jacketed enhanced 111 tank cars

May 1, 2025

N/A

Phase-out schedule for tank cars from crude oil service (UN1267, UN1268 and UN3494)

Legacy Class 111 tank cars

March 1, 2018

November 1, 2016

Unjacketed enhanced 111 tank cars

April 1, 2020

November 1, 2018

Jacketed enhanced 111 tank cars

May 1, 2025

N/A

Phase-out schedule for tank cars from condensate service (UN1265, UN1268, UN1993 and UN 3295)

Legacy Class 111 tank cars

April 30, 2025

December 31, 2018

Unjacketed enhanced 111 tank cars

April 30, 2025

December 31, 2018

Jacketed enhanced 111 tank cars

May 1, 2025

N/A

Phase-out schedule for tank cars from other flammable liquids

Legacy Class 111 tank cars

May 1, 2025

N/A

Unjacketed enhanced 111 tank cars

May 1, 2025

N/A

Jacketed enhanced 111 tank cars

May 1, 2025

N/A

What is an ERAP

An emergency response assistance plan (ERAP) outlines what to do in the event of a release or an anticipated release of certain higher-risk dangerous goods while they are in transport. Each plan is approved for specific dangerous goods, modes of transport, means of containments and geographical areas.

These plans describe the response capabilities, address emergency preparedness and list specialized personnel and equipment needed to respond to such a release or anticipated release.

When implemented, approved ERAP are used to assist local emergency responders by providing them with technical and emergency response advice as well as the necessary resources for incident response.

Background

The requirement for an Emergency Response Assistance Plan (ERAP) can be traced back to recommendations made by Justice Grange following the enquiry into the 1979 Mississauga train derailment. This derailment caused the rupture of several rail cars, including chlorine and several propane tank cars. The chlorine leak led to an evacuation of approximately 220,000 people, the largest peace time evacuation in North America at the time. The derailment demonstrated a need for specialized response teams and equipment to provide support to first responders during major releases of high risk dangerous goods.

The Grange Commission Report recommended that any shipper of dangerous goods be required to have a Transport Canada approved emergency response plan to control releases of dangerous goods in the event of an accident.

Persons who require an ERAP

Under section 7 of the Transportation of Dangerous Goods Act 1992, a person must have an approved ERAP before offering for transport, importing handling or transporting certain dangerous goods that are above a quantity specified in the Transport of Dangerous Goods Regulations. This includes, for example, chlorine, ammonia and certain flammable gases such as propane. Since the Lac-Mégantic incident, an ERAP is now required for certain flammable liquids transported by rail, such as gasoline, ethanol, diesel and crude oil. The ERAP holder is typically the producer, manufacturer or distributor of dangerous goods.

When ERAPs are implemented

The person with an approved ERAP must implement the plan when there is a release or anticipated release of the dangerous goods to which the plan applies.

How ERAPs are implemented

The person with the approved ERAP must decide how it will be implemented, as it is the most familiar with the resources in the plan. Other than promptly providing technical and/or emergency response advice when requested, the ERAP holder must monitor the response and decide what resources, such as equipment and personnel, are needed respond at the site of the incident.

Transportation of Dangerous Goods (TDG) Program

Purpose

  • To provide an overview of the TDG Program and recent accomplishments.
  • To outline a way forward for program priorities and funding.

TDG – Mandate & Role

Promoting public safety in the transportation of dangerous goods by all modes of transport in Canada – rail, road, air, and water

  • Promoting safety, and anticipating & responding to evolving TDG issues, domestically and globally.
  • Promoting safety, and anticipating & responding to evolving TDG issues, domestically and globally.
  • Ensuring risk-based TDG enforcement that is consistent and effective, throughout the country.

TDG in Canada

What?
About 30 million dangerous modes goods shipments every year in Canada, for all, with 99.998% reaching their destination without incident.

Where?
Approximately 20,000 + TDG sites known to Transport Canada.

Who?
Significant network of individuals who handle, offer for transport, transport, or import dangerous goods, including:

Shippers – manufacturers, distributors, general public
Carriers – trucking, air cargo, marine, and rail companies
Recipients – those who receive dangerous goods shipments

History of TDG in Canada

Establishment of TDG Program (1972)

Some federal legislation in place:

  • Railway  Safety Act
  • Canada Shipping Act
  • Specific provincial legislation for intra-provincial transport by highway

Late 1970s:

Significant amount of dangerous goods being transported without overarching, uniform federal regulation or legislation across all modes and types of goods.

1979 Mississauga train derailment & resulting Grange Report recommendations

Regulatory oversight of TDG in Canada

  • TDG Act (1980)
  • TDG Regulations (1985)
  • Provincial & Territorial Regulations (except Alberta)

Harmonized and / or aligned with:

  • United Nations (UN) Model Regulations
  • U.S. Code of Federal Regulations (CFR 49)

Historical Capacity of TDG Program

Historical Capacity of TDG Program
 

A Strengthened TDG Program Following Lac-Mégantic

Regulatory Frameworks & International Engagement

  • Development / amendment to TDG Regulations and safety standards
  • Policy development to support regulatory activities
  • Representation of TDG in international fora

Safety Research & Analysis

  • Scientific / engineering and socio-economic research
  • Development of TDG National Oversight Plan
  • Risk analysis and assessment
  • Data, statistics, and analysis (e.g., incidents, compliance)

Compliance & Response

  • Oversight / inspections, including inspector training
  • Functional guidance to regions
  • Management of Emergency Response Assistance Plan (ERAP) and Chemical, Biological, Radiological, Nuclear and Explosive Program

Emergency Response – CANUTEC

  • Advice to first responders during emergencies on 24/7 basis
  • Database of more than
  • 2.7 million hazardous products
  • Development of Emergency Response Guidebook
  • Response to thousands of DG-related calls annually
  • Support to first responders during DG simulations

Supported by Management and Resource Services & TDG Secretariat

TDG Program: By the Numbers

People

FTEs: 114 (2013) - over 300 (2019)

Inspectors: 30 (2013) - over 130 (2019)

Means of Containment Engineers: 6 (2013) - 16 (2019)

Network of Emergency Contacts: 27,000 contacts that can provide CANUTEC with technical information during an emergency

Activities

Planned and reactive inspections per year:

2420 (FY 2013-14) - 5861 (FY 2018-19)

Over 30,000 calls answered by CANUTEC annually

Over 800 municipalities registered to receive DG reports by rail

2019 TDG-led Research Symposium – over 200 participants and 120 project ideas

Over 180 safety awareness events since 2017-18

14 ongoing initiatives under Canada-U.S. Regulatory Cooperation Council

Information

Paper-based - 100% digital CANUTEC information

Over 2.7 million safety data sheets of hazardous materials

Over 371,000 hits for online Emergency Response Guidebook from 2017 to 2019

15 emergency response product checklists to support first responders

Key Accomplishments Since Lac-Mégantic

Reinforcing Regulations

  • 10+ major regulatory amendments to:
  • Implement fundamental changes that had not been completed in past 25 years
    • Strengthen ERAP program by addressing Emergency Response Task Force recommendations established in response to Lac-Mégantic
    • Reinforce tank car requirements for TDG that are toxic by inhalation
  • Maintain frameworks that are aligned internationally to promote trade and economic growth

Reinforcing Oversight Regime

  • Increased number of inspectors and annual inspection activities
  • Development of risk-scoring methodology to prioritize annual inspections
  • Establishment of additional compliance and training programs to bolster oversight functions

Promoting Open Transparent Government and Community Engagement

  • Increased safety awareness among general public, communities, industries, and first responders through significant outreach and awareness efforts

Building Relationships and Enhancing International Collaboration

  • Greater engagement and consultation with industry partners
  • Membership in core UN organizations, including certain voting rights
  • Leadership in the international development of standards, codes, and/or regulations
  • Greater collaboration with U.S. Department of Transportation to integrate transportation systems and align requirements

Improving IM/IT Systems

  • Modernized online tools and services to strengthen emergency response
  • Greater integration of existing Transport Canada systems to improve efficiency

Current Environment

Modern & Agile Regulatory Regime

OAG Audits

  • Continue outstanding activities to address recommendations from 2011 audit
  • Anticipate new recommendations (Dec. 2019)

Evolving Transportation Sector

  • Transformation agenda
  • Emerging and disruptive technologies
  • Advancing supply chain and logistics
  • New dangerous goods entering the market

Funding

*Current budget sunsets in fiscal year 2022-23

Funding past 2022-23 is required to sustain current levels of regulatory capacity, technical expertise, and engagement.

Program Priorities

Short-term (0-3 months)

  • Continue outstanding activities to address recommendations from 2011 audit
  • Develop action plan to address new audit recommendations
  • Publish new edition of Emergency Response Guidebook
  • Continue ongoing research projects:
    • Lithium battery transport
    • Tank car modelling / testing
    • Crude oil analysis
    • Dispersion of toxic by inhalation gases
  • Initiate research projects in new areas:
    • Advanced tank car and highway tank testing
    • Liquefied Natural Gas (LNG) UN portable tank performance
    • Composite container and intermediate bulk container life extension

Medium-term (0-18 months)

  • Conduct policy, regulatory, and legislative review for:
    • Client Identification Database for greater risk-based oversight
    • Administrative Monetary Penalty regime to augment TDG enforcement options
    • Modernization of TDG authorities to support safety and innovation
  • Advance the following initiatives:
    • Regulatory Sandbox exercise for electronic shipping documents
    • IT capacity / efficiency through TDG Core
    • Policy frameworks for reverse logistics and hazardous waste
    • Regulatory requirements for LNG by rail
    • Policy framework for Remotely Piloted Aircraft Systems carrying DGs
    • Standardization of training for TDG industry
    • Fee modernization for TDG services

Long-term (0-3 years)

  • Advance policy to address disruptive technologies:
    • Automated vehicles and Remotely piloted vehicles
    • Platooning
  • Address other emerging issues:
    • Long-term solution for Class 3 flammable liquids
    • Dangerous goods safety implications of northern economic development
    • Review of TDG Regulations for nuclear and radiological substances
    • Review of storage tank facilities
  • Secure permanent funding for additional capacity in TDG & Rail Safety
    • Project funding
    • FTEs

Next Steps

  • Continue advancement of TDG's Transformation Agenda and implementation of the OAG Action Plan, to remain an efficient and effective regulator.
  • Return to Cabinet to secure permanent funding past 2022-23