Thank you, Mr. Chairman.
The Freight Management Association of Canada was the Canadian Industrial Transportation Association until this year. We've been representing the freight transportation concerns of Canadian industry to various levels of government and international agencies since 1916.
The 90-plus members of FMA spend approximately $6 billion annually on transportation services by all modes, and we advocate for our member companies’ interests regarding air freight, trucking, marine, and rail.
As background, I am a member of the Transport Canada advisory committee on rail safety representing the shipper community. The role of the advisory committee relates only to the Railway Safety Act and its regulations, including SMS, and does not generally deal directly with TDG issues. While your committee's mandate from the minister is to consider transportation of dangerous goods and safety management systems in all modes, my remarks will focus primarily on rail freight.
Before addressing the specific topics, I would like to offer a few general comments about transportation safety. One, by any reasonable standard, modern transportation in all modes in the western world is very safe. Two, as long as there is movement controlled by human beings, there will be accidents. Three, safety can never be taken for granted and vigilance can never be let down, and four, there is always room for improvement.
The Canadian transportation safety regime—that is, the policy, the laws, the regulations, enforcement, accident investigation, and practice—focuses on prevention of accidents. This, of course, is the right emphasis. The recent Lac-Mégantic derailment was a tragedy, and the work by all stakeholders in both Canada and the U.S. to take actions to minimize the possibility of another such accident has been intense and thorough. As the Transportation Safety Board continues its investigations, it is expected to make further recommendations that will lead to even more improvements. While many of the recommendations and subsequent actions of the minister focus on prevention, there is a tendency by both media and government to focus on “the next Lac-Mégantic,” and by that I mean that considerable activity is focused on the characteristics of, in this case, the DOT-111 tank cars and on making them more robust for the next big accident.
Such accidents are extremely rare, a fact that needs to be considered in any actions the government decides to take. The last accident that came even close to Lac-Mégantic was a derailment of propane cars as well as some cars carrying other DG substances, including chlorine, on the CPR in Mississauga on November 10, 1979, nearly 35 years ago. In that accident, no one was killed or injured. There was limited direct property damage, and about 250,000 people had to be evacuated for several days. Transport Canada and the railways learned significant lessons from the Mississauga accident, with the result that there has been no accident as severe as the one in Mississauga on either CN or CPR since that time. There of course have been other derailments, and some of them have been relatively serious, but there has been nothing of quite that magnitude.
The Transportation Safety Board is the scorekeeper with regard to accidents in aviation, marine, rail, and pipeline, and the statistical trend in all modes is uniformly in the right direction.
When we look at the TDG Act, the evidence is that the TDG Act and the regulations administered by the TDG directorate are generally working well. There continues to be a downward trend in DG accidents, even with increased volumes of these dangerous goods.
The minister has asked your committee how Canada’s TDG regime compares with that of the United States. The minister’s recent actions announced on April 23 provide some insights into the working of the TDG regime here as compared with that in the U.S. The ability of the minister to quickly issue protective directions pursuant to section 32 of the TDG Act when there is danger to the public indirectly indicates that it compares well with that of the U.S., where rapid response seems to be somewhat more difficult.
While specifications regarding the DOT-111 tank cars should be mandated and older models should be removed from service, the most important follow-on work should be prevention. The Lac-Mégantic accident involved a runaway train of 72 cars that derailed at a speed well above the allowable track speed. If the cars had contained only grain, there still would have been significant damage to the heart of Lac-Mégantic. The immediate focus of the TSB was on actions to prevent runaways, and this was of course the correct immediate focus by the Transportation Safety Board.
In this connection, the minister announced last week that the DOT- 111 cars used to transport crude oil and ethanol that do not meet the CPC-1232 standards set by the Association of American Railroads in October 2011 must be phased out or retrofitted within three years.
Just to give you some idea of the size of the fleet, there are currently about 1.5 million freight cars of all types in operation in North America, and virtually all of these are able to move between all railways in Canada and the U.S. According to the AAR, included in this 1.5-million car fleet are 228,000 DOT-111 cars, and 92,000 of these are used to move flammable liquids.
As of last fall, 14,000 of these cars moving flammable liquids were built to the new 2011 standard. The Railway Supply Institute reports that an additional 30,000 compliant cars are expected to be built by the end of 2015. This will leave a significant shortfall of car capacity to move flammable materials, including crude oil and ethanol.
There is provision to retrofit the older cars to bring them up to the current standard; however, there is not enough North American capacity to build or retrofit enough cars to meet the three-year timeline. As these cars move cross-border, it is imperative that the regulations and timelines be harmonized between Canada and the United States.
Turning now to the Railway Safety Act and the safety management systems, the RSA is the enabling legislation for safety management systems, and it is useful to understand the philosophy and context that the RSA provides. This was one of a series of laws passed in the final third of the 20th century that ended the long dark night of oppressive regulation on the railways.
The RSA places responsibility on railway management for safety and provides for relatively rapid rule-making by the industry to facilitate the introduction of new technology and operating methods, but gives Transport Canada very strong powers to protect the public interest. The RSA also provides a significant role for organized labour to participate in the rule-making process.
The RSA became law in 1988. The first rules submitted and approved under this new act in 1990 were the Canadian rail operating rules. This was the first significant update of these fundamental rules since 1962. These are the basic rules that train crews and other operating employees must follow for safe train operation.
I was directly involved in this and the subsequent rules and engineering standards submissions throughout the 1990s, so I am familiar with that rule-making process.
The introduction of SMS in 2001 was a logical extension to railway safety culture, and it facilitates improved oversight by the railway safety directorate at Transport Canada. Safety management systems have been successfully implemented on all the major railways, including the commuter railways, and on the short lines.
The class I carriers have more extensive and complex operations than short lines and have more depth of resources to implement SMS and to provide the required data to Transport Canada. SMS of course will be much more complex on the class I railways than on the short lines, which may have a top speed of only 30 miles an hour.
In 2013 the Auditor General undertook an audit of Transport Canada’s administration of SMS. In his report, the Auditor General validated the basic philosophy of the RSA and SMS and stated as follows:
Safety risks are inherent to all modes of transportation, and rail...is no exception. Federal railways have the primary responsibility for managing these risks and ensuring the safety of rail operations, while Transport Canada plays a key role in advancing the safety of rail transportation...specifically by maintaining the regulatory framework and overseeing federal railways.
The Auditor General’s report identified issues that need improvement by Transport Canada related to data gathering, the number of audits undertaken, development tools to assist inspectors, and skills development. Transport Canada has responded positively to the Auditor General's recommendations and has set timelines for implementing the changes that were recommended.
In answering the three questions on SMS posed to you by the minister, I offer the following comments.
First, SMS implementation in the railway industry is well advanced. Transport Canada is addressing the recommendations of the Auditor General, especially to increase the number of audits.
Second, while it's difficult to determine specifically how SMS has improved transportation safety, the TSB statistics indicate continuing improvement over the period that SMS has been implemented.
Three, on the question of additional methods to improve SMS, continued education and training both within the railways and in Transport Canada will be needed as SMS evolves. The oversight by Transport Canada needs to be robust, not only by the audit function but also with continuing inspections. Where the carriers are found to be deficient, Transport Canada needs to take strong action, including the imposition of administrative monetary penalties.
Safe transportation is vital to the Canadian economy. The members of our association are ready to work constructively with the government and the carriers to improve the safety of Canadian supply chains for the benefit of everyone.
I would be pleased to answer any questions.