Transport Committee on May 1st, 2014

[The Chair, Conservative, Larry Miller]

We'll call our meeting to order. I'd like to thank Mr. Tweed, Mr. Therien, Mr. Marit, and Mr. Demers for joining us today to participate in our study on rail safety and the transportation of dangerous goods.

With no further ado, we will turn it over to SARM and Mr. David Marit for 10 minutes.

[David Marit, President, Saskatchewan Association of Rural Municipalities]

Thank you, Mr. Chairman, for this opportunity to appear before the committee.

I'm the president of the Saskatchewan Association of Rural Municipalities, and we've appeared before the committee in the past and appreciate the ongoing relationship we have with the members.

Today, I'd like to provide you with a summary of the current and future challenges facing rural Saskatchewan regarding rail safety. These issues are of great importance to SARM and our member municipalities. Rail transportation service is an issue of vital importance to our province. Our small, yet growing population, large volume of agriculture, and oil and potash production right in Saskatchewan mean that a significant amount of our products are exported. The distance to ports and the landlocked nature of our province make rail the only mode of transportation currently available to haul our products to export position.

As a result, our province’s economic advantage is very much dependent on a competitive rail transportation system. The recent rail disasters have clearly raised questions about the safe transport of dangerous goods via railways through our municipalities across Canada. We'd like to begin today with comments on grade crossing regulations.

Proposed changes to rail crossings currently being consulted through part I of the Gazette raise issues of concern about both safety and cost for municipalities. SARM supports the intent of the proposed grade crossing regulations; however, their current direction is unclear. SARM is concerned with safety and emergency service access to communities and the length of trains. We understand that there will be a move to two-mile trains and this will block crossings and cause unintended consequences for communities. The continuous obstructions of grade crossings by trains is a large concern for municipalities.

SARM recommends that guidance be provided by the Department of Transport to municipalities on how to address these issues at the local level to increase safety.

The costs for municipalities to upgrade crossings are unknown, and the long-term maintenance can be expensive. It is required that all crossings be upgraded to meet the indicated standards. There remains a possibility that smaller municipalities will face significant costs, ones they cannot afford. Not maintaining crossings will result in closures as a result of municipalities being unable to meet the expense for upgrading sight-line requirements. This would have tremendous impact on local ratepayers and the rural municipalities.

SARM recommends that additional funding be provided to ensure municipalities can comply with the requirements.

It is our understanding that there will be some flexibility in meeting the requirements within the final regulations. SARM recommends that a reference guide be developed that outlines the flexibility that local authorities have to comply with the regulations.

In consultation with the Saskatchewan Shortline Railway Association, SARM has made a submission to the Canadian Transportation Agency on third party liability insurance coverage regulations. The Lac-Mégantic tragedy was a rare case in which no reasonable requirements for third party liability insurance would have provided adequate coverage. After an internal review and consultations with industry stakeholders in our province, we don't believe there should be additional or different third party liability insurance requirements related to the transportation of certain commodities such as dangerous goods.

Our recommendations include the following.

Provincially regulated short lines are a lot different from the high volume, high speed railways that are federally regulated. If minimum requirements for liability insurance are imposed, SARM recommends that the short-line railway requirements be less than those of class I railways.

We also recommend that adequate consideration be given to the level of risk posed by provincially regulated short lines and that, if regulations are imposed on them, they correlate with the level of risk. Because railway operations vary in terms of the volume of traffic, commodity mix, scope of operation, and number of crossings, minimum requirements should be less on shoreline railways and based on individual risk assessments, past history, and length of service.

Short lines have become integral to the transportation network, moving Canada’s mining resources to local and regional markets. Our concern is in regard to increased liability and whether or not the requirements for class I railways will be downloaded onto short lines. The shoreline sector is essential for providing a continuous railway network across federal and provincial jurisdictions; therefore, additional costs in obtaining higher third party liability insurance could be detrimental to their business. SARM recommends that these additional costs remain with the class I railways.

With respect to rail shipments, SARM has always advocated that an effective rail transportation system is critical to the competitiveness of our agriculture sector and other rural-based industries in Canada, including oil and potash, which we will see being transported via rail more regularly as pipelines hit capacity and potash production increases.

The poor level of rail service for the grain industry has been affecting grain profitability across Canada. The rail capacity to handle increased grain exports is vital to supporting the Canadian economy and to the competitiveness of our agriculture and food sector.

SARM supports the efforts the federal government has made to improve grain movement throughout our province, and supports the amended version of Bill C-30, the fair rail for grain farmers act. We are, though, disappointed that the legislation did not include more substantial penalties on the railways and failed to increase the number of grain cars that railways are required to deliver.

With regard to stiffer penalties and minimum grain cars, in order to ensure that a similar backlog does not reoccur in future years, SARM recommends that mandatory levels of rail service agreements be legislated, with much stiffer penalties imposed when levels of service are not met, and that legislation be implemented to ensure that the railways move a minimum of 13,000 cars.

In closing, SARM recommends the following to ensure that rail transportation service continues to sustain Saskatchewan’s growing economy.

If costs for municipalities to meet the proposed grade crossing requirements prove to be too expensive, additional funding should be provided to ensure that municipalities can comply. Guidance should be provided to municipalities to address safety concerns regarding obstruction of grade crossings, and a reference guideline should be developed that outlines the flexibility that local authorities have while attempting to comply with the regulations.

Second, third party liability insurance requirements should be lower for short-line railways than for class I railways, and additional costs should remain with the class I railways.

Finally, to improve the overall current level of rail service for the shipment of products, stiffer penalties should be imposed when levels of service are not being met to ensure that the minimum cars will be moving grain.

Thank you very much, Mr. Chairman, for this opportunity.

[The Chair, Conservative, Larry Miller]

Thank you very much, Mr. Marit.

We will now move to OmniTrax Canada.

Mr. Tweed, welcome back to the committee.

[Mervin Tweed, President, OmniTRAX Canada]

Thank you, Mr. Chair. It is a pleasure to be back here.

I think probably one of the reasons I'm here is that in the last several months, OmniTRAX Canada has put forward a proposal to move sweet crude through the Port of Churchill. Obviously that raises some of the concerns that I think are being addressed by the committee.

I'll give you just a brief overview. OmniTRAX is a North American operation. We run 17 rail companies and two ports in North America. We're the largest independently owned private rail company in North America.

In Canada we have three basic rail assets — the Hudson Bay Railway that runs from The Pas to Churchill, the Carlton Trail into Saskatchewan, and a little piece of the Kettle Falls in southern British Columbia. I think it's important I'm here with Dave today, because Hudson Bay, our railway to Churchill, is federally regulated, and yet our Carlton Trail is regulated provincially, so we do see both sides of it.

We're a full-service provider into northern Manitoba and, indeed, northern Canada. We provide freight services. We provide fuel resupply. We obviously handle a lot of grain, and we are also the resupply area for the Nunavut-Hudson Bay area, so we have lots of interest in part of the discussions that are taking place today.

Through our freight services, basically we offer our clients road, rail, port, and marine. We are working on an air agreement with one of our contractors in the north.

We do run a marine tank farm at Churchill. Basically with the resupply we do into the northern communities and into Nunavut, we have four tanks with ten million litres of capacity each, and the commodities we deal with are gasoline, diesel, heating oil, and aviation fuel.

Obviously when people look at the Port of Churchill in particular, they look at the benefits of distribution. Although I don't have a chart I can share with you, I can tell you shipping out of the Port of Churchill to places like Rotterdam, Liverpool, and Oslo can create as much as three to three and a half days' savings for the exporter, so that's a substantial amount of money to them, and that also provides us with a greater opportunity to the bigger market.

To review quickly, last year we shipped 640,000 metric tons of grain through the port. People ask me about the impact of the Wheat Board. We have gone from basically having two shippers into the Port of Churchill to having five. We're hoping this year we'll have seven. That has created some interest for other shippers to take a look at us and see what we can do and are prepared to do.

We obviously have lots of opportunity for diversification, but I think, with regard to the study, I'm going to focus on crude oil through the north, and obviously on where we're situated with the Bakken development in southeast Saskatchewan and Manitoba.

Something I didn't realize until I got involved in this is that when we talk about shipping east or west or north or south, Canadian oil companies don't get the full value by shipping into the U.S. They only get the full value by shipping export into the world markets. I'm told that about $30 billion is missed over a five-year period simply because we have to accept a price that is different from the world price. So it does make a substantial change in people's thinking as far as how they can ship and how they can benefit going through the Port of Churchill.

Our proposal was to do a test pilot in which we would load a million barrels of oil. For economic development, doing that creates about 25 new jobs as well as 20 in construction. Over the years, through our company, we have shipped a total of 2.354 million barrels of petroleum product, and I'm proud to say that we've done it without any incident. I think that's something that speaks to our safety record. In the last three years, on any of our products that we are moving to the north, we've had no derailments on our main line.

So to talk about the safety parts, obviously, we've had an eye-opener. I think it's interesting, the safety culture in Canada, and in particular, I believe, in the rail. We don't start a meeting, even in our executive offices, anymore without somebody being appointed the safety supervisor. We identify somebody who has CPR. We identify the exits. We believe that if we can set that pattern for our employees, then it creates an atmosphere where everybody feels comfortable. It's something that I've seen as an important part of our issue as we move forward. No matter what we try to ship, we're going to have to do it safely, and we have to have a culture that promotes that.

With the oil in particular, and the volatility, we do have plans in place to address the emergency and security issues. We have investigated and are looking at the necessary equipment required for prevention and response, we are training staff on transfers to oversee the process, and we have oil spill response and fire emergency equipment ready to be deployed.

One of the things...and it's happened, unfortunately, since Lac-Mégantic. You know, everybody has to review their safety procedures and their standards. And looking back at what we have done and how we do it.... We will not leave unattended trains on a main track. We will lay over in protected terminal areas only. We reduce our speeds through communities. I know in provincial legislation they have a maximum speed for going through a community. From discussions with the communities that we serve, we now go through the communities at five miles an hour. I'm told that should something ever happen, at that speed it would just basically be a car going off the rail. It wouldn't be anything quite as tragic as we've seen.

One of the challenges we have, being a northern community and a northern operation, is getting material and people should there ever be an incident. In working with professional people who study this on a daily basis, we are proposing to put an initial response car on every train that we ship oil on. Basically the equipment would travel with the engine, so that our only challenge after that would be to get the people there. We recognize that moving material in an isolated northern area in northern communities does become a bit of a challenge, so having that equipment on site works to our advantage.

With the new railway regulations in regard to tank cars, we've always maintained at least two individuals on our locomotives. No locomotive is attached to one or more loaded tank cars transporting dangerous goods, and they're never left unattended. A specific number of handbrakes are always applied, and all main brakes that are on a locomotive are attached.

Now, we've engaged people who give us advice on our plans. We basically develop a business plan, an economic plan. One of the benefits that we have in Churchill is that we have a third-party organization comprising federal, provincial, and company.... When we're trying to validate our safety plans, we farm it out to a third party to come back and tell us. We believe that because it's a third party and not hired by us directly, we're getting an honest and fair assessment of what we are doing, and I think the governments feel very much the same way.

I won't go too much further. We do have a couple of recommendations, and I would suggest that although OmniTRAX is a North American company, we are Canadian-owned and operated. We're run by Manitobans. We currently in our peak season will run up to 300 employees. In northern Manitoba we're one of the major employers and more than half of our employees are first nation, Métis, or Inuit.

You've probably heard something similar to a couple of the recommendations we'll make. I respect the changes the government has proposed and brought forward. I think they're doing them for the right reasons, the right purposes.

The challenge that you have to some degree when you're working with two countries is that you have to make sure that your regulations are compatible. If they're not then it creates a real problem not only for us as a company but also, I would suggest, for all the companies that are moving product of any kind back and forth. Following up on what Dave said, we are short lines. I think based on what I've seen of other short lines and our company in particular, we do try to do things in a professional way. Obviously, because of our lack of size and lack of capacity we rely on those short runs and those short hauls. That's our investment and that's where our profit centres are.

I encourage the government. I think what you're doing is correct, but we have to be very cautious about limiting or eliminating what short-line rail companies can do for the people they serve. If we're limited in the number of our rail cars like we are this year for wheat, which to me is kind of a strange issue because we have a glut on the market but our challenge is going to be to get cars, the same could apply into the volatile products that we're looking at moving. We want to be safe, obviously, first and foremost, but we also have to be reasonable, in the sense that things happen for a various set of reasons and sometimes it's not the machine that's creating the problem but sometimes it gets blamed for it, and that's where we address the issues first.

Those would be our couple of recommendations. I look forward to any questions from the committee.

[The Chair, Conservative, Larry Miller]

Thanks, Mr. Tweed.

We now move to Mr. Jacques Demers, the Mayor of Sainte-Catherine-de-Hatley.

You have ten minutes or less, please. Go ahead.

[Jacques Demers, Mayor, Municipalité de Sainte-Catherine-de-Hatley, As an Individual]

Thank you very much, Mr. Chair.

I am proud to be here as a mayor and as the person responsible for the Eastern Townships region.

I would like to discuss several points with you today.

I quite agree with the previous speakers who said that what we were resolving was not the Lac-Mégantic tragedy. It occurred in our region, on our land, and it affected friends and relatives who were there, but it goes beyond that. I view the tragedy as an accident that was caused by several factors, as we will see once the investigation report is made public. We have already seen that several factors were involved. Beyond the report, however, this is an opportunity to look at the state of Canada's railway system, some parts of which have not been upgraded in many years. The system must be examined, and that is what we are doing. I think everyone is devoting a lot of energy to it.

The task for municipalities will be to equip people so they know what is being transported on railway lines in real time. This is very important for us. We are told that the same goods will be transported on rail lines as in previous years. That is fine with me, but, where major changes are made, we must know in real time so that we can make sure people are aware. The elected representatives or mayors of a municipality do not necessarily need to know what is happening on the line, but the chief of the fire department or the director of risk assessment must know so that they can prevent accidents. They need to know where the goods are in the event they have to take action.

More qualified people than I could tell you what standards would be appropriate. Should goods be located 50, 100 or 200 kilometres from one another? I do not know. There are various risk levels. We have to accept the fact that certain risks can be mitigated and that it is harder to do so for certain other goods. It is essential for us to know where we can find those goods and who has the skills to use them. The people who must take action also have to have the necessary skills. That is essential.

Costs are associated with that, and they must not fall directly to the municipalities. If rail transport is selected, the costs must be charged to the railways.

The same is true of insurance, which we discussed earlier. I quite agree that insurance needs will have to be looked at based on risk levels, not in overall terms. Some sections of track are less dangerous than others, and the same is true of the goods that circulate on them.

Perhaps we should take out group insurance. I am not a specialist in the field, but I believe there are ways to protect oneself from risks in the marine sector. Depending on the level of risk involved in transporting certain goods and volumes, there should be a way to establish ratios so that everyone pays a fair share in the event of an accident. It is essential for us that a fund and terms and conditions be established so that we can bear the costs if a tragedy occurs.

Now I am going to talk about train speeds, which are the main reason why I am here today and which I have been discussing since last July in particular.

We make rail lines safer by lowering speeds. Rails are checked, most of the time together with the railway, and speeds are often reduced. Limits are 10 miles an hour in several places on very important sections of track. We agree here that 10 miles an hour is not fast enough to make transportation profitable.

If we believe in Canadian railway transportation, we should do something about it. We reduce speeds to 10 miles an hour, but we should require the railways to upgrade rails and restore trains to what is considered a normal speed. Is the normal speed that a railway can support 30, 40 or 50 miles an hour? Once again, I leave it to the experts to determine what a normal speed is, but it is essential that we resolve that aspect.

Let us stop lowering train speeds. Rail transport is not economically viable if speeds are reduced. A region cannot attract businesses that require rail transport if no work has been done to its railway in 10 years and trains are restricted to 10 miles an hour on most sections of track.

Furthermore, to improve safety, people need to see that work is being done on those rails. There are rotten wood and loose spikes on some sections. It is all well and good to say that 10 miles an hour is a safe speed, but people want the work to be done. If we believe in rail transport, that work has to be done.

It obviously has to be done from an economic standpoint. Everyone would gain from it. Some will say that small companies may encounter problems and risk bankruptcy. I think that is completely false. If there is a risk of bankruptcy when railway speeds are limited to 10 miles an hour, that means people are taking a short-term view of their business.

If we keep using the rails at that speed, they will continue to wear out, and work will cost more when it is finally done. I think it is essential to do minimum maintenance on the rails. We absolutely need to make progress on this issue, or else we will not have done our job.

Thank you.

[The Chair, Conservative, Larry Miller]

Thank you very much.

Now we'll go to Mr. Emile Therien, past president of the Canada Safety Council.

[Emile Therien, Past President, Canada Safety Council, As an Individual]

Good morning, Mr. Chair, and thank you very much for having me.

For you people who are not from Ottawa, I apologize for our weather.

In light of that terrible tragedy at Lac-Mégantic last July, Transport Canada was taken to task in many quarters regarding its commitment to rail safety in this country. That awful train accident, the worst in the history of our country, took lives, injured others, caused extensive property damage, and basically decimated a proud and vibrant community.

I have been a long-time critic of rail safety in this country, often being severely critical of Transport Canada and the railway companies. There were very serious problems. Between 2003 and 2007, the average number of main-track derailments in this country was 103, or two a week. That did not include the number of non-main track derailments, mainly in yards or terminals. In the year 2007, then Transport Minister Lawrence Cannon stated in the House of Commons that “rail safety in this country has gone down the tube.”

As regulator, Transport Canada, with overall responsibility for railway safety, conducts audits of how a railway company maintains its safety management systems. It does not engage in the inspection of tracks and switches. The companies’ safety responsibilities include day-to-day safety and inspections. However, Lac-Mégantic, Plaster Rock, and other serious rail incidents aside, I sense that there has been a monumental shift, albeit spearheaded by legislation, in how Transport Canada and the industry approach safety, with very encouraging and positive results.

Since 2007, train accidents in this country have decreased by 23%, and passenger train accidents by 19%. In addition, there were 16 main-track derailments for the first quarter of 2012, representing a significant decrease from the 2011 total of 38 and the total five-year average of 34. In addition, from January to March 2012, total accidents by million train miles are 11.33, down from 14.29 in 2011 and the five-year average of 14.3. Why is this happening?

Transport Canada does, indeed, take railway safety very seriously and continues to take action to ensure that rail safety is a high priority. Only a few years ago, the government increased the rail safety directorate’s financial resources by over $72 million in order to enhance railway safety oversight, and an additional 25 inspectors were hired. Additional resources were also assigned to education and awareness, such as the operation lifesaver program, a joint program of the Canada Safety Council, the Railway Association of Canada, and Transport Canada. I won't go into details on this program but it's in my presentation.

Transport Canada also promoted amendments to the Railway Safety Act through Bill S-4, which received royal assent in May, 2012. These amendments will strengthen Transport Canada’s oversight and enforcement powers to ensure compliance with all safety regulations by the railway companies. These important changes can only encourage rail companies to create, maintain, and enhance a culture of safety.

One important category that has also shown significant improvement when it comes to rail freight is the discharge of dangerous goods. Statistics show an ongoing downward trend. The Lac-Mégantic and Plaster Rock incidents aside, most leaks, fortunately, are small. Organizations and individuals attribute this decrease in incidents involving dangerous goods to the proactive stance and leadership over the years by the Transportation of Dangerous Goods Directorate, which falls under the authority of the Minister of Transport.

The TDG General Policy Advisory Council has played and continues to play a large role in this success. This council, which meets twice a year, brings together stakeholders—police, firefighters, industry, including rail, provincial governments, unions, safety interests and others—with very different interests and agendas. But at the end of the day, through consensus and thoughtful discussion, decisions affecting the movement of dangerous goods are made in the best interests of the health and safety of all Canadians.

The next meeting of the council will be held here in Ottawa on May 15. I have represented the Canada Safety Council on that important committee for many, many years. I mention some of the activities here, and I'll bypass them in the interest of time, but they are the objectives or the activities of that directive, and here I think that things are going well.

Regarding SMS and the railway industry, the amendments to the Railway Safety Act in 1999, many years ago, gave railway companies the authority to implement safety management systems, or SMS, defined as a framework for integrating safety into day-to-day railroad operations. SMS includes safety goals and performance targets, risk assessment, responsibilities, rules and procedures, and monitoring and evaluation processes.

With SMS, companies were supposed to identify risks before they became even bigger problems. With SMS, many critics said Transport Canada largely gave up its safety oversight role.

Since its introduction it has been very controversial. The friction it caused between management and employees of railway companies led to an acrimonious work environment, which in and of itself has a very bad effect on safety.

Proponents have long claimed that SMS is not self-regulation or deregulation, and has not fundamentally changed the way the companies operate. Railway company management say that SMS has enhanced both safety and the culture of safety in the industry.

Opponents of SMS claim otherwise. Railway workers feared that allowing the companies to oversee the government’s safety standards and regulations was a conflict of interest. They pointed out that along with SMS came a reduction in the number of inspectors, thereby eroding the authority and function of the regulator. With SMS, spot audits, historically regarded as critical safety checks, came to an end. Workers were also concerned that SMS gave companies the responsibility to evaluate and manage risks, based on the level of risk they were willing to accept. A risk threshold set by the industry may not be as demanding as one set by Transport Canada. The question must be asked, is transferring the determination of risk levels to the industry, in effect, a deregulation of safety?

Concerns have also been expressed that SMS allows companies to regulate themselves, in the process removing the government’s ability to protect Canadians and their environment and making it possible for the industry to hide critical safety information from the government and the public.

I recognize that SMS is not restricted to Canada. But in view of the poor safety record that accompanied its implementation here, going back to 1999, a critical assessment of its impact on rail safety at this time is in order. The government must take firm action with respect to problems, perceived or not, to maximize safety for Canadians and the protection of our precious environment.

In December 2006, then-transport minister Lawrence Cannon set up an advisory panel to review the Railway Safety Act. The panel came up with 50 recommendations to improve rail safety in Canada. The panel’s report recognized that SMS had not resulted in the overall safety improvements that were expected. The panel called for a strong and proactive role for Transport Canada’s rail safety directorate and a strong commitment to funding and staffing.

I understand there is currently a lack of protection for railway workers who report safety violations to Transport Canada. They are not allowed to bypass their company’s SMS. If that company has already accepted the complaint as a tolerable level of risk, nothing can be done, and Transport Canada will never know about it. Whistleblower protection must be incorporated into the Railway Safety Act, and soon.

I'm almost done, Mr. Chair.

Safety is not a frill. The railway companies are a very important industry, and we've all alluded to that. They employ thousands of Canadians from coast to coast and some in the United States. The products they move—agricultural, industrial, commodities, etc.—are an integral and important part of our economy responsible for a large part of our prosperity.

That being said, Canadians must be assured that rail safety is not being compromised in the interest of profits. It is false economy to cut back on safety. Costly, preventable catastrophes happen because potential risks in the system are accepted as normal.

When the space shuttle Columbia was destroyed in February 2003, seven astronauts died. The report on that disaster revealed that it was a result of flawed safety practices. Even after Challenger blew up in 1986, also killing seven astronauts, NASA did not improve its safety systems. The August 2003 Columbia accident investigation report found that managers accepted flaws in the system as normal and frowned on dissent.

I would not like to think this is the kind of atmosphere that has developed and continues to simmer undetected and unknown to the government and the public in some segments of railway companies until one day other unspeakable tragedies, not unlike those in Mississauga in 1977, and Lac-Mégantic last July, occur.

Just one last thing. I think as an ongoing discussion, especially in this city and across the country, the terrible and tragic collision between a VIA train and an OC Transpo bus in Ottawa last September 8, which left six bus passengers dead and 30 injured—many seriously—has raised many concerns about the safety of railway crossings in this country.

Transport Minister Raitt announced recently that under the grade crossing improvement program, Transport Canada would inject over $9.2 million for improvements at over 600 railway crossings across the country. I would hope a large part of this money focuses on public education and enforcement.

Let's put the facts into perspective. As reported by the Canada Safety Council there were 169 rail/highway crossing crashes in this country in 2011. Of those, 25 people were killed and 21 were seriously injured. It is suspected that some of those killed were suicides, very much a mental health issue. A motorist is 40 times more likely to die in a crash involving a train than in a collision involving another motor vehicle. Most collisions occur within 40 clicks of the motorist's home. The principal cause of the level-crossing collisions is a failure of the motorist to stop or exercise due care and caution or to observe and comply with existing laws and regulations. Roughly 50% of all rail/highway crossing crashes occur at crossings equipped with flashing lights, bell or flashing lights, bell or gate, or whatever goes along there.

Many of these collisions can be reduced by driver behaviour combined with enforcement and common sense and at a very modest cost. In the grand scheme of things, should this not be the priority?

Thank you very much.

[The Chair, Conservative, Larry Miller]

Thank you very much, Mr. Therien.

We'll now go to questions.

Seven minutes, Mr. Sullivan.

[Mike Sullivan, NDP, York South—Weston, ON]

Thank you, Mr. Chair.

And thank you to the witnesses, it's been an interesting set of discussions here today. I'm learning a little bit every day that we talk about this.

I first want to talk to Mr. Tweed about the plans for Churchill. I'm assuming that you don't now have a facility to transfer large amounts of crude oil to ocean-going ships in Churchill, or do you?

[Mervin Tweed]

No, we don't.

[Mike Sullivan, NDP, York South—Weston, ON]

But that's part of the plan, to build one?

[Mervin Tweed]

The plan is to do a pilot test which would involve setting up a loading facility and if we can prove that it makes sense, then we would add to the investment to make it a full-time project.

[Mike Sullivan, NDP, York South—Weston, ON]

So....

[Mervin Tweed]

As of today we're not transporting....

[Mike Sullivan, NDP, York South—Weston, ON]

You're not in that position. So those 2.354 million barrels of petroleum product are for storage and for shipping via other means from Churchill into the north essentially; it's not a world market facility, but that's what you hope to become.

[Mervin Tweed]

Exactly. What we do is supply into the Hudson Bay area by barge. We load it from train onto barge at the port, move it out from there, and then move it by truck to the airports in the surrounding area.

[Mike Sullivan, NDP, York South—Weston, ON]

I was very interested to learn of your speed limit through communities of five miles an hour. Is this dangerous goods only or all commodities?

[Mervin Tweed]

We do it with everything. We met with a lot of the communities and one of the biggest concerns they raised with us was the speed that we went through their community. I think at the time we were doing 10. But in consultation with them, we just felt it was the right thing to do. It doesn't impede our ability to deliver on time, so it's something that we just do.

[Mike Sullivan, NDP, York South—Weston, ON]

The minister last week announced that you will have to have an ERAP when you transport crude oil. Do you already have one in place or is that something you're going to have to develop?

[Mervin Tweed]

That would be something that we would develop. And we're in the process of doing that.

[Mike Sullivan, NDP, York South—Weston, ON]

You have a safety management system obviously, because you're a federally regulated railroad.

[Mervin Tweed]

We have a safety system that we implement and I can tell you that it seems to evolve almost daily, in the sense of reports back that we get from our employees.

I sat in on one of the meetings that we had in The Pas recently and it was pretty enlightening for me to listen to what the people out there actually on the tracks doing the work had to say. And we encourage them to do that simply because we're the lone rail company out there and we're watched very closely by the communities we serve.

[Mike Sullivan, NDP, York South—Weston, ON]

I bet you are.

[Mervin Tweed]

So it's in our best interest to do that.