Transport Committee on May 1st, 2014

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

Would you be willing to share that system with the committee?

[Mervin Tweed]

I don't have it with me, but I can check with my COO to see. As I said we have nine, basically, key core competencies that we review on a daily and weekly basis with our employees. I can ask to see what's available for public consumption.

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

Thank you.

As long as it's available to you, it's available to us essentially?

[Mervin Tweed]

If I can find a document.... I'm sure I can, but I'll advise the committee.

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

Once you build a transload facility in Churchill, would you be operating the ships? These would be ships that would be—

[Mervin Tweed]

No. The vessels are sent to us by exporters. They are inspected at the port by federal regulators. It takes about two and a half days. They do it with our grain now. They would actually give us the approval that the vessels were safe and secure to move into the bay for loading purposes.

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

How big would these vessels be in the oil sense?

[Mervin Tweed]

Well, we're talking about a million barrels per vessel.

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

Per vessel, a million barrels. Okay.

At this committee, in the form of a bill that went through not too long ago, we dealt with insurance issues and funding issues concerning the way that oil in marine waters is insured. That would be up to the shippers. It's not up to you, right?

[Mervin Tweed]

Yes.

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

Okay. There was some discussion from other panellists about the insurance issues. Is that a big concern of yours if you're getting into the transport of Bakken crude?

[Mervin Tweed]

No, not at this point it isn't. We're in compliance with all the regulations on insurance. To move forward, we recognize that those regulations are there for a purpose, and if we decide to move with a pilot project, we'll meet those regulations.

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

Okay.

Mr. Marit, Mr. Demers, and Mr. Therien, thank you very much for being here.

Mr. Marit, some of your recommendations had to do with insurance, assessment of risk, and who is going to end up bearing the burden of those risks, whether that's the municipalities, the rail companies, or the shippers. Essentially, as I understand it, you want to make sure that short-line companies are not put out of business by having to absorb enormous risks, but the short-line companies are going to be the ones transporting the dangerous goods. How do we square that?

[David Marit]

I think there has to be that discussion about who is going to cover the liability insurance. Right now in the province of Saskatchewan—and I can only speak to that—the short lines have to carry the same liability as the class I railways. That's a recommendation that the class I railways say to them.

Now, when you come into the transporting of dangerous goods, it's a different issue, so I think what we really need to have a discussion about is who should be covering those costs. Should it be the shipper? Should it be the carrier? Who should be covering it? At some point in time there's going to be a cost to it, and at the end of the day there's going to one payer, and that's going to be the consumer. The costs are going to be put onto the product at the end of the day. I think we need to have to some real discussion on what that number would be. Or should it even be raised? In the province of Saskatchewan, there's no history of a claim ever exceeding or reaching the $25 million.

I think that when you look at short lines and the regulations that the province has put onto them with speed limits and the movement of dangerous goods...because the short lines still fall under the federal regulations in the transportation of dangerous goods, and then they control everything else provincially with speeds and access to communities. I think there has to be a bigger discussion. I know that Lac-Mégantic was an anomaly that we never want to see again, but before we do knee-jerk reactions, we really should have a discussion and a focus on what we're trying to achieve here at the end.

[The Chair, Conservative, Larry Miller]

Your time has expired, but does any other witness want to comment on that same question?

Okay. With that, we'll move to Mr. McGuinty for seven minutes.

[David McGuinty, Liberal, Ottawa South, ON]

Thanks, Mr. Chair, and thanks for your indulgence and your patience as well.

Good morning, gentlemen. I want to pick up on a few specific points.

I think it was Mr. Demers who made the point about advance notice of dangerous goods in saying that your municipality ought to know in advance. That's the position the Liberal Party has taken since we heard about the discussions between the government and the Federation of Canadian Municipalities. It didn't seem to make any sense to advise municipalities after the fact, 90 or 120 days after the fact, that dangerous goods had circulated through municipalities.

Have you made your views known to the FCM and can you give us some insight? I haven't been able to get any insight from the FCM with regard to their positioning on this.

[Jacques Demers]

I also belong to FCM. I sit on its board. I represent the Fédération québécoise des municipalités to FCM. The Fédération québécoise des municipalités represents more than 1,000 municipalities.

What exactly is your question?

[David McGuinty, Liberal, Ottawa South, ON]

My question is simply this: why has FCM decided to allow the municipalities to be informed after the fact that dangerous goods have been transported across their land?

[Jacques Demers]

David Marit is also an FCM member and he may have his own views on the matter.

In my opinion, the problem is not that FCM has agreed that information may be communicated to us after trains have passed through. What FCM said about this issue was that we had just taken a step in the right direction with regard to the railway sector. We were previously not given that information. We felt that knowing what the cars contained was already a good thing. Before that, the information was not disclosed to us, but now this helps us plan.

We are generally told that the same goods are supposed to be transported on those sections year after year. What we are asking is that we be informed before the fact when different goods are being transported across our land, particularly when quantities have been increased. That is our request.

FCM is grateful that we finally know what is going on in our region, which was not previously the case.

[David McGuinty, Liberal, Ottawa South, ON]

Mr. Marit, could I go to some of your last comments about sharing liability?

We had the Canadian Association of Petroleum Producers testifying here some two weeks ago before we broke for our riding weeks. I'm not going to put words in their mouths but it looked and appeared and sounded to me as if they were extremely reluctant to have their member companies share in the third party liability responsibility.

I don't know if you have any experience or insight in this regard, but wouldn't it seem to average Canadians to make sense that if the importing or transporting owner of the dangerous materials, an oil company for example, were to be forced to have third party liability insurance, wouldn't that company necessarily have to make pretty darn sure that the safety management system in place with that railway, the due diligence they would have to perform, would be pretty onerous given the risks for them?

I say that in the context of the Auditor General's rail safety report, which I don't know if you four gentlemen have read. If you haven't, you really should because the Auditor General has concluded without any kind of prevarication that he cannot say to Canadians whether safety management systems are in place.

Mr. Marit, could you give us some of your insight or thoughts in this regard?

[David Marit]

Thanks for the question.

I echo your concerns, and we've done the same thing. I think that's our focus in this discussion today: who is going to bear the cost and what is going to happen? I think we've always said that. Our organization has taken the position, should we just be looking at raising the liability insurance to offset any risk or should we look at the process and how we could maybe implement some safety regulations that would help in the movement of?

We know we can't slow down the trains on the class I's. The product is moving through. You're just going to have a backlog. There's been discussion about splitting trains as they go through. Now all of a sudden you've got twice as many trains.

I think we have to look at the rail management system. I'm also a president of a short-line operation in our province. We look at the ongoing maintenance of the rail line too. I think the class I's do a very good job of that.

I think it's the product that we have to move. At the end of the day, if governments decide that increased liability is the way it's going to go and will continue to do that, there's only going to be one payor at the end of the day, regardless of who's being charged. If you're paying $1.30 a litre for fuel today, you might be paying $1.50 tomorrow, if you're going to be doing things like that.

I think we have to look at some risk management. My colleague, Jacques, made some good comments about safety and the concern of communities and cost to communities in the movement of goods, training your firefighters and your volunteer firefighters, having the equipment in place, having access to railway property—

[David McGuinty, Liberal, Ottawa South, ON]

Sorry, but I have to cut you short. I get all of that.

[David Marit]

Okay.

[David McGuinty, Liberal, Ottawa South, ON]

The question is, should the owners of the dangerous substances share the liability?

[David Marit]

I think it has to be shared because once they put the product on the line they've lost control of the product.