Transport Committee on May 6th, 2014

[Ed Komarnicki, Conservative, Souris—Moose Mountain, SK]

It's pretty tough to frame this in 30 seconds, but the replacement of DOT-111 cars.... Now, I know that it's fairly costly to do that and the capacity to produce those cars is limited because there are only so many people that do that. In your view, (a) what will be the issues regarding capacity, and (b) who ends up paying for those 100,000 or 80,000 replacements?

[Roger Larson]

In our case it's the shipper. We supply our own railcars.

[Fiona Cook]

Same here. We either own them or lease them. We support any safer standard, but we want certainty and the issue right now is that there is no new standard yet to look at investment decisions around retrofitting and buying new cars. We need that first to really have a good analysis of what the capacity issues will be and what the cost will be. We want to see a standard.

[The Vice-Chair, NDP, Hoang Mai]

Thank you very much, Mr. Komarnicki.

Ms. Morin, you have the floor for five minutes.

[Isabelle Morin, NDP, Notre-Dame-de-Grâce—Lachine, QC]

Thank you very much.

Thank you to the witnesses for their presentations.

Ms. Cook, in the document that you handed out at the start of the meeting, you assured us that when it comes to transporting chemical products, which includes dangerous goods, the Chemical Industry Association of Canada does more than what is required under Canadian legislation. You state that under your commitment to responsible management, which is one of your association's sustainable development initiatives recognized by the UN, your members must choose the safest means of transportation, itinerary and carrier when transporting their products. I congratulate you on making this choice.

Do you not think that regulations like those should be imposed on everyone? In his remarks, Mr. Cove told us that would involve higher costs. You are paying more than others because you place greater importance on safety. Do you not think we should strengthen our regulations so that the costs are the same for everyone?

[Fiona Cook]

I'll answer in English.

[Isabelle Morin, NDP, Notre-Dame-de-Grâce—Lachine, QC]

Yes, no problem.

[Fiona Cook]

I could reply in French, but I will reply in English so that everyone understands.

Yes, we would love to see more people become part of the responsible care program. We did have a TransCAER event out west, I think about a month ago. We had the petroleum people attend, so I think there's recognition that these are good practices. The more people we have out in the communities—

[Isabelle Morin, NDP, Notre-Dame-de-Grâce—Lachine, QC]

Do you think the government should impose regulations like that? Why should we have a self-regulatory system instead of national regulations, if you think that is the thing to do?

[Fiona Cook]

Well, I think that would be the way you would have it recognized as a standard, yes.

[Isabelle Morin, NDP, Notre-Dame-de-Grâce—Lachine, QC]

Perfect. Thank you very much.

Mr. Cove, you told us about the long hauls that you do in the United States, but you were unable to give us examples for Canada. Is that because American regulations are stricter and require you to take safer roads? Why is that done in the United States, but not in Canada?

[Marty Cove]

Primarily because of the railway networking infrastructure. There is quite a large number of alternative routings available in the U.S., whereas in Canada the alternative routings are very minimal.

[Fiona Cook]

That's also, I guess, because about 80% of our shipments do go to the U.S.

[Isabelle Morin, NDP, Notre-Dame-de-Grâce—Lachine, QC]

Thank you.

My next questions are for all three witnesses.

When the insurance policy does not cover a significant part of the residual risk, shouldn't there be more investment in prevention?

What avenues will you explore with a view to improving the safety management system?

[Fiona Cook]

As I mentioned earlier, our responsible care program is a continual improvement SMS system. We believe, yes, the focus should be on prevention. Insurance is your last line of defence, and there could be improvements, we believe, on the safety side that need to be looked at. But again, continuous improvement is the way to go.

[Isabelle Morin, NDP, Notre-Dame-de-Grâce—Lachine, QC]

Thank you.

[Roger Larson]

I would agree and add that in our case our member companies have replaced their entire anhydrous ammonia railcar fleet since 2002. They've developed the first responder training program for first responders across Canada. They've invested in mutual aid response. They've completely reworked their processes.

Since 2002 we have imposed two codes of practice on our industry with independent third-party audits to ensure that our products move through the entire supply chain with the highest level of safety. We fully agree that prevention is much more important.

[Isabelle Morin, NDP, Notre-Dame-de-Grâce—Lachine, QC]

That was your own initiative. The government would have never asked for that.

[Roger Larson]

Some of that is regulatory requirements, such as CEPA section 200 compliance with ERAPs, but a lot of it is voluntary industry initiatives.

[The Vice-Chair, NDP, Hoang Mai]

Thank you.

I now give the floor to Mr. Toet.

[Lawrence Toet, Conservative, Elmwood—Transcona, MB]

Thank you, Mr. Chair.

Thank you to our witnesses today. It's great to have you here and very helpful.

I want to start with you, Ms. Cook.

You talked, and Mr. Larson has talked a little bit too, about responsible care. In fact, Ms. Cook, you said that responsible care was mandatory for members. I'm just wondering how you actually measure that or how you audit that. It's great to say responsible care is a requirement, but how do you actually know that your members are following it? There must be some sort of protocol that you're going through for that.

[Fiona Cook]

Our member companies are verified by a third party every three years. The third-party verification is not just the typical auditor, you also have community members who come in as well as members from environmental groups. It's a full-scale—we call it a verification, not an audit. It can take up to a week depending on the company and the nature of the operations. These results are published on our website. They are publicly available.

[Lawrence Toet, Conservative, Elmwood—Transcona, MB]

When you say it's a verification and you talk about continuous improvement, what are they looking for specifically to see that they're actually following through on a continuous improvement program? What are they verifying? I guess that's kind of the key element as far as I'm concerned, especially on the safety aspect of things. It's verification, but what are they actually looking for?

[Marty Cove]

First of all, they're checking to make sure that we are doing what we say we do.

We have, as I mentioned in my opening remarks, processes and policies and that kind of thing, and they're wanting to see documentation and evidence that we are doing exactly what we say we are doing.

Beyond that, they are constantly challenging us to ask what we are doing differently now that we didn't do before. They're presenting best practices to us from other organizations and asking whether we might consider incorporating those into our procedures and policies.

Those are just a couple of examples.

[Lawrence Toet, Conservative, Elmwood—Transcona, MB]

So they are not necessarily auditing exactly what you've done or verifying what you've done, but also verifying if you are pushing yourself to that next level. They are comparing you against other member companies. I'm imagining then that other member companies need to share those practices with others also, so that each member company knows what other member companies are doing so there can be an ongoing challenge amongst each other to bring that forward also.