Transport Committee on Nov. 27th, 2013

[David McGuinty, Liberal, Ottawa South, ON]

I'm not sure if I would agree with your categorization of nebulous sources. I think The Globe and Mail is a fairly credible organization, I don't think they put stories on the front page of their Saturday edition without verifying the veracity of those sources.

Let's go back to the article and see if you can help me understand this. The article goes on to say:

Instead, oil is being sent blindly, with no added degree of safety, and without the higher degree of transparency that Transport Canada sought with its push for more testing. The Transport Canada order “doesn’t seem to change anything,” said one [senior] industry official whose company is involved in shipping oil to Canada.

Later a former U.S. railway inspector says:

There is no requirement to test oil, despite what Transport Canada claims.

Is that true?

[Marie-France Dagenais]

No. The current regulation requires that every dangerous good that is transported needs to be tested, so that's not true.

The other part of the order, or protective direction, does state that if the product has not been tested, it needs to be tested and be put in the highest high-risk means of containment. Basically what we're telling the industry is that if you haven't had the proper testing done, you need to classify it as a higher-risk product and put it in the proper means of containment. We're basically making sure that there is no loophole.

[David McGuinty, Liberal, Ottawa South, ON]

In the wake of this report, this story, which is very disturbing, I'm sure you would agree—very disturbing for Canadians, who are asking themselves really profound questions—plus the Auditor General's report yesterday, which I'm told we're going to go into great detail on in the future, what has the department done on this question? Have you despatched officials to North Dakota? Have you taken this up with the Canadian ambassador? Have you spoken to American authorities? Have you spoken to the American railways that are apparently involved, or for that matter the oil producers? What has happened in response to this five- or six-day-old report now?

[Marie-France Dagenais]

What is happening right now is that following the protective direction and a letter sent by the administration in the U.S., we are actually refocusing some of our inspections and doing it together, the U.S. and Canada, to focus on how products are classified in Canada and in the U.S. You understand that we don't have the authority, as the Canadian government, to go in and inspect the facilities in the U.S. But we're going to do it collaboratively to ensure that the proper testing is done. If the testing is not done, then the product is classified as the highest-risk product and put in the proper means of containment.

[David McGuinty, Liberal, Ottawa South, ON]

How's my time, Mr. Chair?

[The Chair, Conservative, Larry Miller]

You've got about one minute.

[David McGuinty, Liberal, Ottawa South, ON]

Thank you, sir.

The article goes on to say that Transport Canada effectively refused to answer any questions about compliance with the new rules for testing oil. I'm sure that was a decision taken politically, and I respect that—it's not within the ambit of your responsibility to decide whether you're going to comment to the media or not—but just in terms of your front-line knowledge of what's happening here with this new directive, can you help us understand, is any of this report true?

[Gerard McDonald]

Again, without being able to verify the sources of the report and the allegations being made, it's very difficult to ascertain whether any of it is true.

[David McGuinty, Liberal, Ottawa South, ON]

Are any steps being taken to come to a conclusion as to whether this is true?

[Gerard McDonald]

As Madame Dagenais indicated, we're working with PHMSA in the United States. We're also targeting our inspections to ensure that crude oil shipments are being properly classified, and if we find any contraventions of the order, we will take appropriate enforcement action. We won't hesitate.

[The Chair, Conservative, Larry Miller]

Your time has expired, Mr. McGuinty.

Mr. Komarnicki, seven minutes.

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

Thank you, Chair.

It's good to have you here before us again.

I know there's been a lot of mention made of crude oil coming from the Bakken formation in North Dakota, but the Bakken formation also extends to southeastern Saskatchewan, the constituency I represent. Certainly there have been various modes of transportation used to move the oil from the Bakken formation—trucking, pipeline, and more recently via rail. There has certainly been a rapid increase in the use of rail for the transportation of oil. I see more cars in the trains, and in addition to that, there's been the proliferation of transload facilities where truckers haul the oil to the tankers that are located in certain facilities. For example, in a city like Estevan, Saskatchewan, which is located in the southeast portion, it's had a transload facility located in the city near residential premises. My first thoughts were, what are the safety requirements in terms of where transload facilities can be located, and do communities have some reasonable opportunity to object to their location?

Secondly, I know from the meetings I've seen that the city council has had with the transporter, they were very concerned about how their first responders might be able to react to any situation that would develop, particularly within the limits of the city, and whether they had the capabilities or not. My first question is, what are the safety provisions for these transload facilities and communities, and secondly, would the emergency response plans that you referred to be required for crude oil transport within the cities, particularly in regard to the increased traffic? That's probably two questions, but there's a lot in there.

[Marie-France Dagenais]

In terms of the safety requirements, the Transportation of Dangerous Goods Act does apply to loading and transloading, so they need to follow the regulations and requirements of the act. We don't actually regulate, or it's not part of our jurisdiction to choose where the transloading facilities will be located. That's not part of our mandate under Transport Canada.

With respect to the ERAP program, we are looking...because right now crude oil is not part of an ERAPable program. ERAP was designed to actually help first responders when there was special equipment needed to respond to an incident. Now, with the type of crude oil that is being transported, foam seems to be an indication of what is needed. So ERAP would be applicable to the new crude oil that is being transported, and that is what we're looking into—expanding the ERAP program.

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

To include them and to develop... Would you have a baseline requirement that the ERAP program must contain with respect to that?

[Marie-France Dagenais]

Yes, we would have that in crude oil and other flammable liquids, and there's a working group in place with industry, first responders, and municipalities to look at what would be needed in those ERAPs to ensure that the firefighters can properly respond to an incident.

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

Is that ERAP something that the transporter or the train company would have to put together and you would review it to see if it was satisfactory?

[Marie-France Dagenais]

The shippers and the importers are the holders of the plan. We are also looking at whether some carriers should be responsible for some plans. Those are all policy decisions that will be looked at in the next couple of weeks.

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

You may also find that some of the emergency responders, particularly in small communities, might not have the facility or the capacity or the capability to respond. What might be the case in that situation, with respect to any new plan?

[Marie-France Dagenais]

That's why emergency response assistance plans are there. They're industry-owned, and they're basically there to help first responders answer and properly respond to an incident.

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

Would the emergency response plan be different with respect to simply the increase of the flow of traffic, as opposed to a transload facility?

[Marie-France Dagenais]

They would be totally different, yes.

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

There has been a proliferation of, I might say, transload facilities in southeast Saskatchewan. Is it fair to say there aren't any emergency response plans in place at the present time?

[Marie-France Dagenais]

For crude oil, there's no emergency response assistance plan in place.

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

Is the fact that they're located next to residential premises an item of concern? Shouldn't it be?

[Marie-France Dagenais]

Every time we do a risk assessment, one of the criteria is a high-density area. We looked at that as part of our risk assessment in terms of determining if there's a need for regulatory amendments or not.