:
Thank you, Mr. Chairman, and honourable members.
I will start with an introduction about us. I am Jamal Hematian, the VP of product engineering, and I have Max Vanderby with me. He's our director of production engineering. We run the engineering department of National Steel Car.
National Steel Car is the only railcar manufacturer in Canada. We are over 100 years old. We serve North America and some international markets. Our workforce is about 2,000 people and sometimes goes up to 2,400 people. We design and build freight cars: 12 different cars and 76 models. We have five flexible lines, and our maximum production capacity can go between 12,000 to 15,000 per year.
We are certified to AAR requirements and we are the only railcar manufacturer in North America certified for ISO. We have over 300 patents on different car designs and we spend about $5 million to $6 million on R and D projects every year.
In this slide you can see the variety of railcars we design and build, including tankers. This next slide is important because it shows our AAR certification. You can see in the table that it covers almost every type of railcar, including tankers. We are certified to design and build different tankers, repair them, or refurbish them.
The point about tankers is the rules and the governing bodies. It's very heavily regulated, and there are different organizations that have rules, and we have to obey them and to follow them. If you compare a tanker to another freight car, we don't have that much option of making decisions because everything is in the book and you go by the book.
I summarize major organizations and rules in this slide. There is an Association of American Railroads, which is AAR, and there are different manuals that I summarize over there. There are two important ones, if you take note of them. The third line is CPC-1232, Petition-1577. Also there are more rules from CFR and PHMSA that we have to obey and follow.
On top of that, there are Transport Canada, FRA, ASTM, AWS, and API. You can see that for tankers, it's very well organized and governed, and everybody has to play by the same rules. On top of that, it's well documented. NSC has a certification to design and build tankers. For every order, we have to make a package of drawings and we have to send it to EEC, which is an engineering equipment committee at AAR. They will review it and they give us a certificate for that order with that package. Even during the process if we want to change anything in there, we have to go back through the process and tell them what we want to change. They review it and they get back to us with yes or no. It's a very heavily regulated environment.
There are so many different types of tankers. In total, I think there are over 334,000 tankers in service, but that includes all different types of tankers. They categorize them based on the application of those tankers, on what service they do. They classify them as pressure, non-pressure, jacketed, non-jacketed, insulated, and non-insulated.
When we talk about DOT-111, we are talking about non-pressure tankers. Within this group, we again have subsections. We call them packing groups I, II, and III. What this means is that for the commodities you are moving with these tankers, what's the level of the potential for risk or danger with them? Group I is the highest. It is the most critical one. Group II is a little bit lower, and group III is much lower.
This next slide shows the DOT-111A100W1, which is general purpose, non-pressure, and good for groups I, II, and III. It addresses all of them. Crude oil and ethanol fall into the group I and II packing groups. The first one, at 31,800 gallons, is non-jacketed. The second and third ones are insulated and jacketed. There is another point to that, and we have to be careful. There are two things that we have to consider. We have jacketed with insulation, and we have thermal-protection jacketed. So on the insulation and the thermal protection, they are two different things, and you have to deal with them differently. The design is not so different, but they are two different animals, so we have to be careful with that.
At NSC, we design and build the first two right now. We have the approval to go ahead. We have shipped the first one—I think 25 or 30 tankers right now—and we are building both of them at the same time.
The next point I want to mention is very important. Again, we have all of these discussions about improvements and changes in design. For all of these tankers within DOT-111—I am focusing on this one and not going to any other tanks, because it's going to be endless—for crude oil and ethanol, we have two generations before 2011. They are called legacy cars. The code is HM-251. For this meeting, let's call them old cars.
In 2011, a new package came in to improve the design and make some changes, with about 80% of these changes being about the safety of these tankers, and they called that car CPC-1232. If you remember, when I was going through the rules I said to remember that CPC-1232 is the key. There were changes from legacy cars to these, which they called “good-faith cars”. They called the CPC-1232 the good-faith car. So if you hear that, you can differentiate between them.
One major difference between legacy cars and good-faith cars is the gross rail load. When we talk about gross rail load, it means the car body, the truck or bogies and suspension, what you put inside, and how much it weighs all together. The legacy car was 263,000 pounds; we call it gross rail load.
That's fixed in those cars, just split it into two portions, car body and what you put there. What's the car body? We call it light weight. What you put there, we call lading or capacity. If you increase the light weight, you lose your capacity because the sum is fixed at 263,000. If you reduce light weight, you increase the capacity.
So, the legacy car is 263,000 pounds GRL and the new, good-faith car is 286,000. The gross rail load jumped from 263,000 to 286,000. Because of this jump, to increase the efficiency of the system, they had to review the design and determine what needed to be done to improve the car. At the same time, they looked at other incidents that happened with tank cars and put it all into one package. In a circular letter from the AAR regarding the CPC-1232, they said that going forward, we had to follow this. Nobody could design or build the old one.
:
Thank you, Mr. Chairman and members of the committee, for inviting the steelworkers to discuss our union's perspective on the future of rail safety in Canada as it relates to railway workers and the transportation of dangerous goods.
I'm Richard Boudreault, the steelworkers' area coordinator from Montreal. I'm also the coordinator responsible for our transportation members in the province of Quebec. Since 2005, I am also the chief leader for the negotiations on The Montreal, Maine and Atlantic Railway. The last collective agreement was voted on and adopted by our members in April 2012 and is still in force right now.
The USW, or Syndicat des Métallos, as we are known in Quebec, represents more than 5,000 rail workers across Canada and Quebec, from clerks and intermodal employees to maintenance of rail employees and on-train conductors. As well, I am pleased that also appearing before you today are representatives of National Steel Car Limited, a company that employs members of USW Local 7135 at its Hamilton operation. Indeed, our members have been involved in both manufacturing of rolling stock and railway operations for more than 70 years. We are clearly stakeholders in the future of rail safety.
The Lac-Mégantic tragedy on July 7 involved a railway company that employed our members, including the conductor, Mr. Tom Harding, whose life has changed as dramatically as the families in the community. All were impacted by both government and company decisions that we believe were wrong-headed from the start. For us, a union dedicated to protecting our members and their communities, the Lac-Mégantic story itself can in part be traced to our experience in collective agreements.
In fact, we were in negotiations for 15 months, and I have just a few comments about that. We had a new issue concerning the one-person operation, and we went before the federal government and this item was a deal breaker. We had been told by the federal mediator that we were not the union that would decide if this would be implemented; it was not our responsibility. The responsibility was Transport Canada's to decide if it agreed or not to implement the one-man crew operation at MMA.
In fact, it is important to note that The Montreal, Maine and Atlantic Railway received permission to go with a one-man crew in May 2012 , exactly one month after the signature of the actual collective agreement with our union. MMA was the second company in Canada that received that authorization from Transport Canada; the first one was QNS&L, Quebec North Shore and Labrador.
We are all aware that the volume of dangerous goods shipped by rail across Canada has jumped 30% in recent years. The boom in petrochemical and crude oil shipments is raising new challenges that obviously have not been fully addressed. Otherwise, none of us would be in this room today. We have responded in various ways to questions of rail safety over the years, including on such issues in the Railway Safety Act as the construction or alteration of railway works. This includes the rail lines, structures, signals, and road and utility crossings. This section simply says that the minister or Governor in Council can make regulations that require railway companies to undertake certain actions, such as changing engineering standards.
Our members involved in railway track maintenance report that speed is an issue they often feel threatened by. They often work in very remote areas where trains, including those carrying dangerous cargo, race through a maintenance zone at top speed with workers only a few metres away from the track.
Other so-called rules are that the minister may require a company to make or amend rules on just about every aspect of their operations. In doing so they must consult, during a period of 60 days, with each association or organization that is likely to be affected. This has not been done or enforced as rigorously as it should be. Allowing railways the absolute discretion to inform and involve whomever they choose in the process of transporting increased amounts of dangerous goods is the rail equivalent of allowing the fox to guard the henhouse.
As I said earlier, our members not only work in but are residents of communities through which dangerous goods pass on a daily basis. There is no excuse for safety management systems not to include full disclosure to relevant stakeholders, including employees, their unions, municipalities, and possibly others. Raising the spectre of national security or the threat of terrorism is unjustified. If you ask anyone who still lives in Lac-Mégantic, I am sure that they feel they were the victims of a corporate act of terror.
The steelworkers believe that the role of Transport Canada should be, first, to promote and provide for the security and safety of the public and the environment in railway operations; second, to promote and facilitate participation of interested parties in improving rail safety; third, to monitor railway companies to ensure they adhere to the Railway Safety Act and its rules, regulations, and standards, as well as to monitor the overall safety of railway operations through audits, inspections, and data collection; fourth, to promote transparency of their operations and findings as well as data collected; and, fifth, to investigate rail accidents with the full participation of workplace health and safety committees.
The first two recommendations come from the objectives of the railway act, subsections 3(a) and 3(b). Items three and four are gleaned from the Government of Canada website on Transport Canada.
Comprehensive data collection is, or should be, part of the ongoing federal monitoring of railway companies to ensure they are managing their risks related to safety. For workers, there must be a stronger commitment, compelled by Transport Canada, to develop, monitor, and implement safety management systems, in conjunction with our unions, which are ultimately carrying out the companies’ bidding. This is even more crucial in cases when railway companies apply for exemptions to the regulations or act.
The United Steelworkers union has always taken our role in health, safety, and the environment very seriously. But the very safety of our members and their communities is being put at risk by a Minister of Transport who grants exemptions to railway companies like handing out Halloween candy to kids.
The union believes that the focus of rail safety has been on the development of management safety systems, reducing worker participation, regulations, and enforcement to a subset of those management systems. It is our view that worker participation, supported by their union, is an independent component of safety in the workplace. It provides a well-needed check and critique of the safety system. This is not a new position and was included in our 2007 submission on rail safety.
We will do no less to ensure that workers, their families, and their communities are protected from disaster. Without changes that allow greater transparency and sharing of information, disaster remains a constant potential in the increasing transportation of dangerous goods. You don’t have to take my word for it, just spend some time in Lac-Mégantic.
Thank you very much.
I would be pleased to answer any questions you may have.
:
In fact, there were a lot of things. We think there's a wall between the board of safety and Transport Canada because in 1996, just as an example, there was an accident up here in Quebec with the QNS&L, and the problem was the one-man crew. The report is well known. It's on the Internet.
Also, we have a report here from 2009. The number of the report is R09T0057. It was an accident that happened in southern Ontario, in Hagersville. In the report of the Transport Safety Board of Canada, on February 11, 2009, page 17:
[Translation]
When only one crew member is left to complete train securement tasks at the end of a work shift, the risk for runaway equipment is increased, because there is no opportunity for other crew members to identify and correct any errors.
[English]
So you see already in 2009 there was a lot of concern from Transport Canada about this one-man crew operation. Our position is that we don't believe it's safe because when you transport dangerous goods, at least you have to have some people who will double-check what the operator is doing, and if he's doing something wrong, well at least someone can make the appropriate correction.
Also, when this was implemented by MMA, it was with huge lobbying, without any consultation with the communities, with the unions, with the workers. It was made with no education on how it was going to be implemented, how it will be done, how exactly the people will work with that. Plus, if you record the history of that company, MMA, I don't know what kind of inquiry was made before it was...? In fact, I don't know how MMA had the permission from Transport Canada to go with a one-man crew. Because the history was so terrible, that was not supposed to be like that.
:
I can tell you about the two areas of differences. I'll refer back to the slides I had up here first.
The two areas are basically the appurtenances that we add to the car and the car itself. The slide I have up here for CPC-1232 shows the appurtenances. We're just focusing on a few items, which I'll quickly go through.
Starting from the bottom of the car, there's an additional skid plate that's a half-inch thick. This skid plate is welded to what's called rebars along the length of the car. It actually truncates at a mechanically fastened area of the valve. The valve is protected within the skid, and a flange is bolted outside the skid. If there were any type of rollover or shear point, it would take off the flange but not affect the actual ball valve that holds the product in the car.
Going to the top of the car, we have a reclosing pressure relief valve. The newer regulations in here are for 27 psi start to release, at 27,000 minimum CFM, which is basically your flow of air outside of the car, or your product or your gases.
In terms of vacuum relief valves, in the past you could actually activate them by stepping on them. That's deregulated now. We have a vacuum relief valve that works on -.75 psi up to about 5 psi, depending on the product and the customer and their preference.
For the two ball valves that are on here, we have a two-inch and a three-inch ball valve. The three-inch ball valve could go up to four inches. That's for your loading and discharging, depending on your system. The two-inch valve is basically for vapour when you're loading it or unloading it.
These ball valves used to be able to be screwed into what's called your fittings plate. Now they're bolted on in place with gaskets so that there's no chance of even loosening it up when you're changing your caps or hooking up your equipment for loading and unloading.
At the end of the car on the 31,800, we have a half head shield added from 2011. It's a half-inch thick and bolted to the end of the car to prevent any, let's say, coupler impacts onto the head of the car.
Going down to the couplers, you have a double-shelf coupler, which prevents couplers from decoupling. It contains them so that you don't have a slip of a coupler going into the head of the car or the car adjacent to it.
:
As I mentioned at the beginning, tank cars are very heavily regulated. If the AAR says it's TC-128, one-half inch, I cannot change it. I cannot go with less. I can go with more; but I cannot go with less. If they say a valve should be within this pressure, it has to be that. I cannot change it. What we do when we change it is through our detail design. We design railcars based on a 50-year life. It doesn't matter what type. Based on AAR, when you design a freight railcar, it goes for 50 years. That means if they want it to go beyond 50 years, they have to take it out of service, visit it, check it, recertify it for extended life. That's one.
The second one is we design it for fatigue life. To design any freight cars, you have to look at different aspects of design. There's static design, dynamic design, fatigue design, buckling, and model. One of the key design factors is fatigue life. These railcars are under a lot of vibration. It is not like our cars that have very soft suspension and you don't feel the vibration. It's steel on steel so it gets lots of vibration. So on fatigue life for a railcar, again as specified by AAR, it says for interchange cars it has to be a 1-million mile minimum. For cars, a unit, a train service, like intermodal cars, it has to be a minimum of 3 million miles. What NSC is doing with our cars is going beyond that. Our design is for 5 million miles. That is differentiating us from others, and some customers are asking for that, and they pay for that. It doesn't come for free. This is like options on your car; if you want that, it's different.
Generally speaking, on the details, we protect our IP and we make small changes. But on tank cars, it's not big items. The big items are fixed: that's the minimum, you have to meet it.
Thank you, gentlemen.
There are really a lot of questions that I would like to ask you. But first I am going to pass on a message from some of my colleagues from the Hamilton region. They told me that they are very happy to see that a local company is manufacturing products of such high quality, that the employees are unionized, and they have good, well-paying jobs. It shows that Canadian companies are capable of producing tank cars that can replace the DOT-111s. It could generate good, well-paying jobs. Congratulations for all that from myself, and from my colleagues who have asked me to say hi to you this morning.
Mr. Boudreault, you said that the communities, the workers and the first responders needed to know what was in the tanker cars. The government says that they did know. The problem is that they found out later.
Usually, people are informed about what is going to go through their communities, about the products in general. But with specific products, they are not informed. That is why the first responders do not know how to respond to the emergency.
Do you think that argument is on track, if you will excuse the pun?
:
As I was saying earlier, the first responders are not always members of our union. We have to be careful. People working on the tracks or in trains carrying hazardous materials also have to be aware of what the train is carrying. That seems necessary to me. In any situation, an employee who is not aware can cause anything from an incident to a major accident. In addition, first responders must at very least know which hazardous materials are moving through their communities so that the community can act in a safe and appropriate way when different incidents occur.
Let me give you an example. People are terrorized at the moment. Everyone here keeps up with the news, I am sure. As recently as yesterday, a number of communities in the area around Lac-Mégantic held a demonstration in the town to demand that the government relocate the tracks around the community.
People are afraid, and rightly so. Situations such as the ones we have just gone through must never happen again. Why are they afraid? Because they do not know what is in the trains going through their towns. Imagine! You live in a community, and I am sure that you would like to have the same information, in some fashion, for yours.
Some people will talk about terrorism and will say that, if that kind of information is released, it will open the door to all sorts of crazy people who might do something one day. That is not what we are asking for. No one is asking for the general public to be told what the train is carrying and when it is arriving. That is not so. We are asking that first responders at least be informed about when the train will arrive and what products it is carrying. They are trained and so they will know what to do if an incident or an accident occurs.
Let us not forget that the people in Lac-Mégantic were pouring water on the accident site for more than a day. That had environmental consequences. The oil soaked into the soil and ended up in the rivers and, from there, it spread everywhere. It would have been better to use a foam for an adequate response, but they did not have that equipment at hand. They had a tragic, catastrophic situation to deal with, but they could have avoided having to deal with an environmental disaster as well.
:
Okay, good question. No yes or no answers, and I'll tell you why.
In any engineering design, you have to look at a system. A system has different elements in it. You have to look at all the elements, design them, operate them, and maintain them to achieve a certain goal. In this system, if you have spent all your money on one element, you are not going to have an efficient system satisfying your needs. With tank cars, you have car designs. That's one. Here it was said that operation is another part of it. The product you put in there is another part of it. Education is a part of it. You cannot just focus on one element of the system and forget about the others.
Let me put it in a different format. Every one of us drives a car, and we have accidents on the roads. What do we do? Are we going to jump the gun and say, “All these are small cars. We should eliminate them. Everybody should use SUVs because they are safer.” Or we go back and look at the data. We root cause the problem, and set up a DOE—design of experiment—and set all these parameters here based on real data. We say, “There are ten factors; these are the results.” There is a program within Six Sigma that you can use. It will show you what the effect is of each element on the system, what the effect is of two elements' interaction on the system, or three interactions, and so forth.
So if you ask me if we should go ahead and increase the thickness, I say, “What's the purpose of that?” I'm saying that if you add 10,000 pounds to this car, are you getting the same ratio increase in the safety? No. Based on the fatigue life, static analysis, and dynamic analysis, you get 5% at a maximum.
The other factor I want to add is that when designing the automobiles we drive, everybody's life is in it, and they are moving on the roads, the streets, and outside. Are they going to, based on some accidents, increase the light weight of those cars by 500 pounds just to make it safer? No, they look at what the cost is to address the issue right there.
So we have to be very careful. I'm just coming from my profession.
These new cars, the CPC-1232, the total number from 2011 up to here is only 14,000, compared to almost, let's say, 90,000 DOT-111s. We should go back, look at the data. How many accidents on the legacy cars? How many accidents on the good-faith cars? Then we know which direction we should go. Is this new design not enough, or is it enough? If I add another 16, how long does it take me to get back together here and add another 16, or another half inch to it? We should have a target in our minds.
I'm just coming from pure engineering.
:
Earlier, I focused on deregulation and I said that, in some cases, companies were making substantial changes to regulations, to the SMS, consulting no one and providing no choice. One example I gave was that MMA had permission to have a one-man crew.
In that case, it was clear from the outset that we had no say in that and that we were not going to be making that decision. However, we were in the process of negotiating a collective agreement. It was none other than the federal mediator who told me, after a year and a half of negotiations, that he did not know why I was making such an issue about it, making it a deal breaker, because the decision was not mine to make, it was Transport Canada's. In the eyes of a person running the negotiations, it was clear that we had no say.
You say that there are good situations too, and I am sure that is the case. But I am not talking about the good situations, I am telling you about my concerns. For companies like MMA, it is like getting candy at Halloween. They do what they like with the regulations. They enforce and change them unilaterally without consulting anyone.
In 2014, after the events that occurred in Lac-Mégantic, I think it is important for me to tell you that. Then the committee can provide the government with the recommendations needed to make sure that it never happens again, even if that means imposing really clear penalties on the delinquent companies. If that means taking away their licence, then let's do it. The current situation makes no sense.
:
Thank you, Mr. Boudreault.
We can see your passion for this issue as you talk about it. I can understand that. You represent people on the ground, for whom this is a daily reality and who are clearly frustrated at the government's inaction.
As you said—and I think we have to be very clear on this—deregulation exists; it is a fact. I know that people on the other side will talk to us about Bill S-4. Penalties are established and licences can be withdrawn. However, the Auditor General of Canada has pointed out that, for 70% of the problems, there is no follow-up because Transport Canada does not have the necessary resources. We are told that regulations are in place and that everything is going well, but we know that Transport Canada actually does nothing. The DOT-111s are a specific example. Since the accident in Lac-Mégantic, for example, the TSB has made recommendations. You say that Transport Canada listens to the TSB, sort of. The department hears what the TSB has to say, but does nothing about it.
For at least 20 years, the TSB has been saying that there are problems with the DOT-111s. With the accident in Lac-Mégantic, we know full well that the issue was the old DOT-111s. Today, once again, the rail companies and the oil companies are going ahead with timelines, but the government is not in a position to do so. We understand your frustration and we continue to press forward with this issue. It actually seems that the safety of people in the communities is not a priority. The government is doing nothing. In the last budget, not a cent was set aside for rail safety. That is unacceptable and incomprehensible.
[English]
I have some questions again for National Steel Car Limited. Right now you're talking about 20,000 more or less per year that can be manufactured across North America when we talk about the new DOT-111, and that's according to the regular demand, regular companies asking for new....They're taking their time in terms of changing and getting rid of the old DOT-111 since they're not forced to do it.
If the government actually thought about public security first, and forced the companies to change and to get rid of the old DOT-111, do you think that would increase the manufacturing capacity? Or would it force the manufacturers to increase their capacity or increase production of the new DOT-111?
:
Let me elaborate on that one.
Let's for a minute forget about the accidents. I'm not saying it's not, I'm saying from an engineering point of view.
When you want to make changes you have to have a reason for that. What are the reasons for change, based on our experiences, based on data? It's not what you or I think, or this and that.
You collect data, let's say over five years. You record it, do a root cause analysis, figure out what's going on, and then you put your money where you will get the best value.
We had the legacy cars, we have good-faith cars. As you said, where do we go from here?
If we don't make our decisions based on real fact data nobody can guarantee when the new rules come in, how long it's going to last. You may come back again in two years and want to change it.