Interventions in Committee
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Laureen Kinney
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Laureen Kinney
2015-06-11 15:35
Thank you for the opportunity to speak to you today, Mr. Chair, and members of the committee.
As you are aware, Transport Canada developed an ambitious and comprehensive action plan to address the recommendations in the Auditor General’s fall 2013 report. Implementing the plan has been a departmental priority. On April 30, 2014, when departmental officials appeared before the Standing Committee on Public Accounts to discuss the OAG’s report, the Auditor General said he was encouraged by the department’s response to the report. Today, a little over one year later, I am pleased to provide this committee with an update on our progress. I hope that you will agree it has been significant in the five areas the OAG examined.
With respect to the regulatory framework, most noteworthy is that Transport Canada accelerated the development of a suite of regulations to respond to the OAG’s recommendations. These also respond to outstanding recommendations made by the 2007 Railway Safety Act review and the 2008 study by this committee. We are now well under way in implementing these significant regulations to further strengthen the railway safety regulatory regime.
To that end, the grade crossings regulations, which came into force on November 27, 2014, establish comprehensive and enforceable safety standards for grade crossings. They clarify the respective roles and responsibilities of railway companies and road authorities, and ensure the sharing of key safety information between railway companies and road authorities. The railway operating certificate regulations, which came into force on January 1, 2015, are fundamental in requiring that baseline safety requirements be met in order for a railway to obtain a railway operating certificate and begin operations.
As of April 1, 2015, the following regulations also came into force. The railway safety administrative monetary penalties regulations, or fines, encourage regulatory compliance and deter safety contraventions of the Railway Safety Act, regulations, rules, and engineering standards made under the act. The transportation information regulations improve data reporting requirements to identify and address safety risks. This will provide the department with comprehensive information on the state of railway safety in Canada, allowing for more focused audits and inspections, and targeted programs that address specific safety issues.
The railway safety management system regulations of 2015 respond to recommendations from the 2007 Railway Safety Act review and the 2008 study by this committee related to improving the implementation and effectiveness of railway safety management systems. These regulations are based on more than 10 years of lessons learned in providing regulatory oversight of safety management systems. Key new regulatory requirements include: identification of an accountable executive responsible for the company's safety management system; a process for employees to report to their railway company, without fear of reprisal, a safety hazard or contravention; and the use of fatigue science principles when scheduling work of certain railway employees.
I should also point out that as of May 2015, of the 56 recommendations made by the Railway Safety Act review, all recommendations have been addressed, with work ongoing for five of these. These remaining recommendations will be complete with the coming into force of either legislative amendments or new regulations that are currently in progress.
All 14 of the recommendations made by the the Standing Committee on Transport, Infrastructure and Communities have been addressed, with work under way to address the one remaining recommendation.
To respond to the Auditor General’s recommendations to improve planning for rail safety oversight activities, Transport Canada has reviewed its risk-based planning process to ensure its audit and inspection activities are focused on the areas of highest risk. With the coming into force of the transportation information regulations, as noted, the department has identified the key safety risk and performance indicators and the specific safety performance information that it requires from railway companies, and has developed regulatory requirements outlining the specific safety performance information that is required. By allowing us to analyze and include information from railway companies when preparing annual oversight plans, this will address the OAG’s recommendations.
In terms of conducting oversight activities, Transport Canada’s data system—the rail safety integrated gateway—provides inspectors with the tools they need to document and analyze the results of oversight activities. This system, together with additional tools, processes, guidance documents, and training, ensure that oversight activities are conducted consistently.
These include a management review process for rail safety oversight activities, which defines roles, responsibilities, and accountabilities for both managers and inspectors; performance expectations, which will be included in managers' annual performance agreements; follow-up procedures for audits, inspections, and follow-up activities included in the database system; and updated audit procedures to define clear expectations.
Training and guidance on all new initiatives have been provided to managers and inspectors to ensure a consistent and comprehensive national approach to conducting oversight.
On human resources planning, Transport Canada has a highly dedicated and professional corps of inspectors. To maintain and build on this and to ensure the rail safety program has the required staff with the skills and competencies it needs to plan and implement its oversight activities, a needs assessment was conducted last year. As a result, our comprehensive human resources strategy includes the inventory of skills and competencies required by inspectors in order to perform effectively in a systems-based approach to oversight. This forms the basis for inspector training, recruitment, and retention strategies.
Mandatory training is taken within planned timeframes and is monitored regularly to ensure that compulsory training for inspector credentials is taken in a timely manner. By spring 2014 all inspectors and managers received the appropriate training to become safety management system auditors.
In terms of quality assurance, in a program such as rail safety, work is accomplished through many cross-functional activities—for example inspecting, auditing, and enforcement of rules, regulations, and engineering standards. The challenge is to ensure consistency in the way we deliver our program.
That is why, in 2004, we put in place both a comprehensive quality management system as well as the quality assurance program to verify that the rail safety program's activities are conducted as intended. We have a three-year plan in place to conduct risk-based quality assurance assessments, which involve periodic evaluations of oversight activities, including audits and inspections. For example, in 2014 the rail safety program conducted a quality assurance assessment of its inspection procedure. As a result, the procedure is being further revised. As well, for 2015-16, we have two internal assessments planned that will examine the procedures for issuing notices and orders, and the quality, input, and accessibility of the database system's data.
We continue to improve the rail safety program. As you know, in addition to the above measures, Minister Raitt has announced the multiple decisive actions that Transport Canada has taken to address the Transportation Safety Board of Canada's initial and final recommendations into the investigation of the tragic events at Lac-Mégantic, actions that Mrs. Fox, chair of the Transportation Safety Board, has recognized as significant progress.
We are confident that these actions, together with the progress we have made and presented to you today, respond to the OAG's recommendations and demonstrate the department's commitment and action to ensure Transport Canada's strong, risk-based rail safety program continues.
Thank you, Mr. Chairman and members of the committee. I look forward to your questions.
Laureen Kinney
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Laureen Kinney
2015-06-11 15:51
Mr. Chair, if I may, I'll speak directly to the SMS—safety management system—regulations. Those regulations were promulgated. They came into force on April 1, and the companies are now in the process of converting their systems and establishing some of those new elements that I touched on in my introductory comments.
Our staff will be going out over the next few months, initially making sure that the railways understand how to incorporate these many changes and these many additional requirements, one of which is the process you've just touched on. We will get more information as to how they are approaching that. But the onus is on the railway company to develop a policy and a system to accomplish those objectives in terms of the first issue.
In terms of fatigue science, there's a very extensive section of the regulation that outlines what factors railway companies need to take into account in scheduling work. That is where the fatigue science principles and a broader set of additional parameters have been added to the regulations and are in place now, and they are responding to those now.
View Ed Komarnicki Profile
I'm just wondering a little bit about the railway safety management system regulations with regard to the various recommendations to improve the implementation and the effectiveness of railway safety management systems.
Do you have sort of a core baseline of what you want to see in a safety management system? Do you have a core set of circumstances you expect to see in the implementation? Can you maybe tell us about those and about what those objective standards might be in each of those cases? Can you give me a summary?
Laureen Kinney
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Laureen Kinney
2015-06-11 16:08
Just to introduce that, perhaps I can give you a summary and Ms. Diogo could speak in more detail.
Fundamentally the regulations were designed to lay out a very much more prescriptive set of regulations than was previously the case. There are various categories of issues that must be addressed by each company, and there are also requirements in the regulations so that they can be enforced, such as the specific types of evidence that they have to provide on each of those categories.
Ms. Diogo can speak to the categories, but they are very thoroughly laid out in the regulations.
Brigitte Diogo
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Brigitte Diogo
2015-06-11 16:09
Yes. The new regulations came into force on April 1 and laid out in much more detail the requirements of a safety management system, including the elements that class 1 federal railways need to comply with. They include things like accountability. As was mentioned earlier, for the first time the railway company is required to identify an accountable executive responsible for anything related to safety management systems who the department could communicate with. Companies are required to have a safety policy in place and to demonstrate to Transport Canada that the policy has been developed and has been communicated to employees. As well, they have to ensure that mechanisms, processes, and procedures are in place to ensure compliance with rules, regulations, and the Railway Safety Act.
They are required to analyze what is happening in their company with regard to occurrences, so for any elements related to the slowing of trains, they have to look at the reasons some of the steps were taken. They need to do an analysis and demonstrate that they are managing those types of railway occurrences
They are also required to do risk assessments. Every time the railway company makes changes to its operations, it is required to conduct a risk assessment and, upon the request of the department, it is required to submit that risk assessment to the department.
Robert Ballantyne
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Robert Ballantyne
2015-04-28 16:54
Thank you.
This appears to be appropriate and it looks as if there is provision for further changes, if necessary.
Third, the administrative monetary penalties, AMPS, section 177 of the act is amended by adding proposed subsections 177 (2.1) and 177(2.2), providing for penalties of up to $100,000 per violation for failure to keep the agency apprised of changes and that are in violation and to remit the levies and to keep appropriate accounting records. FMA supports this.
Finally, concerning proposed amendments to the Railway Safety Act, it is preferable—and what I say will be controversial—to leave safety management systems and the detailed management of safety to the railway managers and employees. However, replacing section 32.4 with the new subsections 32.4(3.2) and 32.4(3.4), and adding a new section 32.01 gives the minister authority to order the railways to take “necessary corrective measures”. This is reasonable, especially with regard to short lines, and FMA supports this recommendation.
That's all I have to say.
View Lisa Raitt Profile
View Lisa Raitt Profile
2015-04-23 15:29
Thank you, Mr. Chair.
I just want to note that we're starting exactly one minute early, which is a good thing today.
Good afternoon, Mr. Chair and honourable committee members.
I am very pleased to be here with you today to talk about Bill C-52, the safe and accountable rail act, which, as you well know, is unquestionably a very important piece of legislation that aims to amend both the Canada Transportation Act and the Railway Safety Act.
I'm going to begin with the proposed amendments to the Canada Transportation Act, or CTA.
The tragic Lac-Mégantic derailment has shown us that our liability and compensation regime for rail must be strengthened. The Montreal, Maine and Atlantic Railway carried only $25 million in third party liability insurance, which we now know is not nearly enough to cover the incredible magnitude of the resulting damage to and loss of both life and property that night.
In the 2013 Speech from the Throne, our government committed to holding railways and shippers more accountable. Bill C-52 does that by ensuring that sufficient compensation will be available to pay for damages and compensate victims in the event of a railway accident.
With this bill, railways will be required to hold a mandatory level of insurance based on the type and volume of dangerous goods that they carry. These levels will range from $25 million for short lines carrying limited or no dangerous goods to $1 billion for railways carrying significant amounts of dangerous goods, namely, CN and CP.
These mandatory insurance requirements have been set based on analyses of historical accident costs, taking into account the severity of past accidents involving certain goods. These requirements make certain that a railway's insurance directly reflects the risk associated with its operations. These insurance levels were determined to be adequate to cover the cost of the vast majority of potential accidents.
While a scenario of the magnitude of Lac-Mégantic is thankfully an extremely rare occurrence, we want to be certain that all costs in such a case would be covered. That is why a supplementary shipper-financed fund was created to provide compensation above the railway's insurance for accidents involving crude oil, and any other goods added through regulation.
In the event of a rail accident involving crude oil, railways will be held automatically liable, without the need to prove fault or negligence, up to their insurance level, and that will happen immediately. There will be certain defences to this strict liability. For example, a railway would not be held liable if the accident was a result of war, hostilities, or civil insurrection such as a terrorist act, as these occurrences are outside of the railway's control. If accident costs reach beyond the railway's mandatory insurance level, the supplementary fund covers the remaining damages.
For the supplementary fund, we have included a broad definition of crude oil in recognition of the serious damage that all crude can cause if released. Even a less volatile crude can have a grave impact on the environment and result in very high remediation costs. The fund will be financed through a levy on shippers of $1.65 per tonne of crude oil transported by federally regulated railways, indexed to inflation.
The aim is to capitalize the fund to $250 million. That amount would provide substantial additional coverage for crude oil accidents above the insurance levels. Based on a reasonable projection of oil-by-rail traffic growth in the coming years, we have determined that with a $1.65 per tonne levy, we would reach that target in approximately five years. That said, however, it is important to emphasize at this point that the $250-million capitalization is a target. It is not a cap.
The bill allows the Minister of Transport to discontinue or reimpose the levy as necessary. It could be put in place indefinitely or for any specified time period. This means that the levy could continue for longer than five years should oil-by-rail traffic grow at lower than expected rates. It also means that the fund could be capitalized to a different amount should that be considered appropriate.
Just to be clear, Mr. Chair, the fund will cover all costs above the railway's insurance and will not be capped. In the unlikely event that damages from an accident surpass both the railway's insurance level and the amount in the supplementary fund, the government's consolidated revenue fund will back up the fund but then be repaid through the levy.
By creating mandatory insurance levels for railways and providing an additional pool of available funds, Bill C-52 makes certain that, in the event of a rail accident, there will be sufficient resources to cover all damages.
Following the tragic Lac-Mégantic derailment, and to address the recommendations in the Auditor General of Canada's fall 2013 report, the proposed amendments to the RSA will further strengthen the oversight of federally regulated railways and Canada's railway safety regime in certain areas.
These include the following: a new power for the minister to order a company to take corrective measures should a company's implementation of its safety management system risk compromising safety; a new authority to regulate the sharing of information, records, and documents from one party to another, other than the department, and an example here, of course, is from a railway company to a municipality; broader railway safety inspectors' powers to intervene in a more effective way with any person or entity, including companies, road authorities, and municipalities, to mitigate threats to safety; a broader power for the minister to require a railway to stop any activity that might constitute a risk to safe railway operations, or to follow any procedures or to take any corrective measures specified; and, a cost reimbursement scheme for provinces and municipalities that respond to fires believed to be caused by a railway company's operation.
Part of Transport Canada's prevention strategy has been to ensure the department has an effective oversight regime. This means both ensuring that industry is in compliance with the various regulations that govern it and responding to changes in the risk environment. Transport Canada continuously examines and monitors its resource levels to adjust and reallocate as needed to address emerging issues, trends, and higher-risk issues.
I announced, as part of the department's response to the Transportation Safety Board report on Lac-Mégantic, increased resources dedicated to the rail safety program. Rail safety had approximately 100 inspectors at the time of the Lac-Mégantic accident. As of March 2015, Transport Canada employed 122 rail safety oversight personnel.
Furthermore, I do want to assure the committee that the safety management systems are not self-regulation—far from it. Safety management systems complement a robust railway safety regulatory regime that includes requirements of the Railway Safety Act and the associated regulations, rules, and engineering standards. The new railway safety management regulations of 2015, which came into force on April 1 of this year, are more prescriptive than the 2001 regulations and really will further strengthen railway safety operations across Canada.
Mr. Chair, I would be pleased to answer any questions you may have.
This concludes my remarks.
Laureen Kinney
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Laureen Kinney
2015-04-23 15:43
Yes, if I may.
Without getting into the legal details—Alain can do that if required—fundamentally, as we started to draft new and much more robust safety management system regulations, as the minister mentioned, what we found when we tried to add specific elements of a normal fatigue management system—and we can list some of those four or five elements for you, if you like—was that those elements were not allowable under the way that the definition had been written. It was a good definition of science in fatigue management, but it was actually crafted with three very short elements, and those three short elements confined our ability to do more with fatigue management. So it was fundamentally that.
View Jeff Watson Profile
View Jeff Watson Profile
2015-04-23 15:57
I want to return to the question of “fatigue science” for just a moment. That is being withdrawn. I think it's in subclause 17(1). But authority is being put in—I think it's in subclause 34(3)—for the authorization, if you will, for the SMS regulations to tackle the issue of fatigue management with respect to employees' scheduling.
I think Ms. Kinney referred at least notionally to some of the the restrictions in the legislative definition. I'm looking at the principles that I think are included in the gazetted SMS regulations. Can you cover the four aspects that are in the SMS regulations?
View Lisa Raitt Profile
View Lisa Raitt Profile
2015-04-23 15:58
On the four things that we wanted to ensure were covered on human fatigue, the principles are as follows: that human fatigue is governed by physiology; that human alertness is affected by circadian rhythms; that human performance degrades in relation to hours of wakefulness and accumulated sleep debt; and that humans have baseline minimum physiological sleep needs. Those are important things that people have been asking to have recognized.
Laureen Kinney
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Laureen Kinney
2015-04-23 15:59
If I could, I'll phrase that slightly differently. They would need to take this into account in their safety management system. They would need to take it into account in their work/rest rules scheduling. They would have to look at any risks created by how they address that issue, and then they would have to look at how they mitigate those risks. It's a matter of taking those principles and turning them into specifics, which is a bit complex, but you're generally correct.
Phil Benson
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Phil Benson
2015-04-23 16:45
Thank you, Mr. Chair.
This is really two bills, the first dealing with insurance. We called for the creation of these types of funds. We are supportive of them. After inquiries, we were informed that the money deposited to the fund would go to a special purpose account. Our question is, is that in a CPP lockbox or in an EI cash till? We would recommend that it go into a lockbox, as all special purpose accounts should.
The second issue, of course, is the sufficiency of the fund. We do understand that risk assessments were made. However, after Lac-Mégantic, we're hearing costs of $800 million to a billion dollars. We thought that perhaps to be consistent with marine, a billion dollars in the fund or some higher amount may be required, but I'll leave it to the committee to deal with.
The second part of the bill is where we want to focus. These are the Railway Safety Act portions of it. Just as a note, sometimes when bills are reviewed and amended, parties know what has to be done but they just don't get done at the time. I suggest that this is what happened in 2011 when we reviewed the act, but post-Lac-Mégantic, the landscape has changed. Overall, we welcome the powers this act gives to the minister and department to oversee rail operations, but we do have a few concerns we would consider that you address.
We ask again, where's our 1-800 number? The answer is, it's locked up in the safety management system regulations, where it doesn't really belong. When this idea was included as an amendment to the Railway Safety Act, it was understood that it really should be more like a rule. That's why we're asking you to amend section 18 of the Railway Safety Act to give the minister the power to move forward with the implementation of non-punitive internal reporting and confidential reporting to Transport Canada employees of contradictions of the act, etc.
Clause 17(1) of the bill we are dealing with today deletes the definition of “fatigue science”. We think that should be read with changes made to fatigue management between the Gazette, part I and the Gazette, part II, in the new safety management systems regulations. Gazette I clearly spelled out the running trades—the locomotive engineers, conductors, etc.—to which the regs must apply, which disappeared in Gazette II, coupled with what we think is rather vague language.
We asked, “Why the deletion?” First, it was an outright mistaken belief we were given that the definition came from this committee. It didn't. It was demanded by Justice as a requirement. Second, they said, as you heard earlier, that the definition caused drafting problems. Curious, we said, that it wasn't picked up in Gazette I. Finally, we were told the definition would require the industry to use scientific and peer-reviewed studies and in dealing with fatigue science it would be difficult. Really? That's exactly what happens in air and road when we deal with these issues. We're asking you to strike out clause 17(1), put the definition back in, and, if Ms. Kinney was correct, amend it appropriately.
At the same time, let's rectify another item that was left out of the review. Fatigue management should definitely be in the safety management system, but the rules should be set industry-wide. Without this change, each railway could create its own concept of fatigue management, resulting in each trying to gain competitive advantage through manipulation of a safety issue. We propose a further amendment to Railway Safety Act section 18 giving the minister the power to—quote—create safety management systems including the principle of fatigue science applicable to scheduling.
We think it might be time to look at anachronism in this act, the Railway Safety Act's section 20. I won't go through the whole thing. I'll paraphrase it: “A company shall file with the Minister for approval any rules” with respect to “subsection 18(1) or (2.1) that it proposes to formulate or revise” of its own accord. Further, in section 20.1, the act permits the Railway Association of Canada, a lobby group, to act on behalf of the companies.
It's unique. I can't think of anywhere else in transportation this occurs. This is a section that resulted in a retiring ADM of Transport signing off on rule changes on December 26, rules that we opposed and objected to because we believed they weakened the ministerial directive on rail safety post-Lac-Mégantic, changes that were less about public safety and more about a corporate bottom line—business as usual.
Let's be serious. Does the public believe the RAC rail companies will put the public interest before the bottom line?
We think this act, if you look at the section on rail safety, could be renamed the “we don't trust the companies act”. The powers to inspect or the powers to the minister are all very good things, things that probably should have been included in 2011 but weren't. Let's get rid of sections 20 and 21. Let's put an end to the perception—the reality, we think—of the industry's self-governance and self-regulation.
We think rule changes should be consistent with other sectors, where rule changes are brought, for example, to the CCMTA or the advisory council for TDG, and we have set up the advisory council on rail safety. Let's make the act modern. If we're going to get into it, let's get into it.
I welcome any questions you have.
Phil Benson
View Phil Benson Profile
Phil Benson
2015-04-23 16:51
It is consistent. We had several briefings on it, Mr. Mai, and I thank you very much for the question. It is consistent with what we were told; however, the rationale behind it wasn't given. The idea that this would make difficulties in making studies and having to look at scientists was raised. We did ask to talk to their legal people to see what the problem was between Gazette, parts I and II. Of course, we were told that was not possible.
The huge concern from the TCRC, the Teamsters Canada Rail Conference, who can't be here today because they're in executive board meetings, was the deletion of the running trades specifically spelled out. They feel that in the new Gazette II it leaves a possibility—because of the varied wording, which I have but won't get into—which could actually mean that the people who really require the fatigue management system to be in place may in fact be excluded.
We were told we were wrong. We will see what happens going forward, but our concerns are such that it is why we're asking for an amendment in the clarification. Fatigue management has to be dealt with. This committee has dealt with it and studies have dealt with it. People know we have to solve that problem in the rail industry. As we said about the act, we probably trust the rail companies less than the government does. That is clear by this act.
Jim Vena
View Jim Vena Profile
Jim Vena
2015-03-24 16:31
Thank you very much. I appreciate the invitation. Most of you I've seen in the recent past, so it's nice to be here.
To my left is Michael Farkouh, VP of safety and sustainability, and to my right is Sean Finn. He has a long title, but we'll shorten it to CLO and corporate services. I'm sure some of you have met Sean before.
I'll start with the first slide. I'm sure you guys all have the presentation. What I wanted to make sure today is to go a little longer than I normally would, maybe three or four minutes. If you can have me take the time to go through, and then answer any questions that you have after, I'll go as quick as I can because there's a number of slides here.
We appreciate the opportunity to be here and update on CN's safety initiatives and the efforts we have undertaken to further strengthen our safety management system. We acknowledge that the past year has been difficult for a number of reasons, which we will review. This has only increased our resolve to strengthen our safety programs because we are committed to the journey.
Safety is a domain in which we continue to work relentlessly. We take every opportunity and lessons learned as a means to strengthen our SMS in the areas of people, process, technology, and investment.
Safety is of the utmost importance at CN for a number of reasons. First of all, it's the right thing to do because we owe it to our employees, the communities, and customers. The second point is that, as a business, we recognize that safety is an enabler that strengthens service, cost control, asset utilization, and safety culture. It is the foundation for success. This is why we work so hard to strengthen our safety management system and this is why we exceed regulations in many areas.
The first principle of our safety management system is that we view safety from a human and organizational perspective, rather than only a people-centred approach. This means that we view causation broadly. We work hard to understand most root causes and contributing factors, and we address those causes comprehensively using the initiatives in the area of people, process, technology, and investment. We also work hard to introduce as many lines of defence as we can to protect safety because we understand that more lines of defence are better than one.
As an example, we mitigate risk related to rail by performing visual inspections, ultrasound inspections, test cars, runs, and visual inspections, as well as rail grinding, maintenance, and I could go on. People are the strength of our company and we have invested in a big way to train effectively and strengthen culture. If any of you have had the chance to go to Winnipeg, we built two facilities, one in Winnipeg and one in Homewood, Illinois. We've done that on purpose because of the number of people. We are 25,000 strong right now and in the last five years over 50% of the employees that we have are brand new. We wanted to make sure we had the best facility possible and that was built in Winnipeg. If you ever get a chance to go out there and see the facility, I welcome you, and we'd love to tour you around.
We continue to invest and have increased our investments to $2.6 billion this year. CN invests proportionally more than the class I railroads. For those reasons we have gone beyond regulations. This has allowed us to reduce our accidents by about 40% over the last 10 years.
If you turn to the next page you can see the questions that we asked ourselves after the incidents that we most recently had. Before I try and answer the questions let me take you through a few more points.
In spite of our best efforts to improve safety we saw an increase in accidents in 2014. There were many reasons for that, but one of the key reasons was the harshest winter in generations. There are some people that say it's an easier winter this year in western Canada, but I think it would be hard to say that it was an easy winter in Atlantic Canada and it was a very tough winter in northern Ontario. In fact we had colder weather in February this year in northern Ontario than we did in 2014.
The year 2014 was one of hard work and safety because we implemented a number of initiatives to strengthen our performance in the second half of the year. We implemented peer-to-peer engagement programs. We opened two new training facilities, which I've mentioned. We performed corridor risk assessments and invested in leading-edge technology. These technologies helped us to turn our safety performance in the second half of last year. Recently we faced three accidents in the Ruel subdivision, north of Capreol, in Ontario, which made us question and assess our safety initiatives.
This led us to review every aspect of our safety program and we asked questions such as is the CN safety performance in line with that of the rest of the North American rail industry, are our Canadian operations also in line given recent trends, and what specific factors should be. I won't read the other two, but I think it's something that you might want to look at just to give you a sense. These are not all the questions we have, but when you have incidents occur, even if it's one, we start to ask questions of ourselves and internally say, “Are we missing something? Is there something that we're doing wrong?”
Given the complex nature of the safety issues faced by railways, there are no simple answers and no silver bullet solutions. But CN has been determined to identify root causes and address any systemic problems it identifies fully and promptly as part of its corporate commitment to deliver responsibly.
If you turn to page 4, it provides a comparison of the North American industry. The first point is that the railways are capital intensive and take a long-term view of their assets, operations, and safety trends. It is important to view CN safety performance over a span of time to assess meaningful trend lines and not just on the basis of a single or two-year perspective. This does not mean that we do not look at each individual accident or injury we have to see if there's something that we're missing. But you do as an industry and as a railroad have to understand that you have the right trend line.
In addition to an intense focus on each accident, CN monitors its safety performance looking at three-year averages within a 10-year cycle. Against that framework, CN's accident rate has generally trended in the right direction and compares favourably with the rest of the North American rail industry.
CN recorded one of the lowest number of main track accidents in 2013, and that's all of the performance. Of course, when you're comparing year over year it makes it challenging. Harsh weather was a challenge in 2014. There were record colds and deep cold stresses the rails and wheels, which can produce cracks and other consequences. It affects the infrastructure that we have. We know that and that's why we increase testing in the winter. We have more people out there and we do more ultrasound testing.
We also saw an increase in freight volumes, particularly in western Canada with record volumes of grain, general freight traffic, and energy-related commodities. Full year 2014 volumes reached record levels with car loads up 8% from the year before. The rise in volumes originating in CN's branch line in the network resulted in some increases in accidents owing to joint failures and rail fracturing in western Canada.
Some of you are sitting there going, he's actually telling us what it is. Those are the questions we have and we're trying to answer those questions ourselves.
Here are two key points. Our analysis shows that, first, the CN Canadian ratio is in line with the CN system. It's not different for the U.S., the east or the west of the Canadian versus the rest of our system. Second, the CN three-year ratio is in line with the other railroads in North America.
Turning to the next page, as mentioned earlier we acknowledge that 2014 was a difficult year and you can see the specific causes of the main track accidents in Canada on that page going back to 2005. However, this chart shows that the 10-year trend is positive in all cases.
As an example, rail and track causes dropped from 43 to 29, and wheels and rolling stock decreased from 39 to 18. This is evidence that the investments that we're making in our people, our leading-edge technologies, and our rail and track are bringing results. In fact, CN has worked hard to strengthen its wayside detection network over this timeframe and CN has nearly 900 wayside detectors monitoring bearings and wheels, dragging equipment detectors, as well as 40 wheel impact load detectors that measure wheel impacts and rolling stock imbalance.
We continue to implement leading-edge technologies by engaging research facilities and suppliers. We implemented those detectors using a risk-based approach to our corridor risk assessments. This has further strengthened CN's industry-leading wayside detector network. The other point is that volumes grew significantly during this time period. When we use the absolute numbers and normalize them for volume, we note a reduction of more than 50% in terms of main track accidents.
The next question was on causation for us and the other railroads. Are we missing something? Are we not doing the right things for the main components that cause accidents? In spite of our best efforts to strengthen our safety management system accidents do occur. This is because railways face unique challenges.
The first point is that railways need to maintain their plant, which includes tens of thousands of miles of rail. The second point is that the rolling stock, our mobile assets that can travel all over North American railways, must accept cars and interchange from other railways and car owners. The third point is that cold temperatures do have an impact on steel wheels and rails, as I mentioned before. As well, snow can degrade wheels. Instead of going into that too much I think you can get the general picture of what weather does.
CN and the North American rails have been very successful in using technologies to identify defects, and they use the data proactively. As an example, CN's network of wayside detectors scan three billion bearings and 1.8 billion wheels annually and reduce the impact to just a handful of incidents. Therefore, main track failure modes relate mostly to track and rolling stock, and this applies to CN and all the other railways.
This slide clearly shows CN's main track accident causation pie compared to the U.S. railroads. You can see from slide 6 that causation is almost identical, meaning that CN's accidents are caused by the same factors in the same proportions as the other railroads.
It was important to understand whether we had an outlier. Were we missing something on rolling stock or rail? If you turn to the next page, we dug into that and gave you some history on northern Ontario. The chart shows a 10-year trend for this territory. You can see that the trend is showing improvement, and this is consistent with the 10-year improvement we saw earlier for all of CN's main track accidents. As well, we can see the causation is very similar to CN's system main track causation and to that of other class I railroads, so the facts demonstrate that the recent issues we faced in the NOD, the northern Ontario district, are not inconsistent with the long-term trend.
On top of that though, we wanted to make sure we understood exactly what happened, because when you have three accidents in a close period of time in one area, you need to step back, even if the trend line is right. We needed to do something so we put a speed restriction on northern Ontario until we get a clear understanding of exactly what happened.
At CMAs, census metropolitan areas, we've included that in the key train restrictions we put in, in the rest of Canada, which are going to decrease the speed of what we do in census metropolitan areas. We increased inspections of tracks and trains. We tightened up our standards even further. We've taken an outside-in view, so we brought officers from other parts of the railway to take a look, and we've dealt with external experts who are going to be reviewing the issue of unit trains and how we operate unit trains.
One of the questions we get on unit trains is whether we run the crude trains in any different size from the rest of the unit trains. Are they bigger? We have a long history. We have been operating the normal unit trains.... We're handling crude with around 100 cars, and we handle normally, on a daily basis, trains that are 150, 180, up to 200 cars. We've been doing that for a number of years. This is not something new and their weight is substantially more than what a train carrying crude would be.
I thought it was important to spend a couple of minutes on investment in track infrastructure. The slide on page 8 demonstrates that CN investments have been increasing for the past decade. As an example, we are investing $2.6 billion in 2015, and CN's capital investment represents about 19% of our revenue. When we review investments in track and infrastructure, we can see from the graph on slide 8 also that there has been a consistent increase in our track and infrastructure investment. In 2015 this part of the capital investment will amount to $1.3 billion. This is 70% more than what we did in 2005.
Quickly, I just thought I'd take you through investment in technology. I've been railroading for 37 years. I started in Jasper, Alberta, and I mention that every time I come here, just to tell you that I'm from Alberta. More than anything, this is not a new game for me. I've been doing this for a long time.
One of the challenges the railways face, even talking to my own family, is the perception that we use old technology, large railcars, locomotives on steel wheels with employees still performing manual interventions to operations and inspections of trains and tracks. Employees are very important. They inspect trains and cars as they go by, but nothing is further from the truth because railways have left no stone unturned to leverage technology to enhance safety. Let me take you through a couple.
In line with this, railways use ultrasonics to inspect rail for defects that the eye cannot see, lasers to measure track geometry and identify defects at the edge of visual detection, infrared technology to measure bearing temperatures, acoustic measurement technology to identify potential hidden defects in bearings, force accelerometers, GPS to pinpoint—it goes on and on—sophisticated cameras that can look at the track and tell you what the ties and rail are like and the environment we are operating in.
When it comes to CN's track, the lines of defence have continued to increase over the years from visual inspection, rail flaw track geometry and just this year we are adding the new track geometry test car that we started about a year ago. On this geometry boxcar are advanced optical imaging systems that identify track issues as well as leading-edge tie assessment technologies.
Another aspect is the evolution of data management. It's very important for understanding what the data is trying to tell you and it is used actively for preventative purposes to identify track and equipment issues that can evolve into a defect over time.
I'm just about done. I'll be really quick.
We turn to investing in CN safety culture—page 10—because this is also a key component of what we're doing. Safety culture is the domain where railways have been active with their employees, unions, regulators, and academics. This is critically important for so many reasons, but for two key reasons. First, safety culture is a catalyst and motivator that translates company policy and procedures into action. This is so important for railways because most of our workforce works in a decentralized and mostly unsupervised work environment. They don't see their boss on a daily basis. Second, railways, like many industries, face demographics. As I mentioned before, we're going through a large change in the age and the experience of the people we have.
With respect to safety culture, railways have worked with their unions, regulators, and academics to define it and develop processes to measure. This is an effort that CN has led for several years, and which continues today, to refine a process that measures safety culture along its five dimensions of leadership, two-way communications, employee engagement, learning culture, and just culture.
We also modernized our training program by investing over $60 million in the two facilities, as I mentioned, and we developed a solid process for field training. This was done with the help of senior labour leaders and Saint Mary's University, where CN established the CN Centre for Safety and Occupational Health, and works with CN professor of safety culture, Dr. Fleming, to strengthen culture.
CN also organized the first international safety culture symposium with Saint Mary's University, bringing together broad industry, regulators, and association academics with the objective to share, learn, and strengthen culture. The people portion is very important to us and we continue to invest to make sure we give our employees the best.
Jim Vena
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Jim Vena
2015-03-24 16:50
I apologize. I might have missed the first piece of the question, but you asked about risk assessments and whether we'd be willing to make them public. We do perform risk assessments any time there's a change in our operation. We make sure, because of our SMS system, that we review what impact it would have on the railroad. When we do the risk assessments we give them to the government, specifically to Transport Canada, so they are available and that's how we provide them.
On top of that, we go out and deal with the individual communities. If they have questions about what we've done in the local area and how we operate, we're more than willing to answer those questions at the local level.
Louis Lévesque
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Louis Lévesque
2015-03-10 15:42
The inspectors do both functions, audits and inspections. In the case of TDG, they do inspections. Also currently, in addition to our regular inspectors we have a poster out to our specialized auditors to do our SMS audits on rail safety, as committed to under the management action plan following the Auditor General's report.
View Larry Miller Profile
I call our meeting to order. I think everyone is here and ready to roll. We're a couple of minutes early, but we'll get started.
We have in the room with us Wendy Zatylny—I hope I pronounced that right; I apologize if I didn't—from the Association of Canadian Port Authorities. We also have Mr. Yoss Leclerc, from the Québec Port Authority.
By video conference from Vancouver we have, from the Western Canada Marine Response Corporation, Mr. Michael Lowry. Also by video conference from Vancouver is Jonathan Whitworth, from Seaspan.
In case we run into technical problems, I'm going to start with Mr. Lowry and Mr. Whitworth. Can you both hear me okay?
Jonathan Whitworth
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Jonathan Whitworth
2014-12-02 11:01
Yes. This is Jonathan. I can hear you fine.
Michael Lowry
View Michael Lowry Profile
Michael Lowry
2014-12-02 11:01
Thank you, Mr. Chair.
Good morning, ladies and gentlemen. Thank you for inviting Western Canada Marine Response Corporation to make a presentation to this committee.
WCMRC is one of four Transport Canada certified oil spill response organizations in Canada, and we're the only one on the west coast. We began operations in 1976 as an industry co-op under the name Burrard Clean. At the time, our duty was to provide spill response within Port Metro Vancouver’s waters. Following the Exxon Valdez incident in 1989, the Canadian government established the public review panel on tanker safety and marine spills response capability. The panel’s final report included 107 recommendations that ultimately informed amendments to the Canada Shipping Act in 1995.
The changes created an industry-funded, government-regulated spill response regime for all of Canada’s coastal waters. WCMRC became the only dedicated response organization for the west coast. Three other response organizations operate on the east coast. Our state of preparedness is funded by membership fees from shipping and oil-handling companies that operate along the west coast and from bulk oil cargo fees.
Any vessel larger than 400 tonnes calling on a B.C. port is required to have a membership with WCMRC. Any oil-transporting vessel over 150 tonnes is also required to pay membership fees. This includes tankers, barges, and refuelling vessels. In total, we have nearly 2,200 members. However, if a vessel is transiting Canadian waters and not calling on a Canadian port, they are not required to have a membership with a response organization. In the event of a spill, the responsible party is required by law to pay 100% of the cleanup costs up to the liability limit.
In order to demonstrate to Transport Canada that they are in compliance with the law, vessels must have a shipboard oil pollution emergency plan, and oil-handling facilities must have an oil pollution emergency plan. Both groups must also have a certificate outlining their arrangement with a response organization, proof of financial responsibility, and the name of the person authorized to implement the plan.
Under the amended Canada Shipping Act, response organizations in Canada require certification by Transport Canada. Response times, capacity, and planning standards are laid out in the Canada Shipping Act. The planning standards are not an indication of how long a response would take; they are meant to determine performance requirements. Actual response times would typically be less.
As a Transport Canada certified response organization, we need to demonstrate our ability to respond to spills on a regular basis to maintain our certification. Transport Canada personnel attend and participate as auditors in certification exercises, while other agency personnel participate in actual response roles. In addition, WCMRC also participates in member exercises, annual joint exercises as part of the Canada-U.S. joint contingency plan, and cross-border exercises with mutual aid partners in Washington and Alaska.
Response organizations in Canada are required to have equipment to handle a 10,000-tonne, or 70,000-barrel, spill. WCMRC currently has 2.6 times as much equipment in place. Tiered response times are also defined by the Canada Shipping Act, which stipulates planning standards for spills within designated port boundaries, primary areas of response, and enhanced response areas. Currently Port Metro Vancouver is the only designated port on the west coast. Response organizations are also required to submit an oil spill response plan to Transport Canada every three years.
To meet these requirements, we have warehouses located in Burnaby, Duncan on Vancouver Island, and up in Prince Rupert. We also have 11 equipment caches strategically located along the B.C. coastline. We have a fleet of 31 response vessels and a booming capacity of 32,000 metres, two and a half times the mandated capacity. We train up to 200 responders every year, including first nations fishermen and marine contractors.
In the event of a spill, our organization is contracted by the responsible party to clean up the spill on their behalf and under their command. The Canadian Coast Guard monitors response operations and takes command if the polluter is unable or unwilling to respond. The operation is complete when we can no longer find product to recover and Environment Canada and the province confirm our assessment.
WCMRC has successfully responded to both light and heavy oil spills. We have a range of skimmers that can handle both types of product. The Canada Shipping Act planning standards suggest that on-water recovery operations take no longer than 10 days, and shoreline cleanup operations are completed within 50 days.
If a spill were to occur in or near a transboundary area, a response from two countries would be required by the agencies of the two nations. Joint spill response between Canada and the U.S. is governed by the treaty, the Canada-U.S. Joint Marine Pollution Contingency Plan. Together, the U.S. Coast Guard and the Canadian Coast Guard manage the implementation and maintenance of this treaty. They exercise response strategies every two years.
WCMRC also maintains mutual aid agreements with response organizations in Canada and the U.S. These mutual aid agreements are formal contracts between ROs to lend assistance across jurisdictional boundaries when required. We currently have mutual aid agreements with NRC, Southeast Alaska Petroleum Response Organization, SEAPRO, and Association of Petroleum Industry Cooperative Managers, APICOM, as well as an operational agreement with Eastern Canada Response Corporation, ECRC.
As you are all likely aware, the tanker safety expert panel released a report late last year called “A Review of Canada’s Ship-source Oil Spill Preparedness and Response Regime – Setting the Course for the Future”. The panel proposed 45 recommendations of which WCMRC is supportive, particularly the move to a risk-based regime. We support the idea that spill planning and the response resources allocated to prepare for spills should be based on risks specific to a geographic area.
In May of this year, the federal government announced new measures that act on recommendations by the tanker safety expert panel. These measures include establishing new area response planning partnerships for four regions, including the southern portion of B.C. Oil spill prevention, preparedness, and response in these four areas will take into consideration the area’s geography, environmental sensitivities, and oil tanker traffic volumes. The measures also propose amending legislation to provide the use of alternate response measures such as chemical dispersants and burning spilled oil during emergencies, and to clarify the Canadian Coast Guard’s authority to use and to authorize these measures when there is a net environmental benefit.
Finally, the measures propose strengthening the polluter pay regime by introducing legislative and regulatory amendments that will enhance Canada’s domestic ship-source oil pollution fund. These amendments will remove the fund’s existing per-incident liability limit of $161 million in order to make available the full amount for a single incident, which is currently around $400 million. It will ensure that the compensation is provided to eligible claimants and the recovery these costs from industry through a levy.
As part of the move towards a risk-based regime, WCMRC is developing a digital geographic response planning tool to coordinate our response activities. This award-winning application is shared and accessible to all WCMRC responders, allowing us to coordinate and map the locations of our available vessels, equipment, and personnel. The app displays data in real time so that we can quickly identify priority areas that may require a protection strategy based on potential sensitivities, topography, surrounding infrastructure, and known threats and hazards. It also houses a database of site-specific response plans, which provide information on booming strategies and staging points.
That concludes my prepared remarks.
Thank you, Mr. Chair.
Jonathan Whitworth
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Jonathan Whitworth
2014-12-02 11:08
Good morning, and thank you for the opportunity to speak today.
Similar to WCMRC, Seaspan is an establishment that's been on the B.C. coast for a long time. In fact our roots go back to 1886, and our shipyard business goes back all the way to 1902. For those of you who may not know Seaspan, we have a multi-faceted, diversified marine business here, focusing on areas both on the water and on land.
On the water, we currently operate about 111 barges that run up and down the coast, primarily in the forest products and aggregate business and also some oil and chemical business. We also operate 35 tugs, 20 of which are in the business of actually pulling those barges up and down the coast, but 15 of them operate in the business of docking, undocking, and escorting all vessels in the port of Vancouver, Roberts Bank, the Fraser River, and Victoria. With the exclusion of the north, Prince Rupert and Kitimat, at least for today, we do the primary number of dockings and undockings. To put that into shape, that's about 3,200 dockings and undockings in the port of Vancouver alone. We do more than 1,000 at Roberts Bank, which is the largest export terminal in North America for coal. We've also done about 20,000 separate escorts in the last 30 years underneath the area called the Second Narrows Bridge.
It's a very important part of the discussion and you'll hear it, obviously, when you're hearing about topics like twinning of the Kinder Morgan pipeline: safe transportation and navigation in the B.C. coast. A lot of people, even in this area right here in Vancouver, don't realize that tankers have been safely navigating this area since 1952, and Seaspan has been a big part of that safety regime. Again we have 20,000 escorts through the port of Vancouver. All of that goes between a 450-foot span at the rail bridge right at the Second Narrows. So there is an exceptional safety record, with no incidents during any of that period of time, and it's something that Seaspan and our mariners are very proud of.
Outside of our tug and barge business, we are also a ferry operator. After B.C. Ferries, we are the second largest operator of ferries in western Canada.
Last but not least and what some in the committee may know us for, we're also one of the largest shipowners in Canada, and on October 19, 2011, we were very fortunate to be chosen as the non-combat builders for the national shipbuilding procurement strategy. So we'll be cutting steel very soon on our first vessel for the Canadian Coast Guard, in building hopefully 20 to 30 years' worth of ships for the Royal Canadian Navy and the Canadian Coast Guard.
That's a little bit about Seaspan and who we are. Obviously it's a long history. We have about 2,500 employees. We'll be reaching about 3,500 within the next three years. Everything we do revolves around the ocean and the sea and the protection of the sea.
I myself am actually a former mariner. I sailed for a number of years in the international market. I hold a 1,600 ton captain's licence, which means I could actually be a captain on everything in the Seaspan fleet. I also sailed internationally on tankers. So the carriage of dangerous goods is something I personally know quite well. I sailed all the way up to unlimited chief officer, unlimited vessel size, unlimited ocean.
T hat is something on the marine business. I can't tell you much about mining or some of the other great things that go on here in British Columbia, but we know the marine business quite well.
When I look back at the question about safety and what this committee was looking at, there was one thing I really wanted to speak about, and that's the regulations. What we see, as an operator in British Columbia, is that we fall predominantly under the federal regime here. We also have some provincial regulations, but it is predominantly federal. We are at a point where we have to deliver safety to our employees first, our crew, and then our customers and their products. In order to do that, a lot of regulations have come out, especially I would say, more in the last 20 years than in the previous 100 years, say, and they were all aligned specially by Transport Canada to make a safer regime for mariners and the products.
I'm a strong believer in regulation. I know you probably wouldn't imagine a CEO of a marine company saying that, but I do. I do because it's a differentiator, and it's ultimately what keeps people safe. The reason I bring this up as something important is that Seaspan follows the rules. There are some great companies that you probably know, such as Fednav, out east. A number of Canadian operators follow the rules. Unfortunately, there are a number of Canadian operators, especially in the small vessel class, that don't follow the rules.
Back in 2011, the regional director general for Transport Canada located here in Vancouver presented to our officers conference on what Transport Canada was doing. We had about 300 of our marine officers talking about topics like safety operations, everything that's going on in Seaspan, and we had Transport Canada make a presentation.
At the end of the presentation, the mariners—not me, but the actual mariners—shared with Transport Canada their dismay that there were two standards. There were standards that companies like Seaspan followed with regard to safety, safety management systems, quality management systems, and then there was everybody else. Yet no one seems to check on them. The regional director general took it on himself and said, “That doesn't sound right. We're going to do something about that”.
In the fall of 2011, shortly after that officers conference.... Unfortunately, Transport Canada does not have any boats to actually go out to do surveys, audits, and checks of vessels, so they did two four-day inspections, along with the RCMP, who thankfully do have boats. They focused on tugs and barges, and especially those vessels transporting dangerous goods and petroleum. They boarded 33 vessels on those two four-day patrols, and they found that 64%, or 21 of the 33 vessels, in some way were not in compliance with the Canada Shipping Act, 2001. That was 64%. Those not in compliance were all given notices, and in some cases even administrative monetary penalties.
The problems they saw included life-saving equipment not being up to date, and non-valid certificate of competency. Believe it or not, they found one master who did have his licence with him, but it had expired 10 years earlier. There were medical certificates out of date or absent, non-adherence to marine personnel regulations, and structural deficiencies. In most cases, the masters were not even fully aware of what the Canada Shipping Act, 2001 actually discussed or contained.
They did say that most of these issues were on the smaller vessels, but 64% of all of the vessels that were checked, in a very, very small period of time, failed. When I talk about regulations, I'm very serious about it because there's a reason for them.
We just heard from WCMRC about a lot of change in the oil response business due to the Exxon Valdez incident in the spring of 1989. We don't want to see another incident occur and then have more regulations created at that time. The regulations that are currently on the books, the ones that are already involved with the Canada Shipping Act, are good regulations. My point is that they have to be enforced.
Transport Canada, the folks we see and know and work with closely, do a fantastic job. Their hearts are in the right place. Unfortunately, I don't see that they have the budget. They don't have the manpower and the womanpower, and they don't have the vessels to actually do the audits and inspections in order to make sure that regulations are being adhered to.
Last but not least—it was brought up by the previous speaker—I think the tanker safety expert panel that was conducted in 2013 was an excellent example of the federal government listening to all of the areas, both the east coast and west coast, on how tankers can and should be safely transporting dangerous goods throughout the B.C. coast. I really look forward to the three aspects that they focused on, which are prevention, preparedness and response, and last, liability and compensation, which is short for the polluter must pay. I believe they hit the nail right on the head in the areas they identified, and I certainly look forward to the federal government now turning those words into actions.
Thank you again for letting me speak this morning. That concludes my comments.
Wendy Zatylny
View Wendy Zatylny Profile
Wendy Zatylny
2014-12-02 11:18
Thank you, Mr. Chair. Good morning, everybody.
Thank you for the opportunity to speak with you about important issues that relate to the shipment of dangerous goods and safety management systems in Canada's transportation modes.
I also wish to thank the committee for their patience with us and forbearance in getting us a slot to speak with you today.
As the president of the Association of Canadian Port Authorities, I'm here representing the 18 port authorities that make up Canada's national ports system. I will be sharing my time this morning with Captain Yoss Leclerc, who is the vice-president and chief of marine operations at the Québec Port Authority, as you have mentioned, Mr. Chair. He also represents the 18 port authorities at ACPA.
I want to underline that Captain Leclerc brings with him over 15 years' experience as a merchant marine captain, having specialized in LNG carriers and tankers. He spent another 15 years on land, leading operations at the port of Montreal and Port Metro Vancouver, before moving to head up operations at the port of Quebec.
We wish to discuss the safety management systems used by our members and the private terminals and other users of our ports, and of course answer any questions that committee members might have.
From the outset, let me state that the marine and ports industry adheres to a strong and robust safety regime coupled with an equally strong track record.
I also want to highlight the fact that every day, Canadian ports support our country's economic growth and move our trade in a safe and reliable manner.
As I have said many times however, expanded trade agreements between Canada and international partners are making our world smaller. Traditional trade patterns are changing. Competition to carry and receive cargo is intensifying, so navigating this new environment effectively is crucial to Canada's economy and our standard of living.
That's why any future regulations or legislation relating to the transportation of dangerous goods being considered by the government should be proportionate to risk and integrated within what is already a robust international set of requirements.
We believe the current system both serves the safety of Canadians and the environment, which remains our top concern, as well as adequately supports our competitiveness as an industry. This is because Canada's port authorities operate in a complex environment within major national and international supply chains. By virtue of participating in a global industry, Canada's marine sector, including its port authorities, are subject to a wide range of international regulations and safety standards. ln short, the ports and the marine industry are already highly regulated both domestically and internationally.
Canada's ports are critically important to moving imports and exports around the world while creating jobs across Canada.
With 90% of everything that we buy and sell travelling by ship, maritime trade underpins the global economy. These are the goods we depend on every day: electronics, resources, food, and medicines.
A combined 162 billion dollars' worth of goods are shipped or received through Canadian port authorities every year.
Our ports handle nearly two-thirds of the country's water-borne cargo, contributing to job creation and economic growth, and creating over a quarter of a million jobs directly and indirectly that pay higher than average wages.
We're also proud that Canada's port authorities are strong believers in being responsible environmental stewards. Beyond adhering to established regulations in legislation there is a tremendous amount of independent personal activity, if you will, that is undertaken by the port authorities, which are committed to environmentally responsible and sustainable development. Almost all the CPAs, for example, are proud members of the Green Marine initiative, an internationally recognized certification program begun here in Canada for marine companies to reduce their environmental footprint and ensure the safety of their surrounding ecosystems and communities.
ACPA and Green Marine recently entered into a memorandum of understanding with the goal of jointly expanding efforts to reduce the marine industry's environmental footprint and encourage the industry to continuously improve its environmental and safety performance.
Last, Canada's port authorities are committed to being positive contributors to our communities in many areas, including education, health and welfare, and again the environment.
I would now like to turn it over to my colleague, Captain Leclerc, who will provide further details about the robust safety regulations already in place within the marine shipping sector.
Thank you.
Yoss Leclerc
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Yoss Leclerc
2014-12-02 11:23
Thank you, Wendy.
Thank you, Mr. Chair and committee members for allowing us this opportunity to speak to our strong safety record, and to our commitment to working with our key partners to continue to strengthen this record.
Let me begin by stating that Canada's port authorities are keenly aware of their responsibility to protect community safety and the safety of all port employees and users, including our private sector tenants. We are also aware of the need to ensure that our operations are environmentally responsible.
Of course, there is a good reason for that. A number of commodities handled by Canadian ports are classified as dangerous goods according to the international maritime dangerous goods code, IMDG.
As Canada continues to negotiate free trade agreements with countries around the world, it is expected that commodity throughputs in our ports will continue to grow, including dangerous goods. Given this potential growth, it is in our best interest to ensure that this committee and other decision-makers are aware of current safety and security regimes and practices in our ports.
Within our sector, Transport Canada introduced safety management regulations under the Canada Shipping Act in 1998. These regulations were enacted to meet our international obligations to comply with the International Maritime Organization's international management code for the safe operation of ships and for pollution prevention, the ISM code. That is the code that was used.
Canada's Transportation of Dangerous Goods Act regulates the movement of dangerous goods by rail and road, while the international maritime dangerous goods code, the IMDG code, regulates sea transport. The IMDG code is implemented through the Canada Shipping Act, 2001 and its related regulations, as well as the Transportation of Dangerous Goods Act.
In addition, other IMO requirements play a role in the safety regime in Canadian ports. These requirements include IMO's International Convention for the Safety of Life at Sea, SOLAS, the International Convention for the Prevention of Pollution from Ships, MARPOL, and the International Convention and Standards of Training, Certification and Watchkeeping for Seafarers, STCW. The STCW convention's chapter V addresses the special training requirements for a crew on board oil, chemical, and liquefied natural gas tankers.
Canada's ports also support Transport Canada's role in port state control where Transport Canada inspectors board foreign vessels to ensure they comply with the major international conventions adopted by Canada. Vessels that do not meet robust Canadian safety standards are detained until their deficiencies are corrected.
Many Canadian ports are also defined as mandatory pilotage zones, where all vessels over a certain size threshold are required to have a marine pilot with local knowledge on board to guide the vessel into and out of their harbours. All oil tankers must have a marine pilot on board.
In the case of emergencies within ports, various federal, provincial, municipal, and private agencies and organizations work cooperatively to respond to any incidents that occur. Ports regularly test the effectiveness of their emergency response plans, including conducting emergency simulation exercises.
Safety management systems augment rigorous domestic and international regulatory regimes. The Canada Marine Act requires Canadian port authorities to put in place a framework to ensure order and safety. Each member of the national ports system has its own safety management system in place.
With strong domestic, international, and port-specific safety regimes in place, it is no wonder that marine safety continues to improve, especially in the last decade.
For the marine shipping sector, Transport Canada data show that there were zero reported in-transit dangerous goods incidents between 2006 and 2011. ln terms of collision-related injuries and fatalities per tonne per kilometre, the marine mode of transport led with the lowest number of both from 2002 to 2011. Marine accident rates have also declined about 10% over the last decade. Data and analysis from the Transportation Safety Board of Canada also confirm this.
I will conclude by stating that on behalf of the 18 port authorities that make up the national ports system, we believe that the current safety regimes and safety management systems in place are appropriate to the risks presented. We do not believe that additional regulations are required.
We remain committed to maintaining our strong safety record, and indeed, to always striving to do better, and we look forward to assisting the committee as it reviews the robust systems already in place.
We also want to work with the committee and our other partners to ensure Canada remains a world-leader in the marine shipping sector.
Thank you. Merci.
View Mike Sullivan Profile
Thank you, Mr. Chair, and thank you to the witnesses.
Port Metro Vancouver had an oil spill about three weeks ago. A yacht emptied its diesel. It apparently was cleaned up effectively.
Mr. Lowry, can you tell us how frequently that kind of operation happens, and what impact it has?
Michael Lowry
View Michael Lowry Profile
Michael Lowry
2014-12-02 11:30
That is the bulk of our annual work. We get called out approximately 20 times a year. It generally is for small spills like that. That was a pleasure vessel that had diesel on board. We were called out. We put a boom around it. It had sunk. It was raised, and we removed the boom. Most of the product was recovered using adsorbents. It was a light fuel, so a mechanical cover was not appropriate at that time.
That is the bulk of our annual work.
View Mike Sullivan Profile
When the Simushir was threatening to break up off Haida Gwaii, would that have been under your aegis as well, and if so, how would you have dealt with 400 tonnes of bunker oil and 50 tonnes of diesel?
Michael Lowry
View Michael Lowry Profile
Michael Lowry
2014-12-02 11:31
We were notified by the coast guard that morning around nine o'clock. The coast guard does have the authority to activate us. The vessel in question did not have a membership with us, because it was transiting waters, as opposed to calling on a port in Canada. We eventually did make contact with the marine contractor attached to that vessel, and we signed a third party agreement with them at seven o'clock that night. In addition to our three warehouses, we have equipment depots along the coast. One of them is in Haida Gwaii, near Queen Charlotte City. That would have been called into play. We also had many vessels on standby throughout that day, including vessels that we have up in Prince Rupert.
Jonathan Whitworth
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Jonathan Whitworth
2014-12-02 11:32
We also had a barge from Seaspan that was dispatched that day and was heading up there with a 30,000-barrel barge to assist, just in case.
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