Source: http://canadagazette.gc.ca/rp-pr/p2/2019/2019-05-15/html/sor-dors113-eng.html
Timestamp: 2019-08-22 05:28:55
Document Index: 75410658

Matched Legal Cases: ['art 2', 'art 4', 'art 4', 'arts 1', 'arts 1', 'arts 1', 'arts 2', 'art 2', 'arts 2', 'arts 2', 'arts 1', 'arts 1', 'arts 2', 'art 2', 'art 2', 'arts 1', 'arts 1', 'arts 1', 'arts 1', 'arts 1', 'art 4', 'art 4', 'art 4', 'art 1580', 'art 1580']

Canada Gazette, Part 2, Volume 153, Number 10: Transportation of Dangerous Goods by Rail Security Regulations
Transportation of Dangerous Goods by Rail Security Regulations: SOR/2019-113
SOR/2019-113 May 6, 2019
P.C. 2019-413 May 3, 2019
Her Excellency the Governor General in Council, on the recommendation of the Minister of Transport, pursuant to sections 27 footnote a and 27.1 footnote b of the Transportation of Dangerous Goods Act, 1992 footnote c, makes the annexed Transportation of Dangerous Goods by Rail Security Regulations .
Act means the Transportation of Dangerous Goods Act, 1992 . (Loi)
railway carrier means a person who has possession of dangerous goods for the purposes of transportation by railway vehicle on a main railway line, or for the purposes of storing them in the course of such transportation. (transporteur ferroviaire)
(2) Unless the context requires otherwise, all other words and expressions used in these Regulations have the same meaning as in section 1.4 of the Transportation of Dangerous Goods Regulations .
Rail Security Reporting
2 This Part sets out security requirements for the purposes of section 5 of the Act.
3 (1) A railway carrier must immediately report any potential threat or other security concern by telephone to the Transport Canada Situation Centre. Potential threats and other security concerns include
(c) any reports or discoveries of suspicious items when the report or discovery results in a disruption of railway operations;
(d) any suspicious activities observed on or near a railway vehicle, at or near infrastructure used in railway operations or at or near a facility or location used in railway operations;
(e) the discovery, seizure or discharge of a firearm or other weapon on or near a railway vehicle, at or near infrastructure used in railway operations or at or near a facility or location used in railway operations;
(f) any signs of tampering with a railway vehicle if the railway carrier determines that security has been compromised; and
(g) any information relating to the possible surveillance of a railway vehicle, of infrastructure used in railway operations or of a facility or location used in railway operations.
(a) the railway carrier’s name and contact information, including telephone number and email address;
(b) the name of the person who is making the report on behalf of the railway carrier and the person’s title and contact information, including their telephone number and email address;
(e) the classification and quantity of any dangerous goods that are involved in the potential threat or other security concern; and
(f) a description of the potential threat or other security concern, including the date and time that the railway carrier became aware of it and the date and time of any incident linked to it.
4 This Part sets out security requirements for the purposes of section 5 of the Act.
5 (1) A railway carrier must, at all times, have an employee designated as a rail security coordinator or an acting rail security coordinator.
(2) The railway carrier must provide the Minister with
6 A railway carrier must ensure that the rail security coordinator or acting rail security coordinator
(a) coordinates security matters within the railway carrier’s organization; and
(b) acts as the principal contact between the railway carrier, law enforcement and emergency response agencies and the Minister with respect to security matters.
7 (1) If a railway carrier accepts a railway vehicle that contains dangerous goods for transport in a train and a placard is required under Part 4 of the Transportation of Dangerous Goods Regulations , the railway carrier must carry out a visual security inspection of the railway vehicle when it is accepted for transport and when it is placed in the train.
(2) If a railway carrier accepts dangerous goods for transport in a railway vehicle in a train and a placard is required under Part 4 of the Transportation of Dangerous Goods Regulations , the railway carrier must carry out a visual security inspection of the railway vehicle when it is placed in the train.
(3) If a railway carrier that is carrying out an inspection under subsection (1) or (2) discovers signs of tampering or a suspicious item, the railway carrier must take measures to determine whether security has been compromised.
(4) If the railway carrier determines that security has been compromised, the railway carrier must take measures to address the situation before transporting the dangerous goods.
Security Plan and Training
8 A railway carrier, or a person who is employed by or is acting directly or indirectly for a railway carrier, is a prescribed person for the purposes of section 7.3 of the Act.
Application — security-sensitive dangerous goods
9 Sections 10 to 13 apply only to railway carriers that transport any of the security-sensitive dangerous goods set out in Schedule 1.
10 (1) A railway carrier is required to implement a security plan that
(c) describes the railway carrier’s organizational structure, identifies the departments that are responsible for implementing the plan or any portion of it and identifies every position whose incumbent is responsible for implementing the plan or any portion of it;
(e) sets out a process for notifying each person in a position referred to in paragraph (b) or (c) and who is responsible for implementing the plan or any portion of it that the plan or that portion of it must be implemented;
(f) includes an assessment of the security risks associated with the offering for transport, handling or transport of the dangerous goods set out in Schedule 1 that the railway carrier offers for transport, handles or transports;
(g) sets out a process for security inspections referred to in section 7, including
(iii) a method for determining whether additional security inspections are necessary when, given the circumstances, security could be compromised, and
(iv) a method for addressing the situation, if it is determined that security has been compromised;
(h) sets out measures to prevent access by unauthorized persons to the dangerous goods set out in Schedule 1 and to the railway vehicles used to transport those dangerous goods;
(i) sets out measures to verify information provided by candidates for positions that involve access to the dangerous goods set out in Schedule 1;
(j) sets out a policy on limiting access to security-sensitive information and sets out measures for the sharing, storing and destruction of that information;
(k) sets out measures to address other security risks identified in the assessment referred to in paragraph (f);
(l) sets out a program for the security awareness training required under section 14 and the security plan training required under section 11; and
(m) sets out measures to respond to a security incident and for reporting it.
(2) The railway carrier must
(b) review, and if necessary revise, the plan at least once a year;
(d) notify without delay the persons referred to in paragraph (a) of any significant revisions to the plan; and
(e) provide a copy of the plan to the Minister upon his or her request.
(3) The measures required under subsection (1) and under subsection 7.3(2) of the Act must be commensurate with the security risks identified in the assessment referred to in paragraph (1)(f).
(4) For greater certainty, nothing in this section requires a railway carrier to develop a security plan if it already has a plan that meets the requirements of subsections (1) and (3).
Persons required to undergo security plan training
11 (1) A person who is employed by or is acting directly or indirectly for a railway carrier to which this section applies is required to undergo training on the security plan if that person
(a) offers for transport, handles or transports by railway vehicle, in Canada, any of the dangerous goods set out in Schedule 1; or
(b) is responsible, in Canada, for implementing the security plan or any portion of it but does not perform any of the duties referred to in paragraph (a).
(2) The railway carrier must ensure that training on the security plan is provided to the person
(a) before the day on which the person initially undertakes the duties referred to in paragraph (1)(a), unless the person has, before that date, received training that meets the requirements of section 12;
(b) within six months after the later of the day on which this subsection comes into force and the day on which the person initially undertakes the responsibility referred to in paragraph (1)(b), unless the person has, before that date, received training that meets the requirements of section 12; and
(c) on a recurrent basis at least once every three years after the day on which a person completed their previous training, including any training received before the coming into force of this subsection that meets the requirements of section 12.
(3) The railway carrier must ensure that, until a person with the duties referred to in paragraph (1)(b) undergoes training on the security plan, the person performs their duties under the supervision of a person who has undergone training on the components of the plan that are relevant to the duties of the person being supervised.
12 Training on the security plan must cover the following topics:
(a) the railway carrier’s security objectives;
(b) the railway carrier’s organizational structure with respect to security;
(c) the railway carrier’s security procedures;
(d) the security duties of the person who is undergoing the training and any other security duties that are relevant to their duties; and
(e) the security plan measures that, in the event of a security incident, are relevant to the duties of the person undergoing the training.
13 If a railway carrier revises the security plan under subsection 10(2) in a way that significantly affects the duties referred to in subsection 11(1), it must ensure that a person with those duties is provided with training on the revisions as soon as possible but not later than 90 days after the day on which the plan is revised.
14 (1) A railway carrier must ensure that security awareness training is provided on the following topics:
(a) the security risks that are posed by the dangerous goods that the railway carrier offers for transport, handles or transports;
Persons required to undergo training
(2) A person who is employed by or is acting directly or indirectly for the railway carrier is required to undergo the security awareness training if the person
(a) offers for transport, handles or transports dangerous goods by railway vehicle, in Canada; or
(b) has duties, in Canada, regarding the security of the transportation of dangerous goods by railway vehicle but does not perform any of the duties referred to in paragraph (a).
(3) The railway carrier must ensure that the security awareness training is provided to the person
(a) before the day on which the person initially undertakes the duties referred to in paragraph (2)(a), unless the person has, before that date, received an equivalent training;
(b) within six months after the later of the day on which this subsection comes into force and the day on which the person initially undertakes the duties referred to in paragraph (2)(b), unless the person has, before that date, received an equivalent training; and
(c) on a recurrent basis at least once every three years after the day on which a person completed their previous training, including any equivalent training received before the coming into force of this subsection.
(4) The railway carrier must ensure that, until a person with the duties referred to in paragraph (2)(b) undergoes security awareness training, the person performs their duties under the supervision of a person who has undergone that training.
15 (1) A railway carrier must have a training record for each person who has undergone training under section 11, 13 or 14.
Contents of training record
(2) The training record must include
(a) the person’s name and details of the most recent training session that the person has received under each section, namely the date, the duration, the course title, the delivery method, the components of the security plan that were covered, if applicable, and the name of the training provider; and
(b) the title and date of each training session that the person has previously followed under each section.
(3) The railway carrier must retain the record for at least two years after the day on which the person ceases to be employed by or act directly or indirectly for the railway carrier.
16 Parts 1 to 3 do not apply in respect of dangerous goods that are exempted from all or a portion of the Transportation of Dangerous Goods Regulations in accordance with one or more of the provisions of those Regulations that are set out in Schedule 2.
17 Parts 1 to 3 do not apply in respect of dangerous goods that are in a limited quantity as determined in accordance with subsection 1.17(1) of the Transportation of Dangerous Goods Regulations .
18 Parts 1 to 3 do not apply in respect of dangerous goods if
19 Parts 2 and 3 do not apply in respect of samples of goods that a railway loader reasonably believes to be dangerous goods if
Dangerous goods in apparatus, piece of equipment or piece of machinery
20 Part 2 and sections 9 to 13 do not apply in respect of dangerous goods that are exempted from a portion of the Transportation of Dangerous Goods Regulations in accordance with special provision 167 of those Regulations.
21 Parts 2 and 3 do not apply in respect of dangerous goods that are exempted from a portion of the Transportation of Dangerous Goods Regulations in accordance with section 1.33 of those Regulations.
Engines or machinery containing dangerous goods
22 Parts 2 and 3 do not apply in respect of dangerous goods that are exempted from a portion of the Transportation of Dangerous Goods Regulations in accordance with special provision 154 of those Regulations.
23 Parts 1 to 3 do not apply in respect of dangerous goods that are exempted from a portion of the Transportation of Dangerous Goods Regulations in accordance with section 1.42 of those Regulations.
24 Parts 1 to 3 do not apply in respect of dangerous goods that are medical waste or clinical waste if the conditions set out in paragraphs 1.42.3(a) and (b) of the Transportation of Dangerous Goods Regulations are met.
25 Parts 2 and 3 do not apply in respect of dangerous goods that are radioactive materials included in Class 7 if the conditions set out in paragraphs 1.43(a) and (b) of the Transportation of Dangerous Goods Regulations are met.
26 (1) Subject to subsection (2), Part 2 and sections 9 to 13 do not apply in respect of a residue of dangerous goods contained in a drum if the conditions set out in paragraphs 1.44(a) and (b) of the Transportation of Dangerous Goods Regulations are met.
(2) This exemption does not apply in respect of dangerous goods that are included in Packing Group I or that are contained in a drum for which a Class 1, 4.3, 6.2 or 7 label is required under the Transportation of Dangerous Goods Regulations .
27 Part 2 and sections 9 to 13 do not apply in respect of substances that are classified as marine pollutants in accordance with subparagraph 2.43(b)(ii) of the Transportation of Dangerous Goods Regulations .
28 Parts 1 to 3 do not apply in respect of dangerous goods that are determined, in accordance with subsections (1) and (2) of special provision 21 of the Transportation of Dangerous Goods Regulations , to be either UN2990, LIFE-SAVING APPLIANCES, SELF-INFLATING or UN3072, LIFE-SAVING APPLIANCES NOT SELF-INFLATING, if the conditions set out in subsection (3) of that special provision are met.
29 Parts 1 to 3 do not apply in respect of dangerous goods that are UN2448, MOLTEN SULFUR, MOLTEN SULPHUR, SULFUR, MOLTEN or SULPHUR, MOLTEN, if the dangerous goods are transported in a large means of containment and the conditions set out in paragraphs (a) and (b) of special provision 32 of the Transportation of Dangerous Goods Regulations are met.
30 Parts 1 to 3 do not apply in respect of dangerous goods that are UN3090, LITHIUM METAL BATTERIES (including lithium alloy batteries), UN3091, LITHIUM METAL BATTERIES CONTAINED IN EQUIPMENT (including lithium alloy batteries) or LITHIUM METAL BATTERIES PACKED WITH EQUIPMENT (including lithium alloy batteries), UN3480, LITHIUM ION BATTERIES (including lithium ion polymer batteries) or UN3481, LITHIUM ION BATTERIES CONTAINED IN EQUIPMENT (including lithium ion polymer batteries) or LITHIUM ION BATTERIES PACKED WITH EQUIPMENT (including lithium ion polymer batteries), if
(a) the conditions set out in subsection (1) of special provision 34 of the Transportation of Dangerous Goods Regulations are met; and
(b) in the case of cells and batteries that are installed in equipment, the requirements of subsections (2) to (4) of special provision 34 of those Regulations are met.
31 (1) Parts 1 to 3 do not apply in respect of a neutron radiation detector, including one with solder glass joints, that
(b) may be transported under the UN number and shipping name UN1008, BORON TRIFLUORIDE, in accordance with subsection (1) of special provision 145 of the Transportation of Dangerous Goods Regulations ; and
(c) is packed in accordance with subsection (2) of special provision 145 of those Regulations.
(2) Parts 1 to 3 do not apply in respect of a radiation detection system that contains a neutron radiation detector, including one with solder glass joints, if
(b) the radiation detection system is packed in accordance with subsection (3) of special provision 145 of the Transportation of Dangerous Goods Regulations .
32 Subsection 1(1) of these Regulations is amended by adding the following in alphabetical order:
handling site means a facility connected to a railway line where a railway vehicle is placed for the loading or unloading of dangerous goods. (lieu de manutention)
railway loader means
(a) any person that operates a handling site, or
(b) any manufacturer or producer of dangerous goods that has possession of dangerous goods at a handling site for the purposes of loading them prior to, or unloading them after, transportation by rail. (chargeur ferroviaire)
33 Section 9 of these Regulations is replaced by the following:
9 (1) Sections 10 to 13 apply only to railway carriers that transport and railway loaders that offer for transport or handle any of the security-sensitive dangerous goods set out in Schedule 1.
(2) For greater certainty, paragraph 10(1)(g) does not apply to railway loaders.
34 Sections 10 to 15 of these Regulations are amended by replacing “railway carrier” and “railway carrier’s” with “railway carrier or railway loader” and “railway carrier’s or railway loader’s”, respectively.
(2) Sections 4 to 7 come into force on the day that, in the third month after the month in which these Regulations are registered, has the same calendar number as the day on which they are registered or, if that third month has no day with that number, the last day of that third month.
(3) Sections 8 to 15 come into force on the day that, in the ninth month after the month in which these Regulations are registered, has the same calendar number as the day on which they are registered or, if that ninth month has no day with that number, the last day of that ninth month.
(4) Sections 19 and 32 to 34 come into force on the first anniversary of the day on which these Regulations are registered.
(Section 9 and paragraphs 10(1)(f), (h) and (i) and 11(1)(a))
7 Any of the following dangerous goods included in Class 3 that are included in Packing Group III, are in a single means of containment and are in a quantity that exceeds 10 000 L:
8 Any quantity of any of the following dangerous goods included in Class 3 that are desensitized explosives and for which a placard is required under Part 4 of the Transportation of Dangerous Goods Regulations :
13 Any quantity of either of the following dangerous goods included in Class 5.2:
16 More than 500 kg of either of the following dangerous goods included in Class 7:
1 Section 1.15
2 Section 1.18
3 Section 1.19
4 Section 1.25
5 Section 1.27
6 Section 1.32
7 Section 1.36
8 Section 1.42.1
9 Section 1.42.2
10 Section 1.45
11 Section 1.46
12 Special provision 18
13 Subsection (2) of special provision 25
14 Special provision 33
15 Special provision 36
16 Subsection (2) of special provision 39
17 Special provision 40
18 Subsection (2) of special provision 56
19 Special provision 63
20 Subsection (1) of special provision 64
21 Subsection (2) of special provision 70
22 Special provision 90
23 Special provision 95
24 Special provision 96
25 Special provision 97
26 Subsection (2) of special provision 99
27 Special provision 100
28 Subsection (2) of special provision 104
29 Special provision 107
30 Subsection (7) of special provision 124
31 Special provision 127
32 Special provision 128
33 Special provision 134
34 Subsection (2) of special provision 144
35 Special provision 148
Issues: Freight trains transporting dangerous goods can be particularly vulnerable to misuse or sabotage, given the harmful nature of the goods and the extensive and accessible nature of the railway system. To mitigate these risks and to better align Canadian standards with international standards, Transport Canada is introducing risk-based regulations for the transportation of dangerous goods by rail in Canada.
Description: The Transportation of Dangerous Goods by Rail Security Regulations (the Regulations) will require railway carriers and railway loaders to proactively engage in security planning processes and manage security risks, by introducing the following elements:
security awareness training for employees;
security plans that include appropriate measures to address risks; and
Railway carriers will also be required to
report potential threats and other security concerns to the Transport Canada Situation Centre; and
Cost-benefit statement: The Regulations are expected to have a positive impact on public security, by increasing the likelihood that terrorist activities would be detected and prevented, and by minimizing the consequences should an incident occur, such as loss of life, property damage, environmental damage, and reduced international trade flows.
The Regulations are expected to result in costs to railway carriers and railway loaders and the Government of $17.43 million over a 10-year period (present value). As with the analysis of any security proposal, it is difficult to quantify the benefits; however, the Regulations will result in a positive impact on public security by reducing the likelihood that a terrorist attack involving dangerous goods transported by rail would occur.
“One-for-One” Rule and small business lens: The “One-for-One” Rule applies, with an estimated annualized administrative cost increase to railway loaders and railway carriers of $784 (IN) and an additional regulatory title.
The Regulations are expected to result in incremental compliance and administrative costs for all railway carriers and railway loaders of dangerous goods, regardless of their size. To minimize costs, Transport Canada is introducing an approach that aligns compliance costs with underlying risks, and gives industry the flexibility to implement security practices that are commensurate with their individual risk profiles and operational environments. Under this flexible approach, compliance activities and associated costs are expected to be lesser for small businesses.
Domestic and international coordination and cooperation: The Regulations will enhance alignment of the Canadian dangerous goods security requirements with the United States hazardous materials requirements, and facilitate the cross-border movement of dangerous goods by rail. The Regulations are also generally aligned with the United Nations Model Regulations respecting transportation of dangerous goods security.
The Regulations are also consistent with the objective of the Canada–United States Regulatory Cooperation Council, which is to better align Canada–United States regulatory approaches to make it easier for industry to do business on both sides of the border.
Dangerous goods are an important aspect of the Canadian economy, with an estimated 30 million shipments transported within Canada each year, approximately 24% of which are transported by rail. Dangerous goods are used in almost every facet of Canadians’ lives, from fuelling vehicles and providing home comfort, to manufacturing and industrial processes. Though dangerous goods are important to the Canadian economy and essential to modern life, they can, by their nature, be harmful to people, property and the environment, if misused or mishandled.
To mitigate harm during transport, the Government has historically focused on implementing safety requirements to reduce the likelihood and consequences of an accidental release of dangerous goods. However, dangerous goods are also vulnerable to deliberate misuse or sabotage in the rail supply chain. Though there have been no successful attacks in Canada, terrorist groups have committed numerous deadly attacks using dangerous goods in other parts of the world, which have highlighted the vulnerability of the system. In recognition of this risk, Parliament amended the Transportation of Dangerous Goods Act, 1992 (TDGA) in 2009 to provide new federal authority to enhance the security of the transportation of dangerous goods in Canada. To date, the authority to regulate security has not been exercised: there are no regulations in place respecting the security of the transportation of dangerous goods by rail. Rather, Transport Canada and the rail industry have been working together to strengthen rail security, in part through a Memorandum of Understanding with the Railway Association of Canada and its member signatories. Under this agreement, signatories have implemented a number of effective security practices. However, the agreement does not specifically target the transportation of dangerous goods, nor does it include all railway carriers or any railway loaders.
Other comparable jurisdictions have implemented regulatory regimes for the security of the transportation of dangerous goods by rail. The United Nations has developed Model Regulations to encourage the uniform development of national and international transportation of dangerous goods requirements. The Model Regulations are widely accepted internationally, and form the basis of several international agreements and national regulatory regimes (as well as that of the European Union). The United States, Canada’s largest trading partner, has also developed security regulations for the transportation of hazardous materials by rail that are generally aligned with the United Nations Model Regulations.
Strategic risk assessments conducted by Government of Canada security experts have indicated that the transportation of dangerous goods by rail is vulnerable to misuse or sabotage, including a terrorist attack, and the adverse impacts of such an event could be significant.
Though there is no imminent threat to the transportation of dangerous goods in Canada at this time, there are heightened concerns about the potential threat posed by individuals who subscribe to extremist ideologies. In addition, past events have highlighted the devastating impact that rail incidents involving dangerous goods can have on public safety, the environment and the economy. Most notably, on July 6, 2013, a Montreal, Maine & Atlantic Railway (MMA) train carrying light crude oil derailed in downtown Lac-Mégantic, Quebec: the ensuing explosions and fire killed 47 people, destroyed 40 buildings, and caused serious environmental damage to the downtown area and adjacent river and lake. Though this incident was safety-related, it underscores the devastation that could occur if trains transporting dangerous goods were specifically targeted by terrorists.
The Lac-Mégantic accident and other recent derailments across the United States and Canada (e.g. Casselton, North Dakota; and Gogama, Ontario) have occurred against the backdrop of growing North American crude oil production, limited pipeline transmission capacity, and the corresponding rise in the volume of oil moved by rail. The transportation levels of crude oil by rail are predicted to continue in the near-to-medium term. This increase in volume of crude oil and other dangerous goods transported by rail translates into an increase in the inherent risks of moving these dangerous goods through Canada’s communities.
Though Transport Canada has voluntary agreements with many railway carriers, Canada currently has no security regulations that require railway carriers and railway loaders to address the risks associated with transporting dangerous goods by rail, which is inconsistent with international standards. In an effort to improve Canada’s security posture and align Canadian standards with international standards, Transport Canada is introducing risk-based regulations to strengthen the security of transporting dangerous goods by rail.
In support of the Government’s overall mission to promote a safe, secure, efficient and environmentally responsible transportation system, Transport Canada is introducing a regulatory framework for the security of the transportation of dangerous goods by rail in Canada. The Regulations are intended to mitigate the security risks associated with the transportation of dangerous goods by rail, to demonstrate the Government of Canada’s commitment to safe communities by increasing the security of the transportation of dangerous goods by rail, and to align Canada’s transportation of dangerous goods by rail security regime with international standards and best practices. The objectives include the following:
heightening industry’s awareness of and focus on security, and increasing its capacity to respond to and recover from security incidents, and
Enhancing the alignment of Canada’s transportation of dangerous goods by rail security regime with that of the United States, to facilitate cross-border trade; and
Aligning Canada’s transportation of dangerous goods by rail security regime with international standards and best practices.
The Regulations have been designed using a management-based approach that will require railway carriers and railway loaders to proactively engage in security planning processes and manage security risks. This approach was chosen in response to the open and extensive nature of the railway system and the fact that security risks are constantly evolving. It was also chosen to give railway carriers and railway loaders the flexibility to adopt security practices that are tailored to their operations and proportionate to their risks.
The Regulations will require railway carriers and railway loaders to implement the following risk-based security practices and controls. footnote 1
1.	Reporting potential threats and other security concerns (railway carriers): Railway carriers will be required to report potential threats and security concerns to the Transport Canada Situation Centre.
2.	Rail security coordinator (railway carriers): Railway carriers will be required to designate a rail security coordinator, who will be responsible for coordinating security matters within their organization and serving as the primary contact for security-related activities and communications with Transport Canada and law enforcement and emergency response agencies.
3.	Railway vehicle security inspections (railway carriers): Railway carriers will be required to conduct security inspections of railway vehicles containing dangerous goods for which a placard is required under Part 4 of the Transportation of Dangerous Goods Regulations when accepted for transport and when placed in a train, to check for signs of tampering or suspicious items, and take measures to address the situation if security has been compromised.
4.	Security plan and risk assessment (railway carriers and railway loaders): Railway carriers and railway loaders of “security-sensitive dangerous goods” (i.e. goods that have been determined to pose a security risk, and are listed in Schedule 1 of the Regulations, such as any quantity of explosives included in Class 1.1, 1.2, or 1.3) will be required to develop and implement a security plan that includes requirements set out in subsections 10(1) to 10(4) of the Regulations (e.g. appropriate measures to address the risks identified in the assessment, such as measures to prevent access by unauthorized persons to those dangerous goods, or measures for responding to the security incidents).
The Regulations set out general components that will need to be addressed in each company’s security plan, including measures that would address personnel security and unauthorized access. footnote 2 This will give regulated entities the flexibility to develop plans that are commensurate with their individual circumstances and their assessed risks. Railway carriers and railway loaders will be required to provide a copy of their plans (including their risk assessments) to the Minister of Transport upon request.
5.	Security plan training (railway carriers and railway loaders): Personnel who have responsibilities under the security plan or duties that involve security-sensitive dangerous goods will be required to undergo training on the security plan. Refresher training will be required at least once every three years, and within 90 days if the security plan is revised in a way that significantly affects the person’s security duties.
6.	Security awareness training (railway carriers and railway loaders): In recognition that a knowledgeable workforce is vital to security, personnel who, in the course of their employment, directly affects dangerous goods transportation security will be required to undergo training, and railway carriers and railway loaders will be required to ensure that training is provided to personnel, on the following topics:
security risks associated with transporting dangerous goods;
measures to enhance rail security; and
ways to recognize and respond to potential threats and other security concerns.
For personnel with duties involving dangerous goods, training would be required before they initially undertake such duties and at least once every three years thereafter. For all other personnel (those who have duties regarding the security of the transportation of dangerous goods, but do not handle, offer for transport or transport dangerous goods), awareness training will be required within six months of employment and at least every three years. The goal of this requirement is to increase the industry’s ability to prevent, detect and effectively respond to and recover from security issues.
The table below summarizes the application of the requirements.
Table 1: Application of the requirements
Who? footnote 3
1.	Reporting potential threats and other security concerns Railway carriers Section 3 Any dangerous goods
2.	Rail security coordinator Railway carriers Sections 5 and 6 Any dangerous goods
3.	Rail security inspections Railway carriers Section 7 Dangerous goods for which a placard is required
4.	Security plan (including risk assessment) Railway carriers and railway loaders Section 10 Security-sensitive dangerous goods (defined in Schedule 1)
5.	Security plan training Railway carriers and railway loaders Sections 11 to 13 and 15 Security-sensitive dangerous goods (defined in Schedule 1)
6.	Security awareness training Railway carriers and railway loaders Sections 14 and 15 Any dangerous goods
The Regulations include a list of exemptions to ensure that the requirements would not apply to specified shipments or situations that do not pose security concerns. Part 4 of the Regulations outlines these exemptions, and provides exemptions from certain parts or sections of the Regulations.
Developing more stringent regulations for rail: Transport Canada also considered developing security regulations for the transportation of dangerous goods by rail that were more stringent, including requirements to compile commodity data, conduct route analysis and selection, and provide location and shipping information to Transport Canada (i.e. regulations that are fully aligned with the United States hazardous materials security regulations). However, preliminary consultations and analysis indicated that this approach might impose a burden that is disproportionate to the security risks associated with transporting dangerous goods by rail in Canada. Significant additional analysis would have to be undertaken to understand the full impact on industry (e.g. scientific analysis of the list of security sensitive dangerous goods that would be subject to the enhanced requirements, and the evaluation and identification of geographical areas that would be subject to location and shipping information requirements [i.e. the identification of High Threat Urban Areas]). This approach would not have allowed for the timely implementation of a baseline security regime for the transportation of dangerous goods by rail. Furthermore, not all of the United States security requirements would be practical or cost-effective to implement in Canada, given the different geographical landscape and limited routing options.
Pursuing a voluntary agreement for rail: Transport Canada also considered amending the existing Memorandum of Understanding on Railway Security between Transport Canada and the Railway Association of Canada to focus on the security of the transportation of dangerous goods. However, it would have been impractical to pursue agreements with railway loaders given the size of the industry, and pursuing agreements exclusively with railway carriers would not have the desired impact of increasing the security of the rail supply chain. In addition, this approach would have relied on a voluntary, non-legally binding Memorandum of Understanding and would not have been legally enforceable by Transport Canada.
Based on an analysis of the options, an assessment of international standards and requirements and the level of risk within the sector, Transport Canada considers management-based regulations for railway carriers and railway loaders to be the most appropriate and effective option at this time. The approach being introduced is partially aligned with the United States HAZMAT security regime for rail (i.e. it is consistent with the basic United States security requirements, but not with the more stringent requirements), and is generally aligned with United Nations recommendations. It would facilitate the timelier implementation of a baseline security regime for the transportation of dangerous goods by rail, and takes into consideration the potentially significant costs to industry and Government that would result from regulating both the rail and trucking sectors. The Regulations are risk-based, and give industry the flexibility to adopt security practices that are tailored to their operations and proportionate to their risks.
A cost-benefit analysis has been conducted to assess the impact of the Regulations on stakeholders. The cost-benefit analysis identifies, quantifies and monetizes, where possible, the incremental costs and benefits of the security regulations for the transportation of dangerous goods by rail in Canada.
Timeframe: A 10-year period (2019–2028) was used to evaluate the impacts of these Regulations. A 7% discount rate was used to derive the present value of the option under consideration to a base year of 2019.
Stakeholders: The stakeholders that will be directly impacted by the Regulations are railway carriers that have possession of dangerous goods while they are in transport by railway vehicle on a main railway line; railway loaders, including any person that operates a facility, or any manufacturer or producer of dangerous goods that uses a facility, which is connected to a railway line where a railway vehicle is placed for the loading or unloading of dangerous goods; and their employees.
Baseline scenario: Many of the requirements are already being implemented by the rail industry. Companies that transport dangerous goods into the United States, those that are members of voluntary trusted trader programs like Canada’s Partners in Protection and the United States Customs-Trade Partnership Against Terrorism, and those that are signatories to the Railway Security Memorandum of Understanding with Transport Canada already have many of the regulatory security practices in place. The impact of the Regulations on those companies is expected to be minimal. The cost estimate is based on the assumption that 15% of stakeholders are already compliant with the regulatory requirements in the baseline scenario. Due to data limitations, a sensitivity analysis was conducted on this ratio.
1.	Railway carriers: According to the registration information under Transport Canada’s Protective Direction No. 32, there were a total of 39 railways that transported dangerous goods in Canada in 2013. Two of them, the Canadian National Railway Company (CN) and the Canadian Pacific Railway (CPR), are Class 1 railways, and the remaining 37 are short line operators. It is estimated that Class 1 railways currently employ 28 426 people. Data from the Railway Association of Canada suggests that there are, on average, approximately 40 employees per short line freight railway in Canada, for an estimated total of 1 480 employees for the 37 short line operators. Using these figures, it is estimated that there are 29 906 persons employed by the 39 railways that transport dangerous goods in Canada. It is assumed that 30% of these employees, or 8 972 individuals, handle dangerous goods. Given an assumed baseline compliance rate of 15%, the incremental costs of the Regulations have been estimated for 7 626 individuals in railway carriers.
2.	Railway loaders: Given the limited data availability, it is assumed that the total number of railway loaders that operate in Canada is about 10% of the number of consignors that are registered under the Hazardous Materials Registration Program with the Pipeline and Hazardous Materials Safety Administration of the United States Department of Transportation. In 2014, 14 790 United States consignors were registered under this program. Assuming that the Canadian railway loader population would be approximately 10% of the United States consignor population, it is estimated that there are 1 479 railway loaders in Canada. Given an assumed baseline compliance rate of 15%, the number of railway loaders expected to require action to comply with the Regulations is estimated to be about 1 257.
A breakdown of the railway loaders by firm size is based on the distribution of small, medium and large businesses in Canada. The average number of employees per firm in Canada is 7 for small businesses, 124 for medium-sized businesses, and 715 for large businesses. It is assumed that 10% of employees in medium and large companies handle dangerous goods, and 25% of employees in small companies handle dangerous goods. It follows that an estimated 3 177 railway loader employees handle dangerous goods in Canada. Given an assumed baseline compliance rate of 15%, the number of railway loader employees expected to require action to comply with the Regulations is estimated to be about 2 664.
Detailed estimates of railway carriers, railway loaders, and their employees expected to require action to comply with the Regulations are set out in Table 2.
Table 2: Estimated number of railway carriers, railway loaders and employees who are expected to require action to comply with the requirements
Number of railway carriers and railway loaders handling/ transporting dangerous goods
33 1 257 1 290
Non-small business 2 27 29
Small business 31 1 229 1 260
25 420 13 724 39 144
Employees in non-small business 24 162 5 121 29 283
Employees in small business 1 258 8 603 9 861
7 626 2 664 10 290
Employees in non-small business 7 249 513 7 762
Employees in small business 377 2 151 2 528
3.	Time to meet requirements: The estimated amount of time required by stakeholders to meet each requirement is based on Transport Canada’s previous experience working with the industry and is shown in the following table (Table 3). A sensitivity analysis is conducted on this variable in the sensitivity analysis section.
Table 3: Estimated time (hours per year) to meet the regulatory requirements
Developing a security plan 50 25
Reviewing and updating a security plan 15 7.5
Awareness training 1 1
Developing security plan training materials 15 15
Security plan training 1.5 1.5
Rail security coordinator 72 36
Reporting significant security concerns 20 5
The following costs have been included in the analysis: costs of developing, reviewing and updating security plans; costs associated with awareness training and security plan training; costs associated with additional requirements for railway carriers; and Government costs.
As shown in Table 2, it is estimated that 1 290 companies (33 railway carriers and 1 257 railway loaders) will be required to develop a security plan under the Regulations. Of the 1 290 companies, an estimated 1 260 are small businesses and 30 are medium and large businesses. It is assumed that, on average, each small business would take 25 hours and each non-small business (medium and large firms) would take 50 hours to develop a security plan that meets the regulatory requirements. These are one-time costs that will be incurred in the first year of the Regulations coming into force.
Railway carriers and railway loaders will be required to review and update their security plans, if necessary, once a year starting in year 2. It is assumed that this would take 7.5 hours for small businesses and 15 hours for medium and large businesses (annually, from year 2 to year 10).
Implementation costs would vary significantly among railway carriers and railway loaders, depending on the nature of the materials they transport, the size and the complexity of their operations, as well as the security practices they already have in place. The annual compliance cost per company could range from almost nothing (for railway carriers and railway loaders that already have the regulatory security practices in place) to thousands of dollars. As each security plan is unique, it is difficult to estimate the associated implementation costs without knowing the specific circumstances of each entity. It is expected that each company will make reasonable and cost-effective decisions to improve security.
Given the above estimates and an hourly wage rate of $51.95 (the average wage rate of middle management occupations in trades, transportation, production and utilities), the present value of the total estimated costs associated with developing and reviewing security plans over 10 years is $5,067,777 ($144,587 for railway carriers and $4,923,189 for railway loaders), which corresponds to an annualized value of $721,537.
It is expected that security awareness training will be added to each railway carrier’s or railway loader’s existing safety training program. It is also expected that training delivery costs will be minimal, as the Regulations do not prescribe the method of delivering training. Rather, railway carriers and railway loaders will be able to determine the most efficient and effective method of training for their organization (e.g. self-instruction, online program or classroom sessions). The costs of developing the awareness training program are expected to be minimal, given that Transport Canada plans to provide guidance materials, and there are a variety of existing training programs that can be leveraged (e.g. documents and programs from the United States and from industry associations).
It is estimated that awareness training would take one hour on average per employee, and 39 144 employees would be required to receive the training. Following initial training, railway carriers and railway loaders will be required to retrain their employees once every three years. Therefore, the associated costs will be carried in year 1 (initial training) and every three years thereafter (years 4, 7 and 10). Railway carriers and railway loaders will be required to keep a record of the names of the employees who have taken the training to demonstrate compliance: it is estimated that this would take one minute per employee in year 1, after which it is assumed that companies would integrate their security awareness training program into their safety training program.
Given an hourly wage rate of $28.49 (the average wage rate of transport and heavy equipment operation and related maintenance occupations), the present value of the total costs of awareness training over the 10-year period is estimated at $1,696,786 ($1,101,891 for railway carriers and $594,896 for railway loaders), corresponding to an annualized value of $241,584.
Employers will also be required to ensure training is provided on the security plan and its implementation. It is estimated that it would take each company approximately 15 hours to develop their security plan training program (in year 1), given that training modules and guidance are readily available and Transport Canada intends to develop guidance materials. It is expected that stakeholders will use the least costly option to deliver their training (e.g. using their own facilities and equipment), therefore there should be no or minimal program delivery costs.
It is assumed that 50% of the 10 290 employees (Table 2) who handle dangerous goods would be required to take approximately 1.5 hours of security plan training in year 1 (initial training) and every three years thereafter (years 4, 7 and 10).
Given the above estimates and an hourly wage rate of $51.95 for developing the security plan (the average rate of middle management occupations in trades, transportation, production and utilities) and $28.49 for receiving training (the average rate of transport and heavy equipment operation and related maintenance occupations), the present value of the total costs associated with security plan training (developing the training program and receiving training) is $1,673,749 over the 10-year period ($522,744 to railway carriers and $1,151,005 for railway loaders), corresponding to an annualized value of $238,304.
Costs associated with additional requirements for railway carriers (reporting, rail security coordinator and security inspections)
Under the Regulations, railway companies will be required to have a rail security coordinator who coordinates security practices and procedures within their organization and acts as the principal contact with appropriate law enforcement and emergency response agencies, as well as the Minister of Transport. It is estimated that a large railway carrier’s rail security coordinator would require 72 hours per year and a small carrier’s rail security coordinator would require 36 hours per year to fulfill their duties. It is assumed that each carrier would need an average of 10 minutes to prepare and to submit the name of the coordinator and other relevant information to Transport Canada. Whenever the coordinator is replaced, the updated information will have to be submitted to Transport Canada; it is assumed that this would occur once every three years.
Railway carriers will also be required to report potential threats and security concerns to Transport Canada. It is expected that, on average, there would be 20 reports per large business annually and 5 reports per small business annually, and that it would take carriers approximately one hour to prepare and submit each report.
The Regulations will also require railway carriers to conduct visual security inspections of railway vehicles containing dangerous goods for which a placard is required. It is expected that there would be no or very minimal incremental costs for conducting security inspections, since most carriers already conduct pre-trip visual inspections for safety purposes under the Railway Safety Act .
Based on the above-mentioned estimates and an hourly wage rate of $51.95 (the average wage rate of middle management occupations in trades, transportation, production and utilities), the present value of the costs associated with reporting duties is estimated at $80,037 over 10 years, which corresponds to an annualized value of $11,396. The present value of the costs associated with the rail security coordinator is estimated at $549,134 over 10 years, which corresponds to an annualized value of $78,184.
The Government’s costs will be driven by the need to dedicate an additional 8.5 full-time employees in years 1 to 10, to ensure that the Regulations will be supported by an effective and risk-based oversight regime. Costs include salaries, accommodation costs, travelling costs and training costs. Transport Canada expects that the Regulations will impose an additional $8.36 million (present value) on the Department over a 10-year period, which corresponds to an annualized value of $1.19 million.
In summary, the present value of the total costs of the Regulations over a 10-year period is $17.43 million, including $2.40 million to railway carriers, $6.67 million to railway loaders, and $8.36 million to Transport Canada, which corresponds to an annualized value of $2.48 million.
The Regulations are expected to have a positive impact on public security. They are expected to promote a more aware, alert, prepared and proactive regulated community that would be better able to detect, prevent, respond to and recover from terrorist incidents. The Regulations are intended to improve the industry’s resilience, minimizing the consequences should an incident occur (minimizing loss of life, property damage, environmental damage and reduced international trade flows).
The Regulations will better align Canada’s transportation of dangerous goods by rail security regime with international standards and practices. They will also enhance alignment of Canada’s dangerous goods security requirements with the United States’ hazardous materials requirements, and facilitate the cross-border movement of dangerous goods between the two countries.
Table 4 provides the cost-benefit statement of the Regulations.
Table 4: Cost-benefit statement (Can$ 2017, PV 7%) footnote 4
A. Quantified impacts $ (PV)
Total benefits: n/a
$6,669,089
Industry — Total
$3,590,852
$9,067,483
$4,575,751
$1,362,611
$17,429,660
A sensitivity analysis was conducted on the key variables that are uncertain. These are the number of regulatees in compliance (i.e. baseline compliance rate) in the baseline and the time expected to meet each requirement.
Baseline compliance rate: Sensitivity on the total costs to industry was conducted with two scenarios: (1) 0%, reflecting a scenario where no regulatees are in compliance in the baseline; and (2) 30%, to reflect a scenario where twice as many regulatees are in compliance in comparison to the central scenario of 15%.
Table 5: Sensitivity analysis on the baseline compliance rate
Baseline Compliance Rate
Total costs to industry (PV, Can$ 2017)
$10,607,828
$7,601,323
Time expected to meet each requirement: Two scenarios were considered to estimate total costs to industry given the different amount of time expected to meet each requirement: (1) 25% less time than the central case estimates is required to comply with each requirement; and (2) 25% more time is required.
Table 6: Sensitivity analysis on the time expected
Central scenario (see Table 2)
(PV, Can$ 2017)
$8,491,749 $9,067,483 $9,643,222
In total, the incremental industry costs of the Regulations are estimated to be $9.07 million over 10 years or $1.29 million annualized. The railway carriers and railway loaders are expected to incur approximately 28.47% and 71.53% of total industry costs, respectively.
Table 7: Distribution of total industry costs among affected stakeholders (Can$ 2017)
Total PV over 10 years (2017 Canadian constant dollars)
Railway carriers $2,398,393 26.45%
Railway loaders $6,669,089 73.55%
Total $9,067,483 100.00%
More than half of the costs (55.89%) are due to the requirement of security plans (development, review and update). Approximately 18.71% of the costs are associated with awareness training. Approximately 18.46% of the costs are due to the requirement of security plan training (development of training materials and training). Approximately 6.06% of total costs are associated with the rail security coordinator requirement, and would be borne entirely by railway carriers. Approximately 0.88% of the costs are due to the requirement to report significant security concerns, and would be borne entirely by railway carriers. The distribution of total industry costs borne by differently affected stakeholders are presented in tables 8 and 9.
Table 8: Distribution of total industry costs by requirements
Share of Total Industry Costs (%)
1. Security plans: development, review and update 55.89%
2. Awareness training 18.71%
3. Security plan training: development of training materials and training 18.46%
4. Rail security coordinator 6.06%
5. Reporting significant security concerns 0.88%
Table 9: Distribution of total industry costs by requirements among stakeholders
Borne by Stakeholders
Loaders %
Security plans: development, review and update 2.85% 97.15% 100.00%
(including administrative burden) 64.94% 35.06% 100.00%
Security plan training: development and training 31.23% 68.77% 100.00%
Rail security coordinator (including administrative burden) 100.00% 0.00% 100.00%
Security reporting 100.00% 0.00% 100.00%
Transport Canada has considered the potential impact of the Transportation of Dangerous Goods by Rail Security Regulations on the administrative burden for businesses, and has determined that the “One-for-One” Rule applies. Specifically, two requirements will impose an additional administrative burden on railway carriers and railway loaders: the requirement for railway carriers and railway loaders to keep a record of the names of the employees who receive awareness training, and the requirement for railway carriers to provide the contact information of the rail security coordinator to Transport Canada.
It is assumed that companies will require one minute per employee to keep a record of awareness training in year 1, after which it is assumed that companies will integrate their security awareness training program into their safety training program, and each company would need an average of 10 minutes to prepare and submit the name of the rail security coordinator and other relevant information to Transport Canada.
Following the “One-for-One” Rule, a 7% discount rate and 10-year forecast period for the valuation were used. The price base year is in 2012 constant dollars. The present value base year for the valuation of impact under the Rule is 2012 (i.e. the incremental administrative costs were discounted back to 2012). The annualized value of the administrative burden costs over 10 years is estimated at $784 (IN) [or $1 per affected business] under the “One-for-One” Rule.
In order to enhance the security of the transportation of dangerous goods by rail and to strengthen the security of the rail supply chain, the Regulations will apply to all railway carriers and railway loaders, regardless of size. This will result in incremental compliance and administrative costs for all affected companies, including small businesses. However, the Regulations were designed to align compliance costs with underlying risks, and to give industry the flexibility to implement security practices that are commensurate with their individual circumstances, risk profiles and operational environments. It is expected that the risks identified and mitigated in the security plan of a large company with hundreds of employees, numerous distribution sites and a nationally integrated distribution network would be more complex and costly than the security plan of a smaller business with few employees and a purely local distribution network. Therefore, although the regulatory requirements will technically be the same for all businesses, compliance activities and associated costs are expected to be lower for small businesses.
Transport Canada considered adopting a more demanding approach by proposing security regulations for the transportation of dangerous goods by rail that are fully aligned with United States hazardous materials security regulations (the “initial option”). Under this option, additional requirements would have included compiling commodity data, conducting route analysis and selection, and providing location and shipping information to Transport Canada. However, preliminary consultations and analysis indicated that this approach might impose a burden that would be disproportionate to the security risks associated with transporting dangerous goods by rail. As a result, Transport Canada is introducing risk-based regulations that are partially aligned with United States regulatory requirements for rail (the “flexible option”), which will be less burdensome on small businesses.
The present value of the total costs to all small businesses (based on an estimated 31 railway carriers and 1 229 railway loaders) is estimated at $6.38 million over the 10-year period, compared to approximately $1.81 million in costs to the 29 medium and large businesses (2 railway carriers and 27 railway loaders). In annualized average terms, the Regulations will cost $2,921 per year per small railway carrier on average (compared to $193,897 per large railway carrier) and $665 per year per small railway loader (compared to $2,381 per large railway loader).
The total incremental compliance and administrative costs imposed on all small businesses are estimated to be $908,110 in annualized value. However, as the annualized value of the total costs to railway carriers and railway loaders is about $721 per small business, it is not expected that these costs would have a significant or detrimental impact on the operation of these companies.
As Table 10 shows, the initial option (i.e. additional requirements for railway carriers) would impose higher costs on small businesses (specifically the railway carriers), increasing the average cost per small business from $721 to $773 over the 10-year period. The increase would be for small railway carriers, as there would be no additional requirements for railway loaders under the initial option. All of the additional requirements are imposed on railway carriers under the initial option.
Table 10: Flexibility analysis of the initial and the flexible (targeted) options (constant year 2012 dollars, 2012 present value base year, 7% discount rate)
Security awareness training for railway carriers and railway loaders;
Security plan for railway carriers and railway loaders;
Security plan training for railway carriers and railway loaders;
Security inspection for railway carriers;
Security coordinator for railway carriers; and
Security reporting for railway carriers.
Additional requirements for railway carriers:
Commodity data compilation;
Route analysis and selection; and
Providing location and shipping information to Transport Canada.
$6,375,435
$973,473
$6,837,264
$908,110
$6,840,016
Requiring the railway carriers to compile commodity data, conduct route analysis and selection may further reduce the security risks associated with transporting dangerous goods by rail in Canada. However, the additional requirements (required in the United States) may not be applicable in Canada because of the different geographical landscape and limited routing options.
Increased operational costs which may lead to lower compliance rate.
Preliminary consultations and analysis indicated that this approach might impose a burden that is disproportionate to the security risks associated with transporting dangerous goods by rail in Canada.
The Regulations were developed using feedback and input from consultations with industry stakeholders, other government departments and departmental officials over the last several years, and comments received during the Canada Gazette , Part I, comment period.
Extensive preliminary consultations with the rail and trucking industries took place between November 2011 and February 2013. Those consulted included the Multi-Industry Association Committee on the Transportation of Dangerous Goods, footnote 5 the Federal-Provincial/Territorial Dangerous Goods Task Force, footnote 6 and the Transportation of Dangerous Goods General Policy Advisory Council. footnote 7 Through these committees, Transport Canada was able to reach out to industry associations, including the Railway Association of Canada, the Canadian Trucking Alliance (and the various provincial trucking member associations), the Chemistry Industry Association of Canada, the Canadian Association of Petroleum Producers, and the Canadian Fertilizer Institute.
Regulations should be aligned with United States security requirements and United Nations recommendations, with necessary adjustments to address unique Canadian circumstances (i.e. some elements of the United States regime may not be practical or cost-effective in Canada, such as the requirement for route analysis and selection);
Preliminary consultations included messaging from Transport Canada that the Regulations could apply to both the rail and road (trucking) sectors. However, since that time, the policy direction changed to include only rail. Transport Canada reengaged industry in the spring of 2015 to discuss this change, and to give industry the opportunity to review the proposed requirements. Briefings were held with the Railway Association of Canada (teleconference on March 5, 2015, and meeting on May 9, 2016), the Transportation of Dangerous Goods General Policy Advisory Council (teleconference on March 13, 2015, and meetings on May 28, 2015, and May 26, 2016), the Transportation of Dangerous Goods Federal-Provincial/Territorial Task Force (teleconference on March 20, 2015) and the Multi-Industry Association Committee on the Transportation of Dangerous Goods (teleconference on March 27, 2015, and meetings on May 27, 2015, November 17, 2015, and May 25, 2016). Industry stakeholders remained generally supportive of the regulatory approach and provided the following feedback:
Security plans: Industry asked whether Transport Canada would approve the security plans, and who would have access. Transport Canada explained that railway carriers and consignors (the term “consignor” has since been replaced with “railway loader” in order to better clarify who will be captured by the Regulations) would not be required to submit their plans to Transport Canada for approval, but would be required to make their plans available to the Minister of Transport upon request.
Security plan training: Stakeholders requested that Transport Canada ensure that the security plan training requirement be aligned with United States security requirements, to reduce implementation costs for industry.
The list of dangerous goods that trigger security plan and training requirements: Industry questioned whether the list of security-sensitive dangerous goods was harmonized with that of the United States and whether it included all pertinent goods. Transport Canada worked with experts to develop and refine the list, and attempted to align it with the United States list, with a few adjustments that are better suited to the Canadian context (e.g. the Canadian list includes substances regulated under the Human Pathogens and Toxins Act , whereas the United States list includes select agents or toxins regulated by the Centers for Disease Control and Prevention or the United States Department of Agriculture).
Since 2010, Transport Canada has also consulted the United States Transportation Security Administration on this initiative through the Transportation Security Cooperation Group, to obtain background information and compare systems in terms of alignment.
The proposed Regulations were published in the Canada Gazette , Part I, on June 24, 2017, followed by a 30-day public comment period. The 30-day comment period provided an opportunity for industry stakeholders and the general public to submit their comments/suggestions. Sixteen submissions were received from various transportation of dangerous goods companies and major industry associations. Comments received were taken into consideration in the development of the Regulations.
Industry stakeholders and their associations expressed general support for enhancing the security of the transportation of dangerous goods by rail through the Regulations. Support was expressed for Transport Canada’s mission to promote a safe, secure, efficient and environmentally responsible transportation system and the importance of security in the safe transportation of dangerous goods. Industry also supports Transport Canada’s effort to enhance alignment between Canadian and United States regulations that would facilitate the movement of dangerous goods by rail across the border. Moreover, industry has expressed support of the flexible approach adopted by the Regulations which provide the regulated entities with the flexibility to develop and implement security practices that are commensurate with their individual risk profiles and operational environments.
Industry also provided comments and suggestions in the following areas in terms of how to improve the proposed Regulations:
Application of consignor: Stakeholders expressed that the application of consignor was unclear. More specifically, industry recommended that Transport Canada clarify the definition of consignor to ensure that the intended parties/operations are captured within the Regulations. In response to industry feedback, Transport Canada has replaced the term “consignor” with “railway loader” in order to better clarify who will be captured by the Regulations. A concise definition of railway loader is provided in the Regulations.
Scope of security awareness training and security plan training: Various stakeholders commented that the scope of awareness training and the topics for security plan training were too broad and recommended that all training be limited to what is relevant to a person’s security role. In response to stakeholder feedback, Transport Canada has narrowed the scope of both the security awareness and security plan training requirements. The application of awareness training has been revised to capture persons who, in the course of employment, directly affect dangerous goods transportation security. The scope of the security plan training requirement has been revised from “on the entire plan” to component(s) of the security plan that are relevant to the person’s duties.
Recognizing existing security awareness and security plan training: Stakeholders requested that Transport Canada accept pre-existing training that is completed before the date that the Regulations come into force if they meet the requirements of the Regulations. In response to stakeholder feedback, Transport Canada has revised the security awareness and security plan training requirements to recognize previous training. More specifically, existing security awareness and security plan training will be recognized for, at most, three years from the previous training date, as long as the training meets the requirements outlined in the Regulations.
Thresholds for certain classes of Schedule 1 (the list of security-sensitive dangerous goods): Industry stakeholders recommended that Transport Canada revise the volume thresholds of certain security-sensitive dangerous goods listed in Schedule 1. In response to industry feedback, Transport Canada has revised several items in Schedule 1. For example, the threshold in items 6 and 7 has been increased from 3 000 L to 10 000 L.
Transport Canada has responded to all submissions requiring answers or clarifications and has taken these comments and suggestions into account in the refinement of the regulatory package. Transport Canada has also done further analysis to address specific comments. For example, Transport Canada has revised the contact for reporting potential threats and other security concerns (for the railway carriers) from the Canadian Transport Emergency Centre (CANUTEC) to the Transport Canada Situation Centre in the consideration of their expertise in dealing with security incidents.
The United Nations has developed Model Regulations to encourage the uniform development of national and international transportation of dangerous goods requirements. The Model Regulations are widely accepted internationally, and form the basis of several international agreements and national regulatory regimes, including in the United States. The Regulations are generally aligned with the recommended security provisions in the United Nations Model Regulations (section 1.4), which include security training for employees and security plans for high consequence dangerous goods, such as those explosives included in Class 1.1, 1.2, or 1.3.
The Regulations will introduce Canadian requirements that partially align with United States requirements for the transportation of dangerous goods by rail ( Hazardous Materials Regulations — Title 49 of the Code of Federal Regulations [49 CFR], sections 172.700 to 172.704, 172.800 to 172.822, 174.9, 174.14 and Rail Transportation Security Regulations — 49 CFR, Part 1580). The Regulations are consistent with the basic HAZMAT security requirements for rail in the United States, but do not include the more stringent requirements, such as compiling commodity data, conducting route analysis and selection, providing a secure chain of custody and control, expediting movement, and providing location and shipping information to the Government. This approach will facilitate the timelier implementation of a baseline security regime for the transportation of dangerous goods by rail in Canada. Further analysis of the additional United States rail requirements will be necessary to determine whether they are applicable in the Canadian context and commensurate with risk (i.e. considering the Canadian geographical landscape and the limited rail system in Canada).
The Regulations are consistent with the objective of the Canada–United States Regulatory Cooperation Council, which is to better align Canada–United States regulatory approaches to make it easier for industry to do business on both sides of the border.
Moreover, Canada’s current regime is inconsistent with that of its largest trading partner, the United States. The regulatory requirements will allow Canada to better align its requirements with United States hazardous materials security requirements, which would facilitate the cross-border movement of dangerous goods by rail.
Based on an analysis of various options, stakeholder feedback, an assessment of international standards and requirements and the level of risk within the sector, Transport Canada considers the development of management-based regulations for railway carriers and railway loaders to be the most appropriate and effective course of action at this time. This approach would facilitate the timelier implementation of a baseline security regime for the transportation of dangerous goods by rail.
The Regulations are not expected to create any undue costs or burden for the rail industry. This is due, in part, to the fact that many operators already comply with the regulatory requirements (e.g. those that transport dangerous goods to the United States, those that participate in trusted trader programs [Canada’s Partners in Protection program and the United States Customs-Trade Partnership Against Terrorism], and those that are signatories to the Railway Security Memorandum of Understanding with Transport Canada). As well, the Regulations have been designed to be risk-based, which will give industry the flexibility to adopt security practices that are tailored to their operations and proportionate to their risk.
Transport Canada’s objective is to implement a fair and equitable compliance and enforcement regime for the Regulations, using a graduated approach that allows industry to take corrective actions before resorting to enforcement actions. However, where compliance is not achieved on a voluntary basis or where there are flagrant violations, enforcement action could be sought through judicial sanction (indictment or summary conviction) in accordance with paragraphs 33(2)(a) and (b) of the TDGA.
Transport Canada is ready to successfully implement, deliver and oversee the Regulations. The Department will use a national network of surface and intermodal security inspectors to oversee compliance with the Regulations, and is currently developing guidance and training programs to ensure the inspectors will be adequately prepared to oversee this new regime and facilitate industry compliance. The Department will work to coordinate the oversight regime with the rail safety and transportation of dangerous goods safety oversight regimes (e.g. by conducting joint safety and security inspections), to enhance efficiency and minimize the impact on railway carriers and railway loaders.
Inspectors will provide regulatory oversight to ensure compliance and identify any non-compliance with the Regulations. Inspectors will provide ongoing oversight, guidance and education to railway carriers and railway loaders, and will schedule inspections using a risk-based approach. Current risk methodology will be reviewed and elements will be incorporated to support, align and produce a custom security risk assessment methodology. Inspection frequency and scope will be determined by the outcome of the risk assessments. Inspections will be at determined intervals; however, inspectors will have the flexibility to conduct random and for-cause inspections, as deemed appropriate.
Transport Canada will continue its engagement with industry through established transportation of dangerous goods fora and the various industry associations. Transport Canada will also conduct education and awareness activities to support industry and to facilitate implementation and compliance, and will develop guidance materials, as required.
Finally, the coming-into-force dates of the Regulations will be staggered to give railway carriers and railway loaders sufficient time to implement the requirements and to facilitate compliance, in accordance with the schedule set out in Table 11.
Table 11: Staggered coming-into-force dates
Reporting Railway carriers 1 month
Rail security coordinator Railway carriers 3 months
Security inspection Railway carriers 3 months
Security awareness training Railway carriers 9 months
Railway loaders 12 months
Security plan and risk assessment Railway carriers 9 months
Security plan training Railway carriers 9 months
Telephone: 613‑949‑7778
Fax: 613‑993‑1714
I Communication and transparency Yes No N/A
1. Are the proposed Regulations or requirements easily understandable in everyday language? ☑ ☐ ☐
2. Is there a clear connection between the requirements and the purpose (or intent) of the proposed Regulations? ☑ ☐ ☐
The Regulations provide a means to enhance the security of the transportation of dangerous goods by rail and each section clearly outlines the six requirements, which are also generally aligned with the United States regime.
3. Will there be an implementation plan that includes communications and compliance promotion activities, that informs small business of a regulatory change and guides them on how to comply with it (e.g. information sessions, sample assessments, toolkits, Web sites)? ☑ ☐ ☐
4. If new forms, reports or processes are introduced, are they consistent in appearance and format with other relevant government forms, reports or processes? ☐ ☐ ☑
1. Will streamlined processes be put in place (e.g. through BizPaL, Canada Border Services Agency single window) to collect information from small businesses where possible? ☐ ☐ ☑
2. Have opportunities to align with other obligations imposed on business by federal, provincial, municipal or international or multinational regulatory bodies been assessed? ☑ ☐ ☐
3. Has the impact of the proposed Regulations on international or interprovincial trade been assessed? ☑ ☐ ☐
The Regulations introduce Canadian requirements that generally align with international standards and best practices (e.g. the United Nations Model Regulations) and key United States regulatory requirements respecting the transportation of dangerous goods by rail ( Hazardous Materials Regulations — Title 49 of the Code of Federal Regulations [49 CFR], sections 172.700 to 172.704, 172.800 to 172.822, 174.9, 174.14 and Rail Transportation Security Regulations — 49 CFR, Part 1580). The Regulations are expected to increase the level of confidence in the security of the Canadian rail transportation system, resulting in a positive impact on domestic and international trade.
4. If the data or information, other than personal information, required to comply with the proposed Regulations is already collected by another department or jurisdiction, will this information be obtained from that department or jurisdiction instead of requesting the same information from small businesses or other stakeholders? (The collection, retention, use, disclosure and disposal of personal information are all subject to the requirements of the Privacy Act . Any questions with respect to compliance with the Privacy Act should be referred to the department’s or agency’s ATIP office or legal services unit.) ☑ ☐ ☐
5. Will forms be pre-populated with information or data already available to the department to reduce the time and cost necessary to complete them? (Example: When a business completes an online application for a licence, upon entering an identifier or a name, the system pre-populates the application with the applicant’s personal particulars such as contact information, date, etc. when that information is already available to the department.) ☐ ☐ ☑
6. Will electronic reporting and data collection be used, including electronic validation and confirmation of receipt of reports where appropriate? ☐ ☐ ☑
7. Will reporting, if required by the proposed Regulations, be aligned with generally used business processes or international standards if possible? ☐ ☐ ☑
8. If additional forms are required, can they be streamlined with existing forms that must be completed for other government information requirements? ☐ ☐ ☑
1. Has consideration been given to small businesses in remote areas, with special consideration to those that do not have access to high-speed (broadband) Internet? ☑ ☐ ☐
2. If regulatory authorizations (e.g. licences, permits or certifications) are introduced, will service standards addressing timeliness of decision making be developed that are inclusive of complaints about poor service? ☐ ☐ ☑
3. Is there a clearly identified contact point or help desk for small businesses and other stakeholders? ☑ ☐ ☐
Questions can be addressed to Kim Benjamin, Director General, Intermodal Surface, Security and Emergency Preparedness, Transport Canada, Ottawa, Ontario K1A 0N5, telephone: 613‑949‑7778, fax: 613‑993‑1714, email: kim.benjamin@tc.gc.ca.
IV Regulatory flexibility analysis Yes No N/A
The option chosen has the lowest compliance and administrative costs for small businesses. Transport Canada is proposing performance-based requirements that will provide regulated entities with the flexibility to develop and implement security practices that are commensurate with their individual risk profiles and operational environments. As well, Transport Canada plans to develop guidance materials that will ease implementation costs.
IV Regulatory flexibility analysis — Continued Yes No N/A
2. Does the RIAS include, as part of the Regulatory Flexibility Analysis Statement, quantified and monetized compliance and administrative costs for small businesses associated with the initial option assessed, as well as the flexible, lower-cost option? ☑ ☐ ☐
3. Does the RIAS include, as part of the Regulatory Flexibility Analysis Statement, a consideration of the risks associated with the flexible option? (Minimizing administrative or compliance costs for small business cannot be at the expense of greater health, security or safety or create environmental risks for Canadians.) ☐ ☑ ☐
Transport Canada could have taken a broader approach (initial option) by developing security regulations for the transportation of dangerous goods by rail under the Transportation of Dangerous Goods Act, 1992 that are fully aligned with United States hazardous materials security regulations. However, this option could impose a burden disproportionate to the security risk associated with railway company operations. Based on preliminary consultations, an analysis of all options, assessment of international standards and the level of risk within the sector, the recommendation is to develop regulations that are partially aligned with United States regulatory requirements for rail (flexible option). In addition, in order to ensure that the Regulations would not impose a significant burden on small businesses, the requirements provide regulated entities with the flexibility to develop and implement security practices that are commensurate with their individual circumstances, risk profiles and operational environments.
4. Does the RIAS include a summary of feedback provided by small business during consultations? ☑ ☐ ☐
1. If the recommended option is not the lower-cost option for small business in terms of administrative or compliance costs, is a reasonable justification provided in the RIAS? ☐ ☐ ☑
Railway loaders will be subject to the Regulations one year after the Regulations come into force in accordance with the coming into force provisions (section 35).
The Regulations must be read in conjunction with sections 5 and 7.3 of the TDGA. Subsection 7.3(1) provides that “No prescribed person shall import, offer for transport, handle or transport dangerous goods in a quantity or concentration that is specified by regulation — or that is within a range of quantities or concentrations that is specified by regulation — before the person has undergone security training in accordance with the regulations, has a security plan that meets the requirements or subsection (2) and has implemented the plan in accordance with the regulations.” Subsection 7.3(2) provides that “The plan shall, in accordance with the regulations, set out measures to prevent the dangerous goods from being stolen or otherwise unlawfully interfered with in the course of the importing, offering for transport, handling or transporting.”
Railway loaders will be subject to the Regulations according to the coming-into-force provisions (section 35).
Since these calculations have been rounded to the nearest dollar amount, the various totals in each of the tables in this report are approximate.