Canada Gazette, Part I, Volume 151, Number 25: Transportation of Dangerous Goods by Rail Security Regulations

June 24, 2017

Statutory authority

Transportation of Dangerous Goods Act, 1992

Sponsoring department

Department of Transport

REGULATORY IMPACT ANALYSIS STATEMENT

(This statement is not part of the Regulations.)

Executive summary

Background

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.

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 measures and practices. However, the agreement does not specifically target the transportation of dangerous goods, nor does it include all rail carriers or any consignors.

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 U.N. Model Regulations.

Issues

Freight trains transporting dangerous goods can be particularly vulnerable to attacks. The rail system in Canada is open and extensive, with many potential access points for terrorists to infiltrate. Furthermore, trains carrying dangerous goods are easy to identify and target because of the requirement to have visible safety marks that identify the type of goods being transported (to ensure safe handling and provide easy identification during emergency response).

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 by terrorists, and the adverse impacts of such a terrorist event could be significant.

Though there is no specific 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, recent 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. Despite the recent downturn in oil prices and revised production forecasts in Canada and the United States, elevated oil-by-rail levels 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 rail carriers, Canada currently has no security regulations that require carriers and consignors 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 proposing the introduction of risk-based regulations to strengthen the security of transporting dangerous goods by rail.

Objectives

The proposed Regulations would introduce a regulatory framework for the security of the transportation of dangerous goods by rail in Canada, in support of the Government's overall mission to promote a safe, secure, efficient and environmentally responsible transportation system.

The proposed 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 rail security regime with international standards and best practices. The objectives include the following:

• Enhancing the security of the transportation of dangerous goods by rail by
  • Increasing industry's ability to detect security concerns and prevent security incidents,
  • Promoting industry's proactive management of security risks,
  • Improving industry's effective and efficient management of security responsibilities,
  • Heightening industry's awareness of and focus on security, and increasing its capacity to respond to and recover from security incidents,
  • Enhancing coordination and communication of security issues within industry and between industry and Transport Canada;
• Strengthening the security of the rail supply chain;
• Enhancing the alignment of Canada's transportation of dangerous goods rail security regime with that of the United States, to facilitate cross-border trade; and
• Aligning Canada's transportation of dangerous goods rail security regime with international standards and best practices.

Description

The proposed Regulations have been designed using a management-based approach that would require rail carriers and consignors 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 rail carriers and consignors the flexibility to adopt security practices and measures that are tailored to their operations and proportionate to their risks.

The proposed Regulations would require rail carriers and consignors (see footnote 1) that import, handle, offer for transport or transport dangerous goods in a railway vehicle to implement the following risk-based security practices and controls.

• 1. Security awareness training (carriers and consignors): In recognition that a knowledgeable workforce is vital to security, all personnel would be required to undergo training, and carriers and consignors would 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 are assigned such duties and at least every three years thereafter. For all other personnel, awareness training would be required at least every three years. The goal of this proposed requirement is to increase the industry's ability to prevent, detect and effectively respond to and recover from security issues.
• 2. Security plan and risk assessment (carriers and consignors): Carriers and consignors of “security-sensitive dangerous goods” (i.e. goods that have been determined to pose a security risk, as defined in Schedule 1 of the proposed Regulations) would be required to
  • conduct a security risk assessment to identify, analyze and prioritize the security risks associated with handling or transporting these goods; and
  • develop and implement a security plan that includes requirements set out in subsections 4(1) and 4(2) of the proposed Regulations (e.g. appropriate measures to address the risks identified in the assessment).
• The proposed Regulations set out general components that would need to be addressed in each company's security plan, including measures that would address personnel security and unauthorized access. (see footnote 2) This would give regulated entities the flexibility to develop plans that are commensurate with their individual circumstances and their assessed risks. Carriers and consignors would be required to make their plans (including their risk assessments) available to the Minister of Transport upon request.
• 3. Security plan training (carriers and consignors): Personnel who have responsibilities under the security plan or duties that involve security-sensitive dangerous goods would be required to undergo training on the security plan. Refresher training would 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.
• 4. Rail security coordinator (carriers): Rail carriers would be required to designate a rail security coordinator, who would be responsible for coordinating security matters within their organization and serving as the primary contact for security-related activities and communications with Transport Canada, law enforcement and emergency response agencies.
• 5. Railway vehicle security inspections (carriers): Rail carriers would be required to conduct security inspections of railway vehicles containing dangerous goods for which a placard is required when accepted for transport and when placed in a train, to check for signs of tampering or suspicious items.
• 6. Reporting potential threats and other security concerns (carriers): Rail carriers would be required to report potential threats and security concerns to the Canadian Transport Emergency Centre (CANUTEC).

The table below summarizes the application of the proposed requirements.

Table 1: Application of proposed requirements

Requirement	Who? (see footnote 3)	Section of Regulations	What goods?
1. Security awareness training	Rail carriers and rail consignors	Sections 3, 9	Any dangerous goods
2. Security plan (including risk assessment)	Rail carriers and rail consignors	Section 4	Security-sensitive dangerous goods (defined in Schedule 1)
3. Security plan training	Rail carriers and rail consignors	Sections 5-9	Security-sensitive dangerous goods (defined in Schedule 1)
4. Rail security coordinator	Rail carriers	Sections 11–12	Any dangerous goods
5. Railway vehicle security inspections	Rail carriers	Section 13	Dangerous goods for which a placard is required
6. Reporting potential threats and other security concerns	Rail carriers	Sections 15–16	Any dangerous goods

Part 4 of the proposed Regulations provides exemptions from certain Parts or sections of the Regulations.

Regulatory and non-regulatory options considered

Transport Canada considered a number of options when developing a strategy to enhance the security of transporting dangerous goods, ranging from a regulatory approach for rail as well as road, to an exclusively voluntary approach focused on capacity-building activities with industry.

Options not chosen:

• Developing regulations for rail and road: Transport Canada initially considered developing security regulations for the transportation of dangerous goods by rail and road. However, this approach would have taken a significant amount of time and money to implement (given the size and complexity of the trucking industry, and the increased compliance costs for industry and oversight costs for the Government). Further, this approach would not have allowed for the timely implementation of a baseline security regime for the transportation of dangerous goods by rail, which is a priority given the recent high-profile incidents involving dangerous goods (specifically crude oil) transported by rail.
• 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 U.S. 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 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 U.S. 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 rail consignors given the size of the industry, and pursuing agreements exclusively with rail carriers would not have the desired impact of increasing the security of the rail supply chain. In addition, this approach would not be legally enforceable.
• Conducting capacity-building activities with stakeholders: Finally, Transport Canada considered taking an exclusively voluntary approach to enhance the security of the transportation of dangerous goods by rail, by undertaking more capacity-building activities with industry (e.g. holding workshops and developing guidance materials). However, this approach is not commensurate with the risks associated with transporting dangerous goods by rail, and is inconsistent with the approach taken in the United States and internationally.

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 rail carriers and consignors to be the most appropriate and effective option at this time. The approach being proposed is partially aligned with the U.S. HAZMAT security regime for rail (i.e. it is consistent with the basic U.S. security requirements, but not with the more stringent requirements), and is generally aligned with U.N. 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 proposed Regulations are risk-based, and give industry the flexibility to adopt security practices and measures that are tailored to their operations and proportionate to their risks.

Benefits and costs

A cost-benefit analysis has been conducted to assess the impact of the regulatory proposal on stakeholders. The cost-benefit analysis identifies, quantifies and monetizes, where possible, the incremental costs and benefits of security regulations for the transportation of dangerous goods by rail in Canada.

Time frame: A 10-year time period (2016–2025) was used to evaluate the economic impact of these proposed Regulations. A 7% discount rate was used to derive the present value of the option under consideration.

Stakeholders: The stakeholders that would be directly impacted by the proposed Regulations are rail carriers and consignors that import, handle, offer for transport, or transport dangerous goods by rail, and their employees.

Baseline scenario: Many of the proposed 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 U.S. Customs-Trade Partnership Against Terrorism, and those that are signatories to the rail security Memorandum of Understanding with Transport Canada already have many of the proposed security practices in place. The impact of the proposal on those companies is expected to be minimal. However, due to data limitations (i.e. the difficulty of identifying the impacted companies), and to ensure a conservative estimate (i.e. so as not to underestimate the costs), the cost estimate is based on the assumption that there is currently no compliance with the proposed regulatory requirements.

Key data and assumptions:

1. Carriers: According to the registration information under Transport Canada's Protective Direction 32, there were a total of 39 railways that transported dangerous goods in Canada in 2013. Two of them, Canadian National Railway Company (CN) and 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.
2. Consignors: Given the limited data availability, it is assumed that the total number of consignors that offer dangerous goods for transportation 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 U.S. Department of Transportation. In 2014, 14 790 U.S. consignors were registered under this program. Applying the assumption of 10%, it is estimated that 1 479 consignors handle or offer dangerous goods for transportation in Canada. A breakdown of the consignors 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 consignor employees handle dangerous goods in Canada.

Detailed estimates of carriers, consignors, and their employees are set out in Table 2.

Table 2: Estimated number of carriers, consignors and employees

	Carriers	Consignors	Total
Number of carriers and consignors handling/ transporting dangerous goods	39	1 479	1 518
Non-small business	2	33	35
Small business	37	1 446	1 483
Total number of employees	29 906	16 578	46 484
Employees in non-small business	28 426	6 456	34 882
Employees in small business	1 480	10 122	11 602
Number of employees handling dangerous goods	8 972	3 177	12 149
Employees in non-small business	8 528	646	9 174
Employees in small business	444	2 531	2 975

• 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: Estimated time (hours per year) to meet the proposed requirements

Requirement	Non-small Business	Small Business
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

Costs

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 rail carriers, and Government costs.

Costs of developing, reviewing and updating security plans

As shown in Table 2, it is estimated that 1 518 companies (39 carriers and 1 479 consignors) would be required to develop a security plan under the proposed Regulations. Of the 1 518 companies, an estimated 1 483 are small businesses and 35 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 proposed requirements. These are one-time costs that would be incurred in the first year when the Regulations come into force.

Carriers and consignors would be required to review and update their security plans 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 carriers and consignors, depending on the nature of the materials they transport, the size and the complexity of their operations, as well as the security measures they already have in place. The annual compliance cost per company could range from almost nothing (for carriers and consignors that already have the proposed security measures 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 would make reasonable and cost-effective decisions to improve security.

Given the above estimates and an hourly wage rate of $37.70 (the average wage rate of contractors and supervisors in trades and transportation), the present value of the total estimated costs associated with developing and reviewing security plans over 10 years is $4,041,692 ($106,703 for carriers and $3,934,989 for consignors), which corresponds to an annualized value of $575,446.

Costs associated with security awareness training

It is expected that security awareness training would be added to each carrier's or consignor's existing safety training program. It is also expected that training delivery costs would be minimal, as the proposed Regulations do not prescribe the method of delivering training. Rather, carriers and consignors would 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 46 484 employees would be required to receive the training. Following initial training, carriers and consignors would be required to retrain their employees once every three years. Therefore, the associated costs would be carried in year 1 (initial training) and every three years thereafter (years 4, 7 and 10). Carriers and consignors would 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 $27.35 (the average wage rate of transport and equipment operators), the present value of the total costs of awareness training over the 10-year period is estimated at $3,615,874 ($2,326,314 for railway carriers and $1,289,561 for consignors), corresponding to an annualized value of $514,819.

Costs associated with security plan training

Employers would 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 would use the least costly option to deliver their training (e.g. using their own facilities and equipment), so there should be no or minimal program delivery costs.

It is assumed that 50% of the 12 149 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 $37.70 for developing the security plan (the average rate of contractors and supervisors in trades and transportation) and $27.35 for receiving training (the average rate of transport and equipment operators), the present value of the total costs associated with security plan training (developing the training program and receiving training) is $1,507,105 over the 10-year period, resulting in an annualized value of $214,578.

Costs associated with additional requirements for rail carriers (reporting, rail security coordinator and security inspections)

Under the proposed Regulations, railway companies would 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 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 would have to be submitted to Transport Canada; it is assumed that this would occur once every three years.

Railway companies would 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 would also require 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 $37.70 (the average wage rate of contractors and supervisors in trades and transportation), the present value of the costs associated with reporting duties is estimated at $59,578 over 10 years, which corresponds to an annualized value of $8,483. The present value of the costs associated with the rail security coordinator is estimated at $390,829 over 10 years, which corresponds to an annualized value of $55,645.

Government costs

The Government's costs would be driven by the need to dedicate an additional 8.5 full-time employees in years 1 to 10, to ensure that the proposed Regulations would 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 proposed Regulations would 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.

Total costs

In summary, the present value of the total costs of the proposed Regulations over a 10-year period is $17.98 million, including $3.43 million to railway companies, $6.19 million to consignors, and $8.36 million to Transport Canada, which corresponds to an annualized value of $2.56 million.

Benefits

The proposed 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 proposed Regulations are intended to improve industry's resilience, minimizing the consequences should an incident occur (minimizing loss of life, property damage, environmental damage and reduced international trade flows).

The proposed Regulations would better align Canada's transportation of dangerous goods rail security regime with international standards and practices. They would also enhance alignment of Canada's dangerous goods security requirements with U.S. hazardous materials requirements, to facilitate the cross-border movement of dangerous goods between the two countries.

As with the analysis of other security regulations, it is very difficult to quantify the associated benefits of the Regulations, given that both the probability and the impact (baseline and regulated option) are subjective and uncertain.

Table 4 provides the cost-benefit statement of the regulatory proposal.

Table 4: Cost-benefit statement (see footnote a)

		Base Year 2016	Year 2020	Final Year 2025	Total (Present Value)	Annualized Value
A. Quantified impacts
Costs	Carriers	$1,140,665	$75,720	$1,077,929	$3,425,281	$487,683
	Consignors	$2,787,549	$427,518	$946,076	$6,190,490	$881,387
	Industry total	$3,928,214	$503,238	$2,024,005	$9,615,771	$1,369,069
	Government	$1,053,841	$1,207,702	$1,207,702	$8,362,177	$1,190,586
Total costs		$4,982,056	$1,710,941	$3,231,707	$17,977,948	$2,559,655
Total benefits		n/a
B. Qualitative impacts
Costs		Security plan implementation
Benefits		Improved security Improved public security Meeting public expectations Improved harmonization with the United States

“One-for-One” Rule

Transport Canada has considered the potential impact of the proposed Transportation of Dangerous Goods by Rail Security Regulations on the administrative burden for businesses, and has determined that the “One-for-One” Rule would apply. Specifically, two requirements would impose an additional administrative burden on carriers and consignors: the requirement for carriers and consignors to keep a record of the names of the employees who receive awareness training, and the requirement for carriers to provide the contact information of the rail security coordinator to Transport Canada.

Other requirements would either serve a function beyond administration (e.g. preparing security plans), or only be required in the event of a security incident and not as part of regular business practices (e.g. reporting potential threats and security concerns).

It is assumed that companies would require 1 minute per employee to keep a record of awareness training in year 1, after which it is assumed that companies would 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.

The present value of the administrative burden costs over 10 years is estimated at $20,496, which corresponds to an annualized value of $2,226 (IN). Table 5 below provides detailed information on the administrative burden costs by type and size of affected companies.

Table 5: Administrative burden (present value) to the industry over 10 years

	Carriers		Consignors		Total
	Large Business	Small Business	Large Business	Small Business	Large Business	Small Business
Awareness training (keeping training record)	$12,110	$630	$2,750	$4,312	$14,860	$4,943
Security coordinator (submitting information to Transport Canada)	$36	$658	$0	$0	$36	$658
Total costs	$12,145	$1,288	$2,750	$4,312	$14,896	$5,600
Average cost per firm	$6,073	$35	$83	$3	$426	$4

Small business lens

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 proposed Regulations would apply to all carriers and consignors that import, transport, handle, or offer for transport dangerous goods by rail, regardless of size. This would result in compliance and administrative costs for all affected companies, including small businesses. However, the proposed Regulations were designed to align compliance costs with underlying risks, and to give industry the flexibility to implement security measures 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 proposed requirements would technically be the same for all businesses, compliance activities and associated costs are expected to be lesser 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 U.S. 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 proposing risk-based regulations that are partially aligned with U.S. regulatory requirements for rail (the “flexible option”), which would be less burdensome on small businesses.

The present value of the total costs to all small businesses (based on an estimated 37 carriers and 1 446 consignors) is estimated at $6.12 million over the 10-year period, compared to approximately $3.5 million in costs to the 35 medium and large businesses (2 carriers and 33 consignors). On average, the Regulations would cost $2,536 per year per small railway company (compared to $196,923 per large railway) and $538 per year per small consignor (compared to $3,145 per large consignor).

As Table 6 shows, the initial option (i.e. additional requirements for railway carriers and consignors) would impose significantly higher costs on small businesses, increasing the average cost per small business from $4,127 to $18,098 over the 10-year period. For small carriers, the average cost would increase from $17,813 to $306,454 over the 10-year period, and for small consignors, the average cost would increase from $3,777 to $10,720 over the 10-year period.

Table 6: Flexibility analysis of the initial and the flexible (targeted) options

Short description	Flexible Option		Initial Option
	Proposed requirements		The proposed requirements, plus additional requirements for carriers: Commodity data compilation Providing location and shipping information to Transport Canada Storage and delays in transit and notification Chain of custody and control
Number of small businesses impacted	1 483		1 483
	Annualized Average (2012 $)	Present Value (2012 $)	Annualized Average (2012 $)	Present Value (2012 $)
Compliance costs	$870,654	$6,115,106	$3,820,579	$26,834,145
Administrative costs	$797	$5,600	$797	$5,600
Total costs for all small businesses	$871,451	$6,120,706	$3,821,376	$26,839,745
Total costs to small railway carriers	$93,838	$659,077	$1,614,392	$11,338,812
Total costs to small consignors	$777,613	$5,461,630	$2,206,984	$15,500,932
Average cost per small railway	$2,536	$17,813	$43,632	$306,454
Average cost per small consignor	$538	$3,777	$1,526	$10,720
Average cost per small business	$588	$4,127	$2,577	$18,098

Consultation

The proposed Regulations were developed using feedback and input from consultations with industry stakeholders, other government departments and departmental officials over the last several years.

Work on a strategy to enhance the security of the transportation of dangerous goods began in 2009, when Parliament amended the TDGA to provide new federal authorities respecting security. At that time, Transport Canada initiated discussions with industry through established stakeholder fora and bilateral meetings to ensure that the appropriate parties had an opportunity to participate in the risk assessment and policy development process.

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, (see footnote 4) the Federal-Provincial/Territorial Dangerous Goods Task Force, (see footnote 5) and the Transportation of Dangerous Goods General Policy Advisory Council. (see footnote 6) 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.

Industry stakeholders and their associations expressed general support for enhancing the security of the transportation of dangerous goods through regulations. Key messages delivered by industry during preliminary consultations included the following:

• Regulations should be aligned with U.S. requirements and U.N. recommendations, with necessary adjustments to address unique Canadian circumstances (i.e. some elements of the U.S. regime may not be practical or cost-effective in Canada, such as the requirement for route analysis and selection);
• Regulations should be aligned with other government departments' security requirements respecting the transportation of dangerous goods;
• Regulations should be aligned with other parts of the supply chain (e.g. aviation, marine);
• Regulations should be risk-based;
• Regulations should provide flexibility to minimize impact on small companies; and
• Transport Canada should provide practical guidance to industry.

Preliminary consultations included messaging from Transport Canada that the proposed 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 proposed approach and provided the following feedback:

• Application: Industry asked why trucking was excluded from the proposal. Transport Canada explained that regulating both sectors would take significantly more time and resources to implement, given the size and complexity of the trucking industry. Further, it is necessary to implement a timely baseline security regime for the transportation of dangerous goods by rail, given recent events which have shown the impact that rail incidents involving dangerous goods can have on public safety, the environment and the economy. Though these incidents were safety-related, they also highlighted the security risks.
• Security plans: Industry asked whether Transport Canada would approve the security plans, and who would have access. Transport Canada explained that rail carriers and consignors 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 upon request.
• Security plan training: Stakeholders requested that Transport Canada ensure that the security plan training requirement be aligned with U.S. requirements, to reduce implementation costs for industry.
• Reporting of security incidents: The Railway Association of Canada recommended that all security incidents be reported to CANUTEC (the Canadian Transport Emergency Centre operated by Transport Canada's Transportation of Dangerous Goods Directorate), for consistency with safety-related reporting requirements. Transport Canada agreed with this recommendation and revised the proposal accordingly. Stakeholders also requested that Transport Canada avoid duplication with safety reporting requirements. Transport Canada amended the regulatory proposal to ensure that stakeholders not be required to make duplicative reports.
• 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 U.S. list, with a few adjustments that are better suited to the Canadian context (e.g. the proposed Canadian list includes substances regulated under the Human Pathogens and Toxins Act, whereas the U.S. list includes select agents or toxins regulated by the Centers for Disease Control and Prevention or the U.S. Department of Agriculture).

Since 2010, Transport Canada has also consulted the U.S. Transportation Security Administration on this initiative through the Transportation Security Cooperation Group, to obtain background information and compare systems in terms of alignment.

Regulatory cooperation and international alignment

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 proposed Regulations are aligned with the recommended security provisions in the U.N. Model Regulations (section 1.4), which include security training for employees and security plans for high consequence dangerous goods.

The proposed Regulations would introduce Canadian requirements that partially align with U.S. 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 proposed 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 U.S. rail requirements would 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 proposed 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.

Transport Canada has also engaged federal partners with roles and responsibilities respecting the transportation of dangerous goods through the Transportation of Dangerous Goods Interdepartmental Working Group, to ensure coordination and to avoid duplicative or inconsistent regulatory requirements.

Rationale

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 by terrorists. An attack using dangerous goods is feasible, and the adverse impacts of a terrorist event could be significant. This level of risk supports the need to develop security regulations for the transportation of dangerous goods by rail, to strengthen the security of this sector and assist in protecting Canadians.

Moreover, Canada's current regime is inconsistent with that of its largest trading partner, the United States. The proposed requirements would allow Canada to better align its requirements with U.S. 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 rail carriers and consignors 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 proposed 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 proposed 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 U.S. 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 and measures that are tailored to their operations and proportionate to their risk.

Implementation, enforcement and service standards

Transport Canada's objective is to implement a fair and equitable compliance and enforcement regime for the proposed 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) as per paragraphs 33(2)(a) and (b) of the TDGA.

Transport Canada will secure resources to ensure that the Department would be ready to successfully implement, deliver and oversee the proposed Regulations. The Department would use a national network of surface security inspectors to oversee compliance with the Regulations, and is currently developing guidance and training programs to ensure the inspectors would be adequately prepared to oversee this new regime and facilitate industry compliance. The Department would 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 carriers and consignors.

Transport Canada plans to 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 proposed Regulations will be staggered to give carriers and consignors sufficient time to implement the requirements and to facilitate compliance, in accordance with the schedule set out in Table 7.

Table 7: Staggered coming-into-force dates

Requirement	Who?	Length of Time After Registration Before Coming into Force
Reporting	Carriers	1 month
Rail security coordinator	Carriers	3 months
Security inspection	Carriers	3 months
Security awareness training	Carriers	9 months
	Consignors	12 months
Security plan and risk assessment	Carriers	9 months
	Consignors	12 months
Security plan training	Carriers	9 months
	Consignors	12 months

Contact

Marie-France Paquet
Director General
Intermodal Surface, Security and Emergency Preparedness
Transport Canada
Ottawa, Ontario
K1A 0N5
Telephone: 613-949-7778
Fax: 613-993-1714
Email: Marie-France.Paquet@tc.gc.ca

Small Business Lens Checklist

1. Name of the sponsoring regulatory organization:

• Transport Canada

2. Title of the regulatory proposal:

• Transportation of Dangerous Goods by Rail Security Regulations

3. Is the checklist submitted with a RIAS for the Canada Gazette, Part I or Part II?

☑ Canada Gazette, Part I ☐ Canada Gazette, Part II

A. Small business regulatory design

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 U.S. 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, websites)?	☑	☐	☐
Industry will be informed and compliance promotion activities will be provided, as required.
4.	If new forms, reports or processes are introduced, are they consistent in appearance and format with other relevant government forms, reports or processes?	☐	☐	☑
No new forms, reports or processes will be introduced.
II	Simplification and streamlining	Yes	No	N/A
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?	☐	☐	☑
Information will not be collected.
2.	Have opportunities to align with other obligations imposed on business by federal, provincial, municipal or international or multinational regulatory bodies been assessed?	☑	☐	☐
Opportunities to align with current inspection activities conducted by other directorates within Transport Canada are being explored to avoid unnecessary burden.
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 U.N. Model Regulations) and key U.S. 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.)	☑	☐	☐
Any data or information required would be consistent with that of other modes in Transport Canada and can be obtained internally.
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.)	☐	☐	☑
Businesses will not be required to complete any forms.
6.	Will electronic reporting and data collection be used, including electronic validation and confirmation of receipt of reports where appropriate?	☐	☐	☑
Businesses will not be required to file reports.
7.	Will reporting, if required by the proposed Regulations, be aligned with generally used business processes or international standards if possible?	☐	☐	☑
Reporting will not be required.
8.	If additional forms are required, can they be streamlined with existing forms that must be completed for other government information requirements?	☐	☐	☑
Businesses will not be required to submit forms.
III	Implementation, compliance and service standards	Yes	No	N/A
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?	☑	☐	☐
Transport Canada can communicate with businesses via telephone and registered mail.
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?	☐	☐	☑
Regulatory authorizations will not be introduced.
3.	Is there a clearly identified contact point or help desk for small businesses and other stakeholders?	☑	☐	☐
Questions can be addressed to Marie-France Paquet, Director General, Intermodal Surface, Security and Emergency Preparedness, Transport Canada, Ottawa, Ontario K1A 0N5, telephone: 613-949-7778, fax: 613-993-1714, email: Marie-France.Paquet@tc.gc.ca.

B. Regulatory flexibility analysis and reverse onus

IV	Regulatory flexibility analysis	Yes	No	N/A
1.	Does the RIAS identify at least one flexible option that has lower compliance or administrative costs for small businesses in the small business lens section? Examples of flexible options to minimize costs are as follows: Longer time periods to comply with the requirements, longer transition periods or temporary exemptions; Performance-based standards; Partial or complete exemptions from compliance, especially for firms that have good track records (legal advice should be sought when considering such an option); Reduced compliance costs; Reduced fees or other charges or penalties; Use of market incentives; A range of options to comply with requirements, including lower-cost options; Simplified and less frequent reporting obligations and inspections; and Licences granted on a permanent basis or renewed less frequently.	☑	☐	☐
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 measures 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.
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 that are fully aligned with U.S. HAZMAT 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 U.S. regulatory requirements for rail (flexible option). In addition, in order to ensure that the proposal would not impose a significant burden on small businesses, the requirements provide regulated entities with the flexibility to develop and implement security measures 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?	☑	☐	☐
The RIAS includes a summary of feedback provided by stakeholders, including small businesses.
V	Reverse onus	Yes	No	N/A
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?	☐	☐	☑

PROPOSED REGULATORY TEXT

Notice is given that the Governor in Council, pursuant to sections 27 (see footnote b) and 27.1 (see footnote c) of the Transportation of Dangerous Goods Act, 1992 (see footnote d), proposes to make the annexed Transportation of Dangerous Goods by Rail Security Regulations.

Interested persons may make representations concerning the proposed Regulations within 30 days after the date of publication of this notice. All such representations must be in writing and cite the Canada Gazette, Part I, and the date of publication of this notice, and be addressed to Marie-France Paquet, Director General, Intermodal Surface, Security and Emergency Preparedness, Department of Transport, Place de Ville, Tower B, 112 Kent Street, Ottawa, Ontario K1A 0W8 (fax: 613-993-1714; email: marie-france.paquet@tc.gc.ca).

Ottawa, June 19, 2017

Jurica Čapkun
Assistant Clerk of the Privy Council

Transportation of Dangerous Goods by Rail Security Regulations

Interpretation

Terminology — Transportation of Dangerous Goods Regulations

1 Unless the context requires otherwise, words and expressions used in these Regulations have the same meaning as in section 1.4 of the Transportation of Dangerous Goods Regulations.

PART 1

Security Awareness Training, Security Plans and Security Plan Training

Overview — sections 3 to 5

2 (1) Sections 3 to 5 of these Regulations prescribe persons and set out requirements for the purposes of section 7.3 of the Act.

Overview — section 6

(2) Section 6 of these Regulations sets out security requirements for the purposes of section 5 of the Act.

Overview — sections 7 to 9

(3) Sections 7 to 9 of these Regulations set out,

• (a) in respect of sections 3 to 5 of these Regulations, requirements for the purposes of section 7.3 of the Act; and
• (b) in respect of section 6 of these Regulations, security requirements for the purposes of section 5 of the Act.

Security awareness training

3 (1) A person who is employed by, or is acting — directly or indirectly — on behalf of, a carrier that imports, offers for transport, handles or transports dangerous goods in a railway vehicle is required to undergo training on the following topics:

• (a) the security risks that are posed by those dangerous goods;
• (b) the measures that are designed to enhance rail security; and
• (c) the recognition of and response to potential threats and other security concerns.
  

Provision of training

(2) The carrier must ensure that the training is provided to the person

• (a) before assigning the person to duties that involve the importing, offering for transport, handling or transporting of dangerous goods in a railway vehicle; and
• (b) on a recurrent basis at least once every three years.
  

Security plan

4 (1) A carrier that imports, offers for transport, handles or transports in a railway vehicle any of the dangerous goods specified in Schedule 1 is required to have and to implement a security plan that

• (a) is in writing;
• (b) identifies, by job title, a senior manager responsible for the plan's overall development and implementation;
• (c) describes the carrier's organizational structure, identifies any department that is 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;
• (d) describes the security duties of each identified department and position;
• (e) sets out a process for notifying each person who is responsible for implementing the plan or any portion of it when the plan or that portion of it must be implemented;
• (f) includes an assessment of the security risks associated with the handling or transport of the dangerous goods specified in Schedule 1 that the carrier imports, offers for transport, handles or transports;
• (g) sets out measures to prevent access by unauthorized persons to those dangerous goods and to the railway vehicles used to transport those dangerous goods;
• (h) sets out measures to verify information provided by individuals who apply for positions that involve access to those dangerous goods;
• (i) sets out a policy on limiting access to security-sensitive information and sets out measures for the sharing, storing and destruction of that information;
• (j) sets out measures to address other security risks identified in the assessment referred to in paragraph (f);
• (k) sets out a program for the security awareness training required under section 3 and the security plan training required under sections 5 and 6; and
• (l) sets out measures for responding to security incidents and for reporting them.
  

Implementation

(2) The carrier must

• (a) make the most recent version of the security plan or any portion of it available to each person who is responsible for implementing the plan or that portion of it;
• (b) review the plan at least once a year;
• (c) revise the plan if a change in circumstances is likely to affect the security risks identified in the assessment referred to in paragraph (1)(f);
• (d) notify the persons referred to in paragraph (a) of any revisions to the plan;
• (e) ensure that a copy of the most recent version of the plan can be accessed at the carrier's principal place of business; and
• (f) make the plan available to the Minister on reasonable notice given by the Minister.

Commensurate measures

(3) The measures required under subsection 7.3(2) of the Act and under subsection (1) of these Regulations must be commensurate with the security risks identified in the assessment referred to in paragraph (1)(f).

Pre-existing plan

(4) For greater certainty, nothing in this section requires a carrier to develop a security plan if the carrier already has a plan that meets the requirements of subsections (1) and (3).

Security plan training — prescribed persons

5 (1) A person who is employed by, or is acting — directly or indirectly — on behalf of, a carrier that is required to have and to implement a security plan under section 4 is required to undergo training on the entire plan if that person has duties that involve the importing, offering for transport, handling or transporting of any of the dangerous goods specified in Schedule 1.

Provision of training

(2) The carrier must ensure that training on the entire security plan is provided to the person

• (a) before assigning the person to the duties referred to in subsection (1); and
• (b) on a recurrent basis at least once every three years.
  

Security plan training — other persons

6 (1) A carrier that is required to have and to implement a security plan under section 4 must ensure that training on the entire security plan is provided to any person is employed by, or is acting — directly or indirectly — on behalf of, the carrier, and who is responsible for implementing the plan or any portion of it.

Provision of training

(2) The training must be provided to the person

• (a) within six months after the day on which the person is assigned the responsibility referred to in subsection (1); and
• (b) on a recurrent basis at least once every three years.

Supervision

(3) The carrier must ensure that, until the person undergoes training on the entire security plan, the person performs their duties under the supervision of a person who has undergone training on the entire security plan.

Training topics

7 Training on an entire security plan must cover the following topics:

• (a) the carrier's security objectives;
• (b) the carrier's organizational structure with respect to security;
• (c) the carrier's security procedures;
• (d) the security duties of the person who is undergoing the training and the security duties of other persons who are employed by, or who act — directly or indirectly — on behalf of, the carrier; and
• (e) the measures to be taken in accordance with the plan in the event of a security incident.

Training on revised plan

8 If a carrier that is required to have and to implement a security plan under section 4 revises the plan in a way that significantly affects the security duties of a person referred to in subsection 5(1) or 6(1), the carrier must ensure that, within 90 days after the day on which the revisions are implemented, the person is provided with training on the revisions.

Training records

9 (1) A carrier must have an up-to-date training record for each person who has undergone training under section 3, 5, 6 or 8.

Retention period

(2) The carrier must retain the record for at least 90 days after the day on which the person ceases to be employed by, or ceases to act — directly or indirectly — on behalf of, the carrier.

PART 2

Rail Security Requirements

Overview

10 This Part sets out security requirements for the purposes of section 5 of the Act.

Rail security coordinator

11 (1) A carrier must have, at all times, a rail security coordinator or an acting rail security coordinator.

Contact information

(2) The carrier must provide the Minister with

• (a) the name and job title of the rail security coordinator or acting rail security coordinator; and
• (b) 24-hour contact information for the rail security coordinator or acting rail security coordinator.
  

Duties

12 A carrier must ensure that the rail security coordinator or acting rail security coordinator

• (a) coordinates security matters within the carrier's organization; and
• (b) acts as the principal contact between the carrier, law enforcement and emergency response agencies and the Minister with respect to security matters.
  

Security inspection — railway vehicle accepted

13 (1) If a carrier accepts a railway vehicle containing dangerous goods for transport in a train, and a placard is required under Part 4 of the Transportation of Dangerous Goods Regulations for the railway vehicle, the carrier must carry out a ground-level visual security inspection of the railway vehicle when it is accepted for transport and when it is placed in the train.

Security inspection — dangerous goods accepted

(2) If a 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 for the railway vehicle, the carrier must carry out a visual security inspection of the railway vehicle when it is placed in the train.

Tampering or suspicious items

(3) If a carrier that is carrying out an inspection under subsection (1) or (2) discovers signs of tampering or a suspicious item, the carrier must take measures to determine whether security has been compromised.

Compromise of security

(4) If the carrier determines that security has been compromised, the carrier must take measures to address the situation before transporting the dangerous goods.

PART 3

Security Reporting Requirements

Overview

14 This Part sets out security requirements for the purposes of section 5 of the Act.

Potential threats and other security concerns

15 (1) A carrier that handles or transports dangerous goods by railway vehicle must immediately report any potential threat or other security concern by telephone to CANUTEC. Potential threats and other security concerns include

• (a) any interference with a train crew;
• (b) any bomb threats, either specific or non-specific;
• (c) any reports or discoveries of suspicious items that result in a disruption of railway operations;
• (d) any suspicious activities observed on a train or inside a facility used by the carrier that result in a disruption of railway operations;
• (e) 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;
• (f) 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;
• (g) any signs of tampering with a railway vehicle; and
• (h) 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.
  

Contents of report

(2) The report must include, if applicable and to the extent known, the following information:

• (a) the carrier's name and contact information, including telephone numbers and email addresses;
• (b) the name of the person who is making the report on behalf of the carrier and the person's title and contact information, including their telephone numbers and email addresses;
• (c) any information that identifies any train that is affected by the potential threat or other security concern, including its itinerary and line or route position;
• (d) any information that identifies any railway vehicle, infrastructure, facility or location that is affected by the potential threat or other security concern;
• (e) the classification and quantity of any dangerous goods that are involved in the potential threat or other security concern;
• (f) a description of the potential threat or other security concern, including the date and time that the carrier became aware of it and the time and date of any incident linked to it;
• (g) the names of the persons involved in the potential threat or other security concern, and any other information related to those persons; and
• (h) the source of any threat information.
  

Avoidance of double reporting

16 If a carrier is required to make a report under Part 8 of the Transportation of Dangerous Goods Regulations and the report's subject matter is a potential threat or other security concern for the purposes of section 15 of these Regulations, the carrier is not required to make a report under that section.

PART 4

Exemptions

Various exemptions

17 Parts 1 to 3 of these Regulations 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 to these Regulations.

Limited quantities

18 Parts 1 to 3 of these Regulations 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.

Excepted quantities

19 Parts 1 to 3 of these Regulations do not apply in respect of dangerous goods if

• (a) they are in an excepted quantity as determined in accordance with subsections 1.17.1(1) and (2) of the Transportation of Dangerous Goods Regulations or are in an excepted quantity that is specified in subsection 1.17.1(8) of those Regulations; and
• (b) the requirement set out in subsection 1.17.1(5) of those Regulations is met.

Samples for classifying, analysing or testing

20 Parts 1 and 2 of these Regulations do not apply in respect of samples of goods that the consignor reasonably believes to be dangerous goods if

• (a) the classification or the exact chemical composition of the goods is unknown and cannot be readily determined; and
• (b) the conditions set out in paragraphs 1.19.1(a) to (d) of the Transportation of Dangerous Goods Regulations are met.
  

Dangerous goods in instrument or equipment

21 Sections 4 to 9 and Part 2 of these Regulations 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 1.29 of those Regulations.

Flammable liquids

22 Parts 1 and 2 of these Regulations 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.

Gasoline used to operate instrument or equipment

23 Parts 1 and 2 of these Regulations 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 1.34.1 of those Regulations.

Human or animal specimens

24 Parts 1 to 3 of these Regulations do not apply in respect of human or animal specimens that are believed not to contain infectious substances and that are in a means of containment referred to in paragraph 1.42(2)(a) or (b) of the Transportation of Dangerous Goods Regulations.

Medical or clinical waste

25 Parts 1 to 3 of these Regulations 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.

Radioactive materials

26 Parts 1 and 2 of these Regulations 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.

Residue in drum

27 (1) Subject to subsection (2), sections 4 to 9 and Part 2 of these Regulations 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.

Exception

(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.

Marine pollutants

28 Sections 4 to 9 and Part 2 of these Regulations do not apply in respect of substances that are classified as marine pollutants in accordance with section 2.43 of the Transportation of Dangerous Goods Regulations.

Life-saving appliances

29 Parts 1 to 3 of these Regulations do not apply in respect of dangerous goods that are determined, in accordance with subsections (1) and (2) of special provision 21, to be either UN2990, LIFE-SAVING APPLIANCES, SELF-INFLATING, or UN3072, LIFE-SAVING APPLIANCES NOT SELF-INFLATING, containing dangerous goods as equipment, if the conditions set out in subsection (3) of that special provision are met.

Molten sulphur

30 Parts 1 to 3 of these Regulations 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 in a large means of containment and the conditions set out in paragraphs (a) and (b) of special provision 32 are met.

Lithium cells and batteries

31 Parts 1 to 3 of these Regulations 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 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 are met.
  

Neutron radiation detectors

32 (1) Parts 1 to 3 of these Regulations do not apply in respect of a neutron radiation detector, including one with solder glass joints, that

• (a) does not contain more than 1 g of boron trifluoride gas;
• (b) may be transported under the shipping name UN1008, BORON TRIFLUORIDE, in accordance with subsection (1) of special provision 145; and
• (c) is packed in accordance with subsection (2) of special provision 145.

Radiation detection systems

(2) Parts 1 to 3 of these Regulations do not apply in respect of a radiation detection system that contains a neutron radiation detector, including one with solder glass joints, if

• (a) the neutron radiation detector meets the conditions set out in paragraphs (1)(a) and (b); and
• (b) the radiation detection system is packed in accordance with subsection (3) of special provision 145.
  

PART 5

Amendments and Coming into Force

Amendments to These Regulations

33 The English version of these Regulations is amended by replacing “carrier” with “consignor or carrier”, with any necessary modifications, in the following provisions:

• (a) paragraphs 7(b) and (c); and
• (b) subsection 9(2).

34 These Regulations are amended by replacing “carrier” with “consignor or carrier”, with any necessary modifications, in the following provisions:

• (a) the portion of subsection 3(1) before paragraph (a) and the portion of subsection 3(2) before paragraph (a);
• (b) subsections 4(1), (2) and (4);
• (c) subsection 5(1) and the portion of subsection 5(2) before paragraph (a);
• (d) subsections 6(1) and (3);
• (e) paragraphs 7(a) and (d);
• (f) section 8; and
• (g) subsection 9(1).

Coming into Force

One month after registration

35 (1) Subject to subsections (2) to (4), these Regulations come into force on the day that, in the first month after the month in which they are registered, has the same calendar number as the day on which they are registered or, if that first month has no day with that number, the last day of that first month.

Nine months after registration

(2) Sections 2 to 9 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.

Three months after registration

(3) Sections 10 to 13 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.

First anniversary of registration

(4) Sections 33 and 34 come into force on the first anniversary of the day on which these Regulations are registered.

SCHEDULE 1

(Subsections 4(1) and 5(1))

Security-sensitive Dangerous Goods

Item	Description
1	Any quantity of dangerous goods included in Class 1.1, 1.2 or 1.3
2	Any quantity of dangerous goods included in Class 1.4, 1.5 or 1.6 for which a placard is required under Part 4 of the Transportation of Dangerous Goods Regulations
3	Any dangerous goods included in Class 2.1 that are in a single means of containment and are in a quantity that exceeds 3 000 L
4	Any dangerous goods included in Class 2.2, with a subsidiary class of Class 5.1, that are in a single means of containment and are in a quantity that exceeds 3 000 L
5	Any quantity of dangerous goods included in Class 2.3
6	Any dangerous goods included in Class 3 that are included in packing group I or II, are in a single means of containment and are in a quantity that exceeds 3 000 L
7	Any of the following dangerous goods included in Class 3 that are in a single means of containment and are in a quantity that exceeds 3 000 L: (a) UN1170, ETHANOL with more than 24% ethanol, by volume, ETHANOL SOLUTION with more than 24% ethanol, by volume, ETHYL ALCOHOL with more than 24% ethanol, by volume, or ETHYL ALCOHOL SOLUTION with more than 24% ethanol, by volume; (b) UN1202, DIESEL FUEL, GAS OIL or HEATING OIL, LIGHT; (c) UN1203, GASOLINE, MOTOR SPIRIT, or PETROL; (d) UN1267, PETROLEUM CRUDE OIL; (e) UN1268, PETROLEUM DISTILLATES, N.O.S. or PETROLEUM PRODUCTS, N.O.S.; (f) UN1863, FUEL, AVIATION, TURBINE ENGINE; (g) UN1987, ALCOHOLS, N.O.S.; (h) UN1993, FLAMMABLE LIQUID, N.O.S.; (i) UN3295, HYDROCARBONS, LIQUID, N.O.S.; (j) UN3475, ETHANOL AND GASOLINE MIXTURE, with more than 10% ethanol, ETHANOL AND MOTOR SPIRIT MIXTURE, with more than 10% ethanol, or ETHANOL AND PETROL MIXTURE, with more than 10% ethanol; and (k) UN3494, PETROLEUM SOUR CRUDE OIL, FLAMMABLE, TOXIC
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: (a) UN1204, NITROGLYCERIN SOLUTION IN ALCOHOL with not more than 1% nitroglycerin; (b) UN2059, NITROCELLULOSE SOLUTION, FLAMMABLE with not more than 12.6% nitrogen, by dry mass, and not more than 55% nitrocellulose; (c) UN3064, NITROGLYCERIN, SOLUTION IN ALCOHOL with more than 1% but not more than 5% nitroglycerin; and (d) UN3379, DESENSITIZED EXPLOSIVE, LIQUID, N.O.S.
9	Any quantity of dangerous goods included in Class 4.1 that are desensitized explosives and for which a placard is required under Part 4 of the Transportation of Dangerous Goods Regulations
10	Any dangerous goods included in Class 4.2 that are included in packing group I or II, are in a single means of containment and are in a quantity that exceeds 3 000 L
11	Any quantity of dangerous goods included in Class 4.3
12	Any dangerous goods included in Class 5.1 that are included in packing group I or II, are in a single means of containment and are in a quantity that exceeds 3 000 L
13	Any quantity of either of the following dangerous goods included in Class 5.2: (a) UN3111, ORGANIC PEROXIDE TYPE B, LIQUID, TEMPERATURE CONTROLLED; and (b) UN3112, ORGANIC PEROXIDE TYPE B, SOLID, TEMPERATURE CONTROLLED
14	Any dangerous goods included in Class 6.1 that are in a single means of containment and are in a quantity that exceeds 3 000 L
15	Any quantity of dangerous goods included in Class 6.1 that are included in packing group I due to inhalation toxicity
16	Any quantity of any of the following infectious substances included in Category A of Class 6.2 and any substance that exhibits characteristics similar to these substances: (a) Crimean-Congo Hemorrhagic fever virus; (b) Ebola virus; (c) Flexal virus; (d) Guanarito virus; (e) Hantaviruses causing hemorrhagic fever with renal syndrome; (f) Hantaviruses causing pulmonary syndrome; (g) Hendra virus; (h) Herpes B virus (Cercopithecine Herpesvirus-1); (i) Junin virus; (j) Kyasanur Forest virus; (k) Lassa virus; (l) Machupo virus; (m) Marburg virus; (n) Monkeypox virus; (o) Nipah virus; (p) Omsk hemorrhagic fever virus; (q) Russian Spring – Summer encephalitis virus; (r) Sabia virus; and (s) Variola (smallpox virus)
17	More than 500 kg of either of the following dangerous goods included in Class 7: (a) UN2977, RADIOACTIVE MATERIAL, URANIUM HEXAFLUORIDE, FISSILE; and (b) UN2978, RADIOACTIVE MATERIAL, URANIUM HEXAFLUORIDE, non-fissile or fissile excepted
18	Any quantity of a substance that is set out in the table to section 2.2 of Regulatory Document REGDOC-2.12.3, Security of Nuclear Substances: Sealed Sources, published in May 2013 by the Canadian Nuclear Safety Commission, as amended from time to time, and that is categorized in accordance with that table as a category 1 source or category 2 source
19	Any quantity of dangerous goods included in Class 7 that are Category I nuclear materials, Category II nuclear materials or Category III nuclear materials as defined in section 1 of the Nuclear Security Regulations
20	Any dangerous goods included in Class 8 that are included in packing group I, are in a single means of containment and are in a quantity that exceeds 3 000 L

SCHEDULE 2

(Section 17)

Exemptions Under the Transportation of Dangerous Goods Regulations

Item	Provision of the Transportation of Dangerous Goods Regulations
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

[25-1-o]