Proceedings of the Standing Senate Committee on
Transport and Communications
Issue No. 3 - Evidence, May 17, 2016
OTTAWA, Tuesday, May 17, 2016
The Standing Senate Committee on Transport and Communications met this day at
9:30 a.m. to study the development of a strategy to facilitate the transport of
crude oil to eastern Canadian refineries and to ports on the East and West
coasts of Canada.
Senator Dennis Dawson (Chair) in the chair.
The Chair: Honourable senators, today the committee is continuing its
review for the development of a strategy to facilitate the transportation of
crude oil to eastern Canadian refineries and to ports on the East and West
Coasts of Canada.
We have two panels.
For our first panel, from the Office of the Auditor General of Canada, we
have Julie Gelfand, Commissioner of the Environment and Sustainable Development,
and Kimberley Leach, Principal.
We will start with presentations from Ms. Gelfand and afterwards the senators
will have questions for you.
Julie Gelfand, Commissioner of the Environment and Sustainable
Development, Office of the Auditor General of Canada: Thank you for inviting
us here today to contribute to your study on the transportation of crude oil.
I'm accompanied by Kimberley Leach, an audit principal in my group and the
person who ran the audit on the National Energy Board.
Transporting oil and gas in a safe manner is of critical importance. The
Office of the Auditor General has presented several audit reports to Parliament
on this issue. In 2013, the Auditor General conducted an audit of the oversight
of rail safety.
The Commissioner of the Environment and Sustainable Development conducted an
audit of the transportation of dangerous products in 2011 and an audit of oil
spills from ships in 2010.
Today I will present an overview of our audit on the oversight of federally
regulated pipelines that was included in the 2015 fall reports tabled in
Parliament in January 2016.
The National Energy Board's mandate is to regulate pipelines, energy
development and trade in the Canadian public interest. In its regulation of
pipelines, the board sets the requirements that companies must satisfy to ensure
the safe operation of approximately 73,000 kilometres of pipelines. These
pipelines are used to transport oil and gas to customers in Canada and abroad.
Our audit examines some key aspects of the National Energy Board's oversight
of federally regulated pipelines. Overall, we found that the board had made
progress in some areas such as providing more access to information on incidents
and compliance. However, we observed that the board needed to do more to keep
pace with pipeline project proposals, the corresponding public interest and
expectations and the new Pipeline Safety Act.
Our audit concluded that the board did not adequately track companies'
implementation of pipeline approval conditions and that it was not consistently
following up on companies' deficiencies. Some examples of deficiencies found in
emergency procedure manuals included the failure to include descriptions and
locations of emergency equipment, of emergency evacuation routes and of
procedures for shutting down the pipeline.
The lack of follow-up on the deficiencies was also a finding in our 2011
audit of the transportation of dangerous products. In addition, we found that
the board's data tracking systems were outdated and inefficient. We further
concluded that the National Energy Board is facing ongoing challenges to recruit
and retain specialists in pipeline integrity and regulatory compliance.
Another audit that may interest the committee is described in chapter 4,
Implementation of the Canadian Environmental Assessment Act, 2012, of our
2014 fall report. Introduced as part of the government's Responsible Resource
Development plan, the Canadian Environmental Assessment Act, 2012, aimed to
make the review process for major projects more predictable and timely,
strengthen environmental protection, and enhance consultations with Aboriginal
In our audit, we examined whether the National Energy Board was taking steps
to implement the act. An objective of the act was to enhance Aboriginal
engagement. Many Aboriginal peoples were concerned that they did not have the
capacity to participate meaningfully in the National Energy Board's
environmental assessment process. The reduced contribution made by these groups
may have diminished public confidence in environmental assessments.
As you know, we provide Parliament with information that can be used by
parliamentary committees when they conduct hearings on our reports or on
audit-related topics. Attached to this opening statement is a list of questions
you may wish to ask department officials regarding our audit of the oversight of
federally regulated pipelines. I hope you will find this information useful.
Mr. Chair, that concludes my opening remarks. We are happy to answer any
questions you may have.
The Chair: Thank you, Ms. Gelfand.
Senator Doyle: You mentioned in your 2015 fall report that the NEB had
not lived up to, for want of a better term, its responsibilities in tracking the
approval conditions of pipelines. Has there been any improvement in those areas
since your report in 2015 of the NEB following up on tracking the approval
conditions and what have you?
Ms. Gelfand: Unfortunately, we can only speak about what we found
during the period of our audit. If there have been any improvements, it's not
something we can comment on because we haven't gone in to audit that.
What we found when we went in was that in about 50 per cent of the cases the
NEB had not followed up on the approval conditions.
Senator Doyle: Would these concerns affect public confidence in the
Ms. Gelfand: I guess that's a value judgment. We found that, as I
said, in 50 per cent of the cases, both for approval conditions and for
regulations. There are two sets of rules, if you may. Approval conditions are
for individual pipelines, so some pipelines have 25 approval conditions; some
pipelines have 200 approval conditions. They are very specific to each pipeline.
There is a set of regulations that apply to all pipelines. We took
representative samples of those approval conditions and those regulations to see
whether or not the NEB was doing its job of tracking and following up whether or
not those approval conditions or regulations were being found. In both cases,
approximately 50 per cent of the time we found that the NEB was not doing its
job in following up on approval conditions nor following up on company
Senator Doyle: So is the NEB the proper mechanism to both regulate and
enforce its rulings or should there be maybe another agency that might be tasked
with the enforcement?
Ms. Gelfand: That's a very interesting question. Right now, I believe
it is the mandate of the NEB to set the approval conditions and to follow up and
regulate the pipelines. They have approximately 100 companies and approximately
73,000 kilometres of pipelines. There are provincial regulators that exist for
provincial pipelines — ones that don't cross either provincial boundaries or
Canadian-U.S. boundaries. Essentially the job of the NEB is to set those
approval conditions and follow up. That's its job.
Senator Doyle: You mentioned the indigenous groups that were not able
to participate in the environmental process. Shouldn't the federal government be
making funding available if they need capital to do that kind of work?
Ms. Gelfand: My understanding is that the federal government, in
certain circumstances, does provide funding for intervenors and participants to
participate in the environmental assessment process.
What we found when we looked at the National Energy Board's public
participation guidance was that it didn't refer to the new act. In fact, it
applied its own standing test to decide who would participate, so either you
could participate or you couldn't and the NEB decided that.
Once they decided that you had standing, you were an intervenor, a
commentator or "other.'' This was not in line with the new Canadian
Environmental Assessment Act, 2012, and we made a recommendation that they bring
their environmental assessment process in line with the new act.
Senator Boisvenu: Welcome to the committee and thank you for your
report. I have a few quick questions.
In 2013, an audit of oil transportation by rail was conducted, correct?
Ms. Gelfand: Rail transportation, yes.
Senator Boisvenu: Have there ever been audits of land transportation
by truck and of transportation by navigable waterways?
Ms. Gelfand: We have not yet conducted an audit of land transportation
by truck, but I believe that Ms. Leach conducted an audit of potential oil
spills from marine vessels.
Senator Boisvenu: Who conducts the audits, your staff or contractors?
Ms. Gelfand: Our staff.
Senator Boisvenu: From your audits of either rail transportation, land
transportation by truck, pipelines or navigable waterways, can you make a
finding on the safest transportation method for the environment?
Ms. Gelfand: Unfortunately, we did not conduct studies to compare the
different transportation methods. We conducted an audit of the oversight
activities for each method and of the implementation for the rail and pipeline
systems. However, we can't make findings because determining the safest
transportation method was not the objective of the studies.
Senator Boisvenu: Can you make findings on the environmental impact?
Ms. Gelfand: We make findings on the regulator's work to determine
whether it is being done properly.
Senator Boisvenu: I can understand that there may be administrative
problems concerning the emergency measures, but do you make findings on the
environmental impact? Your office deals with the environment. Is your work
limited to only administrative matters or does it also involve verifying the
Ms. Gelfand: For the pipeline audit, we examined the conditions of
approval and the regulations governing the pipeline companies. Here are two
For one of its pipelines, a company had to submit to the National Energy
Board a study of how the possible rupture of the pipeline would affect a caribou
habitat. However, 10 years later, we discovered that the study was not on file.
Regarding a regulation, we learned that the National Energy Board audited a
pipeline and found a crack with liquid sulfur leaking out of it. The National
Energy Board told the company that the crack needed to be repaired, but no
follow-up was recorded. The National Energy Board still does not know whether
this situation is resolved.
Senator Boisvenu: You therefore do not make findings on the
environmental effectiveness of transportation methods.
Ms. Gelfand: We have not yet conducted a study or audit to determine
which transportation system is the safest. Up to this point, we have not looked
into the issue, but we can still do so.
Senator MacDonald: Thank you. I have a couple of questions. I want to
pick up on something that Senator Doyle mentioned with regard to the Canadian
Environmental Assessment Act of 2012. You mentioned that an objective of the act
was to enhance Aboriginal engagement. Many Aboriginal peoples were concerned
they did not have the capacity to participate meaningfully in the National
Energy Board's environmental assessment process.
Why wouldn't they have the ability to participate meaningfully in the
process? There is a duty to consult. I'm sure they would be asked to the table.
Could you define that better for me? What was the issue?
Ms. Gelfand: One of the issues is the definition of what it means to
participate meaningfully in the process. The NEB has not defined that
particularly, therefore it becomes difficult to measure against it. We do
performance audits, wherein we look at particular criteria and decide whether or
not something has achieved that goal.
In that case, we surveyed many participants. We are going back now a few
years. My recollection is we surveyed a lot of participants in the EA process,
and we were told that they did not feel they had the capacity to meaningfully
participate in the hearings.
Senator MacDonald: That's very general. I want you to break that down.
When they say they found they didn't have the capacity, what does that mean?
Ms. Gelfand: I think you would have to ask members of the First
Nations, Inuit and Aboriginal peoples. You would have to ask them that
Senator MacDonald: I had hoped that you would have known.
Ms. Gelfand: There is a very serious methodology around audits in
terms of what we can and can't do. We have given you as much information as we
can in the report on the environmental assessment. We indicate how the NEB sets
up its system. It decides whether or not it applies its own standing test and
then decides whether or not somebody comments or intervenes.
This is not in line with CEAA 2012. I'll give you an example. CEAA 2012
indicates that the board must hear from those who are directly affected by the
project or those with relevant information or expertise.
The NEB Act indicates that the board must hear from those who are directly
affected — so it's the same — and may hear from those who have relevant
information or expertise. The fact that they "may'' hear and not "must'' hear
means that certain groups feel like they cannot participate meaningfully in the
process, and that's where the NEB Act is not in line with CEAA 2012.
Senator MacDonald: I don't see anything there that would prevent
someone from participating, but I'll go to the next question.
You said the reduced contribution made by these groups may have diminished
public confidence in environmental assessments. How was their contribution
Ms. Gelfand: If they feel like they cannot participate meaningfully,
if they have not been given intervenor status, for example — maybe they've only
been given commentator status or "other'' status — they feel like they cannot
contribute meaningfully. That's a feeling that they have.
Senator MacDonald: That's a very subjective feeling. Anyway, thank
Senator Eggleton: Just skimming through your report from last fall, I
see after every recommendation the board's response, and I haven't found one
where the first word wasn't "agreed.'' They seem to have agreed with everything
You've previously reported on the board, I think in 2011. Were there any
Ms. Gelfand: I'd have to ask Kim.
Kimberley Leach, Principal, Office of the Auditor General of Canada:
Transportation of dangerous products was 2011, and then the 2012 chapter on
environmental assessments were the two most recent.
Senator Eggleton: What happens in follow-up here? When you did your
report of last fall, were you also following up on the previous reports as to
whether or not they had completed the recommendations you made or whether there
were still some outstanding?
Ms. Gelfand: I'll let Kim answer in more detail but, yes, normally
when we go back to an entity, we try to do some follow-up. In this case we did
Can I comment on the board agreeing with most of our recommendations? For the
most part most entities that are audited will eventually agree with the
recommendations. That's a pretty normal thing.
I will pass it over to Kim in terms of where we followed up.
Ms. Leach: I would also like to add that the National Energy Board
developed a very comprehensive corrective action plan. The responses to the
recommendations you see in the chapter were followed by a comprehensive
corrective action plan and they made progress on that. That's posted on their
website as well.
On the issue of follow-up, there was a 2011 chapter we did on the
transportation of dangerous products where we looked at the National Energy
Board and looked at specific things. We looked at the Emergency Procedures
Manuals and looked to see where there were deficiencies.
Companies prepare emergency procedures manuals and submit those to the
National Energy Board. The NEB reviews those to see if there are deficiencies,
and if there are they are to follow up with the companies to ensure those are
In 2011, we took a sample of 30 manuals and looked to see if the deficiencies
had been corrected. We found that only 1 in 30 had been corrected. In this
audit, we followed up and took another example of 30, and we found in this case
that 15 had been corrected.
Senator Eggleton: Is that 15 out of 30?
Ms. Leach: Sorry, it was 20 out of 30, so there were still 10.
One-third were still deficient. That's why we can say there was progress,
because previously there was just one.
Senator Eggleton: Several years later.
Ms. Leach: There was progress, but we still view that as a concern.
Senator Eggleton: Who do they report to in terms of their
implementation plans? You say they have implementation plans. Do they report to
the minister responsible for energy?
Ms. Gelfand: My understanding is they would report to the Minister of
Senator Eggleton: To the minister or to Parliament?
Ms. Gelfand: Through the minister to Parliament.
Senator Eggleton: I guess in this latest report they would not have
reported on anything yet. It is not even a year old.
Ms. Gelfand: I don't know. They already have an action plan.
Senator Eggleton: They do have an action plan coming out of the report
Ms. Leach: That is right. It's publicly posted on their website, and I
have one here.
Senator Eggleton: Their progress report is publicly available?
Ms. Leach: Publicly available, that's right.
Senator Eggleton: When you go in a year or so later and find 1 of 30,
or 20 of 30, does the ministry also oversee the implementation? Is the board,
because of its independence, not required to do that?
Ms. Gelfand: My guess is it's up to us to go in and oversee it. Nobody
else would be doing that, would be my understanding. They probably have an
internal audit function, most entities have that now, but in terms of external
auditors that would be the role of the commissioner or the Auditor General.
Senator Eggleton: Can I ask the clerk to get this report to see how
they are implementing these things, because a lot of them are relevant to safety
and public engagement. They are very vital issues in this whole matter.
We also may need to have the National Energy Board in. I know it's sensitive
— we don't want them to talk about the hearings — but we want them to talk about
the implementation of the auditor's report. Perhaps we should consider having
them in because it's vital that they up their game here, as is suggested by the
The Chair: First of all, has it ever been done before? We have to
address where we would stop on the questions. We'll talk with the steering
Senator Eggleton: Just the audit. To go beyond that would be improper.
Senator Runciman: The audit focused on the follow-up as opposed to the
review process itself. I guess there is no suggestion that there is a more
exhaustive process or more onerous conditions with respect to the review
process. You didn't have any comment on that at all.
Ms. Gelfand: Are you speaking about the environmental assessment
Senator Runciman: Yes, the NEB process. This is what we're talking
Ms. Gelfand: There are two different audits.
Senator Runciman: The comments we are dealing with here are with
regard to the follow-up. Through the course of this study, were you looking at
the review process itself or the follow-up on the recommendations that came out
of the NEB?
Ms. Gelfand: In the report that we tabled in the fall of 2015, we did
follow up on the emergency manuals, but we also looked at whether or not the NEB
was doing its job in ensuring compliance with conditions of approval for
pipelines and with the general regulations that pipelines have to follow.
Senator Runciman: And you felt they were lacking?
Ms. Gelfand: That's correct. We took representative samples of
approval conditions and regulations where they had already found deficiencies,
and we went to see if they had done the proper follow-up.
Senator Runciman: As part of that, did you also determine whether the
applicants had complied with the conditions?
Ms. Gelfand: Interestingly enough, we found that in most cases the
applicant had complied but the NEB had not been able to show that to us.
Senator Runciman: They didn't check it off, but they had followed the
Ms. Gelfand: For example, the study on the effects of the caribou, the
NEB didn't know that it didn't have that study. The company had it, but the NEB
had to phone up the company to get that study.
In the case of the sulphur leak, the NEB asked the company to fix it but
never went back to check that it was actually fixed. Likely it was fixed,
however there was no follow-up by the NEB to make sure that it was fixed.
Senator Runciman: I appreciate that. My point was simply that, as far
as we know, most of the conditions were complied with.
Senator Boisvenu: I would like to go back to your audit work. Are the
people on your staff who conduct the audits engineers or specialists in the
pipeline or oil transportation field?
Ms. Gelfand: Our employees are auditors and have expertise in a number
of fields. They must all have expertise in a specific field, but we also have
consultants and we often hire contractors to provide outside expertise. We
always have two or three consultants. In this case, they are people who have
experience in the pipeline field. They give advice and help us conduct our
Senator Boisvenu: Does your audit also take into account the best
possible technology and comparisons with other countries using pipelines to
transport oil? I realize that we would like to live in an ideal world, but is
this audit only administrative? You have a mandate as the environment
commissioner. Do you make findings on the environmental impact of oil
transportation by pipeline? It is clear to me that since, as the office of the
environment commissioner, you do not assess the qualitative aspect of this
transportation method and strictly limit yourself to regulatory compliance, a
large piece of the puzzle is missing.
Ms. Gelfand: According to the commissioner's mandate, at the Office of
the Auditor General, I conduct audits and report the results of my audits to
Senator Boisvenu: Who establishes the framework for the audit? The
commissioner's office? The act? The framework can be very limited or very broad.
Ms. Gelfand: Absolutely. We establish the criteria and obtain the
Senator Boisvenu: So the auditor establishes the framework for the
Ms. Gelfand: Yes. We also always obtain the approval of the people
being audited so that they can assert that the audit criteria are acceptable.
Senator Boisvenu: However, findings still are not made on the use of
pipelines as a transportation method from an environmental protection
Ms. Gelfand: In this case, you are right. We make findings to
determine whether the National Energy Board did the job it is mandated to do,
which is to ensure compliance with the conditions of approval and the
regulations. That is its job.
The Chair: Ms. Gelfand, Ms. Leach, thank you very much for your
If members agree, while waiting for the next witness we could take a minute
to have an in-camera meeting on the date of the tabling of the report.
(The committee continued in camera.)
(The committee resumed in public.)
The Chair: Our next witness is Mr. Phil Benson from Teamsters Canada.
This is Mr. Benson's fourth appearance before this committee since 2006.
Welcome back. Mr. Benson, you may begin your presentation, and afterwards the
senators will have questions for you.
Phil Benson, Lobbyist, Teamsters Canada: Thank you very much, Mr.
Chair. It is wonderful to be here, as always.
Teamsters Canada is, of course, Canada's transportation union. In the case of
your inquiry today, we have the Teamsters Canada Rail Conference, which
represents almost every running trade — that is, locomotive engineers and
conductors in Canada — with very few exceptions. One, sadly, was the
We have Teamsters Canada Construction/Pipeline Division which, of course, by
the title, lets you know they are part of the crafts that build pipelines.
Directly in Fort McMurray, we have a few thousand members doing various works
in the projects. Recently, with the great disaster in Fort McMurray, a lot of
our membership is, of course, out of work. Some are getting back to work. One of
the most poignant pictures I saw was of Sister Angela Pelger from Local 362. Her
day job is to drive buses and workers to and from Fort McMurray to the projects.
In this case, of course, she was driving evacuees. The picture is of her
standing beside her bus wearing the only clean clothes she had — her PJs. We
hope they get back to work soon. Our hearts and minds go out to them.
First, we support the government process in determining the future of these
pipeline projects. We support that process. We believe in the protection of the
environment and public safety, respect for First Nation and Metis. The projects
would be good for Canada and, most importantly, to develop a social licence that
is needed to continue with the projects. I thank you for having these meetings,
because these are the kinds of meetings that, hopefully, will help to build the
social licence that is needed.
Starting with crude oil, you probably have heard this before, but crude oil
is conventional oil. It has a UN designation number. It comes in various
colours, from light to heavy, sweet to sour. This is the traditional oil you
would see moved through pipelines or by rail.
In Canada, we also have Syncrude, synthetic crude. Synthetic crude is a
premium product. It sells at a premium price. Because it is so clean, it is in
demand for the low-sulphur products that we want to see in diesel and in cars.
The second would be fracked oil. Fracked oil is, of course, a new creation, a
creation of the fracking process. It is different from conventional oil or
synthetic crude mostly because it has a lot of gas, or at least some of it does.
When they tested after Lac-Mégantic for how much gas was in it, it basically
broke the needle on the machine — so much gas, in fact, it can't be transported
by pipeline unless it is degasified. We saw what happened in Lac-Mégantic with
The next one is bitumen. Bitumen is tar, basically. It is a product of the
oil sands. It is inert and can be safely transported.
The last is diluted bitumen, or "dilbit.'' They add naphtha or a product to
make it more liquid so they can transport it by rail or pipeline.
From Lac-Mégantic, in some of the committees we sat on, we had a bit of
concern about the diluted bitumen. We focused on fracked oil. The feeling was
that diluted bitumen would not explode or burn. Of course, after Algoma, we
understood that is not correct. Diluted bitumen, because of its constituent
nature, can have bad results. In Algoma, northern Ontario, it was just a few
kilometres from a city.
On the rail side, we talk about the three cars. We have the DOT-111s. They're
the older models, being phased out in part. DOT-111s can still carry a lot of
products. They can probably carry conventional crude oil, mostly because you
might have an environmental problem, but the chances of it burning are pretty
After Lac-Mégantic, they created a DOT-112. Before the committee in the other
place we expressed our concern that it would not be sufficient if there were an
accident. Of course, in Algoma and elsewhere, it proved that was true — that the
DOT-112s, in fact, are still insufficient to contain some of these products. The
new ones will be TC-117s, and we will also express our concerns.
We crash test cars, buses and planes. We crash test everything. We don't
crash test the railcars; we simply rely upon the engineering. We think that is a
mistake. That was the reason why we thought DOT-112s would perhaps be
insufficient: in fact, when they crashed, they were.
For the rail industry as a whole, the major problem in rail continues to be
the rail companies' self-governance and self-regulation. We are conducting a
review of safety management systems and fatigue in the other place, the other
The problem with SMS continues. If you remember the committee on the "Safer
Railways Act,'' we talked about safety management systems. The reason we had the
2011 amendments was because Transport Canada actually went out and inspected,
and they found out that basically the results were very bad: 100 per cent of
rail, 67 per cent of crossings and 28 per cent of locum engineers were
defective. That is not what the companies were telling them.
The way that Transport Canada was doing it was simply to audit. They took the
government information check boxes. Sadly, testimony by the union that
represents inspectors before the committee in the other place indicated that
today that is precisely how they are checking railways; they sit at their desks
The best way to keep safe the movement of oil products by rail is to make
sure they stay on the track. We need government oversight to do much more than
check boxes and do audits.
I have talked to you extensively about fatigue. Recently we had the
anniversary of the Hinton disaster. We have talked extensively about it. All of
the concerns that this Senate committee expressed in 2011 about fatigue with the
Rail Safety Act, I will tell you that nothing has happened — nothing.
In the other place we're pushing strongly to have the same kind of regulatory
rule setting that is done in trucking and for pilots. We just completed the
pilot study two years ago and they just went into effect.
Because of Hinton they left these things to collective bargaining, and you
can't deal with it there. No public safety or health and safety of workers issue
should be left to collective bargaining. We need those rules to be put in place
and we hope to move forward with it.
As for pipelines, they are incredibly safe, as we know. It is the safest and
most inexpensive way to move products. Having gone to some of the presentations,
there is a lot of criticism about issues that I think people have problems
understanding, like waterways. People don't realize, for instance, with Energy
East on the St. Lawrence — and it would be the same elsewhere — that they
actually do horizontal tunnelling to bury the lines underneath the bedrock, they
have safety check valves, and on and on. I am sure the pipeline people can fill
you in on that.
It is an interesting analysis, when you hear the presentations, on the
lengths they go to for safety. The failure rate or problems in Canada was 0.185
per cent. Europe was 2.82. It is very small. Most of the spills are small.
Certainly on the oil side we're not going to have explosions or any problems
The other thing that is bothersome for us is the lack of understanding of the
role that this sector plays in Canada. People call it the driving engine. I will
not go that far. I will say it's an important part of our economy. We can see
that from the brief shutdown of the oil sands in Alberta because of the disaster
of the Fort McMurray fires. Basically, this quarter will be lost, and perhaps
the next quarter.
I will call your attention to the CMHC stress test. This is not an oil
agency. It is the Canadian Mortgage and Housing Corporation. They looked at what
would happen if oil was $35 a barrel for five years. The result: 26 per cent
reduction in house prices and unemployment at 12.5 per cent — cold, dark
Regarding the use of oil going forward, there are a couple of interesting
studies that I have seen reported in Reuters. One was a study on the OECD's use
of oil. They say it flatlined in 1985, and from 2005 it has been declining.
Another study predicted that the peak oil will be 2030, about 50 million
barrels a day and thereafter declining. We can see that even in Saudi Arabia,
looking at a post-oil economy.
That said, we are sitting on the third largest oil resource in the world. I
cannot see a day when that will not be used. If not for transporting people in
cars or otherwise, it will be a resource we will be using for a long, long time.
Before we get to questions, there is one thing I find cuts me to the quick.
It is one of the criticisms I hear all the time: "It's just short-term work.''
When people are sitting in their homes at their computers, they have to realize
that their house was a "short-term work'' for a construction worker. The bridge
they go across was a "short-term work'' for a construction worker. This building
was a "short-term work'' for a construction worker. It's the nature of the
beast. You work to put yourselves unemployed by building the building. You work
to put yourself unemployed.
Right now we have thousands of Teamsters and there are many thousands of
other crafts. They are hoping this process will work its way through and, if it
all comes together right, that they will have a chance to go out and work on
that short-term project to earn the money to pay their mortgage, save for their
kids' education and save for retirement.
With that, I will open up and hopefully answer as many questions as I can. As
always, if I can't I will endeavour to get you the answers.
The Chair: Once again, Mr. Benson, thank you very much for your
Senator Eggleton: The last time you were here you talked about fatigue
with respect to the railway operations. I was going to ask you about that but
you answered that. You said there was no progress.
Let me ask you about something newer. Just last month the government put
Protective Direction 36 into effect which deals with providing municipalities
and first responders in those different municipalities and communities right on
the lines, with information about the transportation of the dangerous goods.
Tell me how you and your union members see this. What is your take on it? Is
it being implemented smoothly or are there problems?
Mr. Benson: I think the answer, whether it is smooth or sufficient,
would be an answer for the first responders.
Of course, first responders are the people on the train who are taking their
lives in their hands going back to see why it came off and what they are
Our position on the safety management systems and all this information is
that it should be public. Basically, the safety management systems are
quasi-regulatory: they are part of an act. Yet, if you ask a bureaucrat here,
"What does it say?'' They say "We can't tell you. It's a secret.''
Part of social licence is information and transparency. We think these types
of things are a good start, but I think a member of the public has a right to
know what's going through their backyard. I think you have a right to know
what's going through the backyard. I think you have a right to know what safety
management says about how it's going to be handled. I think you have a right to
know what the ERAP looks like. For politicians — and this is part of the
oversight issue — how can you conduct oversight of something if you can't get
any information on it because it's a "corporate secret?''
Senator Eggleton: Nobody disagrees with providing it to the
municipalities and first responders. The counter argument is — and I'm not
saying I agree with it — that you may not be transporting any dangerous goods if
the public finds out what's going through lines in advance and there is the
fright factor from that. What is your thought about that?
Mr. Benson: I think it's a bigger fright factor when people put up a
straw man. When there is a lack of transparency, a lack of openness, it allows
the straw man to win the day.
These types of projects have a lot to do with the transportation of products.
If you look at Mississauga, since Mississauga there has been almost absolutely
no problem. If you start with the car, it's a wrapped-coil tank car, something
we thought the gas/oil should go in. It's too small and not economically viable,
but it's the safest way to transport that type of product.
I think people need to realize that they have knowledge, and with that
knowledge comes social licence. Without that, it becomes a constant fight. You
can never beat a straw man when your arm's tied behind your back and you can't
explain the total package.
All that's left is, "It's safe because we say it's safe, because we told you
it's safe.'' In the modern world, that isn't good enough.
Senator Runciman: I agree with your comment regarding the position of
the union with respect to informing first responders. I may be wrong on this,
but 20 years or so ago, for example, the chemical industry had response teams.
In eastern Ontario, for example, DuPont had response teams if there was nitric
acid, ammonia or whatever dangerous goods it might be.
In my part of the world, those plants are no longer there. You wonder about
those industry response teams. Where will they be located now? They don't have
the industry they used to work for in many parts of the province that I
represent. That's another reason why I would think the first responders should
not only be informed but there should be some training, and perhaps the industry
itself. How you would go about doing that, I'm not sure, but they should be
supporting that kind of training for smaller communities.
I live in Brockville, which is not too far from here, a city of 20,000. A
year and a half ago we had 26 cars derail on the western limits of the city. I
think 13 of them had residue jet fuel. You think of what could have happened. A
lot of residents were phoning me, people I have known for years and live along
that rail line and were concerned about safety.
I would like to talk to you about safety. We had witnesses here before us
saying that these are cost efficiencies that have not jeopardized safety.
However, as someone who just sits at a rail crossing once and a while and looks
at the length of these freight trains today, they are about three times longer
than they uses to be and there is less staff on them. You no longer have
cabooses on them. You see them going through at 80 miles an hour and weaving
like this because of the length of them.
I would like to hear your comments with respect to the risk of tripling the
size of these freight trains. I understand the cost efficiencies, but it seems
to me there should be a safety issue there as well.
Mr. Benson: First on the ERAPs. We have been working extensively
through the TDG directorate on that. In fact, there is an ongoing working group.
Congratulations to the government. In the budget I think there was $143
million, and part of that is for ERAP and training. If I am incorrect I
apologize, but I understand the industry ERAP teams are still in place. That's
moving along in a much better way.
Yes, regarding the length of the train — and as I have talked to some of the
locomotive engineers and conductors — you can't see the end of it. There is that
issue. The second issue is pure weight on the tracks. Our maintenance of way
division looks after the tracks and CP most of the short lines. The problem is
getting on the track to do the proper maintenance is an issue.
I would put it this way: I had an interesting discussion in the yard where
they were building the trains about a problem with chlorine. I said, "What do
you do? Do you have safety equipment?'' The answer was, "No, I guess we run like
hell.'' The second one was for a conductor. A train came off the track. The
conductor's job is to get off and walk back to see what it is. He does know what
is on the train. I said, "Do you have any safety gear for chlorine?'' He said,
"No, I just hope the wind is going the other way.''
But most of the chlorines and the stuff today, because of the kind of
containers they are in, unlike the concerns we have with the DOT-112 and the
DOT-117. They have been crash tested in the real world, and they seem to be
doing an excellent job. For the length of train, I guess that's a business
decision. I know a lot of our engineers would like to see something smaller,
easier to control but, again, as we know, they push for every nickel, whether
it's driving people to fatigue to keep going or other issues.
Senator Runciman: How many members do you have in the union across the
Mr. Benson: Teamsters Canada or Rail Conference?
Senator Runciman: Teamsters Canada.
Mr. Benson: About 125,000.
Senator Runciman: Those can be not just rail but employed in one way
or another in the oil industry. You mentioned a few thousand in Fort McMurray,
shipping oil, transporting oil.
Mr. Benson: I imagine over 20,000, 15 to 20. We also have a tank haul
division, trucking and tank haul. So a lot of the gas you see running down the
delivery of gas is related. At airports, we do jet fuel, topping up planes,
things like that. We're horizontally and vertically integrated.
Senator Runciman: A pretty significant component of your membership.
Mr. Benson: Overall. On the pipeline and on the rail side, I imagine
12, 13, 14,000 just there.
Senator Runciman: I wrote a couple of things down. You said that the
pipeline is incredibly safe, an important part of our economy. You cited the
CMHC findings. What, if anything, is your organization, your union, doing to get
the message out to Canadians more broadly with respect to the importance to the
economy and the safety of pipelines?
We see this fight. Most of what we read and see is pretty negative for the
most part. I've been talking to industry reps and others. You have an interest
here, and I think you care for the broader Canadian interest. I just wonder
what, if anything, you are doing.
For example, the Ontario government — they may be moderating somewhat — was
opposed to Energy East coming through the province. Have you or any of your
organization sat down with the Ontario government and talked about the negative
impacts to the province going forward if we don't recognize a way to do this
safely but do it?
Mr. Benson: As the Teamsters, of course, we are also part of building
trades of various organizations. The answer is yes, not us personally but
certainly through our affiliates and our various people.
It's a bigger issue than just us talking to people. One of the biggest
problems, just like with rail and pipelines is that, through the last
administration at least, there was the idea that the pipelines were going to go.
It gave an opportunity for a huge straw man to be set up.
I'll give you an example, when I talk to my friends in British Columbia — I
grew up there; I still have property there — if you look at the existing Kinder
Morgan pipeline, it has been transporting oil out of the harbour for years. What
they don't understand is that a pipeline is just a conduit; it's just a pipe.
What goes into the pipe? In the case of Vancouver, that's where their gas,
diesel and home oil comes from. Shut it down, and I guess you're going to have
to bring gas in on barges and something else. Even for Energy East, it would
carry conventional oil. It would carry Syncrude, and, yes, it would carry
diluted bitumen. It depends what the customer wants to put in it.
The biggest issue with this is not oil at all. It's the issue of CO2,
climate change and dealing with the oil sands in general. When you see actions,
for instance, of the Ontario government yesterday, the leaked release of
whatever they are doing, if you look at Mr. Trudeau's government moving forward
with climate change action in a real way, I think it's a bigger picture than
just these projects and these jobs. I think the industry as a whole has sort of
stood back and not taken the lead in that.
If you look at people like Trans-Canada, they have a huge investment in
renewables: nuclear, which is not a renewable but is carbon free; solar; a huge
generator of wind power. It's a way for them to balance off the carbon footprint
of what they are doing.
To me, there have been a lot of lost opportunities, lost leadership, but it's
that big picture when you see people talking.
I'll give you another example. I always laugh about this one. I'll ask all of
you: Syncrude is an open pit mine. I was up there last year, and it's the size
of Prince Edward Island, right? It's the size of New Brunswick. It's 100 square
miles. Ten square miles have already been reclaimed.
To give an example, Montreal, Toronto, Ottawa, Edmonton are like 1,300 to
1,700 square miles. That's how big they are. This 90 square miles that is
producing Syncrude oil, which is very clean and desirable, would fit inside a
suburb. At Syncrude — that's the Canada oil sands — they have this huge tailing
pond, and I know a few ducks died. Eighty per cent of the water is reused, and
most of the rest goes up the pipe. That's the steam you see. So when people
claim it's a huge use of water, there may be other ones. I don't think they've
told their story very well. That's part of the problem.
When I was up there what impressed me was that they had a real good story to
tell, but they don't seem to be expressing it well. I always laugh when you see
the stars go up. It looks huge but, in reality, it's the size of a suburb in any
of the cities you live in. We have gotten a billion barrels of oil out of there
so far, hundreds of millions of person hours working. I think we have to do a
better job of telling the story of what actually happens.
Senator Runciman: Agreed.
Senator Doyle: On rail safety, you mentioned fatigue management, and
you talked about it here at committee before. A few of us are new members to the
committee. Can you give us an overview of what your concerns are?
Mr. Benson: Thank you very much, Senator Doyle.
Basically fatigue science, and I've done the trucking and pilot, so I'm
somewhat familiar with it. You have 24 hours in a day, and you need between 10
to 12 hours to rest, to get your 8 hours' opportunity to sleep, which leaves you
between 12 to 14 hours a day to work. There is a lot more to it; this is bare
bones. So any time that's exceeded, you start building up fatigue. The science
is quite clear that, within a few days, your performance goes down. In fact,
within a few days your reaction times and thinking are somewhat equivalent to a
drunk. In the long run science shows that you develop obesity, diseases and you
We are doing a study now that can't be done in Transport because it's not in
their silo, but we are arranging it through academics. A study of truckers in
the States showed that they died between 12 to 17 years earlier than the general
public. With fatigue, when you look at the pilot world and the trucking world,
by regulation, we've set the maximum hours that you can work, taking into
account circadian rhythms, taking into account the time of day you start. There
are regulations. Those regulations were set after the inquiry resulting from the
Hinton disaster over 30 years ago. The rest was left to collective bargaining.
Quite simply, these matters should never be left to collective bargaining, and
they can never be resolved by collective bargaining for two reasons.
If we take the rest provisions that exist today, the companies violate them —
these are contractual agreements — 1,000 to 1,400 times a month. Workers can
wait 10 hours to get a call out and then be expected to work 12 to 14 hours.
They can go to bed for 3 hours and get called out to work for 12 hours. You
simply cannot do that.
Second, fatigue management is the icing on the cake on top of the rules. As
far as I can tell, there is no fatigue management in the rail industry. In 2011,
I was told by a bureaucrat working on a study that they went to a rail company
and said they wanted to see the company's fatigue management plan. The rail
company representative walked over to a cabinet, took it out and handed it to
him. The bureaucrat said they wanted to see how the rail company implemented it,
and the company representative said, "You said we had to have one. You didn't
say we had to implement it.''
It's not humane, and it's not just a public safety issue; it is a health and
safety issue. It is a cost to Canada's health care. There is a social cost to
their families. That is part of the reason why, in the other place, we were
calling for a few things.
One is to have these rules put in place. The second is to have Health Canada,
Transport Canada and the Labour Program conduct a study so that we can look at
how much it actually costs society in terms of health care and people, not just
for rail workers but for all transportation workers.
The third is to stop this silo that occurs between the Labour Program and
Transport Canada. All workers under the federal sphere fall under the Labour
Program, except for people running trades: pilots, truckers, locum engineers and
conductors. They are dealt with by Transport Canada. At those meetings, when
we're setting the hours and I ask that we look at the health and safety
consequences, the answer is that they can't because it's not in their mandate.
This government made it clear that they want to use science-based evidence
rule making, but you cannot do that if you are not willing to look at the
science. If the silos stop you from looking at the science you will end up with
Today, we have people who are exhausted. Internal studies showed 67 per cent
of people admitted to falling asleep on the job, never mind the social
consequences like divorces and effects on peoples' kids' lives. You cannot
expect to have that public safety mandate fulfilled if workers are so tired that
they can't do their jobs properly.
Senator Doyle: In your opinion, have there been any improvements since
Mr. Benson: Nothing. Are you talking about fatigue?
Senator Doyle: Rail safety generally.
Mr. Benson: The answer is yes and no. We have full respect for then
Minister Raitt; she was doing her best. I'll give you an example of what the
trouble with the industry is. After Lac-Mégantic — and God bless all of those
people — Minister Raitt came out with a set of rules. Believe it or not, under
the Rail Safety Act — section 20, I think — the Railway Association of Canada,
the lobby group for rail, gets to propose rules. After Lac-Mégantic, they
proposed a set of rules and changed the minister's directives to what we
regarded as business as usual.
Of the DOT-111s, 5,000 were taken off the chain. This was a good move. If you
take a look at the number of DOT- 111s in the field and take their normal
attrition rate — the rate at which they are retired at the end of their lifespan
— it works out to 5,000. Did we do stuff? Yes, we have done a lot of things on
ERAPs, but what we haven't done is anything that would cost the railway company
a nickel, and it saddens me a bit.
It's the same with fatigue management. It will cost a nickel, so they can't
do it. I have no idea why rail companies are treated differently from airlines
or trucking companies, especially after the situation in Mississauga involving
chlorine. At the end of day we get, in our opinion, half measures and
Senator Doyle: I think you had concerns that sections of Bill C-52
would allow the Railway Association of Canada to seek changes to the rules.
Mr. Benson: It has been there forever, Senator Doyle. When we reviewed
the act we made many amendments and changes and, I'll be honest with you, I
think it was a big improvement. Some of the key changes that were needed were
making the government inspect rather than not, making the SMSs more transparent
and open, getting rid of the private police force and to eliminate section 20 so
they can no longer ask to propose rules.
In the trucking world, I can ask for changes to the rules. I would go to the
advisory council, I would seek changes to the rules and if there is consensus we
advise the minister that we'd like changes made to the rules. But I can't go
directly to a minister under the act and say, "Here are the changes we want.''
Even under the rules that you passed, we are supposed to be part and parcel
of the creation of SMSs, but so far there has been nothing. There are supposed
to be risk assessments on major changes, but we have not seen those yet. Part of
the problem is that the rules you passed in 2011, which again in a minor sense
were improvements, weren't enacted. The companies didn't want them, in my
opinion. They weren't enacted post-Lac-Mégantic, and then Minister Raitt pushed
them. They are just coming into effect now. We spent five years waiting for
regulations to pass.
There is a lot of work to do, senator, and I'm more than happy to see you
privately and work on some of them together.
Senator MacDonald: Thank you, Mr. Benson, for being here again.
Before I ask my couple of questions, I want to make a point though because I
think we both have the same goal here. I enjoyed your breakdown of the movement
of oils and your description of different oils: crude, Syncrude, fracked oil and
bitumen. I always want to make the point to people, when they mention the term
"tar'' in relation to bitumen, tar is a coal derivative, and we should always
use the word oil in because it is an oil derivative.
I was intrigued when you mentioned that the railcars have never been crash
tested. Why don't they crash test them? Should they? Do they do so in other
Mr. Benson: First, on crude oil, Syncrude, fracked oil and diluted
bitumen aren't crude oil. We do not have a UN designation for them yet. We would
like to get one, but I understand that it won't happen unless Canada wants to do
it because they only exist here.
On crash testing, we raised this with representatives at the Teamsters Canada
Rail Conference. First, they're not expensive. I thought they were expensive
units, but I understand these types of oil cars are only $100,000 and change.
They just have never done it because it would cost money, and they don't want to
spend it. That's the only thing I can think of.
I have seen tests where they have done exploded charge tests to get rid of
gas, et cetera. I think they should be crash tested, because the DOT-112s were
supposed to be safer following the changes to the DOT-111s to make them thicker,
et cetera, yet failed disastrously when they crashed them in a real location.
In Algoma, you were two kilometres away from a major incident. There was one
in West Virginia that was, I think, 800 metres away from a town.
It seems to me if we're going to carry this stuff, it goes to the public
confidence Senator Runciman or Senator Eggleton talked about. The public
confidence and transparency and do everything we can to show the public that we
have done everything we can and, if there is an accident, it was an accident
that we couldn't foresee.
I think they should be crash tested. I think they should take them out, put
some diluted bitumen or fracked oil in them, crash them into a wall or take them
off a deck to see what happens. See if it's safe to do it.
Senator MacDonald: I think it's a reasonable proposal, frankly. But it
also highlights, again, that pipelines are a well-established and proven
delivery system for petroleum. They are safe, reliable and economically
efficient. Here we are; there are absolutely no regulations in this country to
stop the cross-provincial border transportation of petroleum by rail or truck.
I guess I want to ask you the position of the Teamsters in regard to the
overall transportation of goods by rail and by truck. I'm one of those people
who would like to see more and more petroleum as much as possible go by
pipeline, but I'm also one of those people who would like more trucks off the
road and more of this stuff on rail. There is so much heavy truck on the road
today. What is the position of Teamsters Canada on that?
Mr. Benson: It might surprise you because we are a transportation
union: we do truck, we do rail, we do everything. We see it as complement; we
don't see it as a supplement. One of the problems in trucking, even though their
hours of service, because of the way they're set up protecting the circadian
rhythm that even the pilots don't have and the rail, forget it, is probably
still a little long. You're always going to need truckers for the last mile, the
last 10 miles, or the last 40 miles, and at least they'll be home at night.
I understand there are a lot of hotshots and lots of stuff you have problems
moving and you have to use trucks long distance to do it. I just think it's a
matter of the business case. I know that rail is using, as you can tell,
mile-long trains with material on them, containers, et cetera. I think that
would be a great study and a great question to figure out what the problems are
because at the end of day there is work for all. It all has to be moved somehow.
For instance, we do car haul at our car haul division and in the old days we
used to take them off the line and drive them to the lot in Toronto. That's how
we started. We move a lot by rail and a lot by truck; it just depends on where
That should be the issue when moving stuff. If it's coming out of Vancouver a
lot of it is going onto train because there is nowhere to put a truck. Out of
Montreal, rail uses a lot of intermodal from Montreal and from Halifax. I guess
it's just a question of business decisions, when people want things, and it's
also this idea of when they deregulated trucking. We called it sweatshops on
wheels, but the truck itself was the warehouse. They used to have a warehouse
and they made the truck the warehouse direct from the consumer.
You can see, from even Wal-Mart going down, that kind of model is starting to
fade a bit. We assume over time a business case will develop, but I'd love to
see a major study. I would love the Minister of Transport to look at that whole
idea. If they're looking at greenhouse gases and climate change, it's certainly
one the significant users of diesel and producers.
Senator MacDonald: I'm glad I brought it up now and I'm glad you
responded the way you did. Thank you.
Mr. Benson: It's a win-win situation at the end of the day.
Senator Boisvenu: Mr. Benson, please excuse me for leaving the room
earlier. I had a commitment.
Congratulations the job you do advocating for workers in the energy sector. I
would like to note that these workers provide a very important contribution to
I found your presentation very useful. Your assessment of the use of
pipelines seems very positive in terms of safety and the export of resources.
The pipeline will play an essential role in exporting resources to other users
in the country and will improve Canada's trade balance.
You made a direct link between the workers' qualify of life and resource
development. I am from Abitibi, in northern Quebec. The use of resources is
directly tied to the workers' quality of life, during both their working life
and their retirement.
As an organization, how do you promote resource development and the use of
pipelines as a transportation method? You don't make many public statements.
Mr. Benson: The best thing we can do at this point is to support the
process the government has undertaken. I think that was something that was
missing and lacking, especially for us. We are older, we are used to people
making decisions and us sort of agreeing with them, but as a baby boomer I feel
sad that we are not the most important group and picked-on group anymore as
Two things about millennials: they really care about these issues, and they
are not people who just say, "You made a decision; that's okay.'' Third, look at
their overall power to move everything, from social media to the Internet to how
we distribute news, the total disruption of everything from cars to newspapers,
and on and on, it's the process of gaining that social licence and getting
people on board.
I was proud and pleased to see the government signing the UN Declaration on
the Rights of Indigenous Peoples. If you look at the Supreme Court decisions
that have come down, especially in British Columbia and elsewhere, the respect
for our First Nations and how we deal with that is critical, as well as how we
get these younger people on board and understand that this is part of their
A lesson for us is to eat a little bit of humble pie and sit back and let
them try and meet those expectations. We could be thumping the deck and talking
about the thousands of people who will get work and we're very appreciative if
and when it happens, we hope it does, but we have to meet all the other
expectations and needs to get that licence. We will never convince everybody,
but hopefully there will be enough people.
Senator Boisvenu: Recently, the Union des producteurs agricoles came
out against the pipeline. I don't want to rub salt in the wound, but I remember
when the Harper government was very unpopular with the unions. The unions were
very effective at criticizing some of the Conservative government's actions. I
thought that the unions could contribute to the public debate on this particular
matter by highlighting such issues as jobs, the workers' quality of life and
economic development in Canada. However, you have not been heard promoting the
use of pipelines.
Mr. Benson: The one thing to remember, senator, is that we have a lot
of skin in the game. One of the criticisms our organization, or any organization
like us would face from the public or from the people who are certainly very
opposed to this, is that you have skin in the game.
Our members not only have skin in the game but our members are like the
overall general public. If we polled our members in Quebec, they are concerned
about protecting the environment, they are concerned about protecting public
safety and they are concerned about respecting First Nations and Metis rights.
They're concerned that it's good for Canada in the long run, and that's how
we're addressing it.
We're trying to meet those expectations. Otherwise, like I say, the days of
standing up and going "rah-rah,'' it's like when I talked today about the
criticism of short-term work. I came out of construction. My first craft is
tradesperson. You work to put yourself out of work. It is all short-term work.
When people say that short-term work is bad, well, that's how I make my living.
The way we express it to people, we have to be respectful, we have to be
informative and as helpful as we can through this process to transparency,
honesty, eliminating opaqueness and talking about the good and the bad. That's a
better way of addressing it than attacking anybody. It's not productive any
Hats off to the Senate: I have always said that the Senate is one place I can
come to talk about these issues that is not politically charged. They are the
kinds of studies that you do so well, and that is why I appreciated so much to
be able to come today to speak on this.
We have to be respectful and thoughtful. We have to answer the questions.
It's not attacking the straw man; it's trying to explain things that people had
not thought of.
My friends in B.C. didn't realize that the pipeline coming down, yes, sends
oil overseas, but it delivers all their gas. They had no idea. That is what we
have to explain more and more rather than just tell people, "This is good for
the country; it's great for work; just build it.'' I think we have to meet those
expectations, and it's much harder to meet expectations than it is to get angry,
and I think that's how we are approaching it — at least it's how I am
The Chair: It's reciprocal, Mr. Benson. We appreciate your
presentation. You will always be more than welcome at this committee.
Tomorrow we will be meeting exceptionally at seven o'clock because we are
meeting with Safe Rail Communities, and it will be here in this same room.