Regulations Amending the Transportation of Dangerous Goods Regulations (Site Registration Requirements): SOR/2023-206

Canada Gazette, Part II, Volume 157, Number 22

Registration
SOR/2023-206 October 6, 2023

TRANSPORTATION OF DANGEROUS GOODS ACT, 1992

P.C. 2023-1012 October 6, 2023

Her Excellency the Governor General in Council, on the recommendation of the Minister of Transport, makes the annexed Regulations Amending the Transportation of Dangerous Goods Regulations (Site Registration Requirements) under section 27footnote a of the Transportation of Dangerous Goods Act, 1992 footnote b.

Regulations Amending the Transportation of Dangerous Goods Regulations (Site Registration Requirements)

Amendments

1 The portion of subsection 1.17.1(3) of the Transportation of Dangerous Goods Regulations footnote 1 before “Excepted Quantities Mark” is replaced by the following:

(3) Parts 3 to 8 and 17 do not apply to the offering for transport, handling or transporting of dangerous goods in excepted quantities if each means of containment is marked on one side, other than a side on which it is intended to rest or to be stacked during transport, with the excepted quantities mark illustrated below.

2 The portion of section 1.19.1 of the Regulations before paragraph (a) is replaced by the following:

1.19.1 Parts 2 to 7 and 17 do not apply to samples of goods that the consignor reasonably believes to be dangerous goods whose classification or exact chemical composition is unknown and cannot be readily determined if

3 The portion of section 1.19.2 of the Regulations before paragraph (a) is replaced by the following:

1.19.2 Parts 3, 4 and 17 do not apply to samples of dangerous goods if

4 The portion of subsection 1.22(1) of the Regulations before paragraph (a) is replaced by the following:

1.22 (1) Parts 3 to 5 and 17 do not apply to the handling, offering for transport or transporting of dangerous goods on a road vehicle if

5 Section 1.32 of the Regulations is replaced by the following:

1.32 Parts 3 to 10 and 17 do not apply to UN2857, REFRIGERATING MACHINES, and refrigerating machine components containing gases included in Class 2.2 or UN2672, AMMONIA SOLUTION, if the quantity of gas has a mass that is less than or equal to 12 kg and the quantity of ammonia solution is less than or equal to 12 L.

6 The portion of section 1.39 of the Regulations before paragraph (a) is replaced by the following:

1.39 Parts 3 and 4, except section 4.22.1, and Part 17 do not apply to the offering for transport, handling or transporting of infectious substances that are included in Category B if

7 The portion of section 1.41 of the Regulations before paragraph (a) is replaced by the following:

1.41 Parts 3 to 8 and 17 do not apply to the offering for transport, handling or transporting of biological products if they

8 The heading before section 1.42 of the French version of the Regulations is replaced by the following:

Exemption relative aux spécimens d’origine humaine ou animale dont il est raisonnable de croire qu’ils ne contiennent pas de matière infectieuse

9 Subsection 1.42(1) of the Regulations is replaced by the following:

1.42 (1) Parts 3 to 8 and 17 do not apply to the offering for transport, handling or transporting of human or animal specimens that are reasonably believed not to contain infectious substances.

10 Subsection 1.42.2(1) of the Regulations is replaced by the following:

1.42.2 (1) Parts 3 to 8 and 17 do not apply to the offering for transport, handling or transporting of blood or blood components that are intended for transfusion or for the preparation of blood products and are reasonably believed not to contain infectious substances.

11 The portion of section 1.42.3 of the Regulations before paragraph (a) is replaced by the following:

1.42.3 Part 3, sections 4.10 to 4.12 and Parts 5 to 8 and 17 do not apply to the offering for transport, handling or transporting of dangerous goods that are medical waste or clinical waste if

12 The portion of section 1.43 of the Regulations before paragraph (a) is replaced by the following:

1.43 Parts 3 to 7, 9 to 12 and 17 do not apply to the offering for transport, handling or transporting of dangerous goods included in Class 7 if the dangerous goods

13 The portion of section 1.47 of the Regulations before paragraph (a) is replaced by the following:

1.47 Subsections 5.10(1) and (2) and Part 17 do not apply to the offering for transport, handling or transporting of UN1044, FIRE EXTINGUISHERS, if the fire extinguishers

14 (1) The Regulations are amended by adding the following after Part 16:

PART 17
Site Registration Requirements

Definition

17.1 In this Part, site means a permanent location where dangerous goods are imported, offered for transport, handled or transported and are in the direct possession of a person conducting these activities, but does not include a location where dangerous goods are used only in the scope of a person’s work or as raw materials in products that they manufacture.

Application

17.2 (1) Subject to subsection (2), this Part applies to a person who imports, offers for transport, handles or transports dangerous goods at a site located in Canada that they own or operate.

(2) Subsection (1) does not apply to

Registration

17.3 (1) A person must not import, offer for transport, handle or transport dangerous goods at a site that they own or operate in Canada unless they are registered in the registration database relating to dangerous goods on the Department of Transport website in accordance with subsection (2) and comply with sections 17.4 and 17.5.

(2) A person registers in the database by providing the following information:

Exception — 12 months after coming into force

17.3.1 Despite subsection 17.3(1), a person to whom this Part applies on the day of its coming into force may import, offer for transport, handle or transport dangerous goods at a site that they own or operate in Canada without being registered in the registration database referred to in that subsection for 12 months after that day.

Renewal

17.4 A person must renew their registration annually within 30 days of the anniversary date of their initial registration by validating or, if applicable, updating the information referred to in subsection 17.3(2) in the registration database relating to dangerous goods on the Department of Transport website.

Changes to Information

17.5 A person must update the information in the registration database relating to dangerous goods on the Department of Transport website within 60 days after the day on which any change occurs to the information that they provided under paragraphs 17.3(2)(a) to (e) on their initial registration or annual renewal.

(2) Section 17.3.1 of the Regulations and the heading before it are repealed.

Coming into Force

15 (1) These Regulations, except subsection 14(2), come into force on the day on which they are published in the Canada Gazette, Part II.

(2) Subsection 14(2) comes into force on the first anniversary of the day on which these Regulations come into force.

REGULATORY IMPACT ANALYSIS STATEMENT

(This statement is not part of the Regulations.)

Executive summary

Issues: An internal audit of Transport Canada’s (TC) Transportation of Dangerous Goods (TDG) Program in 2006, and a 2011 audit by the Office of the Commissioner of the Environment and Sustainable Development (CESD), highlighted that TC did not know the entire regulated community involved in the importation, offering for transport, handling or transportation of dangerous goods (hereafter referred to as “DG activities”); did not have sufficient information to understand the risks of some products and operations, or the means to collect such information; and did not have the tools to assess risk and properly evaluate priorities for the risk-based oversight program. These findings were deemed a public safety risk. The CESD recommended that TC develop and implement a national risk-based system to prioritize its inspections of sites operated by persons involved in DG activities (Site). Although TC has developed a system, the CESD found in 2020 that the information included in the system is either outdated or incomplete. In order to evaluate and address risks effectively within the TDG Program, TC needs current, accurate, and complete information about persons involved in the transportation of dangerous goods.

Description: This regulatory proposal introduces the following requirements to the Transportation of Dangerous Goods Regulations (TDGR):

require that persons who import, offer for transport, handle or transport dangerous goods at a site located in Canada that they own or operate be registered in a new registration database if applicable; and

require that all registered persons provide administrative information and information concerning the dangerous goods and operations being conducted at their respective Site located in Canada that they own or operate.

Rationale: The Regulations Amending the Transportation of Dangerous Goods Regulations (Site Registration Requirements) [the “Regulations”] will respond to the issues highlighted in the CESD reports by prompting that TC is provided with accurate and current data about those involved in the transportation of dangerous goods in Canada that are subject to these Regulations, as well as the nature of dangerous goods involved in DG activities.

The Regulations are expected to result in total cost of $10.64 million in present value for a 10-year period starting in 2023–2024 and ending in 2032–2033.footnote 2 Persons involved in DG activities that are subject to these Regulations are expected to incur a cost of $7.66 million associated with reporting, and the Government of Canada is expected to incur a cost of $2.98 million associated with reporting, as well as implementing and maintaining the registration database. Overall, the Regulations will reduce or eliminate the information gap about Sites that are currently unknown to TC. Information collected through these Regulations will be used to conduct broader risk analysis with the intention of better informing decision-making and enhance the efficiency of TC’s existing oversight framework and promoting compliance. This will help reduce the likelihood or the severity of incidents on Sites and better protect employees conducting DG activities and Canadians at large. While these benefits are not assessed quantitatively, they are expected to outweigh the monetized costs associated with the Regulations.

The Regulations will affect an estimated 41 752 small businesses involved in DG activities, which would incur a total cost of $5.82 million between 2023–2024 and 2032–2033. The one-for-one rule applies since there will be an incremental increase in administrative burden on businesses, and the Regulations are therefore considered burden “in” under the rule. The Regulations are expected to result in an annualized administrative burden cost of $366,461 to all affected business, or an annualized cost of $7.02 per business (discounted to the year 2012 at a 7% discount rate expressed in 2012 Canadian dollars).

Issues

Audit recommendations

Concerns were raised in an internal TC audit in 2006, as well as in audit reports from the CESD in 2011 and 2020, regarding TC’s lack of knowledge of Canada’s transportation of dangerous goods regulated community. The initial audit identified a need for TC to implement a national risk-based inspection program that would enable better prioritization of inspections to allow TC to focus on higher-risk Sites. The TDG Program uses a risk-based system for inspections. Risk scores for each Site are calculated using basic information about the Site (e.g. UN number, types of dangerous goods involved in DG activities, location, and compliance history) and these scores are used to help determine a Site’s priority for inspection (i.e. the higher the risk score, the higher the priority for inspection). While the CESD acknowledged in its 2020 audit that TC had developed an inspection program, the CESD concluded that TC still did not have a complete and accurate picture of its transportation of dangerous goods regulated community, and that the information on many Sites was incomplete, inaccurate and/or out-of-date. This lack of reliable data results in improper risk scores being assigned to Sites, which undermines the effectiveness of the TDG Program.

Inaccurate and out-of-date information

The actual number of Sites operating in Canada, and related information on their operations, is currently unknown. To date, TC has collected information on approximately 19 600 Sites. However, it is likely that this number does not represent the actual number of Sites operating in Canada, as there is currently no requirement for stakeholders involved in the transportation of dangerous goods to identify and register themselves or their Sites with TC. It is estimated that there are anywhere from 42 000 to 82 000 Sites operating across Canada. As a result of having no regulated way to collect data on Sites in a standardized manner, or to account for all Sites in Canada, any information gathered to date has been obtained through a patchwork of data sources, public complaints, and inspection reports, leaving room for inaccuracies, duplications, and out-of-date information. This patchwork method for gathering information about Sites is insufficient to provide inspectors with the information needed to determine whether a Site should be prioritized for inspection. A registration database will assist in identifying previously unknown Sites, as well as in collecting basic information on previously known and new Sites so that TC can develop a risk score and appropriately prioritize the new Site for inspection. Depending on how many new Sites are identified through the registration database and the risk-level to public safety in the event of a release of dangerous goods on those Sites, TC may need to reassess inspection cycles (frequency of inspections) based on existing inspection resources.

Risk to public safety

According to the CESD, without a comprehensive understanding of its regulated community, TC does not have a consistent way to measure the effectiveness of inspections at preventing violations, non-compliance, or transportation of dangerous goods incidents.

Between 2009 and 2021, TC was notified of approximately 2 500 reportable on-site dangerous goods incidents and only 84 of them happened on Sites included in TC’s oversight system. In other words, 96.6% of these reported incidents occurred on Sites that were unknown to TC and, therefore, uninspected.

Although the types of incidents occurring at unknown Sites vary, they can still result in devastating impacts. Some examples of such devastating incidents include (i) in 1990, a chlorine (UN 1017) release from a rail tank car in Hinton, Alberta, caused 20 injuries ranging from moderate to severe; (ii) in 2016, an explosion of a tank containing residue of petroleum crude oil (UN 1267) in Red Deer, Alberta, caused one fatality; and (iii) in 2018, a release of organic peroxide (UN 3109) in Surrey, British Columbia, resulted in evacuation, five minor injuries and seven moderate injuries. Inspecting Sites and enforcing TDG requirements are some ways that TC can mitigate the likelihood of such incidents occurring. Not having information on these Sites prevents TC from proactively addressing potential risks and undermines efforts to protect public safety.

Background

The Minister of Transport, pursuant to the Transportation of Dangerous Goods Act, 1992 (TDG Act), is responsible for regulating the transportation of dangerous goods. The TDG Act and the TDGR prescribe the requirements for the transportation of dangerous goods, including proper classification and transportation in proper means of containment in accordance with applicable standards. The TDG Program promotes public safety in the transportation of dangerous goods by all modes of transport in Canada (rail, air, marine and road). The TDG Program maintains a regulatory framework and risk-based oversight regime that supports public safety, economic growth, and innovation.

TC’s risk-based approach to oversight is supported by a yearly oversight plan called the National Oversight Plan (NOP). The purpose of this plan is to see that TDG inspection resources are efficiently and effectively used to promote safety. The NOP considers a variety of factors when determining the frequency of inspections at a Site. Site characteristics, including population density near the location, number of transportation modes (e.g. truck, train), and the risk that the dangerous good itself poses in the event of an incident, all form part of the TDG Program’s risk algorithm. This risk algorithm informs TC on how frequently a Site should be inspected.

To enhance the safe and secure transportation of dangerous goods, the TDG Program requires knowledge of its regulated entities, and their related dangerous goods activities (e.g. classification of dangerous goods involved in DG activities), to inform the development of its risk-based approach to oversight.

Objective

The objective of the Regulations is to reduce or eliminate information gaps that undermine TC’s ability to administer and enforce transportation of dangerous goods requirements effectively. Site information collected through the Regulations will better inform TC’s decision-making and help TC see that transportation of dangerous goods requirements are administered and enforced consistently and appropriately according to risk across the transportation sector, which in turn may reduce the likelihood and severity of incidents and accidents involving the transportation of dangerous goods. The Regulations will also serve to address the CESD’s recommendation in 2020 to strengthen the existing risk-based oversight program.

Description

The Regulations introduce new requirements for persons, involved in DG activities that are subject to these Regulations, to register themselves and their Sites with a new online registration database administered by TC, and to provide data related to their DG activities at those Sites. This registration database will create a reliable and comprehensive inventory of Sites where DG activities occur, providing TC with a more comprehensive picture of such activities taking place across the country, including at Sites that are currently unknown to TC.

Registration requirement

The information collected will be limited and specific to what will directly contribute to achieving the objective for these Regulations, which is to amass a reliable and comprehensive inventory of TDG stakeholders and Sites where DG activities are taking place, in order to strengthen risk-based oversight. Subject to certain exemptions, all persons that import, offer for transport, handle or transport dangerous goods at a Site in Canada will be required to register in the registration database. Pursuant to the TDGR, exemptions to registration in the database will be permitted when all the dangerous goods at a Site are covered by any of the following examples:

Exemption 1: A personfootnote 3 who imports, offers for transport, handles, or transports dangerous goods under any of the Special Cases listed under Part 1 of the TDGR other than

Exemption 2: A person who imports, offers for transport, handles, or transports dangerous goods exempted under a special provision in Schedule 2 of the TDGR;

Exemption 3: A person who imports, offers for transport, handles, or transports selected lower-risk dangerous goods (e.g. retail stores, mail services and courier companies);

Exemption 4: A person conducting cross-border movements that does not have a headquarters or owns/operates a Site in Canada;

Exemption 5: Foreign carriers operating cross-border movements that do not have headquarters or own/operate a Site in Canada where DG activities take place;

Exemption 6: A person who offers for transport, handles or transports dangerous goods at a Site that are in quantities necessary for a federal, provincial or municipal officer to carry out their duties with respect to the enforcement of federal, provincial or municipal law; and

Exemption 7: A person operating one or multiple oil wells.

The Regulations take a risk-based approach that considers the specific commodities involved in DG activities and their quantities, the size and scope of an operation, practical realities (such as whether or not a person transports goods to/from a Site or for personal use or commercial), and administrative burden.

Introduction of a new definition

The Regulations will introduce a definition of “site” into the new Part 17 of the TDGR to indicate that a “site” is a permanent location where dangerous goods are imported, offered for transport, handled or transported and are in the direct possession of a person conducting these activities, but does not include a location where dangerous goods are used only in the scope of a person’s work or as raw materials in products that they manufacture.

For enhanced clarity, the application of the “site” terminology is explained below for different modes of transport or persons conducting DG activities.

Marine

For marine transport, the definition of “site” includes locations where dangerous goods are being loaded and unloaded but does not include a warehouse or a vessel, even if docked at the port. For example, a common-use terminal will be registered as a Site. For ports where there is no terminal, the port will be registered as the Site.

Air

In the context of air transportation, since dangerous goods are loaded onto and unloaded from aircraft at a company’s respective common-use cargo terminal, the location to be registered will be associated with the cargo terminal. For smaller airports with no distinct cargo terminal, the airport will be registered as a Site. In these cases, any road vehicle (such as aircraft refuellers) or aircraft sitting at the airport are not considered Sites. In addition, warehouses storing dangerous goods to be used by the airport presumably do not have to be registered as Sites as they are likely to be considered as end users.

Rail

For rail transport, Sites include any rail terminal that receives dangerous goods to be loaded on a train as well as any location where dangerous goods are off-loaded from a train and transferred to another means of transport. Sites also include rail yards where rail cars are coupled into a train. Warehouses where dangerous goods are stored (likely not in transport) and sidetracksfootnote 4 do not fall under the scope of Site. Stations where trains are only passing through without any handling of dangerous goods will probably not be required to register as Sites.

Consignee

A consignee of dangerous goods, which is also an end user (such as a facility receiving chemicals for their scope of work or forest harvesters storing fuel to be used in their harvesting activities) does not have to register.

Consignor

A consignor of dangerous goods will have to register locations where DG activities are conducted. For example, a chemical company will need to register any Site where dangerous goods are prepared for and offered for transport.

Freight forwarders

For the freight forwarding industry, if the person offering for transport is never in direct possession of the dangerous goods, this person will not be required to register.

Petroleum producers

For the oil and gas industry, Sites include the terminals, refineries, and distribution centres where DG activities are conducted with the intent of being transported. Extraction premises (such as wells and well pads) and retail premises (such as gas stations) are exempted from the Regulations.

Information to provide

When registering in the database, a person will need to provide administrative information, including

Requirement for yearly renewal of registration

A person will have to renew their registration in the database annually and, in so doing, will be required to review and update all the information in the database, as needed, for each Site.

Information that will need to be confirmed or updated annually for each Site includes the following:

How to register

The registration database application will be made available to persons online through TC’s website on tc.canada.ca on the day these Regulations are published in the Canada Gazette, Part II.

For all completed registrations that are saved and sent in the application database, a confirmation message, including a registration number for each Site, will be provided from TC.

Requirement to update the information

Persons will be required to maintain up-to-date information in the registration database by providing updates within 60 calendar days of a change related to their administrative information (e.g. CRA business number or name), addresses (headquarters or Sites), contact information or mode of transportation.

Transitional period

Persons will have a period of 12 months from the coming-into-force date of the Regulations, which is the day they are published in the Canada Gazette, Part II, to complete their registration in the database.

Persons who start new operations after the coming into force date of these Regulations will be required to complete their registration in the database before engaging in any DG activities.

Privacy

Personal informationfootnote 5 collected under the registration database will be protected under the authority of the Privacy Act. The Privacy Act allows a government institution, such as TC, to refuse to disclose personal information to a third party, as per section 26 of the Privacy Act. Any personal information provided to TC will only be used and disclosed by TC in accordance with the Privacy Act.

Regulatory development

Consultation

Extensive consultations were carried out with industry stakeholders (i.e. businesses that import, offer for transport, handle, or transport dangerous goods) and with affected federal, provincial, and municipal entities that will be required to register Sites.

Policy development consultations

TC first held consultations with stakeholders between February and April 2018. The findings from these consultations were summarized in a “What We Heard” report and released to the General Policy Advisory Council (GPAC) in November 2018. Following a review of the “What We Heard” report, GPAC members expressed additional concerns. In response to the feedback received from GPAC members, a second round of consultations was held in January 2019 to better understand the concerns raised. The results of the second round of consultations were presented to GPAC in January 2020.

Following the January 2020 presentation to GPAC, 15 one-on-one consultations were held in spring 2020, to provide stakeholders an opportunity to explain how the proposed amendments may impact their businesses and/or business sector. Based on these consultations, TC amended its policy approach to address concerns raised where feasible. TC’s final policy approach was supported by GPAC in June 2020.

Consultations highlighted three main concerns from stakeholders, as outlined hereafter.

1. How would the information collected by the registration database serve to minimize the risks to public safety associated with the transportation of dangerous goods?

TC intends to use the information on Sites collected through the registration database to assess their risk to public safety and prioritize them for inspection based on risk against other Sites. Having more complete information on the true population of Sites for this prioritization process will allow TC to allocate inspector resources in the most effective and efficient way possible. It is expected that prioritizing inspections will help to identify and mitigate risks and thereby reduce the likelihood and damage of potential incidents.

2. What administrative burden would registration place on persons who do not presently collect the data required to register with the registration database?

Registration will inevitably place some burden on stakeholders, who will be required to provide information on several items related to their business and transportation of dangerous goods activities. As a result of industry feedback, TC reduced the reporting requirements in the proposed amendments by limiting the required information to only what would be necessary to identify a Site and evaluate the level of risk it might pose to public safety.

3. Would the registration database cause registration duplication for stakeholders who have already provided similar information to other federal and provincial government departments? Why is the information contained in these platforms not being utilized instead of developing a new database?

Multiple platforms were assessed by TC, such as those of Natural Resources Canada, Environment and Climate Change Canada, the Canadian Nuclear Safety Commission, the Canada Border Services Agency, Statistics Canada, as well as other TC platforms. Some information, such as the CRA business number, head office location, and contact phone numbers were available, but these inventories would not provide the information necessary for TC inspectors to identify Sites and prioritize inspections according to the specific needs of the TDG Program. Moreover, TC cannot use the relevant information found in these platforms as the information collected by other federal and provincial governments is governed by different policies surrounding collection, privacy, and security. The information that will be collected under the registration database will be specific to the DG activities, namely, classification of the dangerous goods (DGs), the mode of transport, and the type of activities (importing, offering for transport, handling or transporting).

Comments received following the prepublication of the Regulations in the Canada Gazette, Part I, on June 25, 2022

The Regulations were prepublished in the Canada Gazette, Part I, on June 25, 2022, followed by a 70-day comment period. During that period, TC received 33 submissions (each including multiple comments) from manufacturers, road and rail carriers, distributors, the agriculture sector, the oil and gas sector, industry associations, other levels of government and other industries. While most stakeholders supported TC’s primary objective to reduce or eliminate information gaps that undermine TC’s ability to administer and enforce the transportation of dangerous goods regulations effectively, stakeholders also raised concerns about increased burden, questions about registration requirements, questions on terminology or requests for interpretation, requests for exemption, requests for harmonization with the United States (U.S.), questions about data protection measures and confidentiality, questions about the enforcement strategy, questions about the necessity of the Regulations, and a suggestion for the program to move to a licensing system.

Following an analysis of the comments received, TC informally consulted with GPAC to better understand stakeholder issues and to help develop modifications to the Regulations that would help resolve stakeholder concerns without compromising TC’s objectives. As the proposal evolved, so did the TDG Program risk algorithm used in the development of the risk-based approach. Given the evolution of the policy and the refinement of the risk algorithm, TC was able to develop some adjustments to the Regulations that address stakeholder concerns without compromising TC’s safety priorities. Stakeholders were appreciative of TC’s efforts to reduce administrative burden, regulatory overlap, and other issues raised during the official comment period and welcomed the new modifications.

The following sections provide a summary of the issues raised by stakeholders and the actions taken by TC to address those issues.

1. Increased burden

Comments categorized under increased burden include the following sub-categories: regulatory overlap, underestimated administrative burden, and request for regulatory flexibility.

Regulatory overlap

TC received 27 submissions from different stakeholders expressing concerns about regulatory overlap and duplication for regulatees. Although stakeholders were generally supportive of the concept of a registration database, they raised concerns about the reporting requirements for extended informationfootnote 6 that were proposed at prepublication. Under the proposed extended information requirements, stakeholders conducting DG activities of higher-risk dangerous goods would have been required to report additional information to TC. Stakeholders felt that these requirements would be administratively burdensome and duplicative since stakeholders already report similar informationfootnote 7 under other government programs [e.g. the TC Emergency Response Assistance Plan (ERAP)] and Protective Direction 36.footnote 8 Stakeholders, therefore, strongly recommended that TC work with other government departments and jurisdictions to access the required information through already available data sets.

In response to these concerns, the requirements for extended information have been removed from the Regulations and TC is currently working with other departments and other levels of government to put in place information sharing agreements wherever feasible to obtain more information, and to find ways to convert that information into useable data. The removal of the extended requirements is not expected to hinder TC’s objectives as the Regulations still include sufficient data requirements to support the TDG Program’s risk algorithm, such as the Site characteristics, number and type of transportation modes (e.g. truck, train), and the risk (class and division) that each dangerous good itself poses should there be an incident.

Underestimated costs

TC received 24 submissions suggesting that the costs to businesses presented in the Regulatory Impact Analysis Statement (RIAS) at prepublication were significantly underestimated. While stakeholders recognized that the amount of time required to enter the basic information in the registration platform was a reasonable estimate, they were concerned that the time needed to gather the extended information was either underestimated or not taken into consideration at all. Stakeholders also indicated that complying with the extended information requirements would require costly investments in integrated systems to consolidate data to meet the extended reporting requirements.footnote 9 In response to these concerns, the reporting requirements for the extended information were removed from the Regulations. Likewise, the cost-benefit analysis in this RIAS has been updated to remove the estimated costs associated with the extended reporting requirements.

Five submissions received were from the agriculture industry. Their main concern was that excluding section 1.22 — Agriculture: 3 000 kg Gross Mass Farm Retail Exemption from the list of exemptions to the registration requirement would cause heavy administrative burden both to farmers and TC as, without the exemption, the vast majority of the Canadian farming community would be required to register.

In response to these concerns, section 1.22 of the TDGR was added to the list of exemptions to the registration requirement in the Regulations. This decision was taken because, after further consideration, TC determined that the farmers are end users of the DGs they use in their farming production, and as previously explained, a Site does not include a location where dangerous goods are used only in the scope of a person’s work. Therefore, end users like the farmers conducting DG activities under section 1.22 are excluded from the “site” definition and registration requirements. The cost-benefit analysis has been adjusted to reflect this change. Details are presented in the “Regulatory analysis” section.

Lastly, some stakeholders expressed interest in a phased approach to registrations. However, while a phased approach was suggested, there was no consensus on the method to be used. While some stakeholders suggested registering lower-risk DGs in an initial phase and then registering higher-risk DGs in a subsequent phase, other stakeholders suggested the opposite. TC considered the suggestions, but ultimately concluded that a phased approach would add complexity and potential confusion to the implementation of the Regulations and would result in some potential safety risks persisting for a longer period of time. TC was unable to conclude that the benefits of taking a phased approach would outweigh the costs or the risks. Therefore, no changes were made to the Regulations in response to suggestions of a phased approach. However, it should be noted that, since the proposed extended reporting requirements have been removed from the Regulations, the impact of the registration requirement on stakeholders that conduct DG activities is expected to be lower and, consequently, may no longer be of significant concern to these stakeholders.

Regulatory flexibility

TC received 19 submissions requesting greater flexibility with respect to the proposed requirements:

2. Registration requirements

TC received 28 submissions related to the registration requirements.

As these concerns were received, TC followed up directly with numerous stakeholders. In addition, TC presented several proposed modifications to the Regulations, including a revised “site” definition, during follow-up meetings with various associations, working groups, industries, and educational stakeholders between summer 2022 and winter 2023. TC received positive responses from stakeholders who were appreciative of the efforts made to clarify the requirements and reduce administrative burden. Additionally, TC has developed guidance documents, explanations, and examples for regulatees to better understand the Regulations and easily register online. These materials will be available on TC’s website on the day the Regulations are published in the Canada Gazette, Part II.

Comments received also indicated a general misunderstanding of subsection 17.3(2) — Registration requirements for a new company. Furthermore, the requirement for a person to register within 90 days after starting their DG activities was not completely aligned with the TDG Program, which requires that no persons shall conduct DG activities unless they comply with the TDGR. As a result, the 90-day requirement has been removed; the Regulations now require that persons that are new to DG activities be registered prior to beginning their DG activities.

3. Questions on terminology or interpretation

TC received 17 submissions indicating that the “site” definition was unclear or requested that “site” be replaced by “facility.” Four stakeholders also asked for clarification about the term “self-employed commercial truck owner/operator,” as it was not defined in the Regulations. Several stakeholders requested specific scenarios or clarifications about how requirements would apply to their industries. For example, stakeholders wanted to know if the final destination, where DGs may be kept in a storage container, would be captured by the Site registration requirement. Likewise, stakeholders were unsure if freight forwarders, who arrange transportation and logistics for DGs but do not physically handle the DGs, would be required to register. As previously mentioned, TC responded directly to such stakeholder requests for clarification. The intent is that destinations where DGs are stored/used would not be considered Sites, and freight forwarders who are never in direct possession of DGs would not be required to register.

TC did not replace the term “site” with “facility” because there is no known existing definition of “facility” that encapsulates the wide spectrum of TDG-related properties where DG activities take place. By contrast, the term “site” is already used within the TDG Program and was broadly supported by stakeholders during consultations, therefore, TC concluded that it would be the most logical term to use. TC, however, agreed that the definition of “site” could be improved and revised the definition based on the comments received.

4. Requests for exemption

TC received 19 submissions requesting specific exemptions from the Regulations. The rail industry, ERAP holders, and stakeholders involved in the waste industry were strongly opposed to the extended information requirements as comprehensive data sets are already reported to the Government of Canada under other regulations or other requirements in the TDGR.

In addition, farmers, farming associations, and fertilizer distributors requested that farms be excluded from registration requirements. Likewise, consignees requested that they be exempted from registration when they are at the end of the supply chain or when they use DGs as raw materials or essential supply for their operations (e.g. diesel for forestry harvesting or aquaculture operation, explosives for seismic operations, or chemicals for production).

TC considered and analyzed these requests and concluded that it would be reasonable to exempt farms (by including section 1.22 — Agriculture: 3 000 kg Gross Mass Farm Retail Exemption, in the list of applicable exemptions) as they are end users, which have never been in scope given that DGs on their farmlands are likely not considered in transport under the TDGR. The same reasoning applies for consignees. When they are end users, they are likely exempted from the requirements set out in the Regulations. Given the concerns raised by these stakeholders, the definition of “site” in the Regulations has been modified for clarity.

TC also received a request for exemption for persons conducting DG activities at a Site where DGs are present in quantities necessary for a federal, provincial, or municipal officer to carry out their duties with respect to the enforcement of federal, provincial, or municipal law. The Regulations are not intended to capture law enforcement officers who handle/transport DGs in the course of their official duties and, therefore, an exemption for such persons has been added to the Regulations.

No other exemptions have been added to the Regulations. TC concluded that further exemptions could compromise the objectives of the proposal — namely reducing or eliminating existing information gaps about the transportation of DGs. Moreover, several of the exemption requests were related to the extended reporting requirements, which have been removed as previously explained.

5. Request for harmonization with the United States

TC received seven submissions requesting better harmonization with what is currently being done in the U.S. For example, stakeholders requested that TC replace the term “site” with “facility,” that only basicfootnote 10 information about DGs should be reported, and that the Regulations provide a 60-day period (as opposed to the anniversary day) for stakeholders to make required annual updates to their information.

Regarding the request for terminology alignment, as explained previously, there is no known existing definition of “facility” that encapsulates the wide spectrum of properties where DG activities take place. By contrast, the term “site” is already used within the TDG Program and was broadly supported by stakeholders during consultations. Therefore, TC concluded that “site” would be the clearest and most logical term to use.

Regarding the concerns raised about the level of detail that would need to be reported for DGs, particularly higher-risk DGs, TC agreed that the extended reporting requirements proposed at prepublication could be removed since the relevant information could be obtained from reporting that is already done by affected stakeholders under other programs. Therefore, the extended reporting requirements were removed and the Regulations now require only basic information about DGs handled at Sites, which is consistent with U.S. requirements.

In response to stakeholder concerns about the anniversary day for annual reporting, the Regulations have been updated to extend this period to 30 days, which is better aligned with U.S. requirements.

6. Data protection and confidentiality

TC received six submissions about the importance of data protection and confidentiality.

TC recognizes the need for confidentiality and data protection. All data collected by TC, which will be stored in the Microsoft Cloud, will be protected under the Privacy Act and will be secured and protected by

7. Unnecessary Regulations

TC received five submissions suggesting that there was no need for the Regulations as the safety risks were overstated.

No changes were made in response to these comments because the two audits conducted in 2006 and 2011 (discussed in more detail in the “Background” section) highlighted that TC did not have accurate or complete information about the persons involved in DG activities; did not have sufficient information to understand the risks of some DGs and operations, or the means to collect such information; and did not have the tools to assess risk and properly evaluate priorities for the risk-based oversight program.

8. Enforcement strategy

TC received four submissions related to the enforcement of the new requirements. Stakeholders wanted more information about how enforcement will be managed and what mechanisms will be put in place for non-compliance. Some stakeholders also had concerns about the deterrent effect of existing fines, which are perceived to be quite low.

As indicated in the “Compliance and enforcement” section of this document, compliance with the registration database requirements will be addressed using existing enforcement measures and personnel. Should an inspector identify non-compliance through an opportunity inspection, a letter may be sent to the company requiring that the company register within a specified time frame. TDG inspectors who identify non-compliance with the Regulations may apply a graduated approach to enforcement including, but not limited to, education, warnings and/or fines of between $500 and $1,000.

9. Licensing system

TC received one submission suggesting that the program should move to a licensing system like the Commercial Driver’s License Program in the U.S. to prompt that only tested and approved drivers are permitted to conduct DG activities and to build a user database at the same time.

No changes were made to the Regulations in response to this suggestion because the TDG program being multimodal, this approach is not feasible as other modes of transport could not be included in such a program. However, in terms of tested and approved drivers (or other mode-specific employees) involved in DG activities, TC is currently reviewing Part 6 of the TDGR which will update the training requirements for all modes of transport to enhance safe and secure transportation of DGs.

The following table summarizes the changes that were made to the Regulations after they were prepublished in the Canada Gazette, Part I.

Table 1: Changes made after prepublication
Provision of the TDGR Prepublication Final Regulations
Section 1.22, Agriculture: 3 000 kg Gross Mass Farm Retail Exemption Farms were not expressly excluded from the Site registration requirements. Farms are now explicitly excluded from the Site registration requirements.
Section 17.1, Definition The definition of site required more clarity for importers, freight forwarders, end users or third-party companies. The definition of "site" has been updated to specify that importers, end users, or freight forwarders / third-party companies (who are never physically handling the DGs) are not included and to specify that a site must be a permanent location.
Subsection 17.2(1), Application The registration requirements did not specify who needed to register a Site. The registration requirements have been updated to specify that the owner or operator of a Site is the person required to register that Site.
Subsection 17.2(2)

This subsection did not specify that Sites where dangerous goods are necessary to carry out duties with respect to the enforcement of federal, provincial or municipal law were exempted.

This subsection also contained unnecessary text related to self-employed commercial truck owner operator.

This subsection has been updated to specify that Sites where dangerous goods are necessary to carry out duties with respect to the enforcement of federal, provincial or municipal law are exempted.

The exemption related to self-employed commercial truck owner operator have been repealed as the "site" definition clearly indicates that a Site is a location, not a person.
Section 17.3, Registration This section contained the provisions for the following:
  • the extended data requirements;
  • the contact person and their replacement for each site;
  • the yearly reporting timeframe; and
  • the transition period to comply with the regulation.
 The section has been modified as follows:
  • the provisions related to the extended data requirements are repealed;
  • the contact person and replacement requirement is now at the business level instead of at the site level;
  • the yearly reporting timeframe has been modified from the year preceding the registration date to the previous fiscal year; and
  • the transition period can now be found in section 17.3.1.
Section 17.3.1, Exception — 12 months after coming into force This section was not in the prepublication. This section was added for the final publication to simplify the regulatory text regarding the transition period, which consists of completing the registration within 12 months after the coming into force of the Regulations.
Section 17.4, Renewal This section included a fixed date for the yearly renewal. This section now includes a 30-day period for the yearly renewal.
Section 17.5, Changes to Information This section required that administrative changes be completed within 30 days of the change. This section now includes a 60-day period to update administrative changes.

Modern treaty obligations and Indigenous engagement and consultation

In accordance with the Cabinet Directive on the Federal Approach to Modern Treaty Implementation, an analysis was undertaken to determine whether the proposal is likely to give rise to modern treaty obligations. The assessment examined the geographic scope and subject matter of the proposal in relation to modern treaties in effect and, after examination, no implications or impacts on modern treaties were identified.

Instrument choice

TC’s ability to mitigate dangerous goods incidents and to protect public safety in the transportation sector depends on its knowledge of who is involved in DG activities in Canada, which dangerous goods are involved, how much dangerous goods are involved and the conditions under which these DG activities are taking place. The lack of a registration requirement for the transportation of dangerous goods has repeatedly been identified as a critical program and public safety risk. TC has limited, inaccurate and/or out-of-date information about persons involved in the transportation of dangerous goods in Canada. TC has attempted to address the issue through non-regulatory means.

TC has gathered relevant information using a patchwork of data sources; however, the information available through these sources is incomplete and not sufficient to support consistent and effective risk assessment, inspection, and/or enforcement. A registration requirement established in the Regulations will promote complete, accurate and up-to-date information, which will allow TC to identify and evaluate risks and prioritize inspection and enforcement activities. A registration database will also address fundamental concerns raised in the 2011 and 2020 CESD reports on TC’s lack of information on the regulated transportation of dangerous goods community.

If the status quo were maintained, TC would not be able to adequately deliver a risk-based oversight regime that promotes compliance with the TDGR to maintain public safety. Given that non-regulatory options have been tried and have not worked, regulatory intervention is needed to promote the ongoing integrity and success of TC’s TDG Program.

Regulatory analysis

The Regulations will introduce a registration requirement for persons involved in DG activities and who are subject to these Regulations, when applicable. Amending the Regulations will see that TC has the information required to effectively identify Sites. The Regulations would result in an incremental cost of $7.66 million in present value (2021 Canadian dollars, discounted to the first 12-month period starting in September 2023 at a 7% discount rate) to persons involved in DG activities between 2023–2024 and 2032–2033. In addition, the Regulations would result in an incremental cost of $2.98 million to the Government of Canada associated with reporting, as well as implementing and maintaining the registration database between 2023–2024 and 2032–2033. The total cost of the Regulations is an estimated $10.64 million for the same period.

The Regulations will enable TC to close the data gap and therefore develop comprehensive knowledge of active Sites across Canada. In the longer term, information collected through the Regulations will better inform TC’s decision-making, enhance the Department’s capacity of the existing oversight framework, and strengthen the effectiveness of the risk-based inspection program to address the CESD’s 2020 recommendation, which is ultimately expected to reduce the likelihood or the severity of incidents on Sites and better protect employees conducting DG activities on Sites and Canadians at large. Even though these longer-term benefits cannot be presently assessed in a quantitative manner, it is strongly believed that they will outweigh the monetized costs associated with the Regulations.

Following comments received during prepublication of the Regulations in the Canada Gazette, Part I, the cost-benefit analysis was modified to reflect several changes.

First, the proposed extended information reporting requirement was removed, which eliminated estimated reporting costs on some affected stakeholders (i.e. businesses involved in DG activities of higher-risk dangerous goods previously defined under the proposed Regulations). As a result of the change, all businesses subject to the Regulations will report the same information as that required for businesses involved in “lower-risk” DG activities as defined in the proposed Regulations.

Based on TC’s registration database testing with business users (following prepublication of the Regulations), the time required to complete the initial registration was adjusted as follows: two hours for a medium/large-sized business, and one hour for a small-sized business, compared to the previously estimated hour and a half. The time required to complete the annual registration renewal was kept at 25 minutes for all businesses.

The number of affected businesses was revised to be 52 190, compared to the previous estimate of 57 020, due to

Second, costs to the Government of Canada associated with implementing and maintaining the registration database were revised due to updated estimated level of effort. In addition, new costs associated with initial registration and yearly renewal of affected Government of Canada owned Sites were added. As such, there is an increase in estimated costs to the Government of Canada.

While other levels of governments would also incur costs associated with Site registrations, such costs cannot be estimated due to insufficient data. However, a qualitative cost analysis was presented.

Lastly, the base period of discounting was adjusted to the first 12-month period starting in September 2023 to align with the coming into force date.

As a result, the total estimated cost was adjusted from $15.07 million (presented in the RIAS published in the Canada Gazette, Part I) to $10.64 million.

Analytical framework

The costs and benefits for the Regulations have been assessed in accordance with the Treasury Board Secretariat’s (TBS) Policy on Cost-Benefit Analysis. Where possible, impacts are quantified and monetized, with only the direct costs and benefits for stakeholders being considered in the cost-benefit analysis.

Benefits and costs associated with the Regulations are assessed based on comparing the baseline scenario against the regulatory scenario. The baseline scenario depicts what is likely to happen in the future if the Government of Canada does not implement the Regulations. The regulatory scenario provides information on the expected outcomes of the Regulations.

The analysis estimated the impact of the Regulations over a 10-year period from 2023–2024 to 2032–2033.footnote 11 Unless otherwise stated, all costs are expressed in present value 2021 Canadian dollars, discounted to the first 12-month period starting in September 2023 (2023–2024) at a 7% discount rate.

A detailed cost-benefit analysis report is available upon request.

Affected stakeholders

The Regulations will introduce requirements to persons that import, offer for transport, handle or transport dangerous goods to register themselves and the Sites they own or manage in an online database. Based on consultations with subject matter experts at TC, it is expected that the majority of those impacted will be businesses. In this analysis, all affected stakeholders are assumed to be businesses involved in DG activities at a Site located in Canada that they own or operate, if applicable.

TC’s internal analysis estimated that about 52 190 businesses, owning 62 629 Sites, would be impacted, approximately 80% of which are assumed to be small-sized businesses and 20% are medium/large-sized businesses. The number of Sites is higher than the number of businesses, as larger businesses likely own more than one Site. Subject matter experts at TC assume that the transportation of dangerous goods industry is stable; therefore, the analysis does not include a business growth rate.

The Regulations will also likely affect all levels of government departments/agencies that own laboratories, testing facilities, water treatment facilities and health-related facilities. In addition, the Government of Canada (represented by TC) will need to implement and maintain the registration database.

Baseline and regulatory scenarios

In the baseline scenario, personsfootnote 12 involved in DG activities would not be required to register their Sites in the registration database. Therefore, TC’s dangerous goods enforcement would continue to be based on the existing narrow scope of information on businesses and Sites involved in DG activities.

In the regulatory scenario, the Regulations will require persons involved in DG activities that are subject to these Regulations to register their business and Sites located in Canada, which they own or operate in the registration database. This will result in an incremental administrative burden cost for affected stakeholders, as well as the database implementation and maintenance costs for TC. The Regulations will be added under Part 17 of the TDGR and will set out the requirements for the information needed to register and the frequency with which the information needs to be updated. The information collected from the database will allow TC to develop a comprehensive view of the regulated community, which will help better inform decision-making at TC that could enhance program efficiency, regulatory compliance, and the protection of employees conducting DG activities and Canadians at large.

Benefits and costs

Benefits

TC’s Dangerous Goods Accidents Information System (DGAIS) collects annual data on incidents related to the transportation of dangerous goods. The data collected shows that, between 2014 and 2018, a total of 1 879 accidents were reported — 42 of these accidents resulted in 49 fatalities; 312 accidents resulted in 507 injuries.footnote 13

Currently, TC categorizes known Sites based on risk levels (i.e. low, medium, high, and very high); however, TC still does not have sufficient risk-related information to accurately determine risk levels on approximately 12% of these known Sites.footnote 14 This information gap on known Sites highlights present risks in the TDG industry. More comprehensive data collected from Sites will help TC more accurately identify and assess risks and, thereby, better inform decisions on compliance and enforcement strategies.

Between 2009 and 2021, TC was notified of approximately 2 500 reportable on-site dangerous goods incidents and only 84 of them happened on a Site included in TC’s oversight system. In other words, 96.6% of these reported incidents occurred in Sites that were unknown to TC.footnote 15 Such a data gap hinders TC’s ability to effectively regulate the TDG sector and protect employees handing dangerous goods and the Canadian public.

The Transportation Safety Board of Canada (TSB) has identified improperly classified and documented information of highly volatile petroleum crude oil to be a potential risk causing serious accidents when it is transported by train in large volumes.footnote 16 The railway investigation report into the runaway and main-track derailment at Lac-Mégantic in 2013 cited that if information on classification and documentation were properly reported to TC, it would have helped draw the attention of officials to assess risks in a timely manner and take more proactive actions, such as targeted inspections, which could reduce the likelihood or the severity of potential accidents. The Regulations will require this information to be reported which will enhance the focus of TC’s oversight.

In the longer term, data collected through the Regulations will provide TC with a comprehensive view of active Sites across Canada. Such information will better inform TC’s decision-making, enhance the effectiveness of the existing risk-based inspection program at TC, allow TC to more effectively identify and inspect higher-risk Sites, and support TC in raising awareness and promoting compliance. This collection of information is ultimately expected to reduce the likelihood or the severity of incidents on Sites and better protect employees conducting DG activities and the Canadian public. While these benefits cannot be presently assessed in a quantitative manner, it is strongly believed that they outweigh the costs associated with the Regulations.

Overall, the Government of Canada is adopting data-driven decisions in its daily operations, not only to react to stakeholder demands and concerns, but also to proactively identify and even prevent issues before they develop into crises.footnote 17

Costs

Compliance with the Regulations is expected to result in incremental costs of approximately $7.66 million to 52 190 businesses involved in DG activities over the 10-year analytical time frame. Furthermore, the Regulations would result in a cost of $2.98 million to the Government of Canada for reporting, as well as implementing and maintaining the registration database. Together, the Regulations would result in an estimated cost of $10.64 million between 2023–2024 and 2032–2033.

The estimated costs to businesses are based on an assumption that, on average, a small-sized business owns one Site and a medium/large-sized business owns two Sites. It is acknowledged that the actual number of Sites owned by a business may vary; therefore, the compliance costs to individual businesses may differ from those presented in this analysis.

Provincial, territorial and municipal governments will also incur reporting costs if their Sites will be subject to the Regulations. Due to insufficient data, the total reporting costs to each of these affected governments cannot be reasonably estimated. However, such costs to each of these government organizations are expected to be insignificant.

It should also be noted that TC, provincial and territorial governments, will incur costs associated with training inspectors on the Regulations. However, since such training will take place prior to when the Regulations are registered, those training costs are not included in this analysis. Similarly, the cost of updating the training materials developed for regular ongoing training is not included in the analysis as the update will also be completed prior to when the Regulations are registered. Inspectors who attend the ongoing training are not expected to incur additional opportunity costs since the length of training will remain unchanged (generally such training lasts for one week).

Cost to industry

Initial registration requirement

Businesses involved in DG activities at a site that they own or operate in Canada will be required to provide information on their dangerous goods activities. The information that will be required includes the business number assigned to them by the CRA, if any; their name and the address of their headquarters; the phone numbers and email addresses of both a contact person and their replacement when absent; the addresses of all sites where DG activities are conducted; the mode of transport of dangerous goods used at each site; for each site, the classes and divisions of dangerous goods that were involved in DG activities within the previous fiscal year, if any; and for each site, the type of DG activities.

Businesses will be required to register through the online registration database application developed by TC. It is estimated that, on average, a small-sized business involved in DG activities would require one hour to complete the registration, and that a medium/large-sized business would require two hours.footnote 18 Businesses operating an existing Site will need to complete the initial registration within one year after the coming into force date of the Regulations. This requirement is expected to result in an initial registration cost to business of $2.35 million in 2023–2024.

Requirement for yearly renewal of registration

The Regulations will also require businesses to renew their registration on an annual basis by reviewing and updating all business information in the database as needed. It is estimated that businesses conducting DG activities (regardless of their business size) would require an average of 25 minutes to review and update information. This requirement is expected to result in a total cost of $5.31 million on businesses between 2024–2025 and 2032–2033.

Requirement to update the information

Businesses will be required to maintain up-to-date administrative information in the registration database by providing updates within 60 calendar days of a change related to activities or dangerous goods in their profile. This requirement sees that administrative information, such as the CRA business number if any, business name and addresses, contact information for a contact person and a replacement, and site address, is updated in a timely manner in the database if it is changed. Subject matter experts at TC expect that very few businesses will change such information during the analytical period because the cost of the initial infrastructure setup for businesses conducting DG activities is normally considerable, and therefore business owners will be unlikely to change such administrative information. Therefore, this requirement is not quantified for the central analysis. However, in the unlikely case a business does need to update administrative information, it is expected to take 10 minutes and would be done by an administrative level employee.footnote 18 This would result in an estimated $6.25 cost per update required to businesses.

Cost to Government of Canada

Implementation and maintenance of the registration database

The registration database was developed prior to the registration date of the Regulations and, therefore, the cost to develop the database was excluded from the analysis.footnote 19 However, TC is expected to incur the initial implementation and ongoing maintenance costs. It is assumed that in 2023-2024, TC would require four employees, two at the AS-01 level, one at the EC-02 level and one at the PM-04 level,footnote 20 who would be responsible for the implementation of the database. In 2024–2025, it is expected that TC would require one full-time employee at the PM-05 level, one full-time employee at the EC-02 level and five part-time employees at the AS-03 level who would be responsible for ongoing maintenance of the database. This requirement would result in a total government cost of $2.94 million for implementation and maintenance.

The Regulations will not change the way inspections are done on Sites. Even though the number of actual Sites may exceed the estimation used in this analysis, the information collected from the database, especially that from newly identified Sites, will allow TC to make evidence-based decisions to prioritize existing oversight measures (awareness campaigns, inspections, etc.) based on risk. The Regulations are expected to make the existing oversight framework more efficient. The changes are not related to how oversight is performed, but rather where oversight will be focused by better informing the existing risk-based framework and allocating existing resources. Therefore, TC does not intend to hire additional resources.

TC’s TDG Safety Awareness Program regularly informs stakeholders of updates to the TDGR through education and awareness campaigns. Through the development of information documents and by doing presentations, TC will prompt dissemination of information on new requirements and timelines to targeted audiences. It is expected that the Regulations would not add additional financial cost to the program. Any effort associated with outreach and awareness with respect to the Regulations is expected to be minimal and would be absorbed under the normal operating costs to administer the TDGR.

Initial registration and yearly renewal

Using the Directory of Federal Real Property, it is estimated that 358 Sites owned by the Government of Canada would be affected by the Regulations.footnote 21,footnote 22 For the initial registration, it is assumed that, for each Site, employees at the AS-02 level and the EC-07 levelfootnote 22 would need one hour and 0.1 hour,footnote 23 respectively, to complete the initial registration in the period of 2023–2024. Therefore, the total cost associated with initial registration is estimated to be $18,761.

For the yearly renewal of registration, it is assumed that, in every period following 2023–2024, employees at the AS-02 level and the EC-07 level would need a total of 74.58 hoursfootnote 24 and 7.46 hours,footnote 24 respectively, to complete the renewal of registration for all Sites. As a result, the total cost associate with yearly registration renewal is estimated to be $25,465 over the periods between 2024–2025 and 2032–2033.

In total, the cost associated with the initial registration and yearly renewal of registration to the Government of Canada would be $44,226.

Cost to other governments in Canada

Using Statistics Canada’s Census subdivision (CSD)and provincial and territorial government websites, it is expected that Sites owned by 40 provincial and territorial departments and approximately 900 municipalities would be affected by the Regulations. However, the costs of initial registration and yearly renewal of registration to these governments cannot be estimated as there is insufficient data to determine the number of Sites: unlike the Directory of Federal Real Property, a comprehensive list of building addresses for other levels of governments in Canada is not available.

Nevertheless, if assumptions and data used to estimate the reporting costs to the Government of Canada are also applied to evaluate the reporting costs to other levels of governments in Canada, it is then expected that such costs to each of these government organizations are insignificant.

Cost-benefit statement
Table 2: Monetized costs (present values in millions)
Impacted stakeholder Description of cost Period 1 (2023–2024) Period 2 (2024–2025) Periods 3 to 9 (2025–2026 to 2031–2032) Period 10 (2032–2033) Total table b1 note a
(present value)		 Annualized value
Businesses involved in DG activities Initial registration $2.35 $0.00 $0.00 $0.00 $2.35 $0.33
Yearly renewal of registration $0.00 $0.76 $4.11 $0.44 $5.31 $0.76
Government of Canada Initial registration $0.02 $0.00 $0.00 $0.00 $0.02 $0.00
Yearly renewal of registration $0.00 $0.00 $0.02 $0.00 $0.03 $0.00
Database implementation $0.35 $0.00 $0.00 $0.00 $0.35 $0.05
Ongoing database maintenance $0.00 $0.37 $2.00 $0.22 $2.58 $0.37
All stakeholders Total costs table b1 note a $2.72 $1.14 $6.12 $0.66 $10.64 $1.52

Table b1 note(s)

Table b1 note a

Numbers may not add up to totals due to rounding.

Return to table b1 note a referrer
Quantified and qualitative impacts

Positive impact

Collected information will allow TC to develop a comprehensive view of the regulated community, which will help better inform decision-making to enhance program efficiency, regulatory compliance, and the protection of employees conducting DG activities and Canadians at large.

Negative impact

Forty provincial and territorial departments and approximately 900 municipalities in Canada would incur costs associated with initial registration and yearly renewal of registration; however, these costs to each of these government organizations are expected to be insignificant.

Sensitivity analysis

As previously described, a number of assumptions have been made to estimate the costs of the Regulations. To address the effect of uncertainty and variability on these assumptions, a sensitivity analysis was conducted, where variables are assigned different values, and outcomes are re-evaluated. A sensitivity analysis was performed on the following variables: analytical time frame, discount rates, and the number of Sites.

Analytical time frame

A 10-year period analytical time frame was used for the central analysis, whereas the sensitivity analysis presents the results should a 15-year period or 20-year period time frame have been used.

Discount rate

The central analysis used a 7% discount rate as recommended by TBS. The sensitivity analysis presents the results should a 3% discount rate have been used, as well as if there was no discounting.

Number of Sites

The central analysis was based on an estimated 62 629 Sites owned by business across Canada. The sensitivity analysis presents the results should the number of Sites be 42 000 or 82 000.

Table 3: Sensitivity analysis results (present value in millions)
  Parameter Total cost
Analytical time frame 10-year period table b2 note a $10.64
15-year period $13.35
20-year period $15.29
Discount Rates Undiscounted $13.66
3% $12.19
7% table b2 note a $10.64
Number of Sites 42 000 $8.12
62 629 table b2 note a $10.64
82 000 $13.01

Table b2 note(s)

Table b2 note a

Central scenario used in main analysis

Return to table b2 note a referrer
Distributional analysis

The Regulations will impact all four transportation sectors (air, rail, marine and road); however, businesses in the road sector will be impacted more greatly than the other transportation sectors as the majority of businesses involved in DG activities are in the road sector. It is estimated that approximately 70% of the costs would be carried by businesses in the road sector, for a total of $5.36 million. The three other transportation sectors (air, marine and rail) would carry the remaining 30%, for a total of $2.30 million.footnote 25

Table 4: Costs by transportation sector (present value in millions)
Transportation sector Percentage Total cost
Road Sector 70% $5.36
Other transportation sectors (air, rail and marine) 30% $2.30
Total 100% $7.66

Small business lens

The small business lens applies as there are impacts on small businesses associated with the proposal. It is estimated that industries involved in DG activities are made up of approximately 80% small businesses,footnote 26 where a small business is defined by having 1–99 employees, or less than $5 million in annual gross revenues. The Regulations would result in an incremental cost of $5.82 million over the 10-year analytical period to small businesses, with an incremental cost of $139.30 per business, annualized to $19.83 per business (Table 5).

TC has not considered more flexible approaches to minimize the cost impact on small businesses as the Regulations aim to mitigate the risk of incidents on Sites conducting DG activities. Since a small business does not necessarily equate to conducting low risk DG activities, it is important to require consistent information from all businesses impacted.

Small business lens summary
Table 5: Total administrative costs
Activity Annualized value Present value
Initial registration requirement (in millions) $0.22 $1.57
Yearly requirement of registration (in millions) $0.61 $4.25
Total administrative costs table b4 note a (all impacted small businesses, in millions) $0.83 $5.82
Cost per impacted small business table b4 note a $19.83 $139.30

Table b4 note(s)

Table b4 note a

Numbers may not add up to totals due to rounding.

Return to table b4 note a referrer

One-for-one rule

The one-for-one rule applies since there will be an incremental increase in administrative burden on businesses. Therefore, the Regulations are considered burden “IN” under the rule. The Regulations will impose additional administrative requirements on businesses to register and renew registration for each Site. Using the methodology developed in the Red Tape Reduction Regulations, it is estimated that the annualized additional administrative costs imposed would be $366,461 for all affected businesses, or an annualized cost of $7.02 per business (present value in 2012 Canadian dollars, discounted to the year 2012 with a 7% discount rate for a 10-year period between 2023–2024 and 2032–2033).

No regulatory titles will be repealed or introduced.

Regulatory cooperation and alignment

In the U.S., the transportation of dangerous goods is governed by the Pipeline and Hazardous Materials Safety Administration (PHMSA). To fulfill its mandate, the PHMSA establishes national policy, sets and enforces standards, educates, and conducts research to prevent incidents and prepares the public and first responders to reduce consequences if an incident does occur.

Since 1992, PHMSA has required those who offer for transport or transport in commerce certain quantities and types of dangerous goods, including hazardous waste, to file an annual registration statement with the U.S. Department of Transportation (DOT). U.S. departments and agencies, however, are exempted from registration. In addition, all registrants are required to pay a fee on an annual basis.footnote 27
a

The Regulations to require registration in Canada will therefore align to some extent with what is currently being done in the U.S. However, the programs will differ as TC’s registration requirement will (i) apply to all persons that are subject to these Regulations who import, offer for transport, handle or transport dangerous goods within Canada; (ii) not apply fees for those who register with TC; and (iii) apply these requirements to federal departments and agencies that are subject to these Regulations. Despite the differences between these programs, the intent of both initiatives remains the same: to gather information to manage program activities based on risk.

The Regulations will not apply to U.S. persons involved in DG activities in Canada unless they are operating a Site or have their headquarters in Canada.

Strategic environmental assessment

In accordance with the Cabinet Directive on the Environmental Assessment of Policy, Plan and Program Proposals, and the Transport Canada Policy Statement on Strategic Environmental Assessment (2013), the strategic environmental assessment (SEA) process was followed for this proposal and a Sustainable Transportation Assessment was completed. Although no important environmental effects are anticipated, the Regulations may have an environmental benefit because they are expected to reduce the likelihood, frequency, and potential damage — including environmental damage — that can result from dangerous goods incidents and accidents. The assessment considered potential effects to the environmental goals and targets of the Federal Sustainable Development Strategy (FSDS).

Gender-based analysis plus

A gender-based analysis plus (GBA+) review was completed, and the results of the analysis determined that the Regulations will not benefit or disadvantage any groups based on biological, social, economic, or cultural factors. The Regulations will affect businesses involved in DG activities, which are legal entities, rather than individuals; therefore, no differential impacts are expected based on identity factors, such as gender, race, ethnicity, sexuality, religion, etc. TC further consulted stakeholders, including the Assembly of First Nations, regarding potential differential impacts on diverse groups of people, but no specific concerns were raised.

While TC does not have comprehensive data on the gender composition of the transportation of dangerous goods industry, it should be noted that, in general, women are underrepresented in the transportation industry. The Regulations are not expected to create, perpetuate, or reinforce any barriers to access for women within the transportation industry.

Implementation, compliance and enforcement, and service standards

Implementation

The Regulations come into force upon their publication in the Canada Gazette, Part II. However, existing businesses will have one year from the coming into force to complete their registration.

TC will use the following tools, among others, to facilitate the implementation of the Regulations:

Implementation of the database

The registration database will be fully operational and accessible through the TC website on the day the Regulations are published in the Canada Gazette, Part II.

TC operates a risk-based oversight program and takes into consideration important factors before taking any enforcement action. In the unlikely event of a system failure, a registration or update could be completed as soon as the issue is resolved. As such, renewal registration requirements could be delayed by a few days only under these circumstances.

In the event that a business is located in a place where Internet access is limited or impossible, the business could request a paper form from TC in writing, which they will complete and return by fax or by mail.

Corrections or administrative changesfootnote 28 will be required to be made by providing updates within 60 calendar days of a change and will be made directly in the database, except for businesses located in places with limited or no Internet access.

For all completed registrations that are saved and sent in the application database, a confirmation message, including a registration number for each Site, will be provided from TC.

Costs associated with the ongoing operation and maintenance of the database will be managed by TC within existing resources.

Compliance and enforcement

Training on the new requirements will be provided to TC TDG inspectors and provincial and territorial inspectors prior to the coming into force of the Regulations. This training may include a combination of classroom instruction, Web-based learning, advisory notes, bulletins, Frequently Asked Questions (FAQ) and enforcement instructions. Costs for such training will be managed within TC’s existing resources and training curriculum.

Following the transition period and after the first registrations come in, the system will be able to identify the types of businesses who are registering. TC will put in place targeted awareness campaigns to see that all businesses that could potentially be conducting DG activities, provided they are not under any exemptions, are prompted to register in the registration database within a specific time frame.

Compliance with the registration database requirements will be addressed using existing enforcement measures and personnel. Should an inspector identify non-compliance through an opportunity inspection,footnote 29 a letter will be sent to the company requiring that the company register within a specified time frame. When non-compliance to the TDG Act is detected, an inspector may issue a contravention under the Contraventions Act ($500 to $1,000) where an agreement exists between the Province and TC. In extreme or repetitive cases, a criminal prosecution can be considered with a summary conviction not exceeding $50,000 for a first offence.

Contact

Farrah Fleurimond
Executive Director
Regulatory Frameworks and International Engagement Branch
Transportation of Dangerous Goods Directorate
Department of Transport
Esplanade Laurier (ASDD)
300 Laurier Avenue West
Ottawa, Ontario
K1A 0N5
Email: TC.TDGRegulatoryProposal-TMDPropositionReglementaire.TC@tc.gc.ca