Environmental Response Regulations: SOR/2019-252

Canada Gazette, Part II, Volume 153, Number 14

Registration

SOR/2019-252 June 25, 2019

CANADA SHIPPING ACT, 2001

P.C. 2019-919 June 22, 2019

Her Excellency the Governor General in Council, on the recommendation of the Minister of Transport, pursuant to paragraphs 35(1)(d), (e) footnote a and (f)footnote a, subsection 182(1) footnote b and paragraphs 244(f) footnote c and (h) footnote d of the Canada Shipping Act, 2001 footnote e, makes the annexed Environmental Response Regulations.

Environmental Response Regulations

Interpretation

Definitions

1 The following definitions apply in these Regulations.

Act means the Canada Shipping Act, 2001. (Loi)

area of environmental sensitivities means an area containing threatened, vulnerable or endangered species or locations of cultural or high socio-economic significance. (milieux sensibles)

PART 1

Vessels

Classes of Vessels

Classes

2 (1) The following classes of vessels are prescribed for the purposes of subsection 167(1) of the Act:

Exclusions

(2) The classes of vessels that are prescribed by subsection (1) do not include

Definition of oil tanker

(3) In this section, oil tanker means a vessel constructed or adapted primarily to carry oil in bulk in its cargo spaces and includes the following vessels that are carrying a cargo or part cargo of oil in bulk:

Exception — Arrangement with a Response Organization

Exception

3 Paragraph 167(1)(a) and subparagraphs 167(1)(b)(ii) and (iii) of the Act do not apply in respect of vessels that are in waters north of latitude 60° N.

Maximum Quantity of Oil

Maximum quantity

4 For the purposes of paragraph 167(1)(a) of the Act, the prescribed maximum quantity of oil is 10,000 tonnes.

PART 2

Oil Handling Facilities

Classes of Facilities

Classes

5 For the purposes of sections 167.1 to 167.4 and subsections 168(1) and 168.01(1) of the Act, classes of oil handling facilities at which operations are carried out in relation to the loading or unloading of oil to or from a vessel referred to in section 2 are established according to their oil transfer rate as set out in the following table:

TABLE

Item

Column 1


Class of Oil Handling Facility

Column 2


Oil Transfer Rate (m3/h)

1

1

150 or less

2

2

More than 150 but not more than 750

3

3

More than 750 but not more than 2,000

4

4

More than 2,000
Exception — Arrangement with a Response Organization

Exception

6 Paragraph 168(1)(a) and subparagraphs 168(1)(b)(ii) and (iii) of the Act do not apply in respect of oil handling facilities that are located north of latitude 60° N.

Maximum Quantity of Oil

Maximum quantity

7 For the purposes of paragraph 168(1)(a) of the Act, the prescribed maximum quantity of oil is 10,000 tonnes.

Notification of Proposed Operations

Timing — section 167.1 of the Act

8 For the purposes of section 167.1 of the Act, the prescribed time to notify the Minister of the proposed operations relating to the loading or unloading of oil to or from vessels is at least 180 days before the commencement of those operations.

Submission of Plans

Time limit — section 167.4 of the Act

9 For the purposes of section 167.4 of the Act, the time within which to submit the prevention and emergency plans referred to in that section to the Minister is one year after the day on which these Regulations come into force.

Oil Pollution Prevention Plan

Content

10 The oil pollution prevention plan must contain the following:

Oil Pollution Emergency Plan

Content

11 (1) The operator of an oil handling facility must demonstrate in its oil pollution emergency plan that the operator has the ability to meet the requirements relating to the procedures, equipment and resources referred to in section 13 by providing the following information:

Other plans

(2) The operator must ensure that the oil pollution emergency plan takes into account any contingency plan for its geographical area that may affect the facility’s plan, including contingency plans that are issued by the Canadian Coast Guard or provincial or municipal governments.

Notification — exercise

(3) The operator must submit a written description of any exercise referred to in paragraph (1)(i) to the Minister at least 30 days before the day on which it conducts the exercise.

Plan Reviews and Updates

Annual review

12 (1) The operator of an oil handling facility must review the oil pollution prevention plan and the oil pollution emergency plan annually and, if necessary, update the plans to ensure that they meet the requirements of section 10 or 11, as the case may be.

Review — events

(2) The operator of an oil handling facility must review the oil pollution prevention plan and the oil pollution emergency plan when any of the following events occur and, if necessary, update those plans within 90 days after the day on which the event occurred:

Submission of updates to Minister

(3) If the operator of an oil handling facility updates the oil pollution prevention plan or the oil pollution emergency plan, the operator must submit the up-to-date plan to the Minister no later than one year after the update.

Record

(4) The operator of an oil handling facility must keep a record of the date and the results of each review of the oil pollution prevention plan and the oil pollution emergency plan conducted under subsections (1) and (2), including any updates, and must maintain the record for three years after the day on which it is created.

Procedures, Equipment and Resources

Procedures

13 (1) The procedures referred to in paragraph 168(1)(e) of the Act must include the following:

Equipment and resources

(2) The equipment and resources that the operator of the oil handling facility must have available for immediate use in accordance with paragraph 168(1)(e) of the Act are those

PART 3

Consequential and Related Amendments, Repeal and Coming into Force

Consequential Amendments to the Response Organizations and Oil Handling Facilities Regulations

14 The long title of the Response Organizations and Oil Handling Facilities Regulations footnote 1 is replaced by the following:

Response Organizations Regulations

15 Section 1 of the Regulations and the heading before it are repealed.

16 The definitions Oil Handling Facilities Standards and on scene in section 2 of the Regulations are repealed.

17 The heading “PART I” before section 3 of the Regulations is repealed.

18 Section 10 of the Regulations is replaced by the following:

10 A declaration submitted by a person or body for the purpose of subsection 660.4(1) of the Act shall be in the form set out in the schedule.

19 Part II of the Regulations is repealed.

20 The schedule to the Regulations is amended by replacing the references after the heading “SCHEDULE” with the following:

(Section 10)

21 The heading “PART I” of the schedule to the Regulations is repealed.

22 The schedule to the Regulations is amended by replacing “Response Organizations and Oil Handling Facilities Regulations” with “Response Organizations Regulations”.

23 Part II of the schedule to the Regulations is repealed.

Related Amendments to the Administrative Monetary Penalties and Notices (CSA 2001) Regulations

24 Part 1 of the schedule to the Administrative Monetary Penalties and Notices (CSA 2001) Regulations footnote 2 is amended by adding the following in numerical order:

Item

Column 1

Provision
of the Act

Column 2

Range of
Penalties ($)

Column 3


Separate Violation for Each Day

68.021

Section 167.1

1,250 to 25,000

  

68.022

Subsection 167.2(1)

1,250 to 25,000

  

68.023

Subsection 167.2(2)

1,250 to 25,000

  

68.024

Subsection 167.2(3)

1,250 to 25,000

  

68.025

Section 167.3

1,250 to 25,000

  

68.026

Section 167.4

1,250 to 25,000

  

68.051

Paragraph 168(1)(c.1)

1,250 to 25,000

  

68.061

Paragraph 168(1)(d.1)

1,250 to 25,000

  

68.091

Subsection 168.01(1)

1,250 to 25,000

  

68.092

Subsection 168.01(2)

1,250 to 25,000

  

68.093

Subsection 168.01(3)

1,250 to 25,000

  

68.094

Subsection 168.01(4)

1,250 to 25,000

  

25 The schedule to the Regulations is amended by adding the following after Part 13:

PART 14

Violations of the Environmental Response Regulations

Item

Column 1


Provision of the Environmental Response Regulations

Column 2

Range of
Penalties ($)

Column 3


Separate Violation for Each Day

1

Subsection 11(3)

600 to 10,000

  

2

Subsection 12(1)

1,250 to 25,000

  

3

Subsection 12(2)

1,250 to 25,000

  

4

Subsection 12(3)

1,250 to 25,000

  

5

Subsection 12(4)

600 to 10,000

  

Repeal

26 The Environmental Response Arrangements Regulations footnote 3 are repealed.

Coming into Force

S.C. 2014, c. 29

27 These Regulations come into force on the day on which section 69 of the Safeguarding Canada’s Seas and Skies Act comes into force, but if they are registered after that day, they come into force on the day on which they are registered.

REGULATORY IMPACT ANALYSIS STATEMENT

(This statement is not part of the Regulations.)

Issues

The growth of the production of oil and petroleum products in Canada has increased over the past decades. This has resulted in a rise in the number and size of vessels transporting petroleum products, as well as an increase in the number of oil handling facilities (OHFs). footnote 4 Transport Canada estimates that there are approximately 20 000 oil tanker movements off the coasts of Canada each year (e.g. vessels transporting oil to OHFs). Of these, approximately 17 000 (85%) oil tanker movements are on the Atlantic coast. footnote 5Government intervention through regulations and monitoring of oil transfer procedures between vessels and marine facilities is intended to mitigate risks through prevention, preparedness and emergency response, which ultimately could reduce the likelihood and impact of a discharge at OHFs and its associated environmental effects. The Canada Shipping Act, 2001 (CSA, 2001) requires that an OHF maintain an oil pollution emergency plan (OPEP) footnote 6 as well as an oil pollution prevention plan (OPPP) footnote 7 to ensure that OHFs are prepared to respond to a discharge of oil during the loading or unloading of a vessel. While the OPEP requirements are laid out in Part II of the Response Organizations and Oil Handling Facilities Regulations (subsection 12(2)), there are currently no federally prescribed requirements for OPPPs, leading to an overall lack of preparedness should an oil spill from an OHF engaged in the loading or unloading of a vessel occur.

Background

In accordance with its mandate, Transport Canada fosters a safe and efficient marine transportation system by promoting environmental responsibility concerning oil spills in waters under Canadian jurisdiction.

In 2013, a report concerning the transportation of hydrocarbons footnote 8 was issued by the Standing Senate Committee on Energy, the Environment and Natural Resources. Transport Canada undertook a review of domestic and international regulatory regimes to compare the transport of hydrocarbons by transmission pipelines, marine tanker vessels, and railcars. footnote 9 Following this report, recommendations were made to enhance the safety elements of bulk transport of hydrocarbon products in Canada. This report aligned with the Government of Canada’s commitment to Canadians to pursue responsible economic development while safeguarding the environment through initiatives such as the Oceans Protection Plan. The Plan, which was announced on November 7, 2016, allows an increased response capacity on all three coasts in order for the Government of Canada to be in a better position to work closely with Indigenous and local communities in assessing risks and responding quickly to marine emergencies and pollution incidents.

Between 2013 and 2018, the Transport Canada Situation Centre and the Canadian Coast Guard (CCG) reported over 100 separate oil spills into waters within Canadian jurisdiction coming from OHFs and vessels combined. The largest oil spill occurring during that time frame from an OHF was a spill size of 635 L of petroleum product. Although most spills are relatively small in nature, under 20 L, the continued development of oil production and the increase in vessel traffic will pose continued risks associated with pollution releases. Transport Canada amended the CSA, 2001 in 2014 to strengthen pollution prevention and planning for over 300 Canadian OHFs. Most of the amendments to the CSA, 2001 that were made in 2014 have not been brought into force because regulations had to be made.

International

Various international agreements require Transport Canada to fulfill its roles in the prevention and preparedness of marine oil pollution incidents. Canada is a Party to the International Convention on Oil Pollution Preparedness, Response and Co-operation (OPRC) footnote 10 and is required to establish measures for dealing with pollution incidents, nationally and in cooperation with other countries. The International Convention for the Prevention of Pollution from Ships, 1973, as modified (MARPOL), to which Canada is also a Party, seeks to eliminate intentional pollution of the marine environment resulting from ship operations and to minimize accidental discharges of pollutants. The United Nations Convention on the Law of the Sea (UNCLOS) includes measures to prevent, reduce and control pollution of the marine environment. Transport Canada administers and enforces these conventions through the CSA, 2001 and its associated regulations.

Domestic

Transport Canada, in consultation with the private sector, undertook the development of Canada’s National Oil Spill Preparedness and Response Regime footnote 11 (the Regime) in 1995. This partnership between government and industry has become one of Canada’s most important tools for preparedness and response to marine pollution incidents. The requirements for the Regime are set out in the Response Organizations and Oil Handling Facilities Regulations, published in 1995, and the Environmental Response Arrangements Regulations, published in 2008. This Regime provides the framework for preparing and responding to ship-source oil spills in the marine environment under Canadian jurisdiction, including those spills that occur during the loading or unloading of hydrocarbons to or from a vessel at an OHF in Canadian waters.

The oil and petroleum product industry has the liability and responsibility to respond to oil spills in the event of a marine incident in Canadian waters, while several federal departments provide the legislative and regulatory framework for the Regime to oversee the industry’s preparedness and actions during a spill, should one occur. The CCG manages and monitors the polluter’s response, which may utilize its own resources, a response organization, and/or some other service provider to conduct a response. In the event that the polluter is unable or unwilling to respond or is unknown, the CCG will monitor, oversee and manage the response.

OHFs that are located south of latitude 60° N and prescribed vessels footnote 12 that transfer oil between vessels and prescribed classes of OHFs footnote 13 in these locations are required to have an arrangement with a government-certified response organization. Oil handling facilities located north of latitude 60° N are not required to have an arrangement with a response organization, but must meet all of the regulatory requirements in terms of readiness and preparedness should an oil spill occur, according to their level of oil transfer rate.

On July 1, 2007, the CSA, 2001 replaced the Canada Shipping Act, which significantly modernized the legislative framework and included a clear role to “protect the marine environment from damage due to navigation and shipping activities.” The CSA, 2001 also added new enforcement tools such as administrative monetary penalties (AMPs) to promote compliance with regulatory requirements.

With the view to modernize the Response Organizations and Oil Handling Facilities Regulations and the Environmental Response Arrangements Regulations, Transport Canada initiated a working group to review these regulations and relevant supporting standards.

The bill formerly known as Bill C-3, Safeguarding Canada’s Seas and Skies Act, footnote 14 which received royal assent in December 2014, introduced further changes to the CSA, 2001 to increase federal oversight of OHFs. Some of the amendments “not in force” footnote 15 concerning provisions to the Act respecting the loading or unloading of oil to or from a vessel from an OHF include notifying the Minister and declaring their operations through a notification process in addition to developing the appropriate oil prevention and emergency plans.

There are currently regulatory requirements with respect to OPEPs for OHFs of a prescribed class but no regulatory requirements with respect to the prevention of oil spills/discharges during the loading or unloading of a vessel. This means that when oil is loaded on or unloaded from vessels there are no federal prevention plan requirements for the OHFs to follow. Oil spill incidents have decreased drastically over the years, mostly due to the strengthening of the International Maritime Organization, the CSA, 2001 and regulations. The National Aerial Surveillance Program (NASP) data shows a decrease of 79% of oil volume spilled in waters within Canadian jurisdiction in 2017 compared to 1992, the year the NASP was created.

At the provincial level, there are some existing requirements for OHFs to have OPPPs; however, these plans pertain to the OHF operations only and do not take into account preventative and safety measures specifically required during the transfer of oil between an OHF and a vessel.

The modernization of the Regime is being implemented through two regulatory phases. In the first phase, the Environmental Response Regulations will prescribe requirements for OHFs, and bring into force some of the Safeguarding Canada’s Seas and Skies Act provisions related to OHFs. As a result, during that first phase, Part II of the existing Response Organizations and Oil Handling Facilities Regulations and the Environmental Response Arrangements Regulations are repealed. The second regulatory phase would address specific requirements related to response organizations and their role in response measures related to vessels of prescribed classes and OHFs of prescribed classes during an oil spill incident. Part I of the existing Response Organizations and Oil Handling Facilities Regulations would then be repealed and the remaining provisions would migrate to the new Regulations.

Objective

The principal objective of the Regulations is to improve the effectiveness of Canada’s Oil Spill Preparedness and Response Regime for prescribed vessels and OHFs while transferring oil to and from vessels. Enhanced prevention and planning activities by the OHFs, in conjunction with increased compliance and enforcement by Transport Canada, provides a state of readiness.

The Regime’s improvements will better prepare OHFs of prescribed classes during an oil spill incident with new OPPP requirements, which will mitigate the risks of polluting shorelines and sensitive areas, fundamental for Indigenous and local coastal communities.

Description

Some OHFs already have OPPPs; however, provincial requirements for OPPPs do not specifically take into account preventative and safety measures required during the transfer of oil between an OHF and a vessel.

The Regulations introduce measures for the development of an OPPP under the CSA, 2001, an annual review and update of the plans at OHFs, as well as record keeping of dates and the results of each review. New oil handling facilities need to declare their operations to Transport Canada 180 days prior to starting up business.

Specifically, the Regulations set out the prescribed requirements for the OPPP, including the transfer of existing requirements for the OPEP contained in the Response Organizations and Oil Handling Facilities Regulations. The prescribed requirements for the OPPP include elements needed to help prevent an incident from happening, such as

With respect to enforcement, consequential amendments to the Administrative Monetary Penalties and Notices (CSA 2001) Regulations are also included in the Regulations to increase the tools available to the Minister to ensure compliance and better support enforcement actions, where they are needed. The administrative monetary penalties range from $600 to $25,000 for specific provisions of the Environmental Response Regulations based on Part 8 of the CSA, 2001.

“One-for-One” Rule

The “One-for-One” Rule applies because the affected oil handling facilities would incur incremental administrative costs after the implementation of the Regulations. It is considered to be an “IN” under the Rule.

The incremental administrative costs are associated with the requirements of (1) keeping a record of the date and the results of each review of the OPPP and the OPEP, and (2) the requirement for a new OHF to provide notification to the Minister of Transport 180 days in advance of commencing operations related to the loading or unloading of oil to or from vessels.

Table 1. Administrative requirements and estimated costs

Administrative requirements

Assumptions

Administrative burden costs

1. Keeping a record of the date and results of OPPP and OPEP reviews

1. There would be two new OHFs starting operations each year.

2. It would take approximately 15 minutes to keep a record of the date and results of each review of OPPP and OPEP.

3. A supervisor or manager would be responsible for keeping the record.

4. The supervisor’s wage rate is $37.61/hour (overhead included). footnote 16

The increase in administrative cost would be approximately $3,731 (constant 2012 dollars) in annualized value.

Given total affected 352 OHFs (existing and new projected in 10 years), the estimated annualized administrative costs per business would be $11 (constant 2012 dollars).

2. Notification prior to commencing operations

1. It would take approximately 15 minutes to notify a Transport Canada regional office and advise a marine safety inspector (MSI) by email or telephone about the intention to begin operations for a new OHF.

2. A supervisor or manager would be responsible for the notification.

3. The supervisor’s wage rate is $37.61/hour (overhead included). footnote 17

  

Small business lens

The small business lens does not apply to these Regulations because its estimated nationwide cost impacts are under $1 million annually. The incremental industry costs (compliance and administrative) on affected small businesses would be $234,383 in annualized value. These costs would not be disproportionately high for the small businesses expected to be impacted.

Consultation

Transport Canada consulted extensively on the Regulations at various national and regional forums between 2010 and 2017. The Regulations were first discussed with stakeholders at the national Canadian Marine Advisory Council (CMAC) footnote 18 meeting in 2010, and a discussion paper was presented at that time. Subsequently, several meetings were held with response organizations and industry. At that time, Transport Canada received 55 comments which were considered as part of the 2014 changes to the CSA, 2001. In 2016, a comprehensive discussion paper and the draft of TP 14909E – Environmental Response Standards (ERR Standards) related to the Regulations were circulated by email to stakeholders through the CMAC Secretariat. An update of the regulatory changes was also provided to stakeholders at the national spring CMAC meeting in 2016. The documents were also distributed directly to key marine stakeholders such as OHFs, footnote 19 response organizations, footnote 20 and regional advisory councils. footnote 21

Generally, respondents were supportive of the Regulations and believe the changes and updates will serve to strengthen prevention and response capacity. During the fall of 2016, a total of 38 comments were received, reviewed and assessed by Transport Canada. Replies to those specific stakeholder comments and questions were prepared and responses were sent in March 2017. Further changes were made to the Regulations following a review conducted by Transport Canada.

Some stakeholders noted that prevention plans may already exist that contain a large portion of the regulatory requirements, therefore potentially creating unnecessary duplication. To minimize duplication of effort, the Regulations permit an existing OPPP, prepared on a voluntary basis or in accordance with the requirement of another Act of Parliament or the legislative requirements of another government, to be used as long as it meets all the requirements of the Regulations. If the existing plan does not meet all the requirements specified by the Regulations, the plan must be amended to be in compliance with the Regulations. It is anticipated that this flexibility could reduce the costs associated with OHFs.

The definition of “changes in personnel” was also questioned as was the trigger to consider submitting a revised plan to the Minister. Transport Canada indicated that any change of personnel referenced in the plans would require an update. In regard to the Notice to the Minister within 180 days, it was clarified that this requirement pertains only to new OHFs. In terms of duplication of plans, Transport Canada will require two separate plans: one prevention and one emergency; however, if the facility wants to combine both plans, this would be acceptable as long as all of the requirements are met within each plan.

Further comments during the consultation process included the following:

Publication in the Canada Gazette, Part I

The Regulations were published in Canada Gazette, Part I, on December 22, 2018, for a 45-day period. A total of seven stakeholders across the regions provided comments addressing both the Regulations and TP 14909E – Environmental Response Standards (ERR Standards). The following comments were provided by those stakeholders:

ERR Standards

It was noted that vessels on location and engaged in the exploration or drilling for, or the production, conservation or processing of, oil or gas in an area described in paragraph 3(a) or (b) of the Canada Oil and Gas Operations Act cannot fall under the purview of the Regulations, given subsection 166(2) of the CSA, 2001. Transport Canada has stated the non-application of the CSA, 2001 related to those areas in the ERR Standards.

A suggestion was made to add a reference to Schedule 2 of the ERR Standards for insertion into subsection 168.01(1) of the CSA, 2001. The Department considered this suggestion, however, Transport Canada will not be amending the CSA, 2001 at this time. This comment has been noted for future consideration when the CSA, 2001 is next amended.

In addition, within Schedule 2 of the ERR Standards, titled “Notification of Proposed Operations or Notification of a Change to Operations,” a stakeholder felt that the schedule was not clear on the types or magnitudes of change required that might trigger a notification; Transport Canada confirms that Schedule 2 would only be triggered based on specific criteria set out in Schedule 2 of the ERR Standards. For example, if an OHF wants to make a change to their transfer rate, they will need to complete Schedule 2 prior to commencing the change.

It was mentioned that the OPPP and OPEP are two separate plans. If the elements of both plans can be combined into one plan, it is acceptable as long as each component required by the Regulations can be clearly identified. Many members already have plans that will wholly or substantially meet the requirements of OPPPs as outlined in the ERR Standards, so this approach will help avoid duplication and associated administrative burden. While Transport Canada requires two separate plans, if a facility would like to combine the two plans, as long as they remain distinct and clearly show the requirements within the plans, this will be acceptable.

In terms of the OHF plans (the OPPP and the OPEP) and their familiarization, stakeholders were concerned with the real benefit of this measure in terms of prevention and safety. This comment also applies to activation procedures with regard to the internal/external notification systems, as these responsibilities are assigned to specific roles. Transport Canada will amend section 2.7.6.1 with the following proposed text to read: each OHF staff member involved in oil transfer and/or response operations is familiar with the contents of the OPPP and the OPEP and is proficient in the functions that may be assigned to them.

In terms of exercises, it was suggested that a real or perceived event that requires an OHF response and the deployment of resources or equipment as outlined in the plan, be the subject of duly recognized and documented exercises, and thereby contribute to the training and sharing of best practices for the benefit of all stakeholders involved. Transport Canada considers it to be feasible but the stakeholders should discuss this with their regional office.

On the subject of documentation for plans, Transport Canada does not oversee Safety Data Sheets (i.e. a summary document that provides information relating to the hazards of a product or substance, and advice about safety precautions for their use) which may be included in an OPEP/OPPP. The Department considers that a reference to the Safety Data Sheets is sufficient. These procedures can become considerable in size. Transport Canada recognizes that some may see this as being an administrative burden for the OHF. In addition, loading and unloading procedures that the OPPP contains can have a brief description of those procedures and should have a reference to more detailed procedures that can be accessed if required. Training was also a concern because of personnel turnaround which can require numerous updates to the plans. Transport Canada suggests that each trained person be listed either through their title or position.

Triggers for updating plans created comments related to the Notification of Proposed Changes to activities and potential triggers to update those plans. The Regulations state in subsection 12(1) that plans must be updated annually and based on the requirements in sections 10 and 11. If there is a change, a notification must be submitted by the OHF to Transport Canada. A further comment was raised on the lack of mention of needed approval by the Minister of Transport for the plans with Transport Canada officers. There is no need for formal ministerial approval for these two plans; however, before implementing the changes, the plans must demonstrate to the Marine Safety Inspector that all requirements are met.

On the subject of exercises and exercise programs, a comment was made that further clarification was needed for the terms “any exercise” versus “exercise program.” Transport Canada is changing the text in section 2.7.5 of the ERR Standards to refer to “a copy of the oil pollution exercise” referenced in paragraph 11(1)(i) of the Regulations.

Stakeholders commented that exercise requirements under OPEP within the ERR Standards require that each OHF meet the four types of exercises at the prescribed frequency. It is recommended that for larger “Deployment” and “Table Top – Management” exercises, OHF operators should have the option of holding combined exercises with other OHFs, and/or for other regulatory purposes (example: Environmental Emergency Regulations made under the Canadian Environmental Protection Act, 1999 for both efficiency and shared learning opportunities). This is also important to consider in the context of mutual aid agreements, and reliance on certified Response Organizations. An OHF operator cannot use a real incident as one of the above required exercises. However, the department understands that Response Organizations are able to do this. The Regulations related to training do not incorporate by reference the training section of the ERR Standards or the frequency of the exercises or combined exercises. Therefore, the criteria and types of training listed in the ERR Standards are examples only but are not legal requirements. Transport Canada recommends contacting the Transport Canada regional office to discuss training options.

Further recommendations by the stakeholder were that an OHF operator cannot use a real incident as one of the above required exercises. However, Response Organizations are able to do this, and mention that Transport Canada consider the same for OPEPs at an OHF. At this time, Transport Canada again recommends contacting the Transport Canada regional office to discuss exercise options.

The Regulations

Stakeholders commented on the “Review – Event” section of the Regulations with a recommendation not to designate as a violation that may be proceeded with by issuing notices of violation subsection 12(2) due to a potential misinterpretation. Transport Canada is requiring an update to the plan based on criteria that have been taken into account in subsection 12(2). These criteria include change in the law, environmental factors, personnel, gaps found within the plans or change in business practices. When one of these events occur, a plan update is required, taking into account conditions that would affect the loading and unloading of oil between the OHF and vessel. Subsection 12(2) will therefore be designated as violation.

From a safety concern, clarification was sought on activities related to Part II of the proposed Regulations to be carried out in the event of an oil pollution incident, where the name or the position of the persons responsible for carrying them out are taken into account in the plans. Transport Canada requires the name and position of the persons responsible for carrying out the activities in the event of an oil pollution incident. The OHFs have to ensure that personnel dealing with an oil pollution incident are mentioned in their plans. The stakeholder also recommended that the condition in paragraph 13(2)(b) of the current Response Organizations and Oil Handling Facilities Regulations be included in the Regulations as it relates to the safety of personnel. The Department will include the provision related to “unless deployment within one hour would be unsafe, ineffective or impracticable.”

Stakeholders asked for more clarity and precision of the term “equipment” in order to simplify management of the Regulations and to prevent unnecessary red tape for OHF operators. Transport Canada was told that OHF operators would have to provide a variety of unnecessary documents and information unrelated to transshipment and this would offer no real additional benefit in terms of prevention and safety. Transport Canada confirmed that the concept of equipment may change, and as technology changes, it would not be appropriate to specifically quantify the type of equipment or list the equipment. The OHF is responsible to ensure that the equipment owned and operated by the OHF, and used in the loading and unloading of oil, is maintained as per manufacturer specifications. In addition, the vessel is required to ensure that the equipment belonging to the vessel operator/owner used during the transfer operations is maintained as per manufacturer specifications. The OHF must also ensure that in the event of a spill coordination and communication exist between the OHF and the vessel involved. Another question related to hydrocarbons recommended that United Nations (UN) numbers that are unique to each product be referenced. Transport Canada has no authority over UN numbers and cannot consider this recommendation at this time.

Stakeholders also raised concerns on time and timeframes in which to carry out activities that are included in several sections of the Regulations, stating that there was a lack of clarity. For example, paragraph 11(1)(c) states that the anticipated time for each of the listed activities must be indicated. In practice, however, it is impossible to specify the exact time required for each of these activities since emergency plans and procedures must be versatile and adaptable to accommodate a wide range of possible incidents. Stakeholder activities involve several types of products and different types of ships that manœuvre in unique ways. Therefore, it is not possible to include a description of specific timelines for each and every case. Transport Canada recognizes the challenges of an OHF and its operations and does not require a fixed timeline to perform these activities, as many factors can influence these activities. A draft timeline would be acceptable.

A comment was received related to activities to be carried out in the event of an oil pollution incident, and the order in which and the time within which those activities are to be carried out, requiring the name or the position of the persons responsible for carrying them out. Transport Canada does require the name and position of the persons responsible for carrying out the activities in the event of an oil pollution incident. Even if there are recurrent staff changes, the OHFs have to ensure that personnel and not just their responsibilities are mentioned in their plans. The Regulations have removed subsection 13(2) of the current Response Organizations and Oil Handling Facilities Regulations that accounts for the safety of the personnel deploying the resources, and the environmental conditions that would render the deployment ineffective or impractical. Transport Canada will reinstate “unless deployment within one hour would be unsafe, ineffective or impracticable.”

Another issue was subparagraph 13(2)(b)(ii) of the Regulations conveying that oil must be recovered and cleaned up within six hours of the discovery of the spill. It was raised that the wording in this provision is open to interpretation and suggests that everything must be recovered and cleaned up within six hours of the discovery of the spill instead of “starting to begin recovery within six hours.” Transport Canada understands that there can be mitigating circumstances affecting the timeframe of an oil spill recovery and cleanup. A six-hour window ensures that the OHF is prepared and ready to begin recovery and clean up as soon as is reasonable. The Marine Safety Inspector will be available to work with the OHFs to recognize the rationale, should a cleanup take a lengthier period of time. There was a concern with subsection 12(2) of the Regulations which stipulates that the OPPP and the OPEP shall, if necessary, be updated no later than 90 days after an event occurs. Transport Canada does not want to increase administrative burden to industry, as a result of the review of the plans under paragraphs (a) to (d) of subsection 12(2) of the Regulations; however, these stated regulatory triggers must be documented and discussed with the Marine Safety Inspector who will require an update of the plan within the 90-day period. It is important for Transport Canada to have the most updated information related to the plans as soon as is feasible in case of a potential oil pollution spill.

Transport Canada has noted the amount of time that it takes to receive a response from Transport Canada to a plan, and regional offices have been notified of this issue. Transport Canada requires an annual update of both plans and a revision or update of a plan if an event described in subsection 12(2) or (3) occurs. The Regulations refer to several types of procedures in sections 10 and 11. The “procedures” are to be incorporated into the plans and are not a separate document.

In an OPEP, the stakeholder understands that training records for the plan require a listing of each individual person trained versus their position name or title. This requirement can be updated through position, so that individual names in training records do not cause undue administrative burden by triggering an OPEP update every time there is a change in personnel. However, as per paragraph 12(2)(b) of the Regulations, if there is a change of personnel involved in the transfer of oil a plan update is required.

Transport Canada sent all participating stakeholders official responses in the spring of 2019.

Rationale

Matters relating to pollution prevention and preparedness activities for prescribed classes of OHFs interfacing with vessels during the loading or unloading of oil are key elements in Transport Canada’s effort to reduce pollution and to diminish the overall risk to human health and the environment. The impact of these changes will further mitigate the incidence of oil spills between oil handling facilities and vessels, which will benefit Canadians, coastal communities, and the marine environment.

It is important to also note that OHFs may have provincial prevention plans, but these plans do not cover the necessary requirements during the transfer of oil between the OHF and the vessel, which are regulated specifically in the Regulations. In addition to a gap in preparedness, the lack of federally prescribed regulations for OPPPs outlining plan requirements have led to a lack of clarity for the industry. Furthermore, existing CSA, 2001 regulations pertaining to OHFs do not require new OHFs to notify Transport Canada before they commence operations, impacting oversight capabilities, pre-inspections and sharing of valuable information on preparedness and response to oil spills. Updating the current regulatory regime for OHFs will enable Transport Canada to provide strong start up oversight to new oil handling facilities as well as the existing OHFs with a review of their oil pollution emergency and prevention plans. New provisions for these requirements were developed through the Safeguarding Canada’s Seas and Skies Act. Some of the CSA, 2001 provisions in that Act are not currently in force, and require supporting regulations.

A federally regulated OPPP will provide oversight that may help to reduce operational costs by decreasing the facility’s chances of creating environmental contamination that may result in environmental liabilities and large-scale cleanup requirements with associated costs. This will increase efficiency through innovative pollution prevention techniques identified and implemented under the pollution prevention program.

Also, the legislative authorities of the Minister of Transport are being broadened to direct the OHF to review and update or revise their plans if necessary on an annual basis.

Benefits
Improvements to Canada’s Oil Spill Preparedness and Response Regime

Evidence has indicated that an OPPP is one of the most effective and valuable tools to be employed in oil spill preparedness, prevention and response. footnote 22 After the implementation of the regulatory requirement of OPPPs, Canada’s Oil Spill Preparedness and Response Regime under the Regulations is expected to improve in terms of better preparation by OHFs and stronger oversight from Transport Canada. OPPPs and OPEPs would be the only plans that cover both the prevention and emergency measures during the transfer of oil between an OHF and a vessel. The OPPP requirement would provide greater clarity and help to reinforce the responsibility of OHFs to prevent discharges as a result of loading or unloading oil in bulk to and from prescribed vessels. OHFs would be better prepared, and compliance rates are expected to increase, which would in turn mitigate risk of oil spills. footnote 23

Reduced pollutants to the marine environment

The Regulations set out prescribed requirements for the OPPP, including the procedures for equipment and personnel resources that are engaged in the loading and unloading of a vessel, to be prepared to take on the responsibilities and have the capabilities of preventing, mitigating and responding to a discharge of oil. The operator of an OHF is required to keep a record of the date and the results of each review of OPPP and OPEP for three years.

The OPPP includes effective oil spill prevention practices, which are viewed as critical to ensure the protection of the marine environment and reduce environmental damages from oil pollution incidents. Consequently, it will be beneficial to the Canadian public because there would be fewer risks of marine pollution incidents in Canadian waters.

Costs

With the implementation of the Regulations, affected OHFs will incur incremental costs associated with the development, review and update of the OPPP, with keeping a record of the date and results of each review of the OPPP and the OPEP, with the 180-day notification to the Minister of Transport prior to commencing operations, as well as with the training of personnel in the OHFs who are engaged in the loading or unloading of oil in oil pollution incident response or with any other training in relation to an oil pollution incident.

The incremental industry costs (compliance and administrative) of the Regulations were estimated to be $4.03 million (constant 2017 dollars) in present value over a 10-year period using a 7% discount rate, which is equivalent to $0.57 million (constant 2017 dollars) in annualized value.

Data from Transport Canada for the Prairie and Northern Region (PNR) indicates that approximately 78% of OHFs in the Northwest Territories and Nunavut are territorial government-owned. The incremental cost impacts on those affected OHFs will therefore be on the territorial governments. It was estimated that the total incremental costs on provincial and territorial governments were approximately $0.16 million in present value over 10 years (constant 2017 dollars) using a 7% discount rate, which is equivalent to approximately $0.02 million (constant 2017 dollars) in annualized value.

Conclusion

The benefits of the regulatory changes enhances Transport Canada’s safety oversight of OHFs, helps deter and mitigate oil spills, and provides further strengthening in the preparedness and prevention of an oil spill between OHFs and vessels, should one occur. Further, it is beneficial to the Canadian public because the risk of oil spill pollution incidents in Canadian waters are reduced.

In summary, the incremental costs on all affected stakeholders (industry and territorial governments) were estimated to be approximately $4.19 million (constant 2017 dollars) in present value over 10 years using a 7% discount rate, which is equivalent to $0.59 million in annualized value (constant 2017 dollars). The average incremental cost per OHF would be approximately $11,451 in present value over 10 years using a 7% discount rate ($1,630 per OHF in annualized value) [constant 2017 dollars].

Implementation, enforcement and service standards

With implementation of the regulatory amendments, the following stakeholders would be potentially affected:

There will be incremental costs to the Transport Canada Environmental Response Program. The inspectors will be reviewing two plans instead of one. However, the program underwent modernization in 2016 and all the regions staffed new positions to tackle the new requirements, without overwhelming existing resources.

Oil handling facilities will be notified of the new requirements by Transport Canada. This would be done by issuing a publication notice by email through Transport Canada’s Canadian Marine Advisory Council (CMAC) Secretariat, ship safety bulletins and regional awareness initiatives. Non-compliance would be addressed initially through an education and awareness process prior to proceeding to AMPs, should more serious enforcement actions need to be taken.

The compliance oversight approach for the Regulations will be similar to that taken for the current regulations, which includes maintaining a reporting system, a presence on Transport Canada’s website, and responding to inquiries from stakeholders. Regarding the new reporting requirements, it will be necessary for stakeholders to submit updates to their current plans within the year from the date of the last submitted plan, following the coming into force of the Regulations.

The AMPs method of enforcement has been implemented as an alternative to prosecution for offences because of its expeditiousness, which can provide cost savings to Transport Canada. As a matter of general policy, vessels and corporations will be subject to higher penalties than individuals. When there is a violation, the penalty amount would be determined within the range that would be specified within the Administrative Monetary Penalties and Notices (CSA 2001) Regulations using departmental policies and guidelines. If the penalty associated with the violation is not paid or appealed to the Transportation Appeal Tribunal of Canada (the Tribunal) within 30 days of the issuance of the notice of violation, it becomes a debt due to Her Majesty. The Tribunal has full jurisdiction regarding complaints and appeals with respect to administrative monetary penalties under the CSA, 2001, and ensures procedural fairness.

Transport Canada conducts systematic compliance oversight for each region and has the responsibility of providing environmental response specialists who make available their expertise to the industry on regulatory requirements. The Marine Safety and Security Management System provides the framework for Transport Canada marine safety inspectors to conduct inspections and monitor oil handling facilities. Departmental reporting is generated through this framework, where level 1 and 2 OHFs are inspected every three years, whereas level 3 and 4 OHFs are inspected on an annual basis. Environmental response inspectors will inspect the facility to compare the actual site with the OPPP and OPEP submitted to Transport Canada.

Contact

Naim Nazha
Executive Director
Navigation Safety and Environmental Programs
Telephone: 613‑991‑3131
Email: Naim.nazha@tc.gc.ca