Summary of the Regulatory Amendments
There are four changes to O. Reg. 211/01. The
first two will enhance the safety of propane transfer facilities:
from Annual Inspections to Risk-Based Inspections
This change removes
the requirement for annual inspections of propane transfer facilities to enable
TSSA to fully implement its risk-based inspection-scheduling model. A
risk-based approach leads to a better use of regulatory resources by targeting
inspections at facilities that present the greatest risk, thereby enhancing
Minimum Insurance Requirements as a Condition of Licensing
requires a minimum level of commercial general liability insurance as a
condition of licensing for propane transfer facilities. For small facilities (Level
1), the minimum insurance amount is $1 million per occurrence. For large
facilities (Level 2), the minimum insurance amount is $5 million per
occurrence. This change enhances safety by giving both the insurer and the
insured an incentive to work together to minimize safety risks.
The remaining two changes seek to minimize
burden on business by enabling greater administrative efficiency and
the Decision Making Authority for Risk and Safety Management Plan
places the authority for the Level 1 Risk and Safety Management Plan (RSMP)
guideline with the Director of Fuels under the Technical Standards and Safety
Act (the Director), aligning it with that of the Level 2 guideline. This enables the Director to update the Level
1 guideline to incorporate enhancements or remove elements that are no longer
needed. This authority is consistent with the Director’s safety oversight
expertise and responsibilities.
to the Record of Training Requirement
This change simplifies
the current regulatory requirement for an officer, director, partner, or the
sole proprietor of a business to hold a record of training. This ensures that
the senior management of a business understand the safety requirements of their
propane operation without undue administrative burden.
Q1. What prompted the project to consider changes to the Propane Storage and Handling Regulation?
A1. The proposed amendments were based on the outstanding Propane Safety Review (PSR) recommendations from 2008 and submissions previously made by members of the propane industry and fire services to MGCS to enhance public safety and reduce administrative burden.
MGCS and TSSA co-chaired a series of in-person roundtable meetings between September 2013 and November 2013 to seek input and feedback on proposed amendments to O. Reg. 211/01.
Q2. Who was involved in the consultations?
A2. MGCS and TSSA established a roundtable of industry, fire services and consumer representatives. Roundtable members’ input and expertise helped MGCS and TSSA develop these proposals for broad consultation.
Q3. How many proposals were put forward for consideration?
A3. There were six proposals discussed by the roundtable.
1. Moving from annual inspections to risk-based inspections
2. Setting minimum insurance requirements as a condition of licensing
3. Aligning the decision making for Risk and Safety Management Plan (RSMP) guidelines
4. Simplifying the record of training requirement
5. Licensing propane distributors
6. Licensing offsite propane storage locations
Proposals 5 and 6 did not have sufficient incident and technical data and as a result, were not advanced beyond the roundtable level.
Q4. What other, if any, public consultations were undertaken besides the roundtable group?
A4. The final package of four proposed amendments (listed below) to O. Reg. 211/01 was posted to the Regulatory Registry on February 4, 2014 for a forty-five day period to solicit public comment.
- Moving from annual inspections to risk-based inspections
- Setting minimum insurance requirements as a condition of licensing
- Aligning the decision making for Risk and Safety Management Plan (RSMP) guidelines
- Simplifying the record of training requirement
Q5. How is moving from annual inspections to risk-based inspections safer?
A5. An inspection cycle based on risk means that higher-risk facilities will be inspected more frequently than those identified as lower-risk.A risk-based approach leads to a better use of regulatory resources by targeting inspections at facilities that present the greatest risk, thereby enhancing safety.
Q6. How has TSSA determined what inspection frequency is appropriate for my facility?
A6. The Propane Safety Review panel recommended that TSSA continue to inspect facilities annually as required until it had gathered the required data to develop a risk-based approach. TSSA has now gathered sufficient data and has built a rigorous model for risk-based inspection scheduling to determine the appropriate inspection frequency for each facility.
Instead of annual periodic inspections for all facilities, TSSA will schedule periodic inspections based on risk, from six months to three years depending on a facility’s risk score. For most licensees this change will reduce inspection costs.
Q7. How credible is risk-based scheduling? Is it used anywhere?
A7. TSSA has been using risk-based inspection scheduling for elevating devices in Ontario since 2010, and has been awarded a patent for its model in both Canada and the United States.
Q8. What is the advantage of using risk-based inspection scheduling?
A8. TSSA’s risk-based inspection scheduling model offers facility owners transparency and predictability by providing evidential basis for inspection frequency decisions.
Q9. How does the risk-based inspection schedule model work?
Q10. Is it possible for a facility currently classified as higher-risk to be re-categorized?
A9. The model consists of two steps:
1. Determining a facility’s risk score, which is a combination of its location residual risk and operational risk; and,
2. Determining the window of time within which a facility should be inspected to keep its risk within acceptable limits, based on a facility's risk score and the overall occurrence rate in the propane sector.
A10. Yes. While facilities with high-risk rating would be inspected more frequently, there is a focus on continuous compliance improvement. Demonstrating a strong safety and risk management culture could positively influence a facility’s risk score going forward.
Q11. Is there a structure for risk-based inspections?
A11. Yes, inspection cycles will fall into one of four categories.
- Every three years
- Between six months and two years
- Once every six months
Q12. Do you have details relating to the number of sites in each category?
A12. Yes. In general:
- 85% of sites will be inspected every three years
- 4% between six months and two years
- 6% annually
- 5% once every six months
Q13. How will you implement the change from annual inspections to risk-based inspections? How will I know what cycle applies to my facility?
A13. The implementation of risk-based inspections will require the notification of propane license holders of their new inspection cycle (which is based on the facility’s individually assigned risk score).
To find out your site-specific inspection frequency, please contact our Propane Licensing Department:
Phone: 416-734-3587 / toll free 1-855-734-3587
Q14. When will my first risk-based inspection take place?
A14. The date of the first risk-based inspection following implementation of this amendment will be based on the date of the last annual inspection.
Q15. The fee payment structure was aligned with a facility’s annual periodic inspection and license renewal. What can I expect with respect to costs and billing frequency?
A15. License renewal will continue to be based on an annual cycle. The license renewal invoice will no longer incorporate a pro-rated inspection fee. You will only be billed for your inspection after it has been completed.
Q16. Is there a financial advantage to this change?
A16. The overall yearly cost of inspections to the propane industry as a whole will decrease from an estimated $525,930 to $313,960 as a result of moving from an annual to a risk-based inspection cycle.
MINIMUM INSURANCE REQUIREMENTS
Q17. What does setting minimum insurance requirements as a condition of licensing have to do with safety?
A17. Insurance as a condition of licensing gives both the insurer and the insured an incentive to work together to minimize safety risks by establishing an additional layer of oversight on the business.
Q18. What are the minimum insurance requirements?
A18. The proposed minimum amounts are based on similar requirements in other jurisdictions and consultation with industry representatives.
|Type of Facility || Minimum Insurance|
|Level 1||$1,000,000 per occurrence|
|Level 2||$5,000,000 per occurrence|
Q19. Why is this minimum insurance requirement not applicable for another year (i.e. January 1, 2016)?
ALIGNING THE DECISION MAKING FOR RISK AND SAFETY MANAGEMENT PLAN (RSMP) GUIDELINES
A19. The Ontario Government wanted to ensure that operators were given ample time to make any necessary arrangements to comply with this requirement.
Q20. What does “aligning the decision making authority for Risk and Safety Management Plan (RSMP) guidelines,” mean to me as a facility operator?
A20. While the Director of Fuels has the authority to make changes to a Level 2 RSMP, he has no such authority for a Level 1 RSMP. The regulations refer to a specific document as the guideline for the contents of a Level 1 RSMP. Any update to this document requires the government to change the regulation.
Alignment of approval authority for both Level 1 and 2 guidelines, with both adhering to a specific process for change, as set out in the Level 2 guideline, is appropriate and consistent with the Director’s safety oversight expertise and responsibilities.
Following government approval, TSSA would remove the requirement to report the number of cylinder-fills and motor-fills, and the ten highest throughput days from the Level 1 RSMP.
Q21. Why is the Director being given authority over the RSMP template?
ADJUSTMENT TO THE RECORD OF TRAINING REQUIREMENT
A21. This change addresses the regulatory anomaly that currently exists – i.e. the Director has the authority to incorporate enhancements or remove elements no longer needed for Level 2 RSMP, but not Level 1. This authority is consistent with the Director’s safety oversight and responsibilities.
Q22. What exactly does “adjustment to the record of training requirement (ROT) mean?
A22. A corporation now has the flexibility to designate the appropriate senior management to hold the required record of training. The senior management person must be responsible for oversight of the corporation’s propane operations, i.e. an attestation/acknowledgment by the required ROT holder that:
It does not alter the ROT requirements for persons who handle propane directly.
- propane must be handled in accordance with the Technical Standards and Safety Act and its regulations
- all staff that handle propane must have at all times the training specified in the regulations
- a propane-related incident has the potential to cause catastrophic harm to people and property
- This enables businesses to comply within their various organizational structures.