ARCHIVED—Trade Sector Review — Discussion

Retail Petroleum Trade Sector Review - Discussion Paper

Table of Contents

• Introduction
  
• Methodology
  
• Scope
  
  • Stakeholders
    
  • Devices
    
  • Commodities
    
• Criteria
  
• Overview
  
• Points of Discussion
  
  • Standards
    
  • Approvals
    
  • Device Initial Inspection
    
  • Subsequent Inspections
    
  • Commodities
    
  • Alternative Service Delivery
    
  • Complaints
    
  • Periodic Sector Review and Monitoring
    
  • Consumers Position
    
• Appendix I
  
  • RPSR Stakeholders List
    
• Appendix II
  
  • RFSR Team Members
    
• Appendix III
  
  • Recommendations from Other Sector Reviews
    
• Appendix IV
  
  • Measurement Canada's Current Lines of Business
    
• Appendix V
  
  • Definitions
    

Introduction

Measurement Canada’s (MC) mission is currently accomplished in most trade sectors through several key programs such as:

• calibration of test weights (measurement standards),
• approval of device types (measuring device types),
• initial inspection and certification of meters and dispensers (measuring devices),
• subsequent inspections and monitoring of meters and dispensers (measuring devices),
• verification of net quantity content of clerk served commodities (propane bottles),
• investigation and resolution of complaints related to measurement.

Historically, these programs have been implemented exclusively by Measurement Canada. However, with device numbers increasing, measurement technology constantly evolving and Measurement Canada’s present resource level, we can no longer fulfill our mission effectively. Consequently, Measurement Canada has established a new strategic direction that is designed to optimize the use of its resources in fulfilling its mission.

As part of this new strategic direction, Measurement Canada will, at a minimum, continue to:

• establish rules and requirements (for trade metrology),
• investigate complaints,
• monitor the marketplace, and
• where necessary, take action to ensure appropriate levels of compliance.

Measurement Canada will also assess the use of alternate means, such as the accreditation or registration of organizations to perform metrological activities determined to be necessary to the sector. These may include:

• initial inspection and certification of meters and dispensers (measuring devices),
• re-inspections or periodic re-verifications of meters and dispensers (measuring devices),
• calibration of test measures and provers (measurement standards),
• approval of device types (measuring device types),
• net quantity verification (propane bottles).

The primary purpose of the Retail Petroleum Sector Review (RPSR) is to establish an appropriate level of measurement related intervention to ensure accuracy in trade measurement. All adopted recommendations must be consistent with internationally accepted rules and standards. This will be an opportunity for stakeholders, especially vulnerable parties, to express their views on the need for Measurement Canada’s intervention.

It is our intention to create the necessary checks and balances in the Retail Petroleum Industry that will ensure a reasonable marketplace confidence exists and to set an appropriate level of direct intervention by Measurement Canada. The trade sector review is an opportunity for all sector participants to provide input into the decision making process. Adequate controls must exist within the sector to enable Measurement Canada to monitor, on a continuing basis, the level of confidence and satisfaction within the marketplace.

The purpose of this report is to explain the Retail Petroleum Sector Review project; to provide a list of discussion points; and to outline the current Measurement Canada legislation to aid further discussions at the regional consensus meetings.

Methodology

In order for the Retail Petroleum Sector Review (RPSR) to be successful, the direct input from interested and informed stakeholders is critical.

Since December of 2002, the RPSR Team has contacted and met with several representative clients consisting of various stakeholders from the retail petroleum industry and Canadian consumers. The purpose of these meetings has been to acquaint stakeholders with Measurement Canada’s programs and the Trade Sector Review process. In addition, the RPSR team has been actively soliciting views and comments from the stakeholders as to what future measurement programs they would like to see in the industry and how these programs could be best provided. The information obtained from these meetings forms the basis of this discussion paper and will be used to further identify the future direction of Measurement Canada’s involvement within the industry.

Consumer opinion is generally expressed from a non technical point of view. Therefore, their position is separate from the specific proposals contained within this paper, nonetheless, their voice must be taken into account in the project. Consumers were represented mainly by the group Option consommateurs. Primary feedback was received through several focus groups held across Canada during the Spring and Summer of 2003. The RPSR team has also invited several other consumer groups to participate in the project, and each will be invited back to participate in the regional consensus meetings.

The issues presented in this paper are those identified during the stakeholder meetings held over the last year. These issues will be used to provoke further investigations and discussions by the stakeholders to ensure that the project’s objectives are met. This paper forms the basis of the next phase, the regional consensus meetings.

It is imperative that the RPSR team obtains adequate representation from all stakeholders in the industry. These include large and small retailers, both independent and corporate, consumers and service providers. Especially important is adequate representation from the vulnerable parties, in this case, the consumer.

The RPSR team has used various methods of soliciting input from stakeholders including one-on-one meetings, telephone calls, the Measurement Canada website, email u.rptsr@ic.gc.ca, direct mail-outs, etc.. This discussion paper has been sent to all interested parties previously identified by the team. Additional copies are also available on Measurement Canada’s website. Although we have developed a discussion paper outlining the identified issues, we encourage all stakeholders to continue providing comments or concerns to the team for consideration in the final recommendations until the end of 2003 (other comments are always welcome by Measurement Canada).

The upcoming regional consensus meetings (fall/winter 2003/04) will be the forum in which the recommendations in this paper are turned into proposals which will be brought forward to Measurement Canada’s Senior Management Committee for consideration and implementation. The final recommendations for the level of intervention will be determined by consensus amongst all stakeholders. Recommendations are to be submitted to Measurement Canada Senior Management by May 2004.

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Scope

The Retail Petroleum Sector Review Team (RPTSR) has been tasked with reviewing Measurement Canada’s involvement in measurement issues directly and indirectly related to the Retail Petroleum Industry. The specific sectors included are involved in the retail measurement of gasoline, diesel fuel and propane at service stations and card/key lock facilities. It also includes the retail measurement of gasoline for small water craft at marinas; aviation fuel for light aircraft at local airports; and truck meters used primarily for residential heating fuel oil.

Stakeholders

A list of stakeholders that have contributed to this document is included in Appendix I.

Stakeholders:

• National, Regional or Independent Retail Petroleum Companies
• Associations for the Retail Sale of Petroleum
• Provincial Petroleum Regulators
• Petroleum Device Manufacturers
• Petroleum Device Service Companies
• Trade Associations
• Transportation Associations
• Consumer Groups

Devices

The Retail Petroleum Sector uses a limited number of types of measuring devices. For the most part, the two main measuring devices in use in this sector are fuel dispensers and card lock dispensers. Other devices used in the sector are liquid natural gas dispensers, truck mounted metering systems and small platform scales.

Fuel Dispensers: installed at the service stations and marinas. These are used to deliver gasoline, diesel fuel or propane to car, trucks, motorcycles, boats, etc. Most deliver one to three products from each pump and have a flow rate up to 90 litres per minute.

Card Lock Dispensers: installed at truck stops or bulk fuel distribution centres. These are used to deliver gasoline and diesel fuel to commercial vehicles such as cars, truck, semi tractors and heavy equipment. These dispensers have a flow rate up to 225 litres per minute.

Truck Mounted Meters: used exclusively for home heating fuel delivery. Large or medium sized delivery trucks with metering systems installed on board. These metering systems have flow rates up to 500 litres per minute.

Platform Scales: used for propane bottle filling. These are found at service station or propane bottle fill companies. These scales range in capacity from 100 kilograms to 500 kilograms.

Commodities

The RPSR Team will be looking at the net quantity inspections of Clerk Served propane (bottle fills) only. This is when propane bottles are filled by an attendant by weight using a platform scale.

Criteria
During the consultations, Measurement Canada will strive to reach a general consensus¹ amongst the stakeholders in determining the appropriate levels of intervention in the Retail Petroleum Sector. Decisions regarding the appropriate levels of intervention must be determined based upon the informed input from all parties to the transaction.

The following criteria will be used to formulate decisions during the consultation process:

1. Stakeholder Support - all stakeholders involved in the consultation are encouraged to actively participate to the degree possible, however certain conditions must be established:

• stakeholders must be informed on the issues up for discussion
• preferred weighting will be given to ‘vulnerable parties’
• dissenting opinions will be recorded and carried forward

2. Stakeholder Representation - Measurement Canada will encourage the participation, in the discussions, of stakeholders who are representative of the sector.

3. Consistent with Measurement Canada Mission and Strategic Direction - all decisions reached during consultations must be consistent with the department’s mission and established strategic direction. The use of viable Alternative Service Delivery options will be explored and implemented as appropriate.

4. Sustainable - Any recommendations carried forward must be able to be implemented and sustainable on an ongoing basis. All recommendations must be cost effective and must not unnecessarily suppress the emergence of new technology.

5. International Competitiveness - the recommendations of the sector must be consistent with ‘sound metrological practices’ and must not contravene any international requirements nor place Canada in breach of any international trade requirements.

The final recommendations for the level of intervention will be determined by consensus amongst all stakeholders. All recommendations from the Retail Petroleum sector review are subject to review and acceptance by Measurement Canada’s Senior Management Committee (SMC).

Overview

Disclaimer

Documents published by the Retail Petroleum Sector Review team are intended to generate discussion. All efforts are made to ensure that there are no errors or omissions in this document. However, in the case that this has inadvertently happened, the error(s) will be corrected in an updated version published on our website. No formal redistribution of this document will occur solely for this reason.

Introduction

The Retail Petroleum industry in Canada is approximately a $40 billion/year industry². In 2002, approximately 53 billion litres² of gasoline, diesel and propane were sold. Approximately two thirds of this were sold through major retail petroleum stations. The remainder were sold through independent retail stations as well as smaller chains. New retail petroleum stations at grocery chains are beginning to gain market share and play a bigger role in the marketplace.

The average Canadian family spends $1300 annually on automotive fuels. Automotive fuels are also a significant input cost to most other sectors as well. For the consumer, the rising prices have generated more concern on the measurement accuracy but for industry, cost of product as well as environmental requirements have made measurement accuracy a great concern.

The common practice for the large, medium and small retail petroleum chains is to have a maintenance program in place for their dispensers and meters. This ranges from having their dispensers and meters tested twice a year to having them tested once every two years. In most cases, the tolerances used for these calibrations is smaller than what is required by Measurement Canada. Most companies use a service company to perform these calibrations with the exception of a few that have their own in house service department.

The service companies involved in the industry use test equipment similar to that used by Measurement Canada. Some of the test equipment may be calibrated and traceable to a national standard but the majority is not. All of the test equipment used by service companies accredited to perform inspection on behalf of Measurement Canada is calibrated and certified to national standards by Measurement Canada.

¹See ‘Consensus’ in Appendix V

²Source: Statistics Canada CANSIM, table 405-0002.

Points of Discussion

General

Measurement Canada’s (MC) trade sector reviews strive to allow industry stakeholders and vulnerable parties to come to a consensus on how they would like Measurement Canada to intervene in their sector. At this time Measurement Canada has committed to providing the following services:

• establish rules and requirements (for trade metrology),
• investigate complaints,
• monitor the marketplace, and
• where necessary, take action to ensure appropriate levels of compliance.

Measurement Canada is looking for recommendations on how the Retail Petroleum Sector stakeholders and the vulnerable parties would like Measurement Canada to regulate the retails petroleum industry.

Services that Measurement Canada currently provides are:

• initial inspection and certification of meters and dispensers,
• subsequent inspection or periodic re-verifications of meters and dispensers,
• calibration of test equipment, test measures and provers,
• approval of device types,
• net quantity verification of propane bottles,
• accreditation to perform inspections on Measurement Canada’s behalf.

The recommendations may focus on these services or may be of a more general nature and focus on the measurement regulation of the industry as a whole. Currently, Measurement Canada has accredited service companies to perform initial inspections and subsequent inspections on its behalf and is willing to allow this type of program to extend to the other services listed if so desired by the stakeholders. A summary of recommendations from the Retail Food sector, Natural Gas sector and the Downstream Petroleum sector can be found in Appendix I and the full versions on Measurement Canada’s web page.

Standards

Discussion Points

1. Should all measurement standards be calibrated?
2. Should all measurement standards be traceable?
3. Should Measurement Canada be responsible to calibrate all standards?
4. Can other calibration organizations be used?
5. Should the type of standards used for calibration be regulated?

Background

The calibration frequencies are 1 year for test measures and 4 years for provers. Any measures or provers that are used to inspect and certify devices under the Weights and Measures Act and Regulations must be calibrated and certified by Measurement Canada. This applies to test measures and provers owned by industry or Measurement Canada. There are however no requirements for test measures, provers or other types of test equipment that are used for the general calibration of devices.

Approvals

Discussion Points

1. Should the device approval program be maintained?
2. Should Measurement Canada be the only device approval laboratory?
3. Can other approval laboratories be used?

Background

Currently Measurement Canada’s approval laboratory evaluates and approves all devices used in trade measurement in the retail petroleum industry. Device manufacturers are responsible to apply and submit devices to Measurement Canada for approval. Measurement Canada has mutual recognition with the United States to recognize approval test results. Most evaluations are still conducted by Measurement Canada under the Mutual Recognition Program.

Device Initial Inspection

Discussion Points

1. Should all devices be initially inspected prior to their first use in trade?
2. Who should provide this service?
3. Are there other options for initial inspections?

Background

Measurement Canada, as well as accredited organizations, conducts an initial inspection on every trade device prior to its first use in the retail petroleum sector. This inspection is conducted in the factory or on location depending on the device type and its installation.

Subsequent Inspections

Discussion Points

1. Is there a need for subsequent inspections?
2. What should trigger the need for subsequent inspections?
3. Who should perform subsequent inspections?
4. Who should ensure the inspections take place?
5. What should the frequency be?

Background

Measurement Canada currently does not have mandatory periodic inspections. The Weights and Measures Act and Regulations do not prescribe an inspection period for fuel dispensers, meters or scales in the retail petroleum industry. Measurement Canada does conducts random inspections to monitor industry compliance but some traders may not see a Measurement Canada inspector for many years. However Measurement Canada will not be expanding its inspection program to include subsequent inspection which will have to be conducted through some alternative service delivery.

Most traders have some type of maintenance program in place in which the accuracy of their measuring equipment is tested. This testing is done by private service companies or corporate maintenance staff. Many of these traders are concerned with inventory balances for monetary as well as environmental reasons.

With Measurement Canada not having a legislated inspection period, there is little incentive to have private service companies enroll in the accreditation program to allow them to inspect devices on Measurement Canada’s behalf. Shortly there will be another type of alternative service program, the registration program, that is currently being implemented in the Downstream Petroleum Sector. This program could be made available for use in the Retail Petroleum Sector if it is recommended by the stakeholders.

Commodities

Points of Discussion

1. Is there a need for a commodities net quantity inspection program for the propane bottle fill industry?
2. Can this type of program be effective?
3. Should Measurement Canada continue performing inspections under the commodities program or could another organization take over this responsibility?
4. Is there another way to test for compliance in the propane bottle fill industry?

Background

Measurement Canada performs commodity inspections on clerk served propane bottle fills. This is accomplished through anonymous test purchases, where an inspector presents a propane bottle to be filled and checks for the proper amount delivered. Measurement Canada does not have a legislated inspection period for the testing of locations where propane bottles are filled. However, ad-hoc inspections are conducted to determine how the industry is performing in this area.

Alternative Service Delivery (ASD)

Points of Discussion

1. What kinds of organizations should be permitted to become authorized service providers on behalf of Measurement Canada?
2. Is accreditation the ASD program of choice for device inspections in the retail petroleum sector?
3. Is registration the ASD program of choice for device inspections in the retail petroleum sector?
4. Are there other ASD programs that could work well for device inspections in this sector?
5. What ASD programs would work for standards calibration and/or device approvals?
6. How should ASD programs be monitored by Measurement Canada?

Background

Measurement Canada’s accreditation program allows organizations to be granted the authority to inspect and certify weighing and measuring trade devices provided that they implement a quality management program based on Measurement Canada's S-A-01 standard. There are few organizations that are accredited by Measurement Canada in the retail petroleum industry, but 60 or so organizations are accredited overall by Measurement Canada. (See the Measurement Canada web site under Accreditation and the Directory of Accredited Organizations.)

The program has not been well subscribed to as the lack of mandatory subsequent inspection has not provided the incentive for most organizations to implement an accreditation program.

Currently, Measurement Canada is developing another Alternative Service Delivery program, the registration program, that stems from the recommendations of the Downstream Petroleum sector. As of yet, Measurement Canada Alternative Service Delivery programs only apply to commodity inspections.

Recently, an alternative service delivery program was launched for standards calibration in the electricity and gas side as a result of the Electricity and Natural Gas trade sector reviews. This program requires the implementation of a quality management system.

In terms of approval, the mutual recognition program with the United States is the only existing form of alternative service delivery, however, most devices are being tested in Canada.

Complaints

Points of Discussion

1. Are complaints being handled satisfactorily?
2. Can organizations be responsible for resolving complaints adequately?
3. How should complaints be handled?

Background

Measurement Canada currently investigates all complaints reported to them. If any problems are found, enforcement action is taken as prescribed and the complainant is informed of the results. Measurement Canada legislation does not provide for any re-imbursement to the complainant. Complainants would have to pursue this on their own.

Periodic Sector Review and Monitoring

General

Measurement Canada will monitor compliance within all of the trade sectors where it intervenes to ensure that established levels of intervention are adequate to maintain stakeholder confidence. To facilitate this, Measurement Canada will need to establish performance indicators to measure sector compliance. Historically, performance indicators were mainly compliance rates for device and commodity inspections. These rates were determined from results obtained by Measurement Canada inspectors during periodic inspection cycles. Measurement Canada will only conduct future sector reviews if the monitoring of that sector (or these sectors) results fail to meet the performance indicators established.

Points of Discussion

1. How should the Retail Petroleum Sector be monitored?
2. What types of performance indicators should be used to monitor the sector?
3. What indicators should trigger a review by Measurement Canada?

Consumers Position

Consumer comments were solicited through various focus groups held across Canada. Various consumer and polling firms were used to solicit input. The following is a brief summary of some of the findings. The final report on Consumer opinion in the Retail Petroleum Sector will be available shortly.

Consumers generally feel that someone must take overall responsibility for accuracy in trade measurement in the Retail Petroleum Industry. Preferences expressed were that this role be the responsibility of government (Measurement Canada), but the use of authorized service providers was seen as generally acceptable and possibly even inevitable. There was concern expressed that allowing retailers to police themselves may not be acceptable due to the apparent conflict of interest. In any event, it was made clear that the government should continue to provide an integral monitoring role to ensure that any system was in fact unbiased and fair to all.

Few consumers were readily aware of Measurement Canada and its role within the marketplace. In some cases this lack of awareness turned to skepticism when advised of Measurement Canada’s role. Overall, measurement assurance seems to be taken for granted - everyone just assumes that someone is doing it although they’re not sure who.

There appears to be more trust in larger retailers than smaller ones. There also appears to be a higher confidence level in the use of newer technology electronic systems than there was in the older mechanical systems. Ultimately, consumers appear to be more concerned with pricing issues and the apparent fairness of a price than they do with accuracy.

Consumers have indicated that government (Measurement Canada) must continue to provide at least a monitoring role within the marketplace, while the use of suitably recognized 3^rd party service providers is generally supported.

Appendix I

RPSR Stakeholders List - by Company

• Amco Petroleum
• Association des entrepreneurs pétroliers du QC Inc.
• Association québécoise des indépendents du pétrole
• Association québecoise du chauffage au mazout (AQCM)
• Atlantic Marine Trades Association
• CAA Ontario
• Canadian Independent Petroleum Marketing Association
• Canadian Oil Heat Association
• Canadian Petroleum Products Institute
• Canadian Tire Petroleum
• Canadian Trucking Alliance
• Chevron Canada Ltd.
• Consumer Advocate
• Consumer Association of Canada (Nova Scotia)
• Consumer Group for Fair Gas Prices
• Consumers Council of Canada
• Coopérative fédérée de Québec, Division des pétroles Sonic
• Canadian Owners and Pilots Association
• Emeral Fuels
• Fas Gas Oil Ltd.
• Harbour City Propane Ltd.
• Husky Oil Marketing Company
• Imperial Oil
• Independent Retailers of Newfoundland and Labrador
• Irving Oil Corporation
• Island Regulatory and Appeals Commission
• John Reid & Sons Limited
• Kraus Group Inc.
• MacEwen Petroleum Inc.
• McDougall Fuels
• Moncton Flight College
• Mr. Gas Limited
• National Energy Equipment RNG
• Natural Resources Canada
• North Atlantic Petroleum
• Ontario Propane Association
• Option consommateurs
• Overwaitea Foods
• Petro Canada
• Petroleum Products Pricing Commission
• P.D. McLaren Ltd.
• Pioneer Petroleums
• Propane Gas Association of Canada Inc.
• Retail Gasoline Association for Nova Scotia
• Shell Canada
• Sunoco Inc.
• Superior Propane
• Tokheim & Gasboy of Canada Limited
• Ultramar
• United Farmers of Alberta
• Wayne Dresser
• Westfair Foods
• Wilson Fuel Co. Limited

Appendix II

Retail Petroleum Sector Review (RPSR) Team Members

For more information on Measurement Canada and Trade Sector Review, see our website or contact a member of the Retail Petroleum Sector Review Team:

Randy Latta
4940-93rd Avenue
Edmonton, AB
T6B 2L6
(780) 495-2610
(780) 495-7724 fax
Randy Latta: latta.randy@ic.gc.ca

Gilles Pelletier
P.O. Box 2294
Saint John, New Brunswick
E2L 3V6
(506) 636-4933
(506) 636-4928 fax
Gilles Pelletier: pelletier.gilles@ic.gc.ca

Larry Ranger
875 Notre Dame Avenue, Bldg. #3
Sudbury, Ontario
P3A 2T2
(705) 671-0633
(705) 671-0635 fax
Larry Ranger: ranger.larry@ic.gc.ca

Appendix III

Recommendations from Other Sector Reviews

General

This is a summary of the recommendations of the Natural Gas sector review, Retail Food sector review and the Downstream Petroleum sector review. The numbering of the recommendation is in line with the complete recommendations as some of the recommendations are not applicable to Retail Petroleum sector review. The complete versions of these recommendations can be found on Measurement Canada’s (MC) web page.

Natural Gas

1. Measurement Canada works closely with all stakeholders in moving quickly in implementing all of these TSR recommendations.

2. Measurement Canada continues to move to a more performance based approach to requirements and eliminate prescriptive based requirements where appropriate.

3. Measurement Canada develops impact and cost benefit analysis for changes to its intervention programs. Measurement Canada, through a consultative approach, determine the criteria that will define the triggers for implementing this analysis.

4. Measurement Canada, in consultation with stakeholders, should develop effective mechanisms to allow for the ongoing monitoring of the performance of measurement devices within the natural gas trade sector.

5. It is recommended that the role of Measurement Canada should be publicized and that this publicity should be directed towards consumers who believe that they have a problem with their gas meter that can not be resolved with their Local Distribution Company.

6. Measurement Canada should accelerate its efforts in discontinuing its inspection services of metering devices in order to promote viable alternate service delivery by accredited organizations.

7. Measurement Canada uses a Standards Council of Canada accredited Standards Development Organization to develop written standards for measurement and performance specifications. This includes the criteria for approval of type and other technical specifications, ensuring that Measurement Canada is represented on the "Technical Committees" responsible for each specification.

Decision of Measurement Canada (MC) Senior Management Committee (SMC): Recommendation not accepted; decision deferred. The SMC agrees with the principle of adopting a more transparent, inclusive, and formal process when developing requirements but wishes to conduct a pilot before deciding if it will use an Standards Development Organization (SDO) to develop specifications.

8. Measurement Canada, while retaining its legal and statutory accountability, develops an alternate service delivery mechanism for the certification of physical measuring standards, including recognizing international certifying bodies, where the criteria for the certification of the measuring standards are deemed to be, as a minimum, equivalent to the requirements in Canada.

9. Measurement Canada, while retaining its legal and statutory accountability, develops mechanisms for the timely, responsive and efficient "approval of type" of measuring devices. This may include alternate service delivery mechanisms, as well as recognizing the test results of international certifying bodies, where the criteria for the approval of type are deemed to be, as a minimum, equivalent to the requirements in Canada.

10. Measurement Canada's inspection services in the initial and periodic inspections of devices and installations for various trade transactions in the natural gas sector should be subject to varying degrees of intervention justified by the degree of sophistication of the parties involved. Criteria must be developed to define the different transaction types and the parties involved in each transaction.

Retail Food

1. Standards

1. All measurement standards must be calibrated (traceable).
2. All measurement standards must be recognized by Measurement Canada (MC).
3. Measurement Canada to evaluate the re-certification period to ensure that it is appropriate for the sector.

2. a) Devices - Approval

1. The approvals program should be maintained for all trade devices.
2. The responsibility for obtaining approvals should continue to rest with the manufacturer and/or importer of the device.
3. The use of other recognized laboratories should be continued and expanded when and where efficiencies may be realized.

2. b) Devices - Initial Inspection

1. All devices to be used in trade must be Initially Inspected before use.
2. Initial inspections to be provided by an Accredited (S-A-01) Service Provider.

2. c) Devices - Subsequent Inspections

1. Subsequent (In-Service) Inspections should be mandatory.
2. Targeting frequency to be based upon time (X years).
3. Subsequent (In-Service) inspections to be provided by recognized Alternate Service Delivery (ASD).

MC Decision: The mandatory re-certification period for the weighing devices in this sector will be five (5) years. How and when this five year period will apply to weighing devices will be determined and communicated during TSR (trade sector review) recommendation implementation. Subsequent inspections will only be performed by individuals/organizations formally accredited or registered by Measurement Canada .

3. Commodities

1. Measurement Canada continues to operate the Commodity Inspection program as per usual.
2. Measurement Canada and the Canadian Food Inspection Agency review their respective roles within the industry to ensure optimum use of resources.
3. Measurement Canada to determine actual compliance levels for "Clerk Serve" commodities.
4. Measurement Canada continues to be receptive to 3^rd party interest in this area.

MC Decision: Recommendation III rejected. Measurement Canada will continue its commodity inspection program and will dedicate resources to this program based on its priorities and resource availability.

Measurement Canada does not believe that allocating resources to low-risk areas in order to determine the industry's overall compliance would be a proper use of its limited resources. MC will continue to target areas where problems are known. If industry wishes to determine the actual compliance levels for "Clerk Serve" commodities, MC suggests that it could consider hiring an independent body to perform this work on its behalf.

5. Service Industry

1. All service providers must be either recognized or monitored by Measurement Canada (MC).
2. All service providers must use recognized, certified and traceable standards.
3. All service providers must use recognized test procedures to be provided by Measurement Canada.

MC Decision: Recommendation accepted but only for service providers performing inspection work. Measurement Canada will not recognize nor formally monitor organizations that are not accredited or registered to perform work on its behalf.

6. Complaints and Disputes

1. Disputes to be dealt with first between the primary parties (status quo).
2. Measurement Canada to remain responsible for dealing with unresolved disputes.
3. Measurement Canada increases its visibility in the marketplace.

MC Decision: Measurement Canada encourages consumers to raise their concerns or dissatisfaction with retailers at the time of the transaction in an effort to resolve issues directly with them, but will not require that they do so prior to contacting a MC office to register a complaint.

Under the Weights and Measures Act, Measurement Canada can only investigate complaints. There is no authority under the Act for resolving complaints and disputes, nor for arranging for compensation. MC will establish a policy, to be published on the MC Internet site, regarding how it intends to address and investigate complaints.

Regarding increasing its visibility, Measurement Canada will pursue initiatives that are cost-effective and appropriate for a government organization.

7. Alternate Service Delivery (ASD)

1. Mutual recognition of approval(s) laboratories to be continued and expanded when and where efficiencies may be realized.
2. Suitably recognized 3^rd parties to perform initial and subsequent inspections on Measurement Canada's behalf must be identified.
3. Measurement Canada should provide access to test procedures and requirements to ensure all interested parties are thoroughly familiar with them.
4. ASD of choice is Accreditation to Measurement Canada Accreditation Standard (S-A-01) for Initial and Subsequent Inspection.
5. An alternate ASD program to be developed for Subsequent Inspections only.
6. MC to accept Standards Traceability to the "International Prototype Kilogram".

MC Decision: Regarding recommendation II, the accreditation and registration programs will not be restricted to 3^rd parties. For example, a retail food chain which decides to create its own scale inspection department could apply for accreditation or registration.

With regard to recommendations IV and V, accredited organizations will be authorized to perform initial and subsequent inspections while organizations that are registered to perform inspections on MC's behalf will only be authorized to perform subsequent inspections.

8. Periodic Sector Review and Monitoring

1. Measurement Canada will establish an ongoing monitoring program that will include field inspections to monitor compliance levels for device and commodity.
2. Measurement Canada will intervene as necessary to ensure that compliance and confidence levels remain high. Critical issues must be dealt with immediately.
3. Measurement Canada will formally review the sector every 5-10 years to measure the level of satisfaction amongst the stakeholders, to assess the evolution of the sector and deal with non-critical issues.

MC Decision: Measurement Canada will monitor the marketplace and alternative service delivery providers to ensure that equity and accuracy are maintained in the retail food trade sector, and will report on performance indicators on an annual basis.

Measurement Canada will only perform periodic sector reviews when its marketplace monitoring information (e.g. MC inspections, complaints, industry data, industry ad-hoc feedback, etc.) indicates that there are signs of significant potential issues or cause for concern.

Downstream Petroleum

4. Measurement Canada continues to approve measuring devices that are destined for trade use.

6. Measurement Canada explores ways to expedite the approval process to permit industry to obtain the most current device technology by considering;

1. a complete review of the current Measurement Canada approval process to rationalize the full laboratory evaluation of devices, i.e., more performance based criteria rather than a design criteria (especially noted for temperature and pressure instruments) for approval purposes;
2. clearly define whether ancillary device components (i.e., pressure, temperature, density) be approved separately or as part of a complete measuring system;
3. the recognition of other countries' approvals provided the written standards tested to, would not result in a lowering of the current Canadian standards. The device would only be subject to those approval tests not accounted for, in order to supplement the existing approval data from other countries.

7. Measurement Canada continues to require an initial inspection and certification program for devices prior to being used in trade.

10. Measurement Canada provides for mandatory periodic re-certification frequencies for trade devices in the downstream petroleum sector. An initial frequency of 2 years to be established whereby all trade measurement devices are required to be re-certified.

11. A technical working group should be established and made up of industry and Measurement Canada, to study the optimum re-certification frequency of various measuring device types to consider factors such as the type of product being measured (meters), mobile versus stationary, remote locations, and throughput (meters).

13. Measurement Canada develops standard device installation templates to identify the component layout for compliance to the various measurement applications. Templates are needed to assist contractors with the installation and ASDM organizations performing initial inspection and certifications.

14. Measurement Canada provides for the adoption of legislation to formally require that all Level 3 physical working standards used for the calibration and/or certification of trade devices and ancillary instruments be accepted, calibrated, and certified by Measurement Canada at required intervals.

15. Measurement Canada provides for the adoption of legislation to formally require all that Level 2 physical reference standards that are used for the calibration and/or certification of Level 3 physical working standards be accepted, calibrated, and certified by Measurement Canada at required intervals.

July 2003 - Update: Recommendations 14 and 15

Measurement Canada has determined that the Weights and Measures Act will need to be modified to implement recommendations 14 and 15 for trade transactions involving pipeline meters. Under the present Act, Measurement Canada cannot require certification of physical standards used exclusively to calibrate meters. The legislative requirement applies only to physical standards used to perform inspections on behalf of Measurement Canada.

Measurement Canada is conducting reviews in several sectors and the resultant recommendations could potentially lead to other required modifications to the Weights and Measures Act. Consequently, Measurement Canada has decided not to pursue changes to the Act prior to 2006. Amending an Act is a lengthy process and this approach will allow Measurement Canada to incorporate recommendations resulting from more than seven sector reviews at the same time.

As 2006 approaches, Measurement Canada will be contacting stakeholders involved in transactions where pipeline meters are used to measure products to confirm their continued support for recommendations 14 and 15. In the interim, while Measurement Canada encourages the use of certified and traceable standards by all service providers, no program nor regulation will be introduced requiring organizations performing service work outside of Measurement Canada's recognition programs to use certified standards. Meter owners employing service providers not recognized by Measurement Canada to perform regular maintenance of their meters, may wish to include a condition in their service contract requiring these organizations to use certified and traceable standards.

16. Measurement Canada and the National Research Council continue to provide necessary standards calibration and certification services, where applicable, to maintain traceability to international standards.

17. Measurement Canada considers the use of Alternate Service Delivery Mechanisms for the calibration of Level 3 physical working standards.

Decision of MC SMC: Recommendation accepted. MC will "implement ASD ..." rather than "consider the use of ASD ..."

Considerations, conditions and/or limitations:
MC will also consider traceablility to the U.S. National Institute for Standards and Technology (NIST).

18. Measurement Canada maintains or adopts necessary requirements for the design, performance, operation, selection and usage, maintenance and frequency of re-calibration of physical measurement standards.

20. A technical working group should be established and made up of industry and Measurement Canada, to review design criteria for standards and to study the optimum re-certification frequency of various physical standards.

21. Measurement Canada creates a mandatory registration program for all service providers in the Downstream Petroleum industry that is designed and implemented in consultation with affected parties; this program would be focussed on the following elements:

1. technical knowledge of the technicians performing repairs and calibrations (continuous in-house technical training program);
2. knowledge of applicable legislation, proper inspection procedures and enforcement policies; periodic competency checks;
3. proper use/maintenance of appropriate traceable and certified physical standards and test equipment; and
4. other quality elements that are deemed essential.

Decision of MC SMC:

Partial Acceptance

1. MC will design and implement a voluntary registration (licencing) program.

2. The program will focus on device certification pursuant to the Weights and Measures Act and not on maintenance and repairs.

3. Service providers who limit their service offerings to repair and calibration only will not need to be registered (licensed) to perform this service.

4. All registered (licensed) organizations will be delegated the authority to certify devices on behalf of MC (once the voluntary program is in place).

5. Only organizations that are accredited or registered (licenced) will be authorized to perform mandatory periodic re-certifications on behalf of MC (Reference: Recommendation #10).

22. Measurement Canada delegates its authority for initial and periodic inspection certifications under the registration program described in Recommendation 21.

23. Maintenance work that is limited to performing calibration checks and breaking seals on ancillary devices be exempted from the registration program in Recommendation 21 if it has no impact on the device accuracy.

24. Measurement Canada implements adequate monitoring and reporting mechanisms which may include audits and product audits to ensure that organizations comply with the requirements of the registration program.

28. Measurement Canada continues, per its strategic direction to address complaints; review and revise written standards; programs should remain in place per the status quo.

29. Where programs and services are maintained, Measurement Canada remains the organization that monitors the marketplace and maintains/develops the necessary reporting mechanisms, to assess on-going performance of the marketplace and effectiveness of its programs; and to be the custodian of this information.

30. If Measurement Canada chooses to publish sector compliance rates for devices on the Measurement Canada web site, the information must be clear and meaningful.

31. Measurement Canada uses existing industry associations/contacts and the Canadian Forum on Trade Measurement for gathering input from the sector; the creation of sector advisory panels is not required.

32. Measurement Canada should be more proactive in marketing its services to the marketplace to address complaints.

33. Substantial fines/penalties should be imposed for non-compliance for device owners and organizations with delegated Measurement Canada authority to serve as a deterrent

34. The next sector review period be 2-3 years after the full implementation period, and 3-5 years thereafter.

July 2003 - Update: Recommendation 34

Measurement Canada monitors the marketplace and authorized service delivery providers to ensure that equity and accuracy are maintained in the various sectors. The implementation of the downstream petroleum sector review recommendations will result in enhanced Measurement Canada marketplace monitoring and annual reporting on sector performance by Measurement Canada (recommendations 29 and 30).

Consequently, Measurement Canada has reviewed its decision and decided it will only perform periodic sector reviews when its marketplace monitoring information (e.g., the results of Measurement Canada inspections, complaints, industry data and feedback) indicates there are signs of significant potential issues or cause for concern.

35. A more frequent sector review could be initiated should the following occur:

1. a decrease in device compliance rates;
2. an increase in complaints;
3. a major device technological change; or
4. a failure of the existing ASDM to satisfy the needs of the sector.

Decision of MC SMC: Recommendation partially accepted

Considerations, conditions and/or limitations:

1. MC believes that, in the case of a decrease in compliance rates, it would be more appropriate to take enforcement or corrective actions than undertake a trade sector review. Stakeholders would be kept informed.

2. Any sector wide corrective actions will take place in consultation with stakeholders.

Appendix IV

Measurement Canada's Current Lines of Business

Measurement Canada fulfills its mission through the following programs:

1. Establishment of measurement specifications - the Program Development division of Measurement Canada is responsible for the development of specifications, regulatory amendments, policies and procedures for weighing and measuring devices. When a new measurement technology emerges on to the marketplace, it will be approved and inspected against regulatory specifications and test procedures. Specifications are consulted and developed with industry representatives.
2. Maintenance and calibration of measurement standards - Measurement Canada, through its Calibration Services Laboratory, owns and maintains measurement standards (reference) that are traceable to the National Research Council primary base units of measurement. Standards of mass, length, volume, temperature, pressure, and electricity are calibrated and certified. These measurement standards are used by government inspectors and accredited and non-accredited parties. Measurement Canada also calibrates industry standards that are used to calibrate or certify trade measurement devices.
3. Pattern approval of new measurement devices - Measurement Canada, through its Approval Services Laboratory, must approve all weighing and measuring devices intended for trade use in Canada. All new and modified devices are examined and tested with respect to legislative requirements for design, composition, construction, and performance. This service is intended to ensure a population of measuring devices which are reasonably accurate throughout their lifetime and to minimize the possibility of fraudulent use. Note that Measurement Canada has not approved trade measurement devices in sectors where we do not currently have enforcement programs, i.e., pipeline meters, cryogenic meters, water meters, taxi meters, etc. Measurement Canada is a partner in a Mutual Recognition Program with our United States counterparts in order to harmonize requirements for the approval of weighing devices in both countries.
4. Initial inspection of new devices (verification) - Measurement Canada, through its field inspection staff, or accredited meter verifiers must inspect (initial inspection) weighing and measuring devices, unless exempted by the Act and Regulations, before they are used in trade. The intent is to ensure the devices meet approval criteria, are installed correctly and operate within the appropriate limits of error before its service life begins.
5. Periodic inspection of in-service devices (re-verification) - Meters for measuring electricity and natural gas are verified at specific intervals as set out by legislation pursuant to the Electricity and Gas Inspection Act. The intent is to ensure that previously verified meters, after being in use for a period of time, continue to operate within the applicable limits of measurement error.Measuring devices used to measure quantities of mass or volume, pursuant to the requirements of the Weights and Measures Act are verified, on an ad-hoc basis, throughout their lifetime to ensure that they are properly maintained, continue to measure accurately, and are not used in a fraudulent manner. At present, there is no mandatory re-verification period.
6. Inspection of installations - Measurement Canada, through its field inspection staff, inspect installations of electricity and gas metering systems where the impact of measurement error is high. The nature of some electricity and gas device installations are such that installation inspections are required to be performed on a periodic basis.
7. Commodity inspection - Goods and services traded on the basis of measure are inspected periodically to ensure that they are measured with prescribed tolerances. Commodities are generally inspected on a product/industry specific basis with emphasis placed on problem product/industries.
8. Complaint investigation - Measurement Canada, through its field inspection staff, will investigate complaints and advise affected parties of the result of the investigation, including where warranted, any corrective action instituted however, any compensation would normally be left up to the action of the parties involved.
9. Dispute resolution - Measurement Canada, through its field inspection staff, will investigate and resolve disputes via the dispute resolution process administered under sections 23 and 24 of the Electricity and Gas Inspection Act. This occurs when the buyer or seller of electricity or gas is dissatisfied with the condition of the registration of a meter or installation and cannot resolve the difference with the other party of the contract. Measurement Canada authorizes compensation when warranted.
10. Accreditation of qualified organizations to perform inspection work of approved devices - An organization may be granted the authority to initially verify, re-verify, and certify trade weighing and measuring devices on behalf of Measurement Canada provided that it meets the requirements of the program. Accredited organizations are periodically audited by Measurement Canada to ensure that the program is being carried out according to the standard.

Appendix V

Definitions - Stakeholder Consultation Definitions

These definitions are specific to the Retail Petroleum Sector Review and may or may not be relative to all aspects of Measurement Canada’s programs.

Alternate Service Delivery (ASD) Mechanisms: a program or programs which permit organizations to be authorized to deliver services on Measurement Canada’s behalf. [See also Authorized Service Providers]

Examples of ASD:
Measurement Canada Accreditation Program - allows organizations to be granted the authority to inspect and certify weighing and measuring trade devices provided that they implement a quality assurance program based on Measurement Canada's S-A-01 standard and comply with all aspects of the program. These arrangements are subject to audit by Measurement Canada auditors;

Measurement Canada Registration Program - allows organizations to be granted the authority to inspect and certify weighing and measuring trade devices without the requirement to implement a quality assurance program but must comply with the requirement of the Registration Program and Measurement Canada. On a regular basis through meetings, follow-up inspections and witness inspections, Measurement Canada will monitor registered organizations and recognized technicians.

Authorized Service Provider: an organization that has been delegated inspection, calibration and/or certification powers pursuant to the Weights and Measures Act or the Electricity and Gas Inspection Act.

Approvals: a mandatory step before any design or model of device may be sold as Legal for Trade in Canada. Prototype measuring instruments intended for trade use are evaluated for compliance with legislated requirements to ensure they are capable of measuring accurately under normal conditions of use and throughout their service lifetime and are approved for retail and/or commercial use. Once approved, an approval number is issued authorizing the use of the device type for Legal for Trade use in Canada. Weights and Measures approval numbers may be found on the device and will generally be in the format of SWA-XXXX or AM-XXXX. Once approved the device may be initially inspected before used in trade. [See also Initial Inspection]

Card Lock Dispensers: installed at truck stops or bulk fuel distribution centres. These are used to deliver gasoline and diesel fuel to commercial vehicle such as cars, truck, semi tractors and heavy equipment. These dispensers have a flow rate up to 225 litres per minute.

Commodity:
Prepakaged - Any product that is packaged in a container in such a manner that it is ordinarily sold to, used or purchased by a consumer without being re-packaged. Prepackaged commodities may be of random or predetermined sizes.

Clerk Served - Any product which is weighed or measured in the presence of the purchaser at the time of sale.

Computing/Counter Scale: refers to any of a number of scale types which function independent of a cash register and are used for direct sales to the public. These scales are commonly found on the counters of delicatessens, candy and confectionary stores as well as at the checkout of many smaller grocery and general stores.

Consensus: implies that the vast majority of stakeholders agree with the recommendations; there may continue to be stakeholders that would have preferred a different recommendation, but will accept the consensus view. [See also Unanimous]

Custody Transfer: the point at which possession of the product changes possession or ownership.

Device: for the purposes of this document, device means any measuring equipment designed to be used in trade.

Dominant Party: considered the purchaser or seller of a product who owns or controls the measuring device used in the trade transaction. [See also Vulnerable Party ]

Fuel Dispensers: installed at the service stations and marinas. These are used to deliver gasoline, diesel fuel or propane to car, trucks, motorcycles, boat etc. Most deliver one to three products from each pump and have a flow rate up to 90 litres per minute.

In-Service Inspection: the inspection of an individual device, subsequent to the initial inspection. Routinely performed by Measurement Canada inspectors on a random basis depending on resources and/or departmental priorities. This inspection program is not mandated by legislation. [See also Periodic Inspection]

Initial Inspection: the mandatory first inspection of an individual device before it may be placed into trade service. This inspection ensures that the device is installed and measuring correctly.

Legal For Trade / Legal For Use in Trade: the term used to describe a measuring device of a type which has been approved by the Measurement Canada approvals process. The device must be Initially Inspected before it may actually be used in trade. [See also Trade]

Legal Metrology: the science of measurement in legal for trade applications.

Legislation: for the purposes of the Retail Petroleum Sector Review, the term legislation and legislative requirements, refers to the Weights and Measures Act, Regulations and Specifications.

Level of Intervention: the amount of government involvement in regulating an industry sector to ensure fair and equitable trade measurement.

Majority: implies that the vast majority of stakeholders are in agreement with the recommendation: some stakeholders opposed the recommendation and the opposition was noted. [See also Consensus]

MC [Measurement Canada]: Measurement Canada, an agency of Industry Canada.

Metrology: the science of measurement.

OIML: Organisation internationale de métrologie légale (International Organization of Legal Metrology) - an international body established in order to promote the global harmonization of legal metrology procedures.

Performance Indicator: a means of ensuring the effectiveness of a program which has been implemented to assure that Measurement Canada’s mission, of ensuring equity in the marketplace, has been fulfilled. Although historically Performance Indicators have been synonymous with Compliance Rates, they may take other form as well. All programs, whether delivered directly by Measurement Canada or indirectly by a third party must be measurable.

Periodic Inspection: a term used to describe the type of inspection other than the initial inspection of a trade measuring device. The frequency of periodic inspections is not currently prescribed by Measurement Canada. [See also In-Service Inspection]

Platform Scales:used for propane bottle filling. These are found at service station or propane bottle fill companies. These scales range in capacity from 200 lbs to 1000 lbs.

Prover: Narrow neck standard with a capacity of normally 250 litres, 500 litres or higher. It is equipped with drain piping and a valve. It is usually mounted on a trailer. They are generally used to calibrate and verify meters with capacity exceeding 115 litres per minute such as a high speed dispenser for refuelling tractor trailers and a truck meter used primarily for residential heating fuel oil. Measurement Canada Inspectors, Accredited organizations and Registered Service Providers are required to used these standards. Service providers that mainly service and calibrate dispensers may not have certified test measures. [See also Volumetric Standard]

S-A-01:2002: this is the criteria for the Accreditation of organizations to perform inspections pursuant to the Electricity and Gas Inspection Act and the Weights and Measures Act .

Standards (test weights): refers to the actual test equipment or test weights usually calibrated or referenced to a national or international physical standard. The standards are then used to test trade measuring equipment or devices.

Subsequent Inspection: [See In-Service Inspection]

Test Measure: Narrow neck standard which is filled and emptied by the top and the capacity of which is normally 20 litres. Certified in relation to a reference standard. They are generally used to test and calibrate dispensers with a capacity of less than 90 litres per minute. Measurement Canada Inspectors, Accredited organizations and Registered Service Providers are required to used these standards. Service providers that mainly service and calibrate dispensers may not have certified test measures. [See also Volumetric Standard]

Test Procedures: refers to the written technical specifications, procedures and policies.

Test Weights: [See Standards (test weights) ]

Traceable/Traceability: refers to the step by step accountability of a calibration of a standard or device back to a reference standard. Test weights may be traceable to the international prototype kilogram held in Sèvres, France. Measurement Canada Standards are traceable to the Canadian one kilogram standard (K74-1993, replaces K50) which in turn are traceable to the international prototype.

Trade: means the selling, purchasing, exchanging, consigning, leasing or providing of any commodity, right, facility or service on the basis of measure and includes the business of providing facilities for measuring. [See also Legal for Trade]

Trade Sector Review: a process whereby Measurement Canada periodically reviews and assesses its services provided to the marketplace to ensure their relevancy to the needs of the sector stakeholders.

Truck Mounted Meters: used exclusively for home heating fuel delivery. Large or medium sized delivery truck with metering systems installed. These metering systems have flow rates up to 500 litres per minute.

Unanimous: implies that all stakeholders are in full agreement with the recommendations.
[See also Consensus]

Volumetric Standards: Test Measures and Provers that are designated under section 13 of the Weights and Measures Act and certified in relation to a reference standard as being accurate within prescribed tolerances. They are primarily used to calibrate and verify volumetric measuring devices used in trade.

Voluntary Codes: these are voluntary codes that are non-regulatory initiatives-commitments not required by legislation, agreed to by one or more organizations and applied consistently to influence or measure behaviour.

Vulnerable Party: a party who is the purchaser or seller of a product and who does not own or control the measuring equipment used in the trade transaction. The degree of vulnerability may vary from nil to high depending upon the capacity and ability of the vulnerable party to detect measurement errors, re-measure the product and have corrective measures taken where appropriate. [See also Dominant Party]

NOTE: For more information or clarification, please visit the Measurement Canada Web Site or call your nearest Measurement Canada office .