Warning Letter to Blue Tec Construction Inc. (Blue Tec) and Nexrock Design Build Inc. (Nexrock)

CER File: CV2425-366

June 30, 2025

Warning Letter to Blue Tec Construction Inc. (Blue Tec) and Nexrock Design Build Inc. (Nexrock)

Dear and :

Safety and environmental oversight is a core responsibility for the Canada Energy Regulator (CER). The CER holds its regulated companies accountable for the safety, security, and protection of workers, the general public and the environment. CER-regulated companies, as regulatory authorization holders, as well as all those persons working on, near or along a federally regulated pipeline, are required to follow subsection 335(1) of the Canadian Energy Regulator Act (CER Act) and its associated regulations.

For pipeline companies, this includes the Canadian Energy Regulator Damage Prevention Regulations – Obligations of Pipeline Companies (DPR-O). Other parties working on, near or along CER-regulated facilities that may cause ground disturbance are required to adhere to the Canadian Energy Regulator Damage Prevention Regulations – Authorizations (DPR-A).

The CER wishes to emphasize that there is a collective responsibility for preventing damage to regulated facilities which is shared by many parties including: pipeline companies, developers, municipalities, utility companies, contractors, homeowners and those individuals performing construction or excavation work. Compliance with the regulations is a legal obligation and a critical measure to ensure protection of workers and preservation of essential infrastructure.

This letter is to inform you that the CER has serious concerns regarding compliance with the CER Act and DPR-A relating to a construction project at 1565 Thornton Road North, Oshawa, Ontario, in October 2024 that encroached in the prescribed area of a federally regulated pipeline.

BACKGROUND

On October 30, 2024, Trans–Northern Pipeline Inc. (TNPI) reported to the CER (as report DPR2024-307) an unauthorized mechanical excavation on a project at 1565 Thornton Road North within the prescribed area of TNPI’s 10” Mainline carrying refined products. This excavation was completed by Blue Tec at the direction of Nexrock, who was the general contractor for the project.

This is the same project and site where two CER Inspection Officer Orders (IO Orders) were issued in August of 2023 (one to the pipeline company TNPI – PYR–002–2023 and one to Blue Tec – PRY–001–2023) related to other unsafe work around TNPI’s pipeline as reported under DPR2023–232.

Following the events reported to the CER as DPR2023–232 (August 2023) and DPR2024–307 (October 2024), the CER conducted compliance oversight activities to follow up on these events. The CER notes that significant steps were taken by TNPI, and all parties involved in the construction project, in the months following to ensure that ongoing work occurred safely. This included a crossing agreement entered into with the developer, Panattoni Development Company, for this project as well as meetings and communications with TNPI.

With respect to the ongoing work underway at this site, Blue Tec received TNPI's written authorization on April 4th, 2024. One of the conditions of this authorization was to have a TNPI inspector on site while performing any excavation within 30 meters of the pipe (within the prescribed area). This condition was not met at the time of the second reported event of October 2024.

The CER notes that a TNPI inspector had been onsite to observe works at this project many times between August 23 and October 15, 2024, including for the “up–fill” of the property within the 30 meter prescribed area between October 7 to 11, 2024. In addition, meetings were held with all parties in October 2023 to explain the pipeline crossing guidelines and requirements following the August 2023 event. Another meeting was held more recently in November 2024 following the October 2024 event with the recipients of this letter included.

SUMMARY OF FINDINGS

CER Inspection Officers completed their follow ups on the reported events of August of 2023 and October 2024 and additional follow up was also completed by CER Enforcement staff with all parties involved in the October 2024 event. The following is a summary of their findings.

Blue Tec

It is alleged that Blue Tec contravened the CER Act subsection 335(1) by engaging in mechanical excavation that caused ground disturbance on October 30, 2024, within the prescribed area of a pipeline in a manner not authorized by an order or authorization (in this case, being 30 meters each side from the pipeline). A crossing agreement was in place with the pipeline company, which required that any work within the prescribed area be completed with a TNPI Inspector present. This was also stated in the most recent TNPI inspection report (Permit 23248) issued at the site on October 15, 2024.

The CER Inspection Officers completed a field inspection and followed up with Blue Tec after this unauthorized activity. As a result, IO Order LM–001–2024 was issued to Blue Tec on December 9, 2024, with direction to implement safety procedures for working around federally regulated pipelines.

Nexrock

It is alleged that Nexrock contravened the CER Act subsection 335(1) by directing Blue Tec to engage in mechanical excavation that caused ground disturbance, on October 30, 2024, within the prescribed area of a pipeline, in a manner not authorized by an authorization or order. The following facts are relevant to the alleged contravention:

• Nexrock is the general construction contractor for the project under construction at 1565 Thornton Road North in Oshawa, Ontario. Nexrock was the General Contractor at this site when an unauthorized excavation occurred at this same site in August of 2023. That incident was followed up by both TNPI and the CER. The developer for the project, Panattoni Development Co., entered into a crossing agreement with TNPI which required a TNPI representative to observe all work within the 30–meter prescribed area. This was also stated in the most recent TNPI inspection report (Permit 23248) issued at the site on October 15, 2024.
• The CER Inspection Officers completed a field inspection and follow–up at 1565 Thornton Road after this unauthorized activity and issued a CER Damage Prevention Education Letter on December 13, 2024.

CONCLUSION

This warning is issued in accordance with the CER’s Enforcement Policy and is intended to emphasize the necessity of following the directions set out in crossing agreements with the pipeline company when working within the prescribed area of a federally regulated pipeline. The measures in such agreements are to ensure the safety of those working near a pipeline and the integrity of the pipeline. The unintended consequences of unauthorized excavations can be disastrous for people and the environment.

Safety and environmental oversight are at the core of the CER’s mandate. The CER holds its regulated companies accountable to ensure they communicate expectations, and work with those that are undertaking work on or around their pipeline. However, third parties, such as Blue Tec and Nexrock also have obligations under the DPR-A and must work collaboratively with pipeline companies to follow specified conditions of their authorizations. This warning letter is intended to underline the importance of future compliance with the CER Act, and its associated Regulations.

This written warning, and the circumstances to which it refers, will form part of the CER’s compliance records for Blue Tec and Nexrock. Each party is expected to exercise due diligence in meeting all CER requirements and take measures to prevent re-occurrence in the future. More information on safety and damage prevention can be found on the CER website.

Should you have any questions regarding this letter, please contact .

Yours sincerely,

Jonathan Timlin
Vice President, System Operations
Canada Energy Regulator

CC:

Date modified:

2025-07-04