The safety upgrade would build on standards voluntarily adopted by the industry in 2011 and require shippers to make tank cars more resistant to punctures and valve failures in the case of derailment or collisions.
The news comes amid a spate of fiery oil train derailments on both sides of the border that have proven the latest tank car design remains inadequate.
Talks between Canada and the United States on harmonized tank car safety are ongoing, and it was not clear Thursday whether Transport Canada's timetable for retooling or retiring North America's 147,000 older cars used for shipping flammable liquids can be met unilaterally.
"You can't just stop the cars in Sarnia, (Ont.), or wherever and switch cars" at the Canada-U.S. border, Larry Miller, the Conservative chairman of the Commons transport committee, said at a news conference.
Transport Canada noted on its website that "a harmonized standard is essential" while laying out the new Canadian safety timetable.
Officials have been unable to find a cross-border consensus on a proposed new braking system for tank cars and it was not included in the Transport Canada specifications.
Transport Minister Lisa Raitt told the House of Commons "it was agreed to place these brakes into a different track, that is, working with operating rules," rather than tank car specs.
"We will continue to have these technical discussions with the United States to make sure that what we get is the right product," said Raitt.
The new safety standards and timetable for implementation were posted online Wednesday without fanfare, hours before the Commons transport committee tabled its report on the transportation of dangerous goods and Canada's safety regime.
Miller, in delivering the report, noted the changes all flow from the deadly crash of an unmanned oil train in Lac-Megantic, Que., in July 2013 that claimed 47 lives and incinerated the town's downtown.
Most of the recommendations from the Conservative-dominated committee mirror measures the government has already begun taking, such as boosting liability coverage in case of railway disasters.
The committee recommended no set deadline for getting the oldest, least safe tanks cars off the tracks, but the newly released Transport Canada guidelines say unmodified DOT111s should be shelved by May 1, 2017, while 111s with an insulation jacket can remain in service until the end of 2021.
Concerns over the old DOT111 tank car — the workhorse of the North American fleet — date back to at least 1996, when the Transportation Safety Board of Canada recommended the government "take immediate action to further reduce the potential for the accidental release of the most toxic and volatile dangerous goods transported in Class 111A tank cars."
Three years later, the safety board observed that, "In general, Class 111A tank cars do not have sufficient protection against punctures, even in a low-speed impact, due to the thinness of the tank shell and the absence of a head shield."
A booming oil-by-rail business has compounded the danger over the last five years.
In the last month alone, four trains carrying crude oil have derailed in Canada and the U.S., sparking major fires, polluting waterways and forcing some evacuations.
NDP critic Hoang Mai said the transport committee's safety recommendations go far enough, adding a lack of oversight by Transport Canada means "self-inspection, self-regulation is not going in the right direction" for the rail industry.
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