TORONTO - Ontario must do a better job of monitoring the "hazard distance" between volatile fuel depots and residential areas, says a report commissioned after a massive propane explosion in Toronto forced 12,000 people from their homes and left two dead.

While the report released Friday makes 40 recommendations to enhance safety, it doesn't call for any new restrictions on where the depots can locate -- a chief concern raised by residents who evacuated their homes following the blast.

The report, written by experts on volatile fuels, was ordered after a series of explosions rocked Sunrise Propane Aug. 10, but it did not investigate the event or look to find fault.

One of the key recommendations was to have a risk and safety plan for all volatile fuel facilities, whether new or existing, said Harinder Takhar, Ontario's minister of small business.

"The safety plans should really identify risks involved in any facility and (tell us) what kind of design we need and what kind of equipment we need in that facility," Takhar said in an interview.

"So that will go a long way to ensure the safety of the public."

The Opposition welcomed the recommendations to improve training, but complained the report did not recommend emergency plans in the event of future explosions.

"In terms of emergency management, if this were to happen again tomorrow, there's not an awful lot there," said Progressive Conservative critic Lisa MacLeod.

"I think the government really needs to look not only in terms of where these plants should be located, but also what is an effective emergency plan right after such an explosion."

The New Democrats pointed out that Premier Dalton McGuinty, when he was in opposition, criticized the creation of the Technical Standards and Safety Authority, the non-profit agency responsible for regulating transportation, storage, handling and use of fuel.

The sector should once again be regulated by government, said NDP critic Rosario Marchese.

"We cannot leave the responsibility of safety to this group that both consults and regulates at the same time," Marchese said.

"Government should be regulating and have oversight (of propane facilities) and I believe that would give us better safety."

The early-morning blast sent massive orange fireballs into the sky and prompted angry calls to strengthen regulations that had allowed the natural gas depot in northwest Toronto to operate so close to a residential neighbourhood.

Licence approvals for propane facilities must make it clear that operators reassess the land development around them, and municipalities need to notify propane facility operators about development plans close to a depot's defined hazard distance, the two-member expert panel recommended.

The report called on the province to ask the Canadian Standards Association to update the propane installation code, with a "focus on setback distances," emergency response plans and special fire protection.

The panel also recommended that propane operators be required to carry insurance as a condition of licensing.

Annual inspections of propane facilities are needed until the TSSA has enough data to develop "a more rigorous, statistical approach" to safety, under which higher-risk facilities would get more in-depth attention, the panel said.

The city of Toronto said it spent nearly $2 million cleaning up the site of the Sunrise Propane explosion, about 580 nearby properties and the neighbourhood's streets and sidewalks.

The report called for better storage data on what's actually at each site, including so-called transient storage in cylinders, tanks, tanker trucks and rail cars and improved safety training for propane workers.

The TSSA came under fire following the Sunrise blast after it couldn't accurately state the number of propane depots in the province, but Takhar said Friday the public should have confidence in the agency.

He promised to have most of the expert panel's recommendations implemented by the end of this year, but dismissed suggestions the regulatory functions for propane should be returned to government.