Transport Committee on June 11th, 2015

[The Vice-Chair, NDP, Hoang Mai]

Good afternoon, esteemed colleagues.

Today, from 3:30 p.m to 4:30 p.m, pursuant to Standing Order 108, the committee will hold a briefing with officials from the Department of Transport on the implementation of the recommendations in chapter 7 of the Fall 2013 Report of the Auditor General of Canada.

We are hearing from department officials Laureen Kinney, Brigitte Diogo and Nicole Girard. I believe you have a brief presentation to make, which will be followed by a question period.

Please proceed.

[Laureen Kinney, Assistant Deputy Minister, Safety and Security, Department of Transport]

Thank you for the opportunity to speak to you today, Mr. Chair, and members of the committee.

As you are aware, Transport Canada developed an ambitious and comprehensive action plan to address the recommendations in the Auditor General’s fall 2013 report. Implementing the plan has been a departmental priority. On April 30, 2014, when departmental officials appeared before the Standing Committee on Public Accounts to discuss the OAG’s report, the Auditor General said he was encouraged by the department’s response to the report. Today, a little over one year later, I am pleased to provide this committee with an update on our progress. I hope that you will agree it has been significant in the five areas the OAG examined.

With respect to the regulatory framework, most noteworthy is that Transport Canada accelerated the development of a suite of regulations to respond to the OAG’s recommendations. These also respond to outstanding recommendations made by the 2007 Railway Safety Act review and the 2008 study by this committee. We are now well under way in implementing these significant regulations to further strengthen the railway safety regulatory regime.

To that end, the grade crossings regulations, which came into force on November 27, 2014, establish comprehensive and enforceable safety standards for grade crossings. They clarify the respective roles and responsibilities of railway companies and road authorities, and ensure the sharing of key safety information between railway companies and road authorities. The railway operating certificate regulations, which came into force on January 1, 2015, are fundamental in requiring that baseline safety requirements be met in order for a railway to obtain a railway operating certificate and begin operations.

As of April 1, 2015, the following regulations also came into force. The railway safety administrative monetary penalties regulations, or fines, encourage regulatory compliance and deter safety contraventions of the Railway Safety Act, regulations, rules, and engineering standards made under the act. The transportation information regulations improve data reporting requirements to identify and address safety risks. This will provide the department with comprehensive information on the state of railway safety in Canada, allowing for more focused audits and inspections, and targeted programs that address specific safety issues.

The railway safety management system regulations of 2015 respond to recommendations from the 2007 Railway Safety Act review and the 2008 study by this committee related to improving the implementation and effectiveness of railway safety management systems. These regulations are based on more than 10 years of lessons learned in providing regulatory oversight of safety management systems. Key new regulatory requirements include: identification of an accountable executive responsible for the company's safety management system; a process for employees to report to their railway company, without fear of reprisal, a safety hazard or contravention; and the use of fatigue science principles when scheduling work of certain railway employees.

I should also point out that as of May 2015, of the 56 recommendations made by the Railway Safety Act review, all recommendations have been addressed, with work ongoing for five of these. These remaining recommendations will be complete with the coming into force of either legislative amendments or new regulations that are currently in progress.

All 14 of the recommendations made by the the Standing Committee on Transport, Infrastructure and Communities have been addressed, with work under way to address the one remaining recommendation.

To respond to the Auditor General’s recommendations to improve planning for rail safety oversight activities, Transport Canada has reviewed its risk-based planning process to ensure its audit and inspection activities are focused on the areas of highest risk. With the coming into force of the transportation information regulations, as noted, the department has identified the key safety risk and performance indicators and the specific safety performance information that it requires from railway companies, and has developed regulatory requirements outlining the specific safety performance information that is required. By allowing us to analyze and include information from railway companies when preparing annual oversight plans, this will address the OAG’s recommendations.

In terms of conducting oversight activities, Transport Canada’s data system—the rail safety integrated gateway—provides inspectors with the tools they need to document and analyze the results of oversight activities. This system, together with additional tools, processes, guidance documents, and training, ensure that oversight activities are conducted consistently.

These include a management review process for rail safety oversight activities, which defines roles, responsibilities, and accountabilities for both managers and inspectors; performance expectations, which will be included in managers' annual performance agreements; follow-up procedures for audits, inspections, and follow-up activities included in the database system; and updated audit procedures to define clear expectations.

Training and guidance on all new initiatives have been provided to managers and inspectors to ensure a consistent and comprehensive national approach to conducting oversight.

On human resources planning, Transport Canada has a highly dedicated and professional corps of inspectors. To maintain and build on this and to ensure the rail safety program has the required staff with the skills and competencies it needs to plan and implement its oversight activities, a needs assessment was conducted last year. As a result, our comprehensive human resources strategy includes the inventory of skills and competencies required by inspectors in order to perform effectively in a systems-based approach to oversight. This forms the basis for inspector training, recruitment, and retention strategies.

Mandatory training is taken within planned timeframes and is monitored regularly to ensure that compulsory training for inspector credentials is taken in a timely manner. By spring 2014 all inspectors and managers received the appropriate training to become safety management system auditors.

In terms of quality assurance, in a program such as rail safety, work is accomplished through many cross-functional activities—for example inspecting, auditing, and enforcement of rules, regulations, and engineering standards. The challenge is to ensure consistency in the way we deliver our program.

That is why, in 2004, we put in place both a comprehensive quality management system as well as the quality assurance program to verify that the rail safety program's activities are conducted as intended. We have a three-year plan in place to conduct risk-based quality assurance assessments, which involve periodic evaluations of oversight activities, including audits and inspections. For example, in 2014 the rail safety program conducted a quality assurance assessment of its inspection procedure. As a result, the procedure is being further revised. As well, for 2015-16, we have two internal assessments planned that will examine the procedures for issuing notices and orders, and the quality, input, and accessibility of the database system's data.

We continue to improve the rail safety program. As you know, in addition to the above measures, Minister Raitt has announced the multiple decisive actions that Transport Canada has taken to address the Transportation Safety Board of Canada's initial and final recommendations into the investigation of the tragic events at Lac-Mégantic, actions that Mrs. Fox, chair of the Transportation Safety Board, has recognized as significant progress.

We are confident that these actions, together with the progress we have made and presented to you today, respond to the OAG's recommendations and demonstrate the department's commitment and action to ensure Transport Canada's strong, risk-based rail safety program continues.

Thank you, Mr. Chairman and members of the committee. I look forward to your questions.

[The Vice-Chair, NDP, Hoang Mai]

Thank you very much, Ms. Kinney.

Mr. Sullivan, the floor is yours for seven minutes.

[Mike Sullivan, NDP, York South—Weston, ON]

Thank you, Mr. Chair. Thank you to Ms. Kinney and the rest of the panel.

The Auditor General, in his review in 2013, identified that the department planned on conducting many more audits than it actually completed. As well, those audits it did complete were in fact limited in scope, and as per the report of the Transportation Safety Board on Lac-Mégantic, were not adequate and were not in keeping with proper risk assessments because there was considerable risk attached to the way the MMA railroad was working.

How many audits have been conducted since 2012? How many have been missed, and of which railroads?

[Laureen Kinney]

If I can start with the answer in regard to the audits that were not completed, we have accepted all of the recommendations of the Auditor General. We have implemented a new system to look at the scheduling of audits on a broader basis, looking at full-scale audits over a cycle of three to five years. In previous years we had decided to do focused and targeted audits. We've accepted the recommendation to change that process.

We have a new schedule of audits that have gone forward from that date. I'll ask Ms. Diogo to outline the numbers.

[Brigitte Diogo, Director General, Rail Safety, Department of Transport]

We would need to provide this in writing to the committee, given that you asked for the list of companies that we audited. There is also the chevauchement, in that all the audits don't happen within the same timeframe. So I think it would be safer to provide this in writing.

[Mike Sullivan, NDP, York South—Weston, ON]

Thank you.

The other concern was the physical number of inspectors. We've learned over the course of the last couple of years that there has been exactly one new inspector in the system. Can you please tell us how many inspectors there are in total in the department and where they are assigned? Are they assigned to rail inspections? Are they assigned to audits? Are they assigned to inspections of the safety management systems? What are they assigned to and what are they doing?

[Laureen Kinney]

Thank you for the question.

The answer is a little bit complicated, because we have a large number of people in the department who perform oversight functions. Amongst those are inspectors who are actually classified as inspectors and perform inspections primarily, but other activities as well. Then we have engineers who perform inspections too. I can tell you with absolute certainty that we have increased our staff in all modes. I believe the number is 1,600 total people who provide oversight functions, which include the inspection function. We don't track specifically by the classification of inspectors anymore.

In rail safety, for example, we were running normally at around 102 positions associated with oversight. As of April 1, 2015, we were at 122 oversight personnel in rail safety. As I said, that includes some other types of positions aside from pure inspector classified positions, but they do take part in the oversight process. We've had a net gain of 20 in rail safety alone. Certainly we've been in an active recruitment process across all the modes, and I can give you more details, if you'd like.

[Mike Sullivan, NDP, York South—Weston, ON]

In terms of risk assessments, one of the things the minister asked the railroads to provide—certainly the two class 1 railways, CN and CP—was a risk assessment, in particular related to travelling through densely populated areas. At one point Transport Canada told us we couldn't have it because it was the property of the railroads. We've since had the railroads say that, yes, we can.

We haven't seen it yet. Can we get an undertaking to see it? Can you tell me how your plans have changed, given these risks?

[Jeff Watson, Conservative, Essex, ON]

Mr. Chair, I have a point of order. The orders of the day are with regard to the implementation of the recommendations in chapter 7 of the Auditor General's report. I understand that matters arising from, let's say, the TSB's report or other items that might be of interest are certainly of interest not only to that member but to other members of the committee. However, the officials are here today to speak on the recommendations and members should be seeing whether there was any progress made by Transport Canada on the recommendations in the Auditor General's report.

[The Vice-Chair, NDP, Hoang Mai]

Mr. Sullivan.

[Mike Sullivan, NDP, York South—Weston, ON]

Page 4 of their document refers to planning for oversight activities on the basis of risk. I'm trying to get at exactly what those risk assessments have done in terms of their planning for oversight activities. Can they tell us something more about it?

[The Vice-Chair, NDP, Hoang Mai]

I'll let Mr. Sullivan continue his question.

[Laureen Kinney]

If I can just touch back to the beginning of the question, Mr. Chair, one of the responses the minister made to the interim recommendations on the terrible events at Lac-Mégantic included the issue of risk assessments. One of the things that was produced was an emergency directive and a ministerial order that responded to that recommendation. It directed those railways that were carrying any substantial amount of crude oil to carry out a risk assessment of their particular routes. There was a list of 28, or so, factors that were to be included in the analysis of their risks in their transportation of these dangerous goods.

One of the things we have done, as that process continued and as that information was incorporated into their plans, which has already been done.... The Transport Canada role has been to review those risk assessments, to look at what lessons were learned, whether they were similar across different companies, and what kinds of lessons could come from that process to more broadly look at the risk management of the network and the oversight system. They are not directly related to providing oversight input. We have a separate system that includes other processes for establishing the annual risk-based inspection plan that we develop each year. The two are linked, but they are not directly linked in terms of driving our oversight process.

[Mike Sullivan, NDP, York South—Weston, ON]

Can we get a copy of the risk assessments the railroads provided?

[Laureen Kinney]

The risk assessments that the railways have provided for us, in terms of assessing that, are the proprietary information of the railways. They are their information. It would be most appropriate, as we have said before, Mr. Chair, to go to the railways for the information. It would be up to them to provide it.

[The Vice-Chair, NDP, Hoang Mai]

You have one minute.

[Mike Sullivan, NDP, York South—Weston, ON]

In terms of the human resources issues, under “Railway Safety Management System Regulations”, you talk in terms of a process for employees “to report to the railway company, without fear of reprisal” a “safety hazard” or “contravention” and the use of “the principles of fatigue science”, yet the minister has now changed the act to remove “fatigue science”. How are you going to manage it now?

[Laureen Kinney]

Mr. Chair, if I may, I'll speak directly to the SMS—safety management system—regulations. Those regulations were promulgated. They came into force on April 1, and the companies are now in the process of converting their systems and establishing some of those new elements that I touched on in my introductory comments.

Our staff will be going out over the next few months, initially making sure that the railways understand how to incorporate these many changes and these many additional requirements, one of which is the process you've just touched on. We will get more information as to how they are approaching that. But the onus is on the railway company to develop a policy and a system to accomplish those objectives in terms of the first issue.

In terms of fatigue science, there's a very extensive section of the regulation that outlines what factors railway companies need to take into account in scheduling work. That is where the fatigue science principles and a broader set of additional parameters have been added to the regulations and are in place now, and they are responding to those now.

[The Vice-Chair, NDP, Hoang Mai]

Thank you, Mr. Sullivan and Ms. Kinney.

Mr. Dion, you now have the floor for seven minutes.

[Stéphane Dion, Liberal, Saint-Laurent—Cartierville, QC]

Thank you, Mr. Chair. I also want to thank my colleagues for welcoming me to this committee.

Thank you so much. I am replacing Mr. McGuinty, who had urgent family reasons not to be here.

I want to welcome the witnesses appearing before us today.

I have a question about the Administrative Monetary Penalty Regulations and about some other regulations.

Would you say that your ability to conduct audits has improved since the 2013 report? Are you really getting results?

[Laureen Kinney]

I would absolutely say, Mr. Chair, that the changes we've made to the program since 2013, and in particular since the recommendations of the Auditor General, have made a significant difference to the program. We do see that difference to the degree each day as we see more information coming forward and more reporting.... That was one of the key underlying elements, as the Auditor General recommended that we make sure we had better documentation and better awareness of details like that. So yes, that is the case.

[Stéphane Dion, Liberal, Saint-Laurent—Cartierville, QC]

He was concerned about the lack of enforcement, as I read in his report. For enforcement, companies must have an obligation to send you the information. Otherwise, he said, it's not very effective. Is this enforcement really enhanced?

[Laureen Kinney]

The administrative monetary penalty regulations came into force on April 1, 2015. There is a very significant and robust plan to implement those and to train our inspectors on how to apply them, and there is a process on how to approve them in a formal method so that we make sure we have the appropriate documentation to sustain those penalties. Those penalties will be used in any cases where there is significant non-compliance with the regulations. We're very prepared to do that.

[Stéphane Dion, Liberal, Saint-Laurent—Cartierville, QC]

Can I ask you for a concrete example? I am thinking of VIA Rail because it's a company I really like. VIA Rail was not audited between 2010 and 2013. Have any audits been carried out since 2013?