Evidence of meeting #37 for Public Accounts in the 39th Parliament, 2nd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was sms.

A recording is available from Parliament.

On the agenda

MPs speaking

Also speaking

Sheila Fraser  Auditor General of Canada, Office of the Auditor General of Canada
Louis Ranger  Deputy Minister, Department of Transport
Marc Grégoire  Assistant Deputy Minister, Safety and Security, Department of Transport
Merlin Preuss  Director General, Civil Aviation, Department of Transport
Alex Smith  Committee Researcher

11:05 a.m.

Liberal

The Chair Liberal Shawn Murphy

I'd like to start the meeting.

First of all, I'd like to extend to everyone a very warm welcome.

Bienvenue à tous.

Colleagues, the meeting today has been called pursuant to the Standing Orders to deal with chapter 3, “Oversight of Air Transportation Safety--Transport Canada” of the May 2008 Report of the Auditor General of Canada.

The committee is very pleased to have with us this morning, from the Office of the Auditor General, the auditor herself, Sheila Fraser. She is accompanied today by Mark Watters, assistant auditor general, and, Alain Boucher, principal. From the Department of Transport, we have Mr. Louis Ranger, deputy minister and accounting officer. He is accompanied by Mr. Marc Grégoire, assistant deputy minister of safety and security, and, Mr. Merlin Preuss, director general of civil aviation.

On behalf of the committee, I want to extend to everyone a very warm welcome.

This morning, colleagues, we will go until about a quarter to one. I will adjourn the meeting at that point in time to deal with two motions of committee business, and then we'll adjourn by one o'clock.

Without any further delay, I'll now call upon the Auditor General, Sheila Fraser, for her opening comments.

June 5th, 2008 / 11:05 a.m.

Sheila Fraser Auditor General of Canada, Office of the Auditor General of Canada

Thank you, Mr. Chair.

We thank you for this opportunity to present the results of chapter 3 of our May 2008 report, entitled “Oversight of Air Transportation Safety--Transport Canada”.

As you mentioned, I am accompanied today by Mark Watters, assistant auditor general, and Alain Boucher, principal, who are responsible for this audit.

Transport Canada is responsible for promoting air transportation safety, developing regulations, and overseeing compliance. The department is now adopting a new approach to oversight, based on the implementation of safety management systems, or SMS. The International Civil Aviation Organization recommends that all member countries adopt this approach by 2009, noting that the rapidly expanding aviation industry and the limited resources for oversight make it difficult to sustain the existing approach. Transport Canada will shift its primary focus from traditional oversight, such as conducting inspections and audits, to assessing the safety systems that companies have in place.

The audit looked at how Transport Canada has managed the transition to the new approach to oversight to date, with respect to the first sectors implementing SMS: airline operators and associated aircraft maintenance companies. We did not examine the level of air transportation safety in Canada, but rather, the management of the initiative.

It is important to note that oversight based on SMS (in other words, evaluation of a company's SMS, as opposed to oversight based on traditional inspections) will not begin until companies in the first sectors have SMS fully in place. That will be this fall at the earliest.

Once implementation is complete in those sectors, other sectors of the industry, including 2,000 small operators and related aircraft maintenance companies, will begin their transition. The transition process is still in its early stages.

Transport Canada is the first civil aviation authority to put in place regulations requiring companies to introduce SMS. The department deserves credit for this, and for conducting pilot projects and developing a timeline for implementation. However, in planning for the transition, Transport Canada did not forecast overall expected costs and did not formally analyze risks associated with implementation, such as the impact of the transition on other oversight activities. Although resources have been shifted to activities related to SMS implementation, the department did not measure the impact of this shift. It did not set objectives or a threshold for adjustments to be made to its traditional oversight activities during the period of transition. This means that Transport Canada could not demonstrate to us that it is carrying out a sufficient number of inspections during the transition.

Related to this is the need to develop an integrated human resources plan. With only regional plans and no overall human resources plan, Transport Canada has not identified how many inspectors and engineers it needs, both during and after the transition, and what competencies they should have. A reorganization is under way to determine these needs, but it is not expected to be completed until December 2009. Delays in hiring pose the risk that the department will not be able to recruit the people it needs in a timely manner.

Transport Canada has indicated that its development of a national human resources plan will depend on the Department's revised Program Activity Architecture, scheduled to begin in 2009-2010. We recommend more immediate action. For a transition of this scope, best practices call for planning for human resources needs well before implementation begins. But at Transport Canada, implementation is already underway.

Mr. Chairman, Transport Canada has agreed with our recommendations. Action is important to enable Transport Canada to successfully manage the transition in other sectors of the industry, including 2,000 smaller companies. The committee may wish to ask Transport Canada how it plans to address the issues we have raised in our report.

That concludes my opening statement. We would be pleased to answer the committee's questions.

11:05 a.m.

Liberal

The Chair Liberal Shawn Murphy

Thank you very much, Mrs. Fraser.

We'll now hear from Mr. Ranger, the Deputy Minister of the Department of Transport.

11:05 a.m.

Louis Ranger Deputy Minister, Department of Transport

Thank you, Mr. Chair and members of the committee. Thank you for the opportunity to meet with you today. As you mentioned, I'm accompanied by Marc Grégoire and Merlin Preuss. I should perhaps say that both are engineers and both also hold a pilot's licence.

At the outset, I would like to say I welcome the opportunity to explain how Transport Canada is improving its approach to the oversight of aviation safety in Canada and to answer any questions you may have regarding the report of the Auditor General.

Mr. Chair, I did read carefully the transcript of the exchange that took place in this committee when the Auditor General appeared on May 8, and I would like to clarify a number of points.

First of all, Transport Canada is not transferring or delegating its responsibility, be it to airline companies or maintenance companies. As the Auditor General explains very clearly in her report, the department is adopting a new approach to oversight based on the implementation of what we call safety management systems. The approach requires aviation companies to have in place a system for managing safety risks linked to their operations. Transport Canada's oversight is changing from one focused only or solely on conducting inspections and audits to one of assessing the process that companies have in place to ensure safety. The department's overall accountability, however, remains unchanged.

Second, I want to assure you that Transport Canada has no intention of stopping its inspections of aircraft and aviation activities. The department will continue to conduct direct inspections and audits when required. It will continue to set regulations and standards and to apply enforcement measures such as fines and licence suspensions, and we do do that.

Actually, as Mr. Christopherson said on May 8, “...we haven't transferred any of that responsibility. We've actually built a secondary area of responsibility.” This is precisely what safety management systems are expected to achieve. They are bringing an additional layer, an additional level, of assurance that safety objectives are being met.

Third, ICAO, the International Civil Aviation Organization, strictly speaking, does not prescribe the approach that sovereign states should take in meeting their aviation safety obligations. Having said that, ICAO, which is certainly the uncontested world authority on civil aviation matters, has stated unequivocally that member states should establish an acceptable safety management system by 2009 in light of two considerations: expected growth in air traffic, and limitations we are indeed encountering with traditional approaches to civil aviation oversight--and we can elaborate on that later, if you wish.

Fourth, we believe the transition to safety management systems in Canada has been successful to date. It's important to mention that chapter 3 of the Auditor General's report—and Mrs. Fraser repeated earlier—does not question the safety of the travelling public. The audit evaluated, from an administrative perspective, how Transport Canada is managing the transition to a safety oversight approach based on safety management systems.

Fifth, Canada has the safest air transportation system in the world and our safety performance continues to improve. The accident rate in the commercial airline sector, which accounts for more than 95% of fare-paying passengers in Canada, is very low. Between 2002 and 2006, the rate of accidents was 0.31 per 100,000 hours flown. Take a one-hour flight, say, between Ottawa and Toronto: you would have to fly between Ottawa and Toronto more than 300,000 times before being involved in an aviation accident.

The implementation of aviation SMS is well advanced and we are applying lessons learned to each subsequent stage. In that context, Transport Canada welcomes and accept all nine recommendations contained in the Auditor General's report.

All responses to each recommendation on planning for the transition, monitoring of compliance and human resources planning and training are outlined in the Auditor General's report and we will be pleased to elaborate on any of them, if need be.

Regarding human resources, I would simply like to bring to your attention that the number of inspector positions at Transport Canada has actually increased from 866 in fiscal year 2001-2002 to 871 today. I chose this period, because it is the one covered in the audit. However, over 15 years, the number of inspectors at Transport Canada has increased by 295 since 1992.

However, we do have a normal number of vacancies. Ms. Fraser is correcting pointing out that not all positions are staffed. This is as a result of open staffing actions and all the procedures that have to be followed. I shall also point out that we are having trouble finding qualified candidates who are willing to accept the pay rates offered by the government.

Human resources planning is now more tightly focused on recruitment and retention issues. We need to identify the skills and resources required to deliver the future programs.

Finally, I would like to take this opportunity to recognize the level of cooperation that has prevailed throughout the audit between Transport Canada's aviation professionals and the Office of the Auditor General. We do believe that our safety management systems and the safety of the traveling public will benefit from this audit.

Thank you.

11:15 a.m.

Liberal

The Chair Liberal Shawn Murphy

Thank you very much, Mr. Ranger.

I'm going to go to the first round of seven minutes.

Monsieur Bélanger, sept minutes.

11:15 a.m.

Liberal

Mauril Bélanger Liberal Ottawa—Vanier, ON

Thank you, Mr. Chairman.

Good morning, Ms. Fraser. We see you almost twice a week. It is wonderful. I would also like to welcome Mr. Ranger and Mr. Grégoire to our meeting.

Sir, welcome.

I'm not trying to haunt you, gentlemen. The reference here is that I was on the transport committee temporarily, Mr. Chairman, when we were looking at the entire matter--so was Mr. Julian, by the way--of safety management systems and the revision of the Aeronautics Act. This is not intended, but since I'm here, I might as well go at it.

Mr. Ranger, from 2001-2002 to the present, has there been an increase in air traffic in this country, and if so, what is the percentage increase?

11:15 a.m.

Deputy Minister, Department of Transport

Louis Ranger

There has definitely been an increase in air traffic. I do not know whether we have the exact figure.

11:15 a.m.

Liberal

Mauril Bélanger Liberal Ottawa—Vanier, ON

Give me a rough figure.

11:15 a.m.

Deputy Minister, Department of Transport

Louis Ranger

The air traffic has probably increased by 3 to 5%. I cannot...

11:15 a.m.

Liberal

Mauril Bélanger Liberal Ottawa—Vanier, ON

Between 3 and 5%?

11:15 a.m.

Deputy Minister, Department of Transport

Louis Ranger

Per year. There is an increase in air traffic each year.

11:15 a.m.

Liberal

Mauril Bélanger Liberal Ottawa—Vanier, ON

Could it be said that air traffic will increase between 20 and 25% over six or seven years?

11:15 a.m.

Deputy Minister, Department of Transport

Louis Ranger

Possibly.

11:15 a.m.

Liberal

Mauril Bélanger Liberal Ottawa—Vanier, ON

We are expecting a 40% increase in air traffic over the next five or six years. Let us say that it will increase by about 20%. With all due respect for my colleagues opposite, this may be a reasonable figure.

Why is it, then, that the number of inspectors has only increased by 0.5%?

11:15 a.m.

Deputy Minister, Department of Transport

Louis Ranger

I am glad you ask your question in this way. That is precisely why we need to establish different management systems. When I spoke about the two reasons mentioned by the ICAO, I said that the main one was the exponential increase in air traffic. The situation is such that we could have an inspector on every plane and it would not do that much to improve safety. So we have to find other ways of managing safety.

Even if we keep the rate at 0.31 per 100,000 hours of flight time, if the number of hours of flight increases significantly every year, there will be one accident a week throughout the world.

11:15 a.m.

Liberal

Mauril Bélanger Liberal Ottawa—Vanier, ON

When we were on the transport committee — and again today — we were told that the Safety Management Systems, the SMS, were not designed to replace inspections, but were to be in addition to them. If they are in addition to the inspections, that means that they are not at the same level.

You say that normally, you cannot manage to maintain the number of inspectors. In addition, air traffic in this country could increase by 40% in the next few years. In that case, we are not simply just opposing the SMS and the inspections. One of the two will be less important.

11:15 a.m.

Deputy Minister, Department of Transport

Louis Ranger

There will be more risk management. As we say in our statement, we do not need an inspector to check the tire pressure and the landing gear for each aircraft.

However, we want our inspectors to inspect the company's books and make sure that systems are in place so that when someone checks off the box beside “tire pressure”, this is done methodically. That is something we are checking randomly through our inspectors.

In other words, we have more confidence in the airline companies themselves. Very often, we are dealing with very sophisticated companies. We will be spending less time with those that have an excellent record and more time with those for which the risk is higher. That is our philosophy.

11:15 a.m.

Liberal

Mauril Bélanger Liberal Ottawa—Vanier, ON

The Auditor General did not review the whole issue of safety and security. Since that is not what she was auditing, I hesitate to continue along these lines. However, I do have a few questions that come to mind.

One of the Auditor General's conclusions is that you did not have a human resources plan. You acknowledge that and you will be implementing one. Could you tell me when the plan will be implemented?

11:20 a.m.

Deputy Minister, Department of Transport

Louis Ranger

I will let Mr. Grégoire and Mr. Preuss give you the details on that. We have definitely made some progress in this respect since the audit was completed.

Like all departments, we did not want to have a human resources plan in isolation. It must be connected to the business plan, to the way in which we want to conduct our operations.

We have just gone through a major housecleaning in the department, something known as the new program architecture. Our business plan is now much tighter as a result. There is no doubt that work is already under way on a human resources plan.

I do not know which of you would like to begin.

11:20 a.m.

Marc Grégoire Assistant Deputy Minister, Safety and Security, Department of Transport

I will begin and Merlin will finish.

11:20 a.m.

Liberal

Mauril Bélanger Liberal Ottawa—Vanier, ON

Then I would like to briefly raise another issue concerning safety.

11:20 a.m.

Assistant Deputy Minister, Safety and Security, Department of Transport

Marc Grégoire

We thought about applying that recommendation once the program activity architecture audit is completed. We expected the audit to take longer. It was completed sooner than we thought, and is now pending Treasury Board's approval. Civil aviation was therefore able to move towards speeding up the introduction of a plan.

Merlin, maybe you could explain when the HR plan will be completed.

11:20 a.m.

Merlin Preuss Director General, Civil Aviation, Department of Transport

With respect to civil aviation, the regional plans have been done, but they have not been coordinated, which is, of course, an essential recommendation from the auditor. With respect to finalization, it will take some time to identify each and every part that's required. We have no road map to follow, since we're leading this type of implementation globally. We would expect to have a lot more detail by the fall.

11:20 a.m.

Liberal

Mauril Bélanger Liberal Ottawa—Vanier, ON

You would be in a position to update the committee and the Auditor General by the fall of this year.

11:20 a.m.

Director General, Civil Aviation, Department of Transport

Merlin Preuss

Yes, sir.