Public Accounts Committee on April 30th, 2014

[Laureen Kinney]

I think in general it's close, but we do have a number of different categories of people who perform inspections and as to whether they all do the SMS audit part, there's a little bit of variation in that, but fundamentally....

[Malcolm Allen, NDP, Welland, ON]

Because they are inspectors.

[Laureen Kinney]

Exactly.

[Malcolm Allen, NDP, Welland, ON]

I have another life in this world up here in the agricultural field. We have CVS, compliance verification system, which is very similar to SMS. It simply looks at other things that usually aren't living, actually, but that's for another day. They are inspectors also, so there's a dual capacity. I get what you're saying.

I think we are all in agreement here. I think even my colleagues across the way acknowledge the fact that the Auditor General's report has highlighted some things. The Auditor General has clearly said he appreciates the work that your department has done, but he's indicated a number of times in his testimony today—and I think it's apparent in his report—that up until now it was slow. Things are moving far too slowly.

Let me indicate why I think it's so important, what that means when you're slow. The SMS is supposed to be an audit procedure to show that the inspectors—even though they're dual purpose individuals, it might be the same person, clearly not auditing themselves obviously—are auditing an inspection regime to make sure that the inspections were carried out correctly, and that the things that were meant to be done were meant to be done. That's why audit it.

Let me take you to paragraph 7.40 on page 21 of the auditor's report, which talks about planning and methodology. Let me read it to you:

The Department has a methodology for planning its oversight activities of federal railways. However, we found that Transport Canada’s methodology does not require the use of uniform risk and performance indicators to help staff identify areas of railway operations that might be more likely not to comply with the regulatory safety framework.

That's a big gap. Because even though you're saying, and Mr. Lévesque said earlier, that we clearly are getting the inspections done, we're being slow to get to the SMS, we only did 26%, we acknowledge that as a department, and you're taking corrective actions to get more done, the reality is, when it isn't being audited appropriately, the methodology was such, and that's still in the fixing stages as well according to your action plan, it had the potential— and I use the word carefully, the potential because I'm not suggesting it's carelessness—for safety risks because of the methodology being used. Is that a fair assessment of what paragraph 7.40 is telling me? And I'll ask Mr. Lévesque first, and then I'll ask Mr. Ferguson after to look at 7.40 as well.

Mr. Lévesque.

[Louis Lévesque]

I would phrase that differently. Because it's critical to remember that the preface to this report says it's not commenting on safety risks, and it's not commenting on safety in the transportation system, per se.

For me the issue is how do I best deploy resources of the surveillance system to maximize the impact in mitigating—

[Malcolm Allen, NDP, Welland, ON]

I hate to interrupt, but let me just read the words to you again word for word, verbatim, because you're going to try to take me down a different road, or a different track. Pun intended.

It said: “railway operations that might be more likely not”—I'll emphasize the word, sir, not—“to comply with the regulatory safety framework”.

Sir, that says to me that if you do not comply with the regulatory safety framework, the potential for something unsafe to happen is then apparent. Does it not say that? I don't want to box you in yes or no, but does it not say that?

[Louis Lévesque]

It says that if you don't have a uniform methodology—

[Malcolm Allen, NDP, Welland, ON]

Which you didn't--

[Louis Lévesque]

Okay.

[Malcolm Allen, NDP, Welland, ON]

The audit says you didn't.

[Louis Lévesque]

We didn`t have a uniform methodology to both assess risk and deploy the resources. We are not in such a good position, not having that, because if we had that we would be deploying our resources to maximum effect to reduce the risk.

[Malcolm Allen, NDP, Welland, ON]

I hate to cut you off again, sir, but you prefer one word. I prefer to actually use the word that's there, which is “not”--“not to comply”.

I'm a guy from Welland and in Welland when you say “not”, that's a negative. I don't know how else to put that.

Have I run out of time, Chair?

[The Chair, NDP, David Christopherson]

You have, sir. Thank you, Mr. Allen.

Over to Mr. Hayes, who now has the floor, sir.

[Bryan Hayes, Conservative, Sault Ste. Marie, ON]

Thank you, Mr. Chair.

Mr. Ferguson, you mentioned that the guidance and tools provided to inspectors for assessing federal railways' safety management systems are missing many key elements.

You basically told us of one. You said:

For example, they contain few requirements to help inspectors plan, conduct, and conclude on audits and inspections, and for following up on findings.

You've mentioned one key element. What I want to know is if you have provided to officials some advice and guidance in terms of what else is missing.

The reason I ask that is because I want to make sure officials actually understand your line of thinking in terms of what is missing in their ability to assess NSMS. If they don't clearly understand what's required from your perspective, the next audit may come around and they will have been missing something that you think they should have. So I want to understand whether you have provided them information in terms of what they were missing, outside of the one specific item you identified in your report.

[Michael Ferguson]

Actually, I think in paragraph 7.64 we talk about some of the areas where the methodology didn't contain requirements. There are a number of bullets there, including on preparing a sampling plan and so on. There are a number of items listed there. I could read them all out if you want—

[Bryan Hayes, Conservative, Sault Ste. Marie, ON]

You don't have to.

[Michael Ferguson]

—but they're listed in paragraph 64.

[Bryan Hayes, Conservative, Sault Ste. Marie, ON]

I have the same question to you, Mr. Lévesque, with respect to the Auditor General's statement. Can you give me a level of confidence that you understand what guidance and tools need to be provided to your inspectors, and that this concern of the Auditor General has been addressed?

As well, the Auditor General talked about audits and inspections and he had them all within the same sentence. It's a little disconcerting that you've mentioned that...I think you did 30,000 audits, did I hear you say?

[Louis Lévesque]

Inspections.

[Bryan Hayes, Conservative, Sault Ste. Marie, ON]

Inspections, right.

This would lead me to believe that your inspectors don't have the guidance and tools to understand how to do an inspection. I need a level of assurance that your auditors know how to conduct an audit, and that your inspectors know how to conduct an inspection.

[Louis Lévesque]

For us, the basic message from the Auditor General is to have uniform, clear, and systematic documentation and instructions to our staff in the field in order that we maximize the consistency and the effectiveness and efficiency. That message is heard loud and clear.

As professional auditors, their job is to look to see if you have the proof, the documentation that your activities follow that consistency. We are not there yet, but we have a plan to get there.

[Bryan Hayes, Conservative, Sault Ste. Marie, ON]

Okay.

Next, I wonder if you could define for the committee the attributes of a high-risk versus a low-risk railway. With respect to safety risk management, how do they differ and do you actually take into consideration what is a high-risk versus a low-risk railway and put more emphasis on a high-risk railway? I want to understand that whole concept of high risk versus low risk.

[Louis Lévesque]

There is a number of factors, including the types of operations, where they go through, the size of the operation, the nature of what they transport. All of that is taken into account.

Laureen and Luc have 50 years of experience.

[Laureen Kinney]

Perhaps I can just start with the way that the inspection process is looked at. We do look at factors. There are three basic components.

One component is proactive, functional program inspections where we look at the sampling process and go out to sample and surveil across the industry to see where we're finding some non-compliance issues that may indicate a higher risk. We do that sampling on a regular basis all through the year as part of the elements of what we plan to inspect.

The second part is responses. That's where you get a complaint, you get an issue raised. We have very good relationships with the unions as well as the companies themselves, so we will get information through that. We'll get information from the U.S., etc. So that is built in as part of the plan to do inspections, to address those issues.

Then, finally, there are the actual emerging issues that arise from an incident or an accident and something that needs to be addressed.

So all of those things feed in. That tells you where we should focus, where the higher risk inspection priority should be. There are other factors that come in from the regional inspectors, such as if there's a major change in the company, if there's a major change in the operation, in the way that they operate, the area where they operate, they're going into new territory, those kinds of things. There are many factors like that.

[Bryan Hayes, Conservative, Sault Ste. Marie, ON]

What's my time?