Thank you very much, Mr. Chair. No offence. I hope it's not a harbinger of things to come.
I thank the committee for the opportunity to talk to you today. As you mentioned, Laureen Kinney is with me as the newly formally appointed assistant deputy minister for safety and security, but has been in the portfolio and the business for a long time. I also have Luc Bourdon with me, who is the director general for rail safety and is a very experienced manager of safety issues.
The Auditor General’s report identifies major priorities for Transport Canada to improve its rail safety oversight. It identifies some areas that Transport Canada could further improve upon, and we accept all the recommendations made in the Auditor General’s report.
Our efforts to strengthen the rail safety program and to address the Auditor General’s recommendations, have led to the development of an accelerated action plan. Work has already begun on its implementation. Most action items are to be completed by fall 2014 and the entire action plan is expected to be fully implemented by fall 2015. Putting the action plan to work is a departmental priority for the coming years.
I would first like to take a few minutes to explain what a safety management system, or SMS as most call it, is exactly.
A safety management system is a formal framework that helps railway companies integrate safety into their day-to-day operations. It encourages the development of a safety culture throughout all levels of an organization and ensures that safety is considered a factor in all decision-making in the business.
The safety management system approach is not deregulation or self-regulation. In fact it helps organizations comply with regulatory requirements and demonstrate their commitment to the safety of their employees and obviously their whole operation. Key elements of safety management systems for railways include the development of safety goals and performance targets; risk assessments; clarification of rules, responsibilities, roles, and authorities in respect of safety; and development of rules and procedures in monitoring and evaluation processes.
Companies have a wide range of options for compliance within the regulatory requirements and are encouraged to identify means of compliance that are in keeping with the regulations and tailored to specific company circumstances.
In the past, railways and many other safety-critical industries pursued safety through compliance with prescriptive rules and regulations. As safety research progressed during the 1990s, it became clear that compliance tools and regulations alone were insufficient to ensure the highest possible level of safety. What companies really needed for a truly effective safety regime, in addition to specific prescriptive regulation, was a proactive, systemic approach to safety that allowed them to proactively identify hazards and mitigate risk in order to prevent accidents. This approach also allowed lessons learned from minor incidents in day-to-day operations to input into the system, thereby creating a state of continuous safety improvements with more likelihood of avoiding accidents in the first place.
In short, SMS is predicated on moving away from a finite and fixed risk mentality to a greater focus on systemic issues, from being reactive to becoming proactive, from simply measuring by the number of interventions to being really focused on the results, and from only inspecting individual elements to also auditing the whole system. The benefits of a more advanced approach were recognized during the Railway Safety Act review in 1994. Amendments were introduced in 1999 requiring railway companies to develop and implement safety management systems.
When the Railway Safety Management System Regulations came into force in 2001, they were the first of their kind in the federal transportation sector. They were created with significant industry input and emphasized the railways’ responsibility for safe operations.
These regulations were not intended as a replacement for existing rules, regulations and inspection practices. On the contrary, they were implemented as an important complement to other forms of rail safety oversight, which is how they remain today.
That being said, there is always room for improvement, and I am happy to share how Transport Canada is addressing the recommendations of the Auditor General.
On the regulatory framework, the report recognizes that Transport Canada has kept abreast of safety issues and it has made significant progress in implementing recommendations from the Railway Safety Act and the Standing Committee on Transport, Infrastructure and Communities, but notes that more work needs to be done, and we agree with that.
We remain committed to addressing all remaining relevant recommendations, and we have developed a detailed plan to complete their implementation.
We are accelerating the development of several regulations to further strengthen the rail safety federal regulatory regime. Our intent is to pre-publish the proposed regulations of top priority in the Canada Gazette Part 1 before Parliament rises for the summer break in June 2014. In fact, as part of Transport Canada's accelerated plan, the department has already pre-published two proposed regulations in the Canada Gazette Part 1: the grade crossings regulations on February 8, 2014, and the railway operating certificate regulations on March 15, 2014.
The department has also established a formal process to assist with addressing safety issues on an accelerated basis. The department's rail safety integrated gateway data system will track and monitor progress on safety issues from the time they are identified to the point they are mitigated to an acceptable level.
In addition, the department will continue to work with the Advisory Council on Railway Safety and its working groups to mitigate safety Issues. As a matter of fact, following Lac-Mégantic we have already had specific meetings and follow-ups with them to address safety issues.
On the planning side, to respond to the Auditor General's recommendations Transport Canada is undertaking a review of its risk-based planning process with a view to ensuring our audit and inspection activities are focused on areas of highest risk, including railway companies' compliance with the regulatory framework. From the results of the review, the risk-based planning process will be enhanced and will provide the basis for the number of annual audits and inspections.
Resources will be allocated accordingly, keeping in mind the need for the rail safety program to complete a sufficient number of audits and inspections to provide assurance that the federal railways have implemented adequate and effective safety management systems to comply with the regulatory framework.
By fall 2015, according to our plan, the department will have identified key safety risk and performance indicators and specific safety performance information that it requires from railway companies. It will have developed the regulatory requirements outlining the specific safety performance information required from railway companies, and will have communicated this information to federally regulated railways. It will also collect risk and performance information on an ongoing and systematic basis. In that respect, we have regulatory initiatives to ensure we have the instruments to do that. It will review the information to ensure it is both reliable and complete, and analyze information gathered and taken it into account when preparing annual oversight plans.
To this end, Transport Canada' s rail safety program in headquarters and the regions will together monitor the implementation of the annual oversight plans and, if necessary, adjust plans and calibrate planned inspections and audits in response to emerging risks to ensure that plans provide for adequate coverage.
Regarding the conduct of oversight activities,
Transport Canada will use its Rail Safety Integrated Gateway data system to address the Auditor General’s recommendations on conducting oversight activities. This system was developed to provide inspectors with the tools needed to document, analyze and report on the results of their oversight activities.
To enhance its systems-based approach to oversight, Transport Canada will amend the current Railway Safety Management System Regulations. That is in keeping with the new Railway Safety Act that was passed and came into effect last spring.
In addition to existing measures requiring a railway company to address deficiencies within its safety management system, the amendments would also require the railway company to document the results of the activities undertaken to implement and monitor the corrective actions taken.
Transport Canada also has a detailed action plan in place, which includes measures to enhance its oversight activities. Under this plan, the department is updating and developing tools, processes and guidance materials as well as delivering training to ensure that oversight activities are conducted consistently following established processes and procedures.
In order to achieve this, we will meet the following deadlines.
By next spring, we will have developed, documented, and communicated a management review process for rail safety oversight activities. The process will define roles, responsibilities, and accountabilities for both management and inspectors. We will have included performance expectations in managers' annual performance agreements.
By next fall, we'll have developed the follow-up procedures for audits and inspections and will have begun tracking follow-up activities in our railway data system.
By the spring of 2015, we will have updated the inspection procedure to refine the expectations.
To ensure the methodology is consistently applied, training and guidance on all new initiatives will be provided to managers and inspectors on a timely basis.
With regard to human resource planning, we continually analyze our workforce, and we work to recruit and retain staff to make sure we have the resources where they're needed to provide the greatest safety benefits. We have a highly dedicated professional corps of inspectors, which I personally meet with on a regular basis here in Ottawa and across the country.
Transport Canada developed a human resources strategy that will identify the inspector skills and competencies required in a systems-based approach to oversight. It will also include an assessment of skills and competencies found in its current workforce and an assessment of the gaps, if we find any. The assessment will form the basis for inspector training, recruitment, and retention strategies that will ensure the rail safety program has the required staff with the skills and competencies it needs to plan and implement its oversight activities.
Targeted timeframes for mandatory training will be established and monitored on a regular basis to ensure that training required for inspector credentials for oversight activities is taken in a timely manner.
The department will also put in place additional measures. In fact, I shouldn't say “will”: we have put in place additional measures that require all inspectors to update their conflict-of-interest declarations every two years and submit new declarations whenever circumstances change. The railway safety program validates on a regular basis that inspectors have complied with this requirement, if instituted in a departmental cycle, to ensure that they maintain their independence and objectivity.
In terms of quality assurance, Transport Canada Rail Safety has a comprehensive quality management system that includes directives, procedures and processes and a quality assurance program to identify any gaps and best practices.
Transport Canada Rail Safety has developed a risk-based approach to prioritizing internal assessments as part of its established quality assurance plan, which includes regular evaluations of audit and inspection procedures.
A three-year plan for conducting quality assurance assessments, based on risk, has been established and includes periodic assessments of oversight activities, including audits and inspections.
Rail Safety has scheduled a quality assurance assessment of oversight activity on the inspection procedure to be completed by next fall.
We certainly recognize that we need to continue to improve our program, and we certainly take to heart the message. We're making progress, but we need to accelerate the pace of progress.
Last week, Minister Raitt announced multiple decisive actions that Transport Canada is taking to address the Transportation Safety Board of Canada's initial recommendations regarding the ongoing investigation into the Lac-Mégantic train derailment. As we speak, and as people may be aware, there's an ongoing incident in the U.S. involving another derailment of crude oil, in Lynchburg, Virginia. Obviously, we are working continuously with our American counterparts to ensure we share as much information as possible, both to keep our regimes integrated and to benefit from learning about everything that happens in North America.
These actions, in combination with the Transport Canada rail safety action plan presented to you today, not only demonstrate the department's commitment to improve railway safety in the transportation of dangerous goods by rail, but also will further strengthen Canada's regulation and oversight of rail safety and the transportation of dangerous goods.
The Auditor General's report certainly confirmed that the issues we have identified and the actions we are beginning to take are the right ones, which makes us confident that in the coming years we will respond to the Auditor General's recommendations and contribute to Transport Canada having a strong, risk-based safety program. This will ensure that the Canadian railway system remains one of the safest in the world and one that Canadians can trust.
Thank you, Mr. Chairman. Obviously we welcome questions from committee members.