Public Accounts Committee on May 6th, 2021

[Michael Keenan]

I completely agree.

[Luc Berthold, Conservative, Mégantic—L'Érable, QC]

Mr. Keenan, the Auditor General invited you to look at what other countries are doing to improve rail safety in Canada.

Did you contact the Auditor General to find out exactly what she wanted you to see outside? Do you intend to do that?

[Michael Keenan]

Yes. Officials from Transport Canada and the Office of the Auditor General have had some interesting conversations about best practices to guide our efforts to put in place a system to measure the effectiveness of rail safety management systems.

Mike, I'll turn it to you. Could you elaborate on that? You're the one who had those conversations.

[The Chair, Conservative, Kelly Block]

Mr. Berthold, you have 10 seconds left.

[Michael DeJong]

Very quickly, we've actually done follow-up with our U.S. counterparts as well as with our U.K. and European Union counterparts to look into potential indicators for how we can improve our measurements of the oversight regime, including by potentially leveraging some best practices from the U.S. as well as our Canadian Energy Regulator in terms of potential performance indicators.

[The Chair, Conservative, Kelly Block]

Thank you very much.

We will now go to Mr. Sorbara for six minutes.

[Francesco Sorbara, Liberal, Vaughan—Woodbridge, ON]

Thank you, Chair.

Good morning, everyone, and thank you for your testimony.

The issue of rail safety is of paramount importance in the area that I live in and represent. The City of Vaughan is home to CN's largest rail yard in the country, the MacMillan yard, and Canada Pacific's, CP's, busiest intermodal facility in the country is located on the west side of my riding. I have a rail line going over the main artery of a regional road here along Highway 7 and another bridge going over a very densely populated area with many seniors, Woodbridge Avenue, here in the heart of the riding.

To add to that matter, I grew up in northern British Columbia and Prince Rupert, and they have a very busy rail facility there, and the coal port and the grain elevator. Obviously that's been my exposure to rail and rail safety. It's of paramount importance and always on my mind for my residents first and foremost.

I just want to pull up the report, and I want to go to the AG. I've read very intently paragraphs 5.56 and 5.57, in which the Auditor General speaks to the 66 inspections conducted between September 2018 and August 2020 that required a railway to take follow-up action. It seems that our railway operators have quite effectively followed up on those inspections.

Can you comment on that, Auditor General, please?

[Karen Hogan]

I might ask Dawn Campbell to add a bit more detail if you'd like some more specifics, but our findings were that in the 66 inspections we looked at, the department had confirmed that the railway company had taken action in 92% of the files that we reviewed. Then there were some plans to address outstanding issues in the 8% of the files that remained, which is about five of those files.

I don't know, Dawn, if you wanted to provide a little bit more colour to the findings there.

[Dawn Campbell, Principal, Office of the Auditor General]

I think that's been summarized quite well, so I have nothing to add at this point.

[Francesco Sorbara, Liberal, Vaughan—Woodbridge, ON]

In the transportation of dangerous goods, if I can ask, I know MP Bachrach is the former mayor of Smithers, if I remember correctly, in the area of country where I spent the first 20 years of my life in. We know the transportation of dangerous goods is obviously something we think about, but, Auditor General, in your view, how much progress have we made? I know this is a big-picture question. I believe that in the Skeena—Bulkley Valley riding, the number of incidents is actually very low and that there has been no release of dangerous goods at all in the last, say, 10 to 15 years.

Auditor General, and even to the Transportation Safety Board, how much progress have we made in ensuring safety in the transportation of dangerous goods and their release subsequently if an incident happens? How confident can we be in the processes in place?

[Karen Hogan]

I can't really speak to the specifics of a riding, but I can talk to you a little bit about the overall findings in the most recent report that the commissioner of the environment and sustainable development tabled back in October. His findings were quite similar to the ones of the follow-up audit that we're looking at now, which is that steps had been taken by Transport Canada, but they just hadn't gone far enough.

I think one of the most important items that remained outstanding from the dangerous goods follow-up was that a standard for flammable liquids had not yet been established. Now, that was at the time of our audit. There was supposed to be a deadline in early 2021, but at the time of our audit, that had not yet been established. I think we're seeing very similar findings in both follow-up audits, so they're recognizing progress, but there are really important steps still outstanding.

[Francesco Sorbara, Liberal, Vaughan—Woodbridge, ON]

Is there any follow-up from Transport Canada on that?

[Michael Keenan]

I agree with the Auditor General's take that there's been significant progress in terms of dangerous goods and there are some areas outstanding that we are driving to address.

There are two parts to that. One of it is there's some similarity to the observations on this audit in that there is a.... We had to do a better job systemically of connecting the risk information from our inspections to our follow-ups on dangerous goods inspections, and on that one, we went from 30 inspectors to 90 and we had to do more to make it more risk-based.

In terms of the specific item the Auditor General raised, I'm going to turn it over to Mike. I know we're following up on that, but could you or Aaron remind the committee members of the timetable on that?.

[Aaron McCrorie, Associate Assistant Deputy Minister, Safety and Security, Department of Transport]

Maybe I can take that.

In terms of a specific recommendation around a new fuel standard, I'm not familiar with that recommendation from the CESD audit.

As the deputy had noted, there were recommendations around updating our tools and database to have more complete information and accurate tracking documentation to verify that companies have returned to compliance and ensure that the containment facilities where certificates have expired are doing those activities. That last one, for example, is now closed. We've closed that recommendation—

[Michael Keenan]

Sorry; it's actually the standards for flammable liquids on ERAPs. That was outstanding for years. The standard has now been established, and we're now in the process of communicating that and implementing it. I don't think we've communicated it out yet, but we're in the process of doing it this year.

[The Chair, Conservative, Kelly Block]

Thank you very much.

We will now move to Mr. Blanchette-Joncas for six minutes.

[Maxime Blanchette-Joncas, Bloc, Rimouski-Neigette—Témiscouata—Les Basques, QC]

Thank you, Madam Chair.

My question is for Mr. Keenan.

Earlier, you mentioned the responsibility of the railroads for railway safety management systems. What does that responsibility look like? Can they be fined? Can the responsibility for managing their own rail safety management system be taken away from them?

[Michael Keenan]

Thank you for the question.

Railway companies have more than one obligation in that regard. First, they must develop rail safety management system according to the 2015 rules. Second, they have an obligation to implement all plans included in their rail safety management system.

With the new SMS regulations that were put in place in 2015, there are multiple points of accountability, and if a company fails to deliver on that accountability, as conditions warrant and as facts warrant, there is an ability to go from inspections and oversight to an enforcement process that could result, for example, in administrative monetary penalties.

[Maxime Blanchette-Joncas, Bloc, Rimouski-Neigette—Témiscouata—Les Basques, QC]

Mr. Keenan, could your department send me a list of the responsibilities that have been placed on railways since 2015, as well as a list of actions taken by your department?

I'm trying to understand the situation.

In 2001, Transport Canada decided to establish the Railway Safety Management System Regulations, which require federally regulated railways to have their own fail safety management systems. This is called deregulation.

In 2015, after observing deficiencies, the department decided to repeal the Railway Safety Management System Regulations and replace them with new regulations that give Transport Canada an oversight role to assess the effectiveness of railway safety management systems.

However, the Auditor General's report tells us that Transport Canada is unable to measure the effectiveness of railways' rail safety management systems.

In reading the Auditor General's report, I note that you are unable to ensure that the regulations developed by your department are producing concrete results.

[Michael Keenan]

There are two parts to answer that question. The first is that the regulations in 2015 established a modern standard for what has to be in a safety management system, with significant detail that maps to the best knowledge of the day in terms of safety outcomes. It's the accountability and responsibility of the operator to build that system and to document it to Transport Canada.

We first and foremost assess the compliance with the regulations. That was the primary focus of the dramatic increase in audits of SMS plans, and that assures a higher level of safety performance overall. A second aspect is an analytical question of actually taking different elements of the SMS plan and SMS performance and analytically establishing a quantitative relationship between that specific thing and a broader safety outcome, and that's the work we are doing now. The accountability of the companies is there, the improved safety performance is there, and we're now working to go to the next level of analytically tying specific elements of the safety system to outcomes.

That's a complicated piece of work, and it's an emerging piece of regulatory safety oversight on which we're consulting with the leaders in this practice around the world to ensure that we have a world-class framework and approach for doing that.

[Maxime Blanchette-Joncas, Bloc, Rimouski-Neigette—Témiscouata—Les Basques, QC]

Mr. Keenan, I don't find this very complicated. In 2015, you created a framework, a new regulation, and the Auditor General is telling you today that your department is unable to measure the effectiveness of this regulation, in other words, the effectiveness of the rail safety management systems of railway companies.

[Michael Keenan]

There are two parts. We've established the regulations and we've done audits to ensure compliance. We're using the data from that activity to improve effectiveness.

There is a broader question, which is mapping the safety outcome. The safety management system is built on the principle that the operator has a key role and that their management is a key factor in safety outcomes, along with the regulations and standards of Transport Canada and the oversight of Transport Canada and the work of communities at grade crossings, and employees. There are many players and there are many factors in the safety outcome.

The work the Auditor General has asked us to do is to start to isolate those factors and to identify in some analytical and, if possible, quantitative manner how each specific factor of each element of the SMS and the other elements of the safety system contribute to improving performance to have lower accidents with higher volumes.

We are in the process of doing that. The fact that it is ongoing does not undermine the fact that the operators are accountable to a much more exacting standard in their safety management systems, and have been since 2015, and they're being rigorously audited on it. When they're coming up short, they are subject to enforcement measures from Transport Canada.

[The Chair, Conservative, Kelly Block]

Thank you very much, Mr. Blanchette-Joncas.

We will now go on to Mr. Bachrach for six minutes.

[Taylor Bachrach, NDP, Skeena—Bulkley Valley, BC]

Thank you, Madam Chair.

Mr. Keenan, picking up on the key trains and key routes aspect and the situation in northwest B.C. in particular, I understand from your previous comments that CN is doing a risk assessment but has not yet completed it and that Transport Canada has established standards for flammable liquids but has not yet communicated those to the rail company.

The challenge I have is that the trains are rolling. If I walk out the door of my office right now and look down the street, I can see them. They've been rolling for some time. In 2019, the first liquid propane terminal in Prince Rupert began operation. The second terminal began operation just recently.

Should these steps not have been taken before those trains rolled? Are our communities at higher risk until those steps are completed, until the risk assessment is completed by CN and Transport Canada has a chance to check it out? Why are we doing these things retroactively, after the trains are already rolling?

[Michael Keenan]

There are two parts to that.

The first is that trains have been rolling to Prince Rupert with flammable liquids for many years. There has been a systemic increase in standards around key trains, which are trains carrying dangerous goods. There's been a systemic increase in standards for high-risk key trains. The kind of trains you're talking about qualify.

As part of those higher standards, when there is a change in operating, including greater volumes, there's a requirement to update the risk standard. There have been risk assessments, standards and measures put in place for years. Now there's a regulatory requirement for CN to provide an updated risk assessment and for Transport Canada to assess that, but that's not the first step in the safety process. There have been many steps before that.