Public Accounts Committee on Nov. 5th, 2020

[The Chair, Conservative, Kelly Block]

I call this meeting to order.

Welcome, colleagues, to meeting number five of the Standing Committee on Public Accounts. The committee is meeting in public and is being televised today. I would like to save half an hour at the end of our meeting to discuss committee business.

As you are aware, the subcommittee on agenda and procedure met Tuesday evening, and you should have all received a copy of the subcommittee's draft report. I'd also like to advise the committee that after the constituency week next week, we will be able to sit twice a week. Our next meeting will be Tuesday, November 17.

Pursuant to Standing Order 108(3)(g), the committee is meeting today to study report 1, “Follow-up Audit on the Transportation of Dangerous Goods”, of the 2020 fall reports of the commissioner of the environment and sustainable development.

Today's meeting is taking place in a hybrid format, pursuant to the House order of September 23, 2020. The proceedings will be made available via the House of Commons website. The the webcast will always show the person speaking rather than the entire the committee.

To ensure an orderly meeting. I would like to outline a few rules.

You may speak in the official language of your choice. Interpretation services are available for this meeting. You have the choice, at the bottom of your screen, of either the floor, English or French.

For those participating via Zoom, before speaking, click on the microphone icon to activate your own mike. When you are done speaking, please put your mike on mute to minimize any interference. Should members need to request the floor outside of the time that has been given to them by me, you should activate your mike and state that you have a point of order. If a member wishes to intervene on a point of order that has been raised by another member, you should use the “raise hand” function. This will signal to me, your chair, that you have an interest to speak and then I can create a speakers list. In order to do so, you should click on “participants” at the bottom of the screen. When the list pops up you will see, next to your name, that you can click “raise hand”. This function creates a list of speakers.

Unless there are exceptional circumstances, the use of headsets with a boom microphone provided by the House of Commons is mandatory for everyone participating remotely who needs to speak. Of course, if any technical challenges arise, please advise me.

I'd now like to welcome our witnesses.

Joining us today, from the Office of the Auditor General, are Andrew Hayes, deputy auditor general and interim commissioner of the environment and sustainable development; Francis Michaud, director; and Kimberley Leach, principal.

From the Canadian Energy Regulator, I would like to welcome Gitane De Silva, chief executive officer; and Sandy Lapointe, executive vice-president, regulatory.

From Transport Canada, we have Michael Keenan, deputy minister; Aaron McCrorie, associate assistant deputy minister, safety and security; and Benoit Turcotte, director general, transportation of dangerous goods.

To our witnesses, you will have five minutes to make your opening statements.

We'll begin with Mr. Hayes.

You have the floor, Mr. Hayes.

[Andrew Hayes, Deputy Auditor General and Interim Commissioner of the Environment and Sustainable Development, Office of the Auditor General]

Madam Chair, thank you for this opportunity to discuss our follow-up report on the transportation of dangerous goods, which was tabled in Parliament on October 27.

Joining me today are Kim Leach, the principal responsible for the audit, and Francis Michaud, who was on the audit team.

Dangerous goods are solids, liquids, or gases that when spilled or released have the potential to harm the health of Canadians and other living organisms, property, or the environment. Examples include crude oil and petroleum products, toxic and explosive gases, flammable and infectious substances, radioactive materials and corrosive chemicals. These goods play a key part in Canada's economy and society.

They are transported throughout Canada by rail, road, ship, air and pipeline. Spills and releases of dangerous goods can happen with any mode of transportation, and accidents can have tragic consequences. Therefore, these goods require special protection to ensure their safe transportation.

It is the job of Transport Canada to monitor and enforce transporters' compliance with laws and standards that are met to ensure that dangerous goods are transported safely. It conducts inspections at rail, marine, road and air facilities and buildings where dangerous goods are manufactured, stored, or received.

Another of Transport Canada's oversight functions is reviewing and approving emergency response assistance plans prepared by companies transporting dangerous goods. The Canada Energy Regulator, formerly the National Energy Board, plays a similar role by overseeing federally regulated oil and gas pipelines.

Our recent audit followed up on specific recommendations from the audits focusing on the transportation of dangerous goods that we completed in 2011 and 2015. The audit also focused on whether the organizations followed up with companies that had contravened regulations to ensure the companies returned to compliance, among other things.

Overall, we found that since our 2011 audit, Transport Canada had made some improvements in the areas we followed up on. For example, it strengthened some of its policies, procedures, systems and guidance.

However, Transport Canada has more progress to make to address the problems we identified to support the safe transportation of dangerous goods. We found the department still had not followed up to ensure that companies addressed the violations identified through inspections. For example, the department had not verified that companies took corrective action on 30% of the violations we looked at.

In addition, the department had not given final approval to many emergency response assistance plans. These plans outline what is to be done to respond if dangerous goods that endanger, or could endanger, public safety are released while being handled or transported. These plans must demonstrate that specialized personnel and equipment are available in a timely manner to help first responders, such as firefighters.

We found that approximately one quarter of the plans had not received final approval, some of which had had interim approval for more than 10 years.

We also found that, although Transport Canada had developed and implemented a national risk-based system to prioritize its inspections, the underlying data was incomplete and outdated. For example, almost one third of the sites included in the national inspection plan for the 2018-19 fiscal year turned out to be closed, had moved, were duplicates or may no longer have been involved in the transportation of dangerous goods.

In other words, at the time of our audit, Transport Canada did not have a clear picture of the community that it regulates or of the compliance status. As this committee knows, data quality has been a common theme in our performance audit reports across government. Good quality data is needed for good quality decisions.

We made five recommendations to Transport Canada and the department agreed with all of them. In its response the department included specific timelines.

With respect to pipelines, we found that since 2015 the Canada Energy Regulator had largely implemented the three recommendations that we followed up on and improved its oversight of companies that build and operate pipelines. For example—

[The Chair, Conservative, Kelly Block]

Mr. Hayes, I'm so sorry to interrupt, but you're past your five minutes. Would you bring your remarks to a conclusion and then perhaps our members can pick up where you leave off.

[Andrew Hayes]

Absolutely. Thank you, Madam Chair.

I'll finish by saying that we made some observations and a recommendation for the Canada Energy Regulator to improve the way it documents its analysis of pipeline approval conditions and the regulator agreed with our recommendation.

This concludes my opening remarks. We would be pleased to answer any questions that the committee may have.

Thank you.

[The Chair, Conservative, Kelly Block]

Thank you very much, Mr. Hayes. I know we're trying to squeeze a lot of information into a very short period of time.

Ms. De Silva, we will now move to you for your five minutes.

[Gitane De Silva, Chief Executive Officer, Canadian Energy Regulator]

Thank you, Madam Chair.

Good morning. Thank you for inviting us to join you today.

My name is Gitane De Silva and I am the chief executive officer of the Canada Energy Regulator, or the CER. It's an honour to appear here today on behalf of this organization. I am joined by Sandy Lapointe, the CER's executive vice-president, regulatory.

I first want to acknowledge that I am speaking to you from the traditional territories of the people of the Treaty Seven Region in southern Alberta, which include the Blackfoot Confederacy, comprising the Siksika, Piikani and Kainai First Nations; the Tsuut'ina First Nation and the Stoney Nakoda, including the Chiniki, Bearspaw and Wesley First Nations.

The city of Calgary is also home to Métis Nation of Alberta, region 3.

The Canada Energy Regulator is a new organization that takes a modern approach to energy regulation. Our governing legislation was passed only last year. The CER itself came into being about 15 months ago, replacing the former National Energy—

[The Chair, Conservative, Kelly Block]

I'm sorry.

Madam Clerk, we seem to be hearing both the English and the French translation at the same time. They're covering each other. I am on the English translation.

[Lloyd Longfield, Liberal, Guelph, ON]

Maybe Madam De Silva needs to go to the language of her choice.

[Gitane De Silva]

Yes, I've switched to French now.

[The Chair, Conservative, Kelly Block]

Thank you very much, Madam De Silva. You may proceed.

[Gitane De Silva]

Thank you. I apologize.

The CER itself came into being about 15 months ago, replacing the former National Energy Board. I'm new too. I started in this position last summer.

My job is to lead the CER forward with a new strategic plan, new mission and vision, as well as with four core responsibilities, which are safety and environmental oversight, energy adjudication, energy information, and engagement.

I am also focused on delivering the CER's four new strategic priorities, which include reconciliation, data and digital innovation, enhancing Canada's global competitiveness, and building the trust and confidence of Canadians in the CER.

The mandate of the CER is to regulate infrastructure to ensure safe and efficient delivery of energy to Canada and the world, protect the environment, respect the rights of indigenous peoples and provide timely and relevant energy information and analysis.

I'd like to begin by stating that safety is the CER's absolute priority. Our commitment to keeping people safe is at the core of who we are and what we do. As many of you have likely heard, sadly, there was a tragic incident resulting in a worker fatality last week at a Trans Mountain pipeline work site near Edmonton. On behalf of the CER, I extend my deepest sympathies to the family and all those affected by this tragedy. This is a truly heartbreaking event and a loss no family should suffer.

I would like to share with the members of this standing committee what the CER has done following this tragedy. Work at this site was halted, and two CER safety specialists were immediately sent to the site. Their role was to provide oversight of the respective investigations of the company and the contractor and to conduct an assessment of risk and non-compliance.

Last Friday the CER issued an inspection officer order to Trans Mountain regarding the incident. As the regulator, we share, along with provincial authorities, responsibility for overseeing occupational health and safety measures for the Trans Mountain expansion project. The lessons learned from this investigation will be used to prevent other tragedies in the future.

Now, turning to the Office of the Auditor General's release of its follow-up audit on the transportation of dangerous goods. The audit focused on the extent to which the CER and Transport Canada followed up on recommendations from the Commissioner of the Environment and Sustainable Development's 2015 audit focusing on the transportation of dangerous goods.

As Canada's national energy regulator, the CER welcomes this audit, as it verifies that the systems the former NEB implemented in its response to the 2015 audit are in place.

The 2015 audit put the organization on a path to identify what was important and to up its game.

I am pleased that, overall, the OAG found that the CER has largely implemented the recommendations from the last audit and that we have improved our oversight of companies that build and operate pipelines. More specifically, they commended the CER’s operations regulatory compliance application, or ORCA system, that is used to track and document compliance oversight activities. The OAG also noted that we have improved our follow-up measures to make sure companies take corrective actions to address any non-compliance activities.

The OAG did have one recommendation relating to how the CER documents the analysis of filings for the approval of conditions. The OAG recommended that “the Canada Energy Regulator should ensure that it has documented its analysis of companies’ submissions about how pipeline approval conditions have been satisfied”. The CER agrees with the OAG’s recommendation.

We are taking steps to address the OAG's finding and to implement corrective action by the end of 2020. Specifically, we will ensure that the correct documentation is added by updating the guidance to our staff and the systems that we operate.

I would like to thank you for giving me the opportunity to come before you today to speak about the work of the CER. We are committed to continual improvement, and we will always take on board any measures—like this audit—that can help us become a better regulator.

Before I wrap up, I would like to thank the CER staff, who worked so hard on this audit. Their professionalism and passion are greatly appreciated.

I look forward to your questions.

Thank you.

[The Chair, Conservative, Kelly Block]

Thank you very much, Madam De Silva.

Now we will go to you, Mr. Keenan, for your five-minute presentation.

[Michael Keenan, Deputy Minister, Department of Transport]

Good morning. It's good to see you again, Madam Chair.

Thank you for the invitation to appear before the Standing Committee on Public Accounts today.

As part of the audit of Transport Canada’s transportation of dangerous goods program, the commissioner of the environment and sustainable development issued five recommendations to Transport Canada.

At the outset, I would like to thank the interim commissioner and his team for their rigorous review of the program. We take very seriously the findings and the recommendations from this audit, and we've begun implementing them.

We also recognize and appreciate the value of this audit in helping us to continually improve our oversight and the safe transportation of dangerous goods in Canada and to deliver on our mission to be a world-class regulator.

As noted in the audit, Transport Canada has made some important progress in terms of addressing the earlier recommendations from the CESD. These include implementing agreements with all provinces and one territory to share data related to the transportation of dangerous goods, given that it is an area of shared effort between governments; clarifying requirements for the review and approval of the emergency response and assistance plans, the so-called ERAPs; and adopting a risk-based plan to target inspections.

Following the Lac-Mégantic tragedy, Transport Canada began a series of immediate and longer-term actions to further strengthen federal rail safety and the transportation of dangerous goods. Actions were taken under the following pillars: promoting open transparent government and community engagement, enhancing international collaboration, and reinforcing the oversight regime.

Transport Canada also amended regulations to impose stricter requirements on the securement of unattended trains and to require that railway companies carrying large volumes of dangerous goods reduce the speed of their trains.

Regarding oversight, the department has overseen the implementation of a more robust oversight regime in recent years. The number of oversight personnel employed by the transportation of dangerous goods program has quadrupled from around 30 inspectors to over 100, and approximately 5,900 inspections are planned in 2020, compared to 2,300 in 2012.

While these actions represent significant progress in improving rail safety and the transportation of dangerous goods, we fully accept the findings of the CESD regarding the need for further improvement. We have already started taking action and have implemented changes to address two of the five recommendations. The first relates to procedures and training for inspectors to ensure that follow-up on violations is undertaken by companies, and the second involves a more rigorous oversight process ensuring that facilities do not operate with expired registrations.

We are working on the other three recommendations, and they will be addressed over the next two years through continued improvements and the implementation of a national risk-based oversight system by refining and modernizing data collection efforts to better understand the national rate of compliance and the emerging risks in the transportation of dangerous goods and by addressing the delays in the final approval of the emergency response assistance plans.

Madam Chair, I should say that our progress in addressing these recommendations is closely related to the organizational transformation we've undertaken across all of Transport Canada, with the top priorities being shifting from paper-based to digital work processes, transforming our service delivery and modernizing our safety regulations and oversights.

In our safety oversight programs, we're working to use digital platforms and tools for our inspectors to enable our system to be responsive and risk based, to enable us to have common oversight processes and to make better and more effective use of data and analytics in driving our oversight program. The work under way to improve the TDG program is really an important element of this broader departmental strategy. For example, we're modernizing digital information systems and allowing for better capture and analysis of data to have a comprehensive risk-based oversight of regulated companies in this program. One example is the new TDG inspector information system, which is currently undergoing beta testing. We plan to roll it out in the spring of 2021. That will no longer allow inspections to be closed off or completed until there's a confirmation of follow-up.

In closing, we are committed to ensuring continued improvement in how we deliver our program to ensure safe transportation of dangerous goods in all modes of transport in Canada, and we would greatly appreciate the analysis, critiques and recommendations of the commissioner of the environment and sustainable development in informing and shaping our efforts.

My colleagues and I look forward to your questions and comments.

[The Chair, Conservative, Kelly Block]

Thank you very much, Mr. Keenan. It is good to see you again. I appreciate all the different positions you've served in and that we've had an opportunity to work together on.

Before I go to questions by members, I'd like to welcome our colleague Mr. Bachrach. I believe he is with the NDP. He's going to be sharing time with our colleague Mr. Green.

Our first round of questioning will go to Mr. Luc Berthold for six minutes.

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

Thank you very much, Madam Chair.

First of all, Mr. Hayes, my thanks to you for your report highlighting what has happened at Transport Canada over the past few years.

Ms. De Silva, I would also like to thank you very much for your testimony.

Thank you, Mr. Keenan. This is not the first time we have had the opportunity to speak. I would like to say that Transport Canada has made progress over the past few years on rail improvements since the Lac-Mégantic tragedy. Many improvements have been made, but allow me to focus on what can be further improved, Mr. Keenan. I feel it is important.

A report like the one tabled by Mr. Hayes is worrisome for people in the Lac-Mégantic area. In that respect, to put you in context, I will read two passages from the mayor of Lac-Mégantic's open letter:

The day after the tragedy in Lac-Mégantic, consciences awoke, political will rose, and committees mobilized. But seven years later, are we collectively forgetting what happened that night?

A little further on, she writes:

But what I am asking you today, out of a duty to remember, is to see to it that everyone moves to action, and does so quickly. If reports are this worrisome seven years later, something is wrong. I would thank you to take the reports seriously.

Mr. Keenan, I saw in your responses that you had decided to take action, but what worries the people of Lac-Mégantic a lot is the response time given this shift to digital you are undertaking. How can you assure the people of Lac-Mégantic right here, right now that measures are being taken and you are acting as quickly as possible? When I look at the current report, I see many gaps. It shows that the department has not followed up on violations identified during inspections. Some of the gaps raised in 2011 have yet to be corrected.

Mr. Keenan, in a nutshell, what can you do to speed things up? Actually, what we want is to make things go even faster.

[Michael Keenan]

Thank you for the question.

It has been years since the tragedy at Lac-Mégantic, but it still looms large, not just for the citizens who suffered in that community but for the whole country. We continue to drive and push our program of dangerous goods and railway safety to ensure that we don't allow a tragedy like that to happen again.

I fully understand the mayor of Lac-Mégantic's concerns.

I can say that we are working across multiple avenues to continue to dramatically improve the rigour of the program on dangerous goods and the program on rail safety.

In particular, Transport Canada has taken a series of strong enforcement actions in the Sherbrooke subdivision over the last two years to get at a number of issues that came up with the operation under the CMQ.

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

Mr. Keenan, I understand, things always take time. However, the people of Lac-Mégantic are concerned; several things have happened.

Over the past few years, Transport Canada has made a commitment to correct the shortcomings, but with each report, we can see that things are still going backwards. In his report, the Commissioner of the Environment and Sustainable Development states the following:

1.30 We found that in 18 (30%) of 60 violations, Transport Canada did not verify that companies took corrective actions to return to compliance... - had no evidence to determine whether violations have been resolved, and that it did not follow up with companies to obtain the required evidence

It's very disturbing to read that when you have experienced and gone through a tragedy like the one in Lac-Mégantic.

In 2009, I sent a letter to Minister Garneau asking that dangerous goods no longer be transported by rail through Lac-Mégantic because the tracks were in terrible condition. Unfortunately, I did not even get an acknowledgement of receipt from Transport Canada or the minister's office. We know that those tracks were not built for trains running at such a low speed.

People are still worried, Mr. Keenan. What follow-up have you done on this matter? I could ask Ms. Crandall to send you the photos I received this morning of the current condition of the tracks. It would be good to send them to all committee members as well. Despite repairs by Canadian Pacific, Lac-Mégantic still has safety issues.

Mr. Keenan, you have set deadlines through to 2021. Honestly, with the staff you have, I wonder how you are going to be able to speed things up so that the next commissioner's report is not as devastating. Despite the progress, sadly, major gaps still remain.

[Michael Keenan]

Madam Chair, the member speaks to really important issues of rail safety. I can commit that in the recent years we have taken dramatic steps to improve oversight. For example, we have quadrupled the number of inspections.

The member has pointed out accurately that we are following up on the majority of inspections but not all of them. On that issue, we're bringing in a digital system for managing inspections that will require our inspectors to follow up on a hundred per cent of them. That will be in the spring of 2021.

Where we have an opportunity—

[The Chair, Conservative, Kelly Block]

I'm sorry, Mr. Keenan, but your time is up. Perhaps we can come back to that line of questioning further down the line.

I will now turn to Mr. Longfield for six minutes.

[Lloyd Longfield, Liberal, Guelph, ON]

Again, thank you to all the witnesses for the presentations to us today. I'm going to follow up on data with Mr. Keenan. That was something I had a question about.

First, I'm looking at the audit scope.

Mr. Hayes, I was very interested when I read in the audit that you were using sustainable development goals as part of your audit plan, specifically target 3.9, which is: “By 2030, substantially reduce the number of deaths and illnesses from hazardous chemicals and air, water, and soil pollution and contamination.”

Are we typically using the United Nations sustainable development goals as part of our audit plans?

[Andrew Hayes]

Thank you.

Yes, the Office of the Auditor General has been using and incorporating sustainable development goals and targets into our performance audits across the board. You can expect to see this as a frequent or regular part of our audit reports for both the commissioner and the Auditor General.

[Lloyd Longfield, Liberal, Guelph, ON]

Terrific. Thank you.

For Ms. De Silva, it's interesting to have a new department that, compared to the old energy board, has some expanded scope, which includes indigenous reconciliation. I'm wondering, with your department, how you might be using indigenous governance in meeting our regulatory requirements for transportation of dangerous goods through indigenous communities.

[Gitane De Silva]

We recently announced an indigenous advisory committee, which was put together back in August, of nine members representing indigenous nations and communities across Canada from coast to coast to coast. We have one member from each of the national indigenous organizations, as well as six other members representing leadership in their communities—a really diverse set of views.

Their job is to provide strategic advice to our board on a range of issues. That would be on everything from issues such as indigenous monitoring and how we can better include indigenous peoples in monitoring and oversight throughout the entire regulatory process, to more specific issues like increasing the cultural competency of the staff within this organization.

We're always looking for opportunities to increase that voice. We have placed reconciliation as one of our priorities and are really very focused on that. Our indigenous advisory council will help us to get there.

[Lloyd Longfield, Liberal, Guelph, ON]

How does that work get translated to departments like Transport Canada, which then in its case has to change some of its operations and standards. Would that be audited?

That's for Ms. De Silva, but it's actually a joint question, Mr. Keenan. Maybe you could start, Ms. De Silva, on how you communicate, and then Mr. Keenan on how you incorporate that into your operation.

[Gitane De Silva]

We certainly share the lessons we've learned across the federal government family, and we will be doing so going forward. There are a variety of fora for that.

We don't have direct responsibility for the transport of goods by rail that would follow Transport Canada, so I'll let Mr. Keenan address that part of the question.