Transport Committee on April 23rd, 2007

[Brian Storseth, Conservative, Westlock—St. Paul, AB]

Thank you very much, Mr. Chair.

Thank you very much, Minister Cannon, for coming forward once again today to help answer some questions on Bill C-6.

Hopefully this committee can continue to work together in the great progress that we have made. Soon we can be moving into clause-by-clause on Bill C-6, so that we can get on to some other important issues, like shippers' issues, that we're all aware of.

Minister Cannon, one of the storylines that we've really gotten in this committee from the start, with our witnesses, has been an endorsement of the safety management system and overlaying that on our current regulatory system.

In fact I can't recall a witness who hasn't come forward and said that safety management systems are great in theory. In fact, while we're reading quotes into the record, I would like to read a quote from Captain Dan Adamus of the Air Line Pilots Association:

Putting “Safety Management Systems” in place at aviation companies regulated and certified by Transport Canada would be an extremely promising step forward in safeguarding Canada's passengers, crew, and cargo. If it is passed, Bill C-6 would set the stage for a quantum leap in safety that will help detect safety threats long before accidents occur. ALPA strongly urges the Parliament to pass this important legislation.

Now, also Judge Moshansky, who was here, talked about SMS and the importance it would have. He actually claimed to have been one of the founders to start the conversation around SMS. Everybody is clearly in favour of SMS, as long as the current regulatory system and process remains in place. And from conversations with you and the department, I believe that those systems are not only going to stay in place, they're going to get a little bit stricter.

I would like to give you the opportunity to set the record straight for this committee on what we will be doing with the existing regulatory system.

[Lawrence Cannon, Conservative, Pontiac, QC]

Thank you for your question. Once again, I think it's an opportunity to be able to reassure everybody around this table that our objective is not to walk away from our responsibility. Our objective is not to deregulate.

Once again, the Government of Canada, through its legislation, and Transport Canada regulate this sector. This is an umbrella approach. It is another tier, another layer of security and safety that is being put forward.

When I was first introduced to this system, I asked exactly the same questions as a lot of the colleagues here around the table, and I wanted to know whether or not this was diminishing Canada's ability and Transport Canada's ability to perfectly regulate the industry and regulate it in terms of safety. We—or at the very least, I—came to a conclusion. When we have somebody who is working on a manufacturer's level and who is looking at the way they're going forward in terms of assembling a plane, when we have somebody who is with a recognized and well-known airline association, who says they are extremely conscious of the role they play with their pilots and with the industry, and when they are able to come forward and issue certificates, people take this extremely seriously. I think that at the end of the day, we have to be able to have confidence in the men and women who do this as a job. This is their daily bread, and they're extremely not only conscious but sensible, sensitized to these important issues. So we're not trying to walk away from our responsibilities.

I mentioned before in French that Transport Canada is a world leader in aviation safety. We've always been a world leader. We do not want to walk away from that. We still want to maintain our number one position. If we need to bring forward amendments that are going to reassure the members of this committee, we will do so, but our intention is to continue with the progress that we've established over the last number of years. It's not a question of being partisan or non-partisan. We're looking at the way Canada has made progressive and important moves in the past, and we want to be able to support and sustain that.

So any idea of walking away from that responsibility would be contrary to what the principles are and what the objective of this piece of legislation is.

[Brian Storseth, Conservative, Westlock—St. Paul, AB]

Thank you, Mr. Minister.

[The Chair, Conservative, Merv Tweed]

Thank you, Minister.

Your timing is impeccable. That was the full five minutes. The hour has passed us through, and I would like to thank you for attending today.

Perhaps we'll take a two-minute break while the minister and others choose to leave the room, and then we'll come back with our next witnesses.

[The Chair, Conservative, Merv Tweed]

Order, please.

Welcome back to the continuation of meeting 45. We still have the Department of Transport people here with us.

I would ask Mr. Bell to please continue.

[Don Bell, Liberal, North Vancouver, BC]

Thank you.

I had hoped to get a chance to ask the minister this question.

I noticed one of the key amendments or proposals outlined in this bill, which I gather is really an updated version of Bill C-62, under the previous government's introduction. One of things that I noticed in the outline, and it was mentioned in the discussion, was the provision to encourage employees of Canadian airlines to report safety concerns voluntarily, without fear of legal or disciplinary action.

On the question of the safety management system and the issue of getting employees to be able to report things in an open or protected way, when we originally started discussing this, I was somewhat impressed with some of the proposals under the SMS, safety management system, for the airline industry.

We had the experience of the reports that came through on the railway. Mr. Grégoire, I guess this would be overlapping your area. These two gentlemen specifically focus on the airline, and I'm going to keep to that.

The connection was that in the safety audit we had done and the safety management system appraisal we had done on CN's operations in rail safety, it indicated that although a safety management system was supposedly in place, one that was supported and advocated by management or even extolled by management, it wasn't necessarily enforced and followed through on. There was a disconnect between management and the employees, the supervisors and the mainline employees. It was something that was in fact reported in the audit and in those reports as being a serious flaw.

In fact, there were instances when employees almost lived in a culture of fear. If they reported things too often, they would be penalized in promotion, even to the extent of being able to maintain their jobs. That concerned me. It concerns me coming back now to Bill C-6 and the proposals.

What do you see as being able to prevent the kind of problem we saw for CN, with its safety management system and the ability of employees to feel they were able to do their jobs and report the deficiencies? How do you see it being covered in the case of what's being proposed here?

[Marc Grégoire]

What is being proposed here is enforceable. There are a number of provisions in Bill C-6 that would make the situation quite different from what it is in rail.

The Railway Safety Act does not provide for very stringent enforcement action. For instance, there are no monetary penalties, and there's no way to lift an operating certificate. The Railway Safety Act is under review now, and we'll have the chance to bring forward all the amendments we wish.

To come back to aviation, if a similar situation occurred in aviation, our inspectors, who would be in the numbers we discussed, would go in. But rather than do the inspection in the way they are doing it today or in the way they used to do it, they would specifically look at a detailed analysis of the safety management system. On the basis of the report, it would indicate that the SMS is not well implemented, and a number of enforcement actions could be taken, or we could decide to go in to do inspections and audits in the usual manner.

All the options are open, and we could lift a certificate or set a huge fine. You will have noticed that in Bill C-6 we are proposing to significantly increase the fines we would be able to set for airlines. All of those avenues and enforcement tools could be used.

It is fundamental in the SMS culture we want to implement that employees must report. It's a reporting culture. We really want to encourage everybody to report problems before they arise and before they become more serious problems. We think it's the best way to improve safety.

But if an employee is fired the first time he makes such a report, the system obviously doesn't work and must be fixed. It wouldn't meet the intent of the actual regulation, but we have all the provisions to address the problem.

[Don Bell, Liberal, North Vancouver, BC]

Do you think, then, as you're moving into this kind of system now with the aviation industry, it makes sense to have some standards during the initial period, whether it's for however many initial years you want to consider it, and to have something as to the frequency and intensity, or the detailedness or quality of the federal inspections? You ramp that up so that as it starts there's a protection, a feeling that it's being done, and then as it proves itself, you back off on the—

[Marc Grégoire]

All the provisions to do that are there. And it's not only during the first years, but forever. If in ten years we found out that a company has not applied the SMS properly, we would take action. We could still go back there and do regular inspections, as we did ten years ago, or we could do a full audit of the company, because all of the regulations stay there.

The SMS regulation is truly an umbrella that goes above. If the company is very serious about implementing SMS and has truly implemented it, we need fewer old-fashioned inspections, because they will take the steps themselves.

It's like the certification. Any company that gets self-certification will tell you that the certification process will bring about significant improvements in the management. But if a company does not play the game, we can go and suspend a company based on the SMS or we can go back with the regular inspection or audits--both. And those are specified today for the SMS implementation that we recently started.

[The Chair, Conservative, Merv Tweed]

Mr. Watson.

[Jeff Watson, Conservative, Essex, ON]

Thank you, Mr. Chair.

Thank you to our witnesses for appearing today.

I've been listening to the testimony on Bill C-6 for a while here. Bill C-6, as a bill, is no surprise. What surprises me are the last-minute allegations that have been coming in the last couple of weeks or so.

Bill C-6 was preceded by Bill C-62. We already heard that in the last Parliament. As I understand it, there were pretty lengthy consultations prior to Bill C-62 as well, before it was introduced. No one raised concerns during that whole process about the inspectorate or the safety issues. The previous government, now the official opposition, didn't raise any caution flags.

As somebody listening to this and following this along and participating in moving Bill C-6 forward, I'm now confronted with hearing the “ifs” or the “might haves” or the “could” or “possibly”. I'm still waiting for some solid evidence that somehow SMS is either going to be a bad thing or that Transport Canada's not fulfilling its obligations, and I'm not hearing that.

SMS—and I've said this before to the committee—is not theory in Canada; it's actually in practice. We have something to look at, at least the beginning of a track record on that. Are we teaching others around the world about SMS? Are we showing others how SMS works? Can you tell us who? What other countries are learning from our experience? Because we have experience in it now; it may not be a lot, but we have experience in it now. Can you enlighten us a bit on that?

[Marc Grégoire]

Yes. Everybody is stuck in the same situation as we were a few years ago; that is, the rates of accidents have been going down significantly, as the minister mentioned, since the sixties, but in the last five to ten years or so, or since the mid-nineties, the rates of accidents have been virtually flat. Everybody is concerned that if the traffic picks up again significantly, the number of accidents will increase, because the rate will not have changed.

So the question was this. As everybody is for more safety, what can we do to reduce the rates? The answer was risk management and safety management systems.

We did not invent this. This started in the chemical industry after the Bhopal accident in India. This is really where the SMS concept was started, and it was implemented with great success in the chemical plants around the world. So we said, why don't we move into implementing this in aviation, in rail, and perhaps in other modes, and that's precisely what we're doing.

Given our experience over the last few years, yes, a number of countries are quite impressed and interested in what we're doing to improve safety, and they are calling upon our experts to deliver courses. We cannot be everywhere, but we are going where it makes a difference. We have attended and given courses in China, for instance, where you have the largest volume of growing aviation industry.

I don't know about other countries.

[Merlin Preuss]

I can add a few more. Certainly we have a policy of the western hemisphere first, plus specific areas in ICAO that we support with our limited resources. What we're talking about there is an aid program called COSCAP, which operates out of Beijing. It has both Koreas, and Manchuria in China, in it. So we've been focusing there.

As Marc indicated, China is looking for a way to cope with it, with around 20% growth, and they're implementing it. In fact, I'll be going there again at the end of May to participate in an SMS workshop with their carriers.

We've done the same thing in providing courses for Colombia most recently through that GEASA, the Group of Experts on Aviation Safety, Security and Assistance, under the WHTI, Western Hemisphere Travel Initiative. We're working closely with the FAA, now that they're in the process of putting together their package to meet the ICAO requirement. And of course we've been working hand-in-glove with ICAO on this for many years now. Almost every week there's an official request for us to participate in some program or other around the world, now that ICAO has made it their future framework. Again, we do what we can.

[Jeff Watson, Conservative, Essex, ON]

The inspectorate captures a certain amount of information. In addition to that, SMS is designed, if I understand it correctly, to try to capture information the inspectorate itself may not necessarily capture. Human decisions occur in the context of real-life or real-time conditions in a highly competitive industry. So SMS is designed, as I understand it, to add those types of things not normally captured by the inspectorate, so we can get an idea before an actual problem occurs of what safety threats there may be, such as what corners are being cut, and is the pressure of delivering or being on time forcing us to bypass a step here or there—the things that may not necessarily be captured by an inspectorate.

What types of data or information are you hoping SMS will capture that the inspectorate doesn't capture?

[Merlin Preuss]

Frankly, I'm not hoping, but can give you examples from preliminary implementation. In fact, this is not full implementation yet.

Companies who are embarking on this path can expect somewhere in the order of a 400% to 500% increase in reports. Assuming they follow up these appropriately—in other words, determine what the causes are and put appropriate corrective measures in place—we've seen a 60% reduction in occurrence reports. An occurrence report is for somebody who has actually been hurt, metal that's been bent, property that's been damaged and money that's been lost.

So that's the type of preliminary data we're starting to see in our industry already, and the system is not anywhere close to being mature.

I think you heard a couple of examples from ALPA, in terms of exactly what they're seeing, such as a bunch of data that doesn't make any sense, with incidents repeating—minor though they are—with indications of something more important. And when you go back there with all of that information, including potential violations, or potentially where someone has made an error, you fix those things before the error becomes fatal.

So again, the preliminary data is already there; it's not a speculation. Where it's implemented correctly and appropriately, we're seeing results already.

[The Chair, Conservative, Merv Tweed]

Thank you.

Mr. Zed has given his five minutes to Mr. Volpe.

[Joe Volpe, Liberal, Eglinton—Lawrence, ON]

Thank you very much.

I'm sure that the honourable member opposite, Mr. Watson, had no intention of indicating that the opposition in the last Parliament wasn't doing its job when he complimented us on actually doing today what wasn't being done then. But that wasn't his intention, and I'm sure it's nobody's intention around the table to take words out of context.

But I didn't have an opportunity to remind the minister, as I'm sure you as the senior staff will, that Judge Moshansky, in a response to a question by Mr. Jean regarding whether if they'd had the SMS they were proposing—and I quote him—“plus the existing regulatory oversight, the incident at Dryden would not have taken place”. Of course, Judge Moshansky said that it's very unlikely it would have.

There's been a campaign, I think, of trying to get at where this SMS fits into the spectrum of trying to do the right thing for Canadian safety, and people are asking some very pertinent questions. I indicated earlier that I had a letter here from DaxAir that was to the attention of David Bayliss, acting regional director, civil aviation. I think you probably have that.

If you'll permit, I'll just read a couple of lines in here, and I think when you read it you'll understand why some of us have to ask some of those very tough questions. It's not an issue about whether it's bodies that count and moneys that count, or whether the new computer systems give you a sense of greater safety. Maybe Mr. Reinhardt is right, you're trying to build a reporting culture. But a reporting culture without the operational audit that actually has teeth causes people some concern. I know that if I'm travelling at 5,000 feet or 35,000 feet, I don't want to be comforted just by the fact that there is a reporting culture.

Here's what DaxAir has to say, and I hope you'll be able to respond:

Transport Canada senior management are becoming rather free and careless with their use of statistics to justify our safety record and Canada's supposed “safest aviation system in the world” status. — Existing reports show operator deficiencies, which are not being followed up with enforcement action. — Many of your own inspectors know where the problems lie; yet they do nothing.

What's the value of a reporting culture if the regulator does nothing when the operational issues are raised and when non-compliance is underscored with impunity?

Then just some more:

You speak of more in depth oversight, yet in conflict with your promises, inspectors are being retired without replacement, training budgets cut and the national audit program cancelled.

DaxAir actually signs this letter.

Monsieur Grégoire, you and I had a bit of an exchange earlier. These are people who are in the business, and they're saying, “Are you trusting us to do the job that you're not doing yourselves?” That's really what they're saying.

They finish off with:

Based on our experience to date, change does not appear to be forthcoming from within Transport Canada.

You have to expect that whether it's members of the loyal opposition or others, we have to ask the tough questions.

So Mr. Reinhardt, Mr. Preuss, Mr. Grégoire, we asked this before. Is the SMS stand alone, without continued inspectorate, without the continuation of a very rigorous regulatory and consequential program, a valid way to go?

[Franz Reinhardt]

Let me answer.

With respect, I'll just go back to the beginning of your question, Mr. Volpe. Regarding DaxAir, first of all, this is a level carrier that is not part of the national audit program and they're not governed by SMS. That's the first thing.

With respect to taking enforcement action against other carriers that may have been observed by DaxAir carrying out activities that were untoward, we asked DaxAir to provide us with evidence, because like anybody else, when we go to the tribunal, when we go to court, we need evidence. Our inspectors need something to use, and we were not provided with that evidence. So absent evidence, we cannot go to the aviation tribunal with those cases. We have conducted enhanced surveillance there.

With respect to the national audit program, I'm happy to cover this, because this is only covering six or seven carriers, bigger carriers. That's it. All the others are not under the national audit program. When the national audit program was cancelled, there were other staff instructions given. Mr. Preuss showed you the one-inch thick document there, but there is more than that. We have established program validation. We have established assessment. People who are actually monitoring the establishment of SMS are there with the certificate holders more than they were ever there before. Before, we had a frequency of inspection policy stating what the frequency of inspection would be concerning that type of carrier, depending on the nature and risk of the operation. We still have this under the implementation of SMS. We have not changed that.

When people do validation, do not think they're just sitting at their desk looking at papers. Yes, they will start by looking at papers regarding systems, but then they'll travel on site. I have all the staff instructions there, and I could quote for you what they have to do to validate on site.

This is more than we used to do under the old audit program.

[Joe Volpe, Liberal, Eglinton—Lawrence, ON]

I know you want to assure and reassure everybody who is watching and following this, but I imagine that what has crossed everybody's mind is, if you're at 5,000 feet, 10,000 feet, or 30,000 feet, you have to be asking yourself a question: Why does Mr. Reinhardt think that my flight, up here, isn't one of those six that's going to be covered by this? What's the difference? Why shouldn't he cover everybody who is up in the air?

[Franz Reinhardt]

As I mentioned to you, everybody is covered. The SMS system deals, for now, with bigger carriers. There will be a progressive implementation, on a piecemeal basis, for smaller carriers later on, and it will be commensurate with the size, nature, and risk of the operation. Everybody will be covered.

For those who are not currently covered, we of course have the old inspection and audit system that is still working, and inspectors are there to do the inspections. We have evidence of this, regarding smaller carriers, on incidents that happened lately, where we took enforcement action.

[The Chair, Conservative, Merv Tweed]

Mr. Jean.

[Brian Jean, Conservative, Fort McMurray—Athabasca, AB]

Thank you, Mr. Chair.

I want to go back a little bit, to the beginning of this whole system.

I understand that the old system was one of physical inspection, in essence. The inspector would go out and inspect the plane. They would do up a report and they would submit that report, and if there was any suggested deviance from what was necessary to be done, that would be fixed, and then the report would come back and it would look good.

The new system is a system of checking the system itself. Is that fair to say?

[Marc Grégoire]

Yes.

[Brian Jean, Conservative, Fort McMurray—Athabasca, AB]

Okay. So my question to you is, how in the world could these inspectors inspect a plane? I don't know how many planes are in the air at any one time, or in Canada at any one time, but I can imagine it would take one person probably three months to inspect a plane, how many nuts and bolts could go wrong, how many different pieces of that aircraft. Would that be fair to say?

[Franz Reinhardt]

You're right. It was the same in the past. We didn't have enough people to do all the planes all the time. We had to inspect the program; we had to inspect aircraft maintenance organizations and take cross-section samples of what they were doing. Now we're going further, because on top of this we're asking the company to prove to us that their systems will catch the problems before they get into the airplane.