Transport Committee on May 28th, 2007

[Ed Fast, Conservative, Abbotsford, BC]

So you're recommending against this amendment?

[Susan Stanfield]

Yes.

[The Chair, Conservative, Merv Tweed]

Are there any other comments?

Mr. Julian.

[Peter Julian, NDP, Burnaby—New Westminster, BC]

Mr. Laframboise was first.

[The Chair, Conservative, Merv Tweed]

Mr. Laframboise.

[Mario Laframboise, Bloc, Argenteuil—Papineau—Mirabel, QC]

I am very disappointed in the minister's response. Somehow, we, as committee members, want to ensure that Transport Canada and the minister will be bound by the highest safety standards. I think we're doing our job, but there is an attempt to lower the bar. I think you're telling us that the bill falls short of our wishes. Mr. Chairman, I have a major problem. I want this bill to meet the highest safety standards. I do not want to reinvent the wheel but I do want compliance with the highest safety standards. This means that we would have a bill that would lead in certain cases to the highest standards not being met for administrative reasons. Quite honestly, I have a problem with that.

[The Chair, Conservative, Merv Tweed]

Mr. Julian.

[Peter Julian, NDP, Burnaby—New Westminster, BC]

I propose, Mr. Chair, that we stand aside the amendment and come back to it on Wednesday.

[The Chair, Conservative, Merv Tweed]

Are there any comments?

We'll be resuming again on Wednesday, then.

Again, I understand that phrases change and amendments get introduced, but I think it's important that if you have questions for the department on your amendment, perhaps we can clarify them ahead of time, if there are words that need to be rectified or changed. I think debate continuously on one or two words could be resolved before we get to this, if there's willingness by the department to have that discussion with all the members. I'm sure the department has a copy of all the amendments and would be willing to do that.

(Amendment allowed to stand)

(Clause 4 allowed to stand)

With that, we'll suspend for a couple of minutes while we clear the room and bring in our new guests.

[The Chair, Conservative, Merv Tweed]

Welcome back.

Moving forward on the agenda, we're going to deal with the Department of Transport. With us today are Marc Grégoire and Luc Bourdon.

Welcome.

We are discussing rail safety in the next 45 minutes or so. Do you have a written presentation that you would like to make?

I would ask for the committee's indulgence to please give Mr. Grégoire the floor.

[Marc Grégoire, Assistant Deputy Minister, Safety and Security, Department of Transport]

Thank you very much, Mr. Chairman.

We're here to respond to the committee's interest in exploring the subject of railway safety in Canada.

I will take some time to provide you with a description of the general foundation for railway safety in Canada, and then take you through the actions that Transport Canada has taken to respond to the more recent safety issues culminating in the minister's decision to launch an independent review of the key legislation governing railway safety in Canada.

Today I am joined by Mr. Luc Bourdon, Director General, Rail Safety. Luc has a considerable amount of experience in the rail sector. After working for 19 years in the industry, he joined Transport Canada, first in the Quebec City region and then here.

It is important to note that, as with companies in other modes of the transportation industry, railway companies are responsible for making the appropriate decisions to ensure that operations are safe and that they are in compliance with federal regulations, standards, and rules including requirements for infrastructure, equipment, operations and employee qualifications.

The railway safety management system regulations came into force on March 31, 2001. They require all federally regulated railway companies to document, implement and maintain a formal framework integrating safety into day-to-day operations, including safety and performance targets, risk assessments and maintaining and evaluating processes.

The implementation of a safety management system enables a railway company to demonstrate their commitment to safety by ensuring that it is a priority throughout the organization. This provides an additional level of safety to enhance Transport Canada's oversight program.

Transport Canada actively monitors the railways, and when railway safety inspectors discover an immediate threat to safe railway operations they have the legal responsibility and the authority to issue safety orders restricting the operation of railway companies. They may also place restrictions on the use of roadway crossings if they find a safety problem.

With the committee's interest in the more recent derailments of CN, I'd like to highlight the government's immediate safety action following an increase in CN's mainline track derailments in 2005. Transport Canada performed expensive targeted inspections and a company-wide audit of CN's safety management system.

To give you a sense of the scope, the inspections covered CN Rail operations across the country, examining 230 locomotives, 3,000 freight cars, 1,900 miles of track--or 3,040 kilometres, if you want--over 900 grade crossings, and 160 warning systems. The four-week audit of CN's safety management system from November 14 to December 10, 2005, focused on assessing CN safety management practices throughout the company.

Following this initial focused surveillance, the minister met with the president and chief executive officer of CN regarding safety issues on two separate occasions in 2006, and Transport Canada performed an additional series of targeted inspections on CN's property during the week of July 17, 2006. The results confirmed the need for immediate corrections to CN's safety management systems.

The department also took direct enforcement action, issuing 54 enforcement actions in fiscal year 2005-06 and 75 in 2006-07. These include 24 orders regarding CN operations and 52 notices on a wide variety of safety issues.

For example, while the Transportation Safety Board continues to investigate the cause of the CN derailment along the Cheakamus River in British Columbia in August 2005, Transport Canada immediately issued an order limiting train lengths on high-degree curvature, steep-gradient trackage in that area. Other actions taken by the department include issuing CN a notice and order imposing immediate operational restrictions on locomotives in the Lillooet subdivision as a result of the derailment near Lillooet, B.C., on June 29, 2006, which resulted, unfortunately, in two crew member fatalities.

On July 24, 2006, the Minister of Transport issued CN a ministerial order under section 32 of the Railway Safety Act, ordering the company to take the necessary corrective measures to address the deficiencies in the CN safety management system. While CN initially appealed to the Transportation Appeals Tribunal of Canada for a review of this order, senior management of the railway met with Transport Canada officials and agreed to provide a corrective action plan, which would bring the company into compliance with the ministerial order. CN submitted their action plan to Transport Canada on October 18, 2006, and following a review which confirmed that the requirements stipulated in the order had been met, on November 15, 2006, the minister informed CN in writing that the order is considered spent.

As you may know from recent media coverage and as is normal practice in these types of cases, the department was not able to release documentation related to the order, including the audit and results report, without following the appropriate access to information legislation. This process has now been completed, and the final inspection and audit reports are now available on the department's website.

To set the safety context for our discussion, it's important to know that according to the Transportation Safety Board figures, CN main track derailments decreased by 28% in 2006 over 2005. This number was reduced by a further 4% in the first quarter of 2007 over the same time period in 2006.

Although, as you have seen, Transport Canada has taken significant safety enforcement action across Canada over the past years to address these safety issues, it has become apparent that the current regulatory framework may not provide the full set of tools to effectively deal with them. There's also a view that the current framework needs to be modernized and better aligned with safety legislation in place for other modes of transport in Canada.

Accordingly, in December 2006, the government announced the Railway Safety Act review to improve railway safety in Canada and further promote a safety culture within the railway industry, while preserving and strengthening the vital role this industry plays in the Canadian economy.

More recently, the minister has announced an independent four-member panel that will conduct this important exercise. The panel is consulting a wide range of stakeholders, including the public, railway companies and their industry associations, railway company employees and their unions, railway customers, provinces and territories, municipalities, aboriginal and environmental groups as well as Transport Canada and other federal government departments and agencies. Efforts will also ensure an extensive range of access for input, including a website to accommodate input from the public.

I understand that Doug Lewis, chair, and Tim Meisner, executive director of the panel, met with the committee chair on May 1, and that the panel will provide a brief to study in the near future. The panel will prepare a report for the minister with findings and recommendations to improve railway safety, including possible amendments to the Railway Safety Act. This report is to be submitted by October 2007.

Thank you. It will now be our pleasure to take your questions.

[The Chair, Conservative, Merv Tweed]

Thank you, Mr. Grégoire.

For the information of the committee, after meeting with him I received a letter from Mr. Lewis with a list of the available dates for their cross-country tour, and also dates that he would be available to meet with our committee. I will be forwarding that to the members.

Mr. Bell.

[Don Bell, Liberal, North Vancouver, BC]

Thank you.

Welcome to our two guests from Transport Canada.

First of all, Mr. Chairman, I'd like to advise the committee that I did attend the panel's hearings in Vancouver. I had an opportunity, at Mr. Lewis's invitation, to explain what I felt the difference was between the work we were doing in this committee and the work the panel was doing, that they were indeed complementary, and the reason this committee had pursued the decision last October to proceed with this review.

To Mr. Grégoire, back in April this committee heard from Gord Rhodes, one of the gentlemen who was on the train that derailed in Lillooet. His two co-workers died in that locomotive. He said that, in his opinion, had Transport Canada's safety audits been released earlier--I'm going to the point you raised, that the information was not released--as had been previously promised by Jean Lapierre, minister at the time, it may have prevented some of these accidents.

When our committee met last November, I asked Deputy Minister Louis Ranger to release the audits. He replied that as a policy it does not disclose the results of these audits because they consist of third party information. I presume that's what you're responding to in your question on page three of the presentation you just made.

Do you think it makes sense that audits paid for by the Canadian taxpayer and conducted for the express purpose of public safety, whether it be for rail, aeronautics, or anything else we're doing as a committee of Parliament, only be made public through an access to information request and not to elected members of government such as are represented on this committee?

[Marc Grégoire]

I cannot comment on the first part of the question; however, this is the rule we follow for all audits. Sometimes it is privacy information, sometimes it is third party. It's third party information all the time because we're auditing a company and we need the consent of the company.

Normally we don't encounter problems. Normally we do the audit, we present the audit to the company, the company reviews it, comments on it, and puts in a company action plan to address the concerns we have identified. Normally we publish the audit report along with the action plan of the company. It's a bit like when we ourselves are audited by the OAG. We do exactly the same thing, except we cannot oppose being published.

[Don Bell, Liberal, North Vancouver, BC]

Mr. Chair, these companies are not ordinary companies. These companies are federally regulated and enjoy the ability to operate through federal approvals. When we're dealing with companies, whether it's aeronautics, airlines, or railways, that are dealing with passenger safety or the safety of communities or the environment that can occur as part of a derailment, I think there needs to be a responsibility that if we're trying to look into problems we have the ability to get that information and do the oversight that's necessary. That's more of an opinion than a question.

In your statement today you made reference, which was repeated by CN, that incidents were down by 28% in 2006 over 2005 and down again a further 4% thus far this year, these first four months. Would you say, based on your knowledge of the phase one and phase two audits, that you're happy with CN's current status, the current response, or the way they're implementing their safety management plan?

[Marc Grégoire]

I am happy with the trend, but I'll let Luc answer on the details.

[Luc Bourdon, Director General, Rail Safety, Department of Transport]

I think there's still some improvement to come. Statistics are issued by TSB. We don't control them. You may want to ask TSB at one point about the statistics, and if there's anything that may be added concerning the previous year. I think they have some issues on that.

As far as we're concerned, we're seeing some improvement at CN. However, following the 2005 audit, as Mr. Grégoire mentioned, we only got their corrective action plan later in 2006, which will be verified through a focused audit in the next few months to verify that everything they have in that plan has been effectively implemented.

[Don Bell, Liberal, North Vancouver, BC]

I guess I'm concerned that those reports came in during November or December 2005, and it would take them until October 2006 to respond. And during that period of time, in June 2006, we had the fatality.

I hear the comment that they've reduced over 2005. Well, 2005 was one of the worst years. You don't compare to your worst year and say you're better. And it can be the last year; I appreciate that.

Another issue I have, referring to British Columbia in particular, is that the committee was told by more than one witness--from CN Rail employees, some former, and from B.C. Rail--that when it was a provincial railroad, there were higher standards. It appears that those standards, the general operating instructions, were not the same, or were not applied in the same way.

Can you comment on that? Do you feel that our federal railway standards currently imposed on CN in B.C. are less than what were imposed on B.C. Rail by virtue of provincial standards, or because of the terrain?

[Luc Bourdon]

No, they're quite similar. Our Pacific region was heavily involved in the transition between B.C. Rail and CN Rail. I wouldn't say the rules they had in place were 100% harmonized with federal, but almost; it was very close.

[The Chair, Conservative, Merv Tweed]

Thank you.

Monsieur Laframboise.

[Mario Laframboise, Bloc, Argenteuil—Papineau—Mirabel, QC]

Thank you very much, Mr. Chairman.

First, I will be referring to your opening remarks as well as comments we heard during previous testimony. What upsets me is that we're dealing with an industry that was subject to a safety management system since 2001. It was the 2005 accidents that ultimately led you to take a closer look at CN's situation. You said yourself that you ordered a more specific investigation in 2005.

When I asked the Transportation Safety Board if the safety management systems had improved safety in the railway sector they could not confirm this. I can understand that—in 2005 fatal accidents occurred. If I look at the facts objectively, I can see that there was one accident in Montmagny, Quebec, in 2002 or 2003, and another in 2007, that is, after you had conducted your analysis at CN, after you had gone through the whole process.

I'm trying to understand. Surely something, somewhere, is not being done properly. You'll probably say that it's not you, but something's going on. From what I can see, there have been just as many accidents. Your numbers have barely changed. There may have been a small improvement.

What can we do to discipline this industry?

[Marc Grégoire]

As I mentioned, the act needs a few more tools to make it more enforceable. The only tools we have are the power to issue notices and orders, or to take court action, whereas under other laws, such as the Aeronautics Act, we have a whole range of tools, including monetary sanctions and the power to directly impose fines. Those fines are significant, but since you are reviewing the Aeronautics Act, we would propose increasing those even more. It's a way of bringing about discipline, if you will, especially when dealing with extremely profitable companies.

We do not have those tools today. We use the tools which are at our disposal. We have often issued notices and orders. For example, we can impose speed limits on rail sections, significant reductions or operational changes, as we did in western Canada with regard to the length of trains, or specific operational measures. But we do not have the range of tools you are talking about.

So what can we do? You are saying that the SMS is not working. As I already explained to you, the SMS marks an important change in culture which we cannot measure after just a few years.

[Mario Laframboise, Bloc, Argenteuil—Papineau—Mirabel, QC]

Basically, under your audit system, between 2001 and 2005, you nevertheless reviewed the SMS and did not realize that the condition of the rails or of the equipment was deteriorating. After several accidents happened, it finally took a special investigation for you to realize what was broken within CN. If those investigations had not taken place, things would probably have kept on deteriorating.

Employees of the company who testified before the committee told us that they had never heard about the safety management system. That's rich! It has been around since 2001. Men even lost their lives. So don't tell me that you did your job. Your monitoring system failed to detect what was wrong with CN's network. Finally, in 2005 and 2006, you conducted specific investigations which is when you realized, upon taking a closer look at your locomotives, that there were particular problems.

Today, Mr. Bourdon, you are telling us that the situation has not been corrected yet. Men had to die for you to reach this point. That is extremely deplorable. This happened under the Liberals. Today, people are asking questions, but something happened which resulted in your not being able, with your monitoring system, to detect the fact that your network was deteriorating, and that this was causing more and more accidents to happen, in a nutshell.

[Luc Bourdon]

No. I believe we did realize the network was deteriorating. We took measures. The number of notices and orders increased. The number of court cases too: we launched six court cases, some of which have not yet been resolved. I learned today that there was another one and two further ones could happen. We sued. During that period, no other railway in Canada apart from Canadian National was taken to court. Since 2002, we launched six court cases. We conducted inspections, we made surprise visits, we worked within the limits of the act. As Mr. Grégoire mentioned, we probably don't have enough tools under the current act. We went after CN much more than after other railway companies.

We had already audited CN's safety management system once. Since it was the first audit of the safety management system, we worked a little more closely with the company. The results were not excellent, but no worse than elsewhere. We worked with CN to improve the situation. But then we realized that the company was complying less, so we did what we had to do.

Then the two unfortunate accidents happened in 2005. The first thing we did was conduct a focused investigation. Mr. Grégoire shared the results of that investigation with you. We then completely reviewed the safety management system in specific areas. That's when we produced a report, which took a while to come out. Several things were done to attempt to correct the situation. As I said, during that period, only CN was taken to court.

[Mario Laframboise, Bloc, Argenteuil—Papineau—Mirabel, QC]

Except that the incompetent maintenance continued. This means that what action you took was not enough to deter such a huge company. Three, four or five court cases are nothing for a multinational. You either did not have enough staff, enough time, or something else was missing.

I'm all for jailing the president, but given how much senior officials are paid, several of them will end up in jail if we don't take care of them first. We can always amend the law to make all senior officers liable, but we would also have to ensure that, throughout the entire network... In 2007, some employees told us that they did not even know of the existence of the safety management system. Perhaps the company did not do its job, but perhaps Transport Canada also did not do enough to ensure that all railway employees understood that the company had obligations. I don't know, but surely there are questions we must ask ourselves about this entire situation.