Transport Committee on March 13th, 2008

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

Thank you, Mr. Chair.

Thank you very much for coming before the committee.

It's interesting to see the statistics since SMS was implemented in the year 2000. We have a couple of anomalies—from 2001 to 2002 there was a slight fall, and from 2005 to 2006 a slight fall also—but generally, the trend has been upwards in terms of accidents.

I noticed, Mr. Lewis, in your presentation—which was very good—that you used the verb “failed”, that the “railway industry has failed to achieve the maximum buy-in” and “Transport Canada has failed to maximize this new approach”, in referring to SMS. From interpreting your comments, I would suggest that the railways have, in a sense, failed to implement effective SMS systems.

Do you believe the implementation of SMS has been a failure or has been ineffective?

[Douglas Lewis]

Can I drive somewhere between the two? I don't think it's been a failure; I don't think it's been ineffective; I don't think it has been as effective as it could be.

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

We're seeing all the statistics you've presented in your report. There's no doubt there's been an upward trend in railway accidents. The point is that something is fundamentally wrong. It's not that it's not as effective as one might hope; it's that we're seeing a higher railway accident rate, so it's difficult to use the term “not as effective as one might hope” when we've seen railway accidents skyrocket.

[Douglas Lewis]

I don't know that they've skyrocketed. They are trending upward, there's no question about that, but look at where they are. Where are they occurring? The number of collisions is down, but the number of derailments on main lines and on non-main line track is up, and that's where we say we have to attack it.

I'd have to get back to you on this, but it seems to me the whole SMS idea hasn't been around that long. The act came in in 2000.

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

The implementation was in 2000, yes.

[Douglas Lewis]

It's going to take a while to get it proclaimed and to get it working effectively. I wouldn't say SMS has failed for that reason.

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

You do use the verb “fail”, so certain aspects of the implementation of SMS, in your words, have failed.

I'll come back to the question we've wrestled with as a transport committee. A number of people came forward and testified on behalf of SMS in the airline industry, but they fell into two groups. The theoretical individuals said in theory SMS will make the airline system safer, and then the practical witnesses came forward and said SMS simply will not work.

I know my Conservative colleagues disagree, but the reality is that very notable witnesses--as Mr. Fast well knows--criticized the SMS approach.

Of course, if the Conservatives were that interested in bringing it forward, they wouldn't have pulled Bill C-7.

That being said, I'd like to come back to two of the practical aspects. Do you believe the cutbacks in Transport Canada, the reduction in resources you very clearly identify in your report, are part of the reason we have not seen...? Whether you call it failure or not as effective as you would like, the cutbacks in resources in Transport Canada have made a difference to that increase in the accident rate and the problems with the implementation of SMS.

[Douglas Lewis]

I would rather approach it by saying it's not that the resources to Transport Canada were cut back under any one government; they have just stayed even while the amount of traffic and the government revenues from the railway industry have gone up.

For example, in 1995 you didn't have any revenue from CN, did you? It was not producing any corporate profits, and CP was not, according to the railway statistics. They are profitable now.

We're saying to the government of the day and to the Minister of Finance that Transport Canada has to be funded properly to implement the SMS.

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

Thank you.

The other issue you raise very clearly is information collection and dissemination. Do you believe the safety data, the safety audits, should be available to the public, that the public should know which companies are doing an effective job on safety and which companies are not? Again, with Bill C-7, which the Conservatives have pulled, that information was not accessible to the public, so people wouldn't know whether they're getting on an airline that has an atrocious safety record internally or an effective internal safety management system.

[Douglas Lewis]

I'm not sure we addressed the issue of whether the safety audits should be made public. We did address the issue of making the statistics available, and we also felt administrative monetary penalties should be publicized.

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

Okay. You didn't clearly say that in the report, that is true, but in your personal opinion, is that not public domain, speaking as a former member of Parliament as well? Do you not believe it is in the public interest to have that kind of information available to the public?

[Douglas Lewis]

I'd rather examine that whole issue more thoroughly than give you an off-the-cuff answer. I'm not above giving off-the-cuff answers, but I've kind of learned where I should and where I shouldn't. So I'd rather not jump into that one, Mr. Julian.

One of the other things we mentioned was.... I was in auditing and I got away from it, and I'm now a director of the State Bank of India (Canada). I'm on the audit committee, and I'm dealing with the auditor when he comes in with the annual results.

That's one of the things that struck us. There were complaints from the railway companies about audits where there was no follow-up. Nobody sat down with management and said, “Here are the findings of our audit”, let alone addressing the public. The auditors weren't coming back to the railway companies and saying, “Here's where we found the problems”. Do you know what I mean?

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

That's a valid point.

[Douglas Lewis]

And I think you'll notice a reference in there that the audit procedures should be brought up to the level of the Auditor General. I think that's what we're driving at.

There is a learning process here. You've got to learn how to audit, and then you've got to learn how to report your audit findings to the people you've audited, so they can then make sure you don't find the same things next year. That's what we're driving at.

[The Chair, Conservative, Merv Tweed]

Make it a very short question, please.

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

I'll keep it very short.

Concerning the penalties for violations of safety information, particularly with respect to the CEOs, do you believe there should be substantial increases in penalties for corporate executives who do not put safety before other elements in the company?

[Douglas Lewis]

I think everybody, from the employee up to the top, has to pay attention to the safety systems.

Regarding whether or not you want to go after the CEOs, I happen to think you've probably got enough clout in the publicity if it's done properly. I make no bones about this. You're all politicians here. You know how public opinion is generated, and you know what public opinion can do to the stock market. We see it every day.

We had an example of President's Choice jerking a product yesterday, and you'd better believe that affects their bottom line.

So I think you've got a better chance with the publicity surrounding the administrative monetary penalties than you do with the targeting of one particular individual, because then you've got to prove that the individual should pay it personally. With that approach, there are a lot of problems.

[The Chair, Conservative, Merv Tweed]

Mr. Fast.

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

Actually, Mr. Chair, if I may have a second, I want to have an opportunity to thank Mr. Lewis, on behalf of the Prime Minister, the Minister of Transport, and of course our government for all your hard work and that of your team members, including Mr. Côté, M. Lacombe, and Mr. Moser. We really do appreciate it.

Safety is very, very important to everyone on this committee and to all members of Parliament, and we do appreciate your time very, very much.

[Douglas Lewis]

Thank you.

[The Chair, Conservative, Merv Tweed]

Mr. Fast.

[Ed Fast, Conservative, Abbotsford, BC]

Thank you, Mr. Chair.

Thank you, to all three of you, for appearing before us today.

As is often the case, I want to correct the statements made by Mr. Julian. I can assure you that the large majority of witnesses who appeared before us on the amendments to the Aeronautics Act strongly supported SMS. The aviation industry has embraced SMS in a way that perhaps the railway system has not. In fact, the only ones who spoke against it were the inspection unions. Even Judge Moshansky grudgingly confirmed that when implemented properly, SMS considerably enhances public safety.

I'd like to refer to page 67 of the report. For me, this was perhaps the most shocking aspect as it relates to SMS.

You make the statement, and I quote:

Railway employees largely had less to say because many told us they were unaware of SMS or had not been trained in its objectives.

I would suggest that the employees' buy-in to SMS is perhaps the most critical component of making sure SMS works. And here you have employees saying they're not aware of it, and if they're aware of it, they don't know what it means; they don't know the details of it. That's perhaps one of the failings within our railway system in Canada, that SMS isn't actually working.

I want to also refer you to a number of other comments that were made, which has to do with the culture of fear that has developed within some of our railway companies. You make the statement, on page 70, and I quote:

With some exceptions, employees recounted a culture based on fear and discipline.

That was with reference to CN.

On page 71, I quote again:

The Panel sees such an over-reliance as a culture where strict adherence to rules is achieved primarily through discipline or a threat of potential discipline. Disciplinary cultures have a tendency to instil fear, and to stifle employee participation and reporting.

To me, that's the critical component of making sure that SMS works. If the front-line employees, who are identifying risks within the system, aren't buying in and they are afraid of discipline, it's not going to work.

I did notice that your recommendation 18, says, “Transport Canada...and the railway industry must take specific measures to attain an effective safety culture.” But you're not specific on how to achieve that. The aviation industry has fully embraced this notion of immunity for employees when they self-report risks. You reference that in your narrative when you referred to Air Transat, but you don't make that part of your recommendation.

Is that something you would consider adding to the recommendations, that there be some kind of immunity process to ensure that employees can get rid of that fear of being disciplined for reporting risks within their sphere of operation?

[Douglas Lewis]

You covered quite a gamut of issues there.

[Ed Fast, Conservative, Abbotsford, BC]

I'd like to focus on the immunity part. You barely touched on it.

[Douglas Lewis]

I'm going to focus on that as well.

Time and time again, witnesses, whether in public or in private, said they didn't know what SMS was. That's why I said in my opening remarks that we're too wrapped up in the theorist at the top who is gung-ho on SMS but has never run a train. We have to get to the front-line person and ask what the risks are and how they would be mitigated.

I said to one group of railway executives, “I know how I would do it. I'd give them a questionnaire with the pay cheque just before Christmas and ask what the five riskiest things are in their part of the operation and how they would fix them.” Then I'd say, “You'll get your first pay cheque after Christmas when you give me your answers. I don't want a thesis, but I want to know.” And then I'd take those and put them through the system.

It really has to be that basic.

Now, to your whistle-blowing, if I could--