Transport Committee on March 13th, 2008

[Ed Fast, Conservative, Abbotsford, BC]

It's not whistle-blowing. It's referred to as immunity in your report, and immunity has also been made part of the amendments to the Aeronautics Act that are presently before the House at third reading.

[Douglas Lewis]

We had some issues in public. We had meetings in private, meetings in small groups with local occupational committees, and there was a theme throughout that said we need to have a system for reporting without blame to get at this. That came from employees in both companies and it came from unions. They feel they have to be able to talk about things that happen without facing repercussions, punishment, or blame.

[Ed Fast, Conservative, Abbotsford, BC]

Is that part of your recommendation, then? Can it be read into what you've stated in recommendation 18?

[Douglas Lewis]

However we term it, I think there has to be better input from the employees. I'm saying the employees--not the unions--as to how they are doing their job. That's where we've got to get it from. They should be able to talk about these things without worrying about being disciplined for it.

[The Chair, Conservative, Merv Tweed]

Mr. Volpe, go ahead.

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

Thank you very much, Mr. Chair.

Thank you, Mr. Lewis, and your colleagues. I'd like you to feel that at least the official opposition is sufficiently appreciative of your work to be able to offer you thanks. I found it, on a preliminary reading, to be a remarkably non-partisan report, so I thank you for that.

I realize these questions will be generic in nature, and probably cursory from your point of view. Perhaps we'll be a lot more enlightened as we study this, but I'm wondering about a couple of things. It appears to me, at first read, that your report is really calling on Transport Canada to play a much more significant role than it appears to have been playing so far. I don't want others to think this is a condemnation. It's just what I read from your report. I'm wondering if that is what you intended to convey as an impression and whether a couple of other things that come forward should also flow from that.

For example, you've talked about SMS and trying to get a sense of why the employees have not yet bought in. Secondly, you've talked about the railway industry now turning a profit, which it wasn't turning when you were last in Parliament. Thirdly, you made a careful note that, since 1990, just before you left Parliament, there were some 67,000 employees in the business, and just before you started your report there were only 35,000. The railways are actually now turning a profit, or they're at least reporting a profit. By my calculation, just by reducing the staff, it's about $3 billion annually.

I don't want to make a co-relation, but given that you wanted buy-in by employees in order to secure the safety and the efficient running of these railroads, do you see a role for Transport Canada to assume the responsibilities, not only for inspection but also for the issuance of the certification of--I forget the exact title you put down, but the appropriateness of the operation, i.e. is the thing ready to roll, and to roll safely? Should that be a role assumed by Transport Canada, or is it something we need to demand from the industry?

[Douglas Lewis]

I think what the panel was driving at was that Transport Canada has to play a more significant role, and they have to pay more attention to how they play the role. I think that's key.

Let's take the whole issue of the rules and how they were made.

There's a lot of grief surrounding how the rules are made. Remember that Transport Canada has the final hammer. Whether it's a rule or a regulation, the minister has to approve it. If it's a regulation, the government has to approve it, but the minister has to approve it. Transport Canada has the hammer, but as we all know, having the hammer and using it effectively are two different things. If two parties are negotiating and they can't get along, then negotiations break down, but if we're trying to prepare a rule that has to develop railway safety, the important thing for Transport Canada to do at the start is to say they want a rule that attacks the following problems, and here's what they're expecting from the rule. They have to give them some parameters at the start, and then the person in Transport Canada who's dealing with the railway companies has to have the clout to be able to go back to Transport Canada and get some definitive answers on what will fly and what won't fly. Those are the things, Mr. Volpe, that we're missing.

Now, you made reference to the profit. The profits are going up and the number of employees is going down. Since 1997 the number has gone from 46,000 to 34,000, but by the same token, the average wage per employee has gone from $54,000 to $73,000, so I think that's a factor that has to be looked at too.

The last point, briefly, is that the railway operating certificate has to be approved by Transport Canada. It only works if they come in and take a look at it. In this day and age, it's usually a short-line operation. It was different in 2005, when CN took over BC Rail, and in that case maybe there should have been a little better look at overall safety, but it's got to be Transport Canada.

[The Chair, Conservative, Merv Tweed]

Thank you.

Go ahead, Mr. Carrier.

[Robert Carrier, Bloc, Alfred-Pellan, QC]

Good afternoon, ladies, gentlemen and Mr. Lewis. I too feel that you have provided us with a fine piece of work. We can learn a lot from this report.

We in the Bloc Québécois supported the establishment of the safety management system for air transportation after having been persuaded that it was an additional safety system that would in no way replace the inspections conducted by the department. A system in place in each company would have to mean better and more consistent audits, over and above the inspections conducted by the department.

However, your observations do little to reassure me about railways. You said that it has been in place for seven years. On page 183, you write: "There is a need for Transport Canada to develop the capacity to provide effective oversight of SMS while maintaining appropriate inspection functions." You seem to be pointing out that we need additional resources to oversee the implementation of safety management systems. After all, you do not push a button and get perfectly operating systems in place. You are confirming that it is Transport Canada that should be making sure they work.

Also on page 183, we read the following: "Finally, lack of resources, both financial and human, to carry out the Transport Canada rail safety mandate was a matter of widespread concern within the department and elsewhere." From this, we gather that the department itself is aware that it lacks resources. To me, the fact that a department does not have the resources to fulfill its mandate is quite serious. I find it troubling. Everyone on the committee, even government members, are well aware of the importance of railway safety. But the department responsible for it lacks resources. That is the root of the problem.

Could you tell us precisely what you mean? Has putting the safety management system in place caused more administrative work for the department? Has it resulted in fewer resources for inspection because people were not specifically assigned to oversee the safety management systems? Perhaps our situation is worse after the SMS were put in place because we do not have enough resources. Instead of doing on-site inspections, people audit management systems that are not even completely supervised, according to what you are telling us.

Could I ask you to expand on this or to correct any erroneous comments I may have made?

[Douglas Lewis]

Thanks very much, Mr. Carrier.

I think we were driving at not only additional resources but a different way of deploying resources. In other words, there are different skill sets that are required to implement an SMS system. You still have to have the inspector function, but you have to have people who have the skills to implement an SMS system and audit it appropriately. That's where, in my personal opinion, more emphasis could have been given: how are we going to start doing this auditing as opposed to inspecting? I don't know what discussions took place with the Auditor General, but I would have thought that this would have been the first place to start, because the Auditor General carries out government audits and knows what's involved. I'm not sure this happened. They were given as resources, as I remember, two inspectors per region to do the SMS monitoring.

The question is, and I think it's fair to say, we found this difference as we went from region to region. In discussing it with the inspectors we met, without being specific about which region did better than others or seemed to be more in tune, we got a different impression of SMS implementation from region to region. I think that's what we have to address through resources for Transport Canada.

[The Chair, Conservative, Merv Tweed]

Mr. Watson.

[Jeff Watson, Conservative, Essex, ON]

Thank you, Mr. Chair. Thank you to our witnesses for appearing today, and for your report.

There is an awful lot of detail, several hundred pages, in this report, and we've seen in the line of questioning so far that everybody is seizing on a number of the small details. It's easy to get lost in the details, but I want to try to crystallize this report, if I possibly can, to what's really at the heart of these couple of hundred pages or so.

Is the achievement of safety management systems, at stage five in your continuum, at the heart of the fullness of safety for our rail system in Canada? Is that what this all really boils down to at the end of it, getting to stage five on the continuum with respect to SMS? Or is there more than that? I'm trying to get to the heart of it.

[Douglas Lewis]

Yes, I think I'd refer you to pages 69 and 70.

In our opinion, VIA Rail has the best safety culture, and that ties in with implementing SMS. They're all over it. CP has made great strides and they're working towards it; they have embraced the safety culture of the SMS system. We don't feel that CN has because they're too wrapped up in the rule-making.

[Jeff Watson, Conservative, Essex, ON]

Which brings me to the next thing. Sticking with the measurement, using that continuum from stage one to five, on page 73 you say this continuum can be applied to a company and the regulator.

So I'm going to ask you this question. With Transport Canada and the government being the regulator, where are they at currently on the continuum, stages one through five, and where is industry on that same continuum, in your opinion? That will help us evaluate progress to date and where we need to go.

Your unvarnished assessment of both would be appreciated.

[Douglas Lewis]

We reviewed a lot of potential questions beforehand. I didn't think of that one.

[Jeff Watson, Conservative, Essex, ON]

But it's really at the heart of where we want to go, in terms of progress we've made. If stage five for both the industry and the regulator is where we need to get, in order to have the safest rail system possible in Canada, then the proper evaluation of where both the industry and where the regulator are in that respect will tell us how far we've come and how far we need to go.

[Douglas Lewis]

All right, let me apply myself to the companies, and this is off the cuff. I would say that VIA is probably in four or five, and they would state that they're still looking for ways to improve it.

I think CP is in the mid-range. They embrace it, but as Faye Ackermans says, it's a fragile thing. You have to be moving along and bringing everybody under the tent.

CP is in a stage one or two--

[Jeff Watson, Conservative, Essex, ON]

CN, you mean.

[Douglas Lewis]

CN, thank you; that's where I would place them.

Now, the Transport Canada concept is a really interesting question. I can tell you that that depends on the region, in my opinion. There's a head office look at it and the regions. There's one region where we were very impressed with the embracing of it, the concept, and what they were doing. There were other regions where--

[Jeff Watson, Conservative, Essex, ON]

Which region was that?

[Douglas Lewis]

The Atlantic region, in our opinion, had the best “on the ground in the region” approach and sense of safety cultures and safety management systems.

[Jeff Watson, Conservative, Essex, ON]

For the benefit of the committee at some point, in a memo or something later on, can you write out the regions for us from best to worst as far as the regulator goes in that regard? I think that would be very instructive for the government in terms of which regions need to improve.

[Douglas Lewis]

That's a reasonably subjective question, but a good one.

[Jeff Watson, Conservative, Essex, ON]

Well, your opinion is better than none.

[Douglas Lewis]

I'll take counsel and get back to you.