Transport Committee on April 1st, 2008

[Brian Masse, NDP, Windsor West, ON]

The question would be whether it's exercised enough. That's where I hear some disagreement.

I want to move to the terms of reference for the advisory council. Thank you for tabling that today in front of us.

In general, I've seen many panels and working groups like this, but what I'm really worried about is the accountability of the work that comes out of it and whether it has any enforcement mechanisms or ability to move itself up the food chain, so to speak.

It's good to see that the unions are recognized here. I don't think the panel, in their report, recognized the input from the unions. I think that's very much a disservice, given the fact that they work every single day on these things. Nonetheless, at least their members are here.

But at the end of the day, if a working group is created over an issue—for example, derailments—and they come forth with a series of recommendations or a report and it gets back to the main body, what really can the main body then do with that report that has been worked on? They're only meeting twice a year by mandate. They can meet more often.

Potentially, on the surface it appears that there could be some good work that would come out of here. My fear relates to similar panels, such as the CAPC panel for automotive and a series of others, where the recommendations basically get posted on a website and sit for many, many months and you get just an occasional House of Commons question based upon the work that a panel has done and it has just basically been posted.

So perhaps you can tell us what type of teeth the work of this panel could actually have.

[Marc Grégoire]

This is not a panel, this is an advisory council, and it has no teeth whatsoever. The intent is not to have this as a decisive or decision-making body. That is not what it is. It's a consultative body.

Will Luc and I be interested in what comes out of it? Of course. As you have noticed there, I will chair this council, starting on May 2. I'm very interested in finding ways of improving railway safety by any means and matter.

We had something before. It wasn't working very well because there were too many people participating. So we thought, for this committee to be productive, we needed to limit it to a manageable number, which is around 20 or less. That is what we have now.

The thing we have put in the mandate is any safety issue that needs to be addressed and any regulatory proposals. So a regulatory proposal that the department could make would go through this committee for consultation. Any rule that affects the nation, any national rule by the railway industry, would go through this committee, and anything else that the members of the committee would bring. But the goal is to improve safety.

As to what we will do with the recommendations, I am the minister's adviser on a day-to-day basis. So if I chair this and I have recommendations on specific things to do, of course I will have to report and make a recommendation to the minister.

We have another similar committee that works very well. We kind of modelled the membership and the number of people on the transportation of dangerous goods advisory council. Over the years, the TDG council has made a number of recommendations that actually came out very positively in regulatory improvements, for instance. So we are very optimistic as to the work that would come out of this council.

[The Chair, Conservative, Merv Tweed]

Mr. Watson.

[Jeff Watson, Conservative, Essex, ON]

Thank you, Mr. Chair.

Thank you to our witnesses.

The railway panel commissioned a pretty comprehensive study. We've heard from Mr. Lewis in terms of his thoughts crystallizing this broad study down to something a little more functional for us to assess and to begin to make decisions on.

I posed a question. I presume you are familiar with the report, but I'll draw your attention to pages 73 and 74 of the report, where he talks about the continuum of a safety culture, the progression toward the full implementation of SMS, which would be stage five.

I asked Mr. Lewis to evaluate two things: at what stage are the railway companies, the industry itself--I think he indicated somewhere around stage two, maybe stage three--and as well, where the regulator is at, which is Transport Canada. I think the answer was about the same. I think kudos were given to VIA Rail, which he said was beyond that, maybe around stage four. It is much further along than the rest of the industry and the regulator.

I would like you to respond to Mr. Lewis's assessment. Where do you see yourself currently with respect to this continuum? What stage do you find yourself at, as the regulator? Where were you at two or three years ago? Have you made some progress? Were you stage two before and now you're stage three? Were you stage one before and now you're stage two? I'd like an honest assessment. I'd like you to respond to Mr. Lewis, first of all.

[Luc Bourdon]

To answer your question, I think we are progressing. As to where we are on a scale of five, I would agree, we're probably between three and four right now. We're not there yet, but I think there's been major improvement. There were growing pains. We had to learn. We had to work with our people, and through our risk-based approach that was implemented when we integrated all our programs into SMS I think we've made some great improvements. And we're seeing from our own people that we're getting a better level of buy-in from everyone.

[Jeff Watson, Conservative, Essex, ON]

So your assessment is a little higher than Mr. Lewis's was.

[Luc Bourdon]

Maybe a bit higher, yes. We're optimistic.

[Jeff Watson, Conservative, Essex, ON]

Mr. Laframboise earlier said that what he sees when he looks at this is a failure of SMS. I'm not sure I agree with that. In fact, where SMS is being implemented it's being successful. Even Mr. Lewis had said. “Let's take VIA Rail, for example, where they're much further along”. We can look at their safety record, for example, and see that in fact SMS can work. There are certain regions that are further along as well. So where it's actually being done it's being successful. It's in the areas where we've not gotten to full implementation where we're continuing to see the problems.

I have a question with respect to some of the regional variations with respect to the regulator. Mr. Lewis had singled out the Atlantic region as being one of the more successful regions with respect to the regulator. What lessons are you transferring from that region to the other regions where we're not seeing the same success? What can we learn from the Atlantic region? What's actually working there that could be used to bring up the standard in other regions?

[Luc Bourdon]

Actually I'd say that most of the successes in the Atlantic region are being carried over in other regions by those working groups that we have in place, whereas we bring mostly the people from the Atlantic region to share their successes with the others.

[Jeff Watson, Conservative, Essex, ON]

What successes? Where are they succeeding where others are failing? What lessons are you bringing over? I'm talking about the process of bringing it over. What are you bringing over? What's being translated?

[Luc Bourdon]

Mainly with their approach to SMS and the way they dealt with railways....

You also have to consider that from region to region there are different numbers of railways. Whereas some region might have five or six railways, you have other regions that may have, with the provincial roadwork that they're doing, way over twenty. So that can cloud a bit the implementation of SMS as well.

[Jeff Watson, Conservative, Essex, ON]

You've recognized internal problems with consistency and standardizing your processes.

You said about a third of this process is done. When do you expect to have the other two-thirds completed?

[Luc Bourdon]

What do you mean by a third is done?

[Jeff Watson, Conservative, Essex, ON]

You had mentioned---

[Luc Bourdon]

No, the third I talked about was the quality management process and all the procedures that are being.... As far as SMS is concerned, as I said, we're probably between a three and a four right now. It's getting better by changing the focus. When we started at the beginning with what we called at the time global audits, we felt they were very time consuming, and probably the results at the end of the day were not what we expected. Some areas of the railway, we already knew they were doing a very good job. So we used the risk-based approach lately, whereby we're focusing where we believe there are problems, and those are the areas we audit. So they're more focused and they are now called integrated audits, and the quality is way better.

[Jeff Watson, Conservative, Essex, ON]

The resistance to change within Transport Canada, you've indicated the movement from inspection to audit as part of that resistance to change. I want to step back for a second, though, and examine it in terms of getting to a culture of safety in SMS. In which groups are you finding resistance, and what type of resistance are you finding within them? For example, in the railways themselves, is there resistance there to this, and where? Is it within the civil service, within Transport Canada? Is it with unions? Give us a sense of where the obstacles are in resisting that kind of change.

[Luc Bourdon]

In terms of resistance to change, for the most part I think it was on both sides. It was us as well as the railway, because I think we had a lot to learn about SMS. As far as the unions are concerned, I think they were very supportive of SMS; however, the complaint that we've heard constantly was that they felt they were not involved enough in SMS. You have people within the railway, as well as within Transport Canada, who feel it's way too paper intensive. It may be they are more of the culture that believes inspection will do it all for us. They've been doing that for 20 to 25 years. So I think it's on both sides. As we're getting new staff on board, we're changing the culture slowly at the railway as well as the regulator.

[Marc Grégoire]

If I may add something, Mr. Chair, on that one, the experience we've had about this is that most people find our speeches very interesting, but only get convinced when they see good examples. If I can go back to the aviation side for a minute, what some companies like Air Transat have seen, and it took many years, since they implemented SMS—and we hope that the railway company will follow suit—is that there is far more communication inside the company between labour and management. Labour is reporting problems before they arise, before they cost. So there's a lot of cost saving that is possible within the company. So not only are there safety benefits to going SMS, but as proven by more than one company, there are actually cost savings; therefore there are real financial benefits to going there, because problems and issues are discussed and resolved before they generate cost, which was not the old way of doing things. But it takes time.

[The Chair, Conservative, Merv Tweed]

Thank you.

We're going to Mr. Zed, who has generously given his time to Mr. Bell.

[Don Bell, Liberal, North Vancouver, BC]

Thank you.

Thank you, gentlemen.

I wanted to address the area of the railway safety inspectors. One of the suggestions was that their function not so much shift away from, but include an audit function as well as an inspection function, and that their title be changed to railway safety officer.

I'm curious about recommendation two, which says the Railway Safety Act should clarify that the railway safety inspectors exercise their powers under the authority of the minister. I understand they get their power under sections 27, 28, and then they issue their orders and notices under section 31. I'd heard there was a suggestion prior to this report coming out, and in a lot of the earlier discussions, that the orders and notices had to be cleared first by the deputy minister. I note the reference here that there is a proposal, or the suggestion if you read the act carefully as it exists, that there is an appeal process to the minister for an order or a notice, which is rarely used, and it's one that could be used by the railways in the process.

But I'd heard there was a suggestion that inspectors were going to have to clear their orders with Transport Canada, which seems to be a backward step, since these inspectors are on the ground. They're looking at something, they see something, they have to take action for the safety of that train, or the safety of the individuals, the workers.

I know the suggestion is that administrative penalities, which are referred to on page 59 of the report, would be applied by the minister only. They might be recommended, but they're administrative penalties. I would like to know how those administrative penalties are applied in the aviation or the other transport modes. Are they done by the minister, or are they done by some other body or person? I'm particularly interested in the suggestions for the RSIs. On page 29 there's a reference under orders and notices that they would report their decision to the director of rail safety. I guess the effort of the report was that the panel was to ultimately link it more directly to the minister, and these would all be reported to the minister but not go to the minister or the deputy minister for approval. I just want to clarify that.

In your comments on the new audit role, what additional training would you be planning for these inspectors? I presume it would require a slight shift. I'm presuming you're adding an auditor's function rather than taking away an inspector's function, but I know Mr. Lewis made reference to the fact that all their energies are focused on inspection, and they felt there was some value to having some of their energies applied to the audit function. I know these inspectors exercise their power under the authority of the minister. I'd like some comment on that. That's one question.

The second question is about the communication of policies, which is a different area. Some of the companies—CP was one good example—have a culture of safety, and it's well communicated to the employees. CN was an example where it wasn't as well communicated. There was a disconnect between the corporate intent and what was being understood.

I noted recommendation 24 talks about specifically “improving their safety management systems, including a means of involving railway employees at all levels and, where possible, through health and safety committees and representatives”. I wonder if you could comment on how you might see that coming about.

[Marc Grégoire]

That's all?

[Don Bell, Liberal, North Vancouver, BC]

That's it. I have more, but in the interests of time.... Go ahead.

[Marc Grégoire]

I don't know if I wrote everything you asked, but between Luc and me, we'll try to cover most of the ground.

If I can start with the railway safety inspectors and their titles, we haven't decided yet if we're going to change their titles. What they do and what they will do in the future is changing, so they will do more audits and fewer inspections, as you mentioned. But I'll let Luc cover all the details on that one.

There's a big difference--and we've had conversations with the panel on that subject--between what's being done under the Railway Safety Act with inspectors and under the other acts. I'll cover the monetary penalties at the same time, outlining some of the differences

. If I take the Aeronautics Act, for instance, there's no power defined for inspectors per se in the act. Everywhere in the act, we talk about “the minister”--“the minister shall do”, “the minister can do”, “the minister can enter premises”, “the minister can ground an aircraft”--but we don't talk about the inspector. We have a regulatory instrument, a delegation instrument, whereby the minister delegates his authorities through the chain of command. He delegates most of his authorities to me, and I further delegate that to the DG of civil aviation, and down the line, all the way to the inspector. We have an instrument of delegation for everybody in the department concerned with the Aeronautics Act.

Here it's different. The act itself delegates power to inspectors, so in theory you could have an inspector who will do something somewhere in the country on his own without consulting. Some of the recommendations here, when we're going to come up with an important monetary penalty scheme, or we're going to come out with a railway operating certificate, you could have theoretically an inspector who would decide to pull out a certificate without consulting anybody. This is not advisable, but in theory, under the act as it is written now, you could have this situation.

On the aviation side, we keep reminding our inspectors that the minister is a person--he exists; he has delegated his authority, but in some big cases it's highly advisable to consult him. For example, if somebody wanted to pull the certificate of Air Canada tomorrow, I think we should meet the minister and see if he really wants that inspector to take that action. What has been taken into account? What are the repercussions on the public interest? What are the repercussions on the economy of the country?

All those questions also apply to the railway industry, which is why we're interested in clarifying this aspect. The panel has not made a specific recommendation with regard to that, except the title.

[Don Bell, Liberal, North Vancouver, BC]

I just wanted to clarify that we're talking orders and notices, as opposed to administrative penalties, which would be the minister's. Orders and notices are on the ground when a train is sitting there and an inspector sees something. He has to be able to make that decision right there, because that train shouldn't leave.

[Marc Grégoire]

He is, and he will continue. Inspectors in other modes do have this authority also, but it's delegated to them by the minister. Luc will cover that aspect.

As far as the monetary penalties go, the way it works in other modes is that a regulatory inspection or an audit is done. There is an investigation for which the conclusion is that there was an infringement of the rule. The rule was broken, so a monetary penalty must be given. It's not the inspector who has done the analysis who gives the fine to the company. In aviation--and again I'll let Luc explain what is being proposed for rail, but it's not there yet because we don't have it in the legislation--it's the original manager of enforcement who makes decisions on the fines. For instance, the inspector will say, “Here's what I found, and given the track record of this company, here's my recommendation. We should fine this company $5,000.”

Then there's a process in which the company is invited to an informal meeting by the manager of enforcement, where this could be negotiated, so the company will say, “Yes, but it's my first offence. Don't be so harsh”, and blah, blah, blah, and it could end up at $4,000, in which case it ends there. If there's no deal, the person can pay an appeal to the TATC, the Transportation Appeal Tribunal of Canada, which of course would have to be the case here if we came out with monetary penalties.

That's how it's done, and we would like to say that we would like the same thing in rail, rather than reinventing a different system.

By the way, we're now starting the implementation on the marine safety side under the Canada Shipping Act, 2001. Up until now, we were only able to prosecute companies. We just had the final regulation in the Canada Gazette. We will be able to go ahead with monetary penalties, and it's the same thing in the marine security environment.

I'll let Luc cover the notices and orders.