Transport Committee on Nov. 25th, 2013

[Gerard McDonald]

Certainly, we have consultative mechanisms that perform much in the same manner. Each of our modes have well-established mechanisms for consulting all of the groups that I mentioned.

On the rail side, we have the Advisory Council on Railway Safety that was formed after the Railway Safety Act review. On the transportation of dangerous goods, TDG, side, we have the Transportation of Dangerous Goods General Policy Advisory Council, which met just last week with well over 100 participants, I would think, who were there to give the minister their views on what should be done to improve rail safety.

On the marine side, we have the Canadian Marine Advisory Council which meets twice a year and welcomes all participants. I believe they had about 300 or 400 participants at the last meeting.

On the civil aviation side, we have the Canadian Aviation Regulation Advisory Council, which meets on a regular basis as well.

[David McGuinty, Liberal, Ottawa South, ON]

I understand exactly what you're saying. It's the old traditional North American approach. The regulator holds meetings; all kinds of voices are brought to a table; it's all taken under advisement; the doors are closed; and the regulator does what the regulator does. Usually it's with instructions from the political master. That's how it's been working forever in this country.

What I'm asking is, can we graduate and take steps into a new kind of decision-making, where governments are actually prepared to cede a certain amount of their authority? For example, if an SMS is being crafted with a particular company, a major rail company, why can't that SMS be signed off by a major consortium of environmental NGOs who understand the plan and legitimize the plan by actually participating in it? Why can't the labour groups that are actually being consulted sign off? I'm not talking about bringing people into a room, hearing them, closing the doors, and then deciding what's going to happen.

[The Chair, Conservative, Larry Miller]

Okay. Could you let them answer that, Mr. McGuinty?

[David McGuinty, Liberal, Ottawa South, ON]

Can that be done?

[Gerard McDonald]

First of all, I take exception to the characterization that we invite people in, then we close the doors and we don't tell them what we're doing. Our consultation is a continual process. We try to keep stakeholders as informed as we possibly can on where we are going and try to come up with a solution that all can agree on.

In terms of doing business a different way, certainly we're always open to looking at ways to improve our fora. In fact, we have revamped both the Canadian Marine Advisory Council and the CARAC, Canadian Aviation Regulation Advisory Council, process on the civil aviation side, just recently, to look at new ways of consulting. We're certainly open to doing things in a different manner.

[The Chair, Conservative, Larry Miller]

Okay. Thank you.

I'll move to Mr. Watson for seven minutes.

[Jeff Watson, Conservative, Essex, ON]

Thank you, Mr. Chair.

Thank you to our witnesses for appearing today.

On safety management systems, let me address it in general terms first. It is not deregulation; that is, it doesn't remove regulations from the books.

Is that correct, Mr. McDonald?

[Gerard McDonald]

That's absolutely correct.

One of the biggest problems we have is that people characterize it as deregulation. With the implementation of safety management systems, not one Transport Canada regulation has been removed from the rule book. In fact, we see safety management systems as an umbrella regulation on top of all the others to make sure that they're working properly.

[Jeff Watson, Conservative, Essex, ON]

Neither is it self-regulation. Is that correct? That is, the industry simply writes its own rule and the government accepts the way that industry has written it.

[Gerard McDonald]

That is correct as well, sir.

[Jeff Watson, Conservative, Essex, ON]

It's the minister, in fact, at the end of the process. Though the companies may draw up a rule, it's the minister who has to approve a rule at the end of a process. Is that correct?

[Gerard McDonald]

That's correct. Are you referring specifically to the rail side where there's—

[Jeff Watson, Conservative, Essex, ON]

That's correct. I think a lot of my questions will be relating to rail today.

[Gerard McDonald]

—a different regulatory construct?

[Jeff Watson, Conservative, Essex, ON]

Right, and it will carry the force of law once approved. Is that correct?

[Gerard McDonald]

That's true.

[Jeff Watson, Conservative, Essex, ON]

In fact, all of those elements were contained in the 2007 independent rail advisory panel report, “Stronger Ties”.

I would add, by the way, it doesn't replace Transport Canada's right to regulate, in addition. Is that correct?

[Gerard McDonald]

That is correct as well.

[Jeff Watson, Conservative, Essex, ON]

Concerning safety management systems, the 2007 report—and I'm going to start there, because I want to focus my comments on rail today—called for effectively a shift in culture within the railway companies and within Transport Canada itself as a regulator. In fact, they used what I think they referred to as the “ICAO continuum” for evaluation, as contained in pages 73 and 74 of the report.

I'm going to refer to that at the moment. This is in “An Evaluation Tool for 'Safety Culture'”.

On the one end is “a company that complies with minimum safety standards and views compliance as a cost of doing business.” They take “a short-term perspective”, and the regulator “must engage in significant surveillance and enforcement activities”. The report at that time said CN was at that particular stage.

Next in the continuum is “a company that views safety solely as compliance with current safety standards”. They may have an “internal inspection and audit” process and “a system of reward and punishment”, but “intervention is still required from the regulator, though the approach may be more educational in nature”. They identified CP as at that stage.

The third stage along the continuum is “a company that sees safety as risk management and recognizes that compliance alone cannot guarantee safety. This company is anticipatory and identifies the potential for hazards before they occur. The regulatory approach must evolve from compliance inspections to system audits.” At the time, they said that Transport Canada effectively was at that stage.

The fourth stage is “a company that views safety as an opportunity”. They leverage “safety management capability to...economic benefit” and have “a longer-term outlook”. The regulator's role “is primarily one of monitoring the company's safety performance.” They had VIA Rail at stage four in terms of its progress in the implementation of SMS.

Then, “at the advanced end of the continuum”, which is stage five, is “a company that has fully integrated safety into its business practices. Safety is reflected in core values and built into the business model”, and “the regulator's role is one of monitoring”.

That was the 2007 report. Again, they had Transport Canada at level three. We are now six years down the road with the implementation of safety management systems.

Mr. McDonald, where would you say Transport Canada is today?

[Gerard McDonald]

Certainly we've progressed from where we were in 2007, and to talk to the specific rail experience on how we have progressed and to what measure, I'll turn to Monsieur Bourdon to answer the question.

[Luc Bourdon]

I think we progressed by adopting many of the recommendations that were generated by the report Mr. Watson is talking about. I mentioned earlier that now we have guidelines that were developed to assist the railway. We have best practices that were gathered in two documents to assist the larger railways as well as the smaller operators. We developed a safety culture checklist, as well as other documents, to support SMS.

On a scale of one to five, I'd be very careful about saying where we stand, but we have definitely progressed; there's no doubt about that.

[Jeff Watson, Conservative, Essex, ON]

Both the report as well as Transport Canada's own publication “Moving Forward”, which preceded the report in its publication by a few months, talked about the requirement of a culture shift not just within railway companies, but within Transport Canada itself.

I want to probe three areas, if I may, in that regard. One is with respect to personnel.

On page 10, “Moving Forward” says that Transport Canada “will maintain the capability to apply its traditional compliance inspection and audit activity — while augmenting its capability to perform system audits and assessments.”

What did that mean in 2007 with respect to personnel? Is it that in addition to the inspectorate they would be looking to add new auditors for system audit, or that they would cross-train the existing inspectorate to do the additional function of audit and evaluation? What was the philosophy or the decision by Transport Canada?

[Luc Bourdon]

I think it was both. Whereas we did take some of our inspectors and train them to be auditors, we also hired people who had the auditing skills to lead some of these audits.

For example, in Ottawa at headquarters we hired people who had an auditor's background in order to assist the region, and in the region we trained our inspectors. There is still some training that needs to be conducted, but we trained our inspectors to be auditors as well.

[Jeff Watson, Conservative, Essex, ON]

Let me move to the audits themselves.

In terms of traditional inspections, which would be for compliance with regulations, approximately how many do Transport Canada inspectors across the country and the five regions conduct on an annual basis?

[Luc Bourdon]

Last year we did close to 32,000.