Transport Committee on Nov. 25th, 2013

[Harold Albrecht, Conservative, Kitchener—Conestoga, ON]

Thank you, Mr. Chair.

Thanks to you and your team, Mr. McDonald, for being with us today and for giving us what I consider a very comprehensive and also complex overview of the safety management systems.

I thank you for confirming again today that it is not a deregulation or a self-regulation concept that we're dealing with here. In fact, page 3 of your presentation summarized very well the whole area of how the SMS are developed. In going through the points there—consultation, examination, licensing, and so on, and I'll come back to some of those later—I'd like to spend a few minutes on consultation.

You indicated at various points throughout your presentation today that you incorporate the involvement of multiple stakeholders, including unions and employees of the company, in developing and implementing the SMS plans, including providing guidance by Transport Canada in developing these plans and including examples of best practices. The results, we would hope, would be fewer accidents and reduced costs.

Also, it would seem to me that there would be an increase in customer confidence. To me, there would seem to be a self-preservation motivation on the part of any company, such that they would want to implement an SMS plan regardless of whether or not there are regulatory systems in place to do that. In fact, there are many other non-transportation sectors, such as the health sector, food processing, and chemical processing, that would automatically have SM systems in place. The whole idea of improving customer confidence in the product I think is key to understanding the difference between simply regulation or having a system in place for self-governance and including the regulatory part in that.

The other points on your page 3 include the examination, licensing, certification, the initial approval of the SM system, and then the ongoing oversight and monitoring, and the authorization of third parties to check on pilot proficiency, and those sorts of things.

On the last point, deterrence, we've talked a little about the monetary penalties, but I haven't heard anything on the suspensions, cancellations, or refusals to renew. I'm wondering if you could just give us some examples of the length of time for a cancellation or a suspension, and how those things would come into play.

[Gerard McDonald]

As I indicated earlier, I believe it's a graduated process that we would follow with an operator. If we see a problem with their safety management system, the first thing we would like to do is talk to them about it, ask them for a corrective action plan. They would submit the plan. We would analyze it and see whether it's going to achieve the desired result. If we think it is, we give them time to implement it.

If that doesn't work, we step up the amount of surveillance we may do with that particular company. We may get to a point where we do administrative monetary penalties. Then as we move on we can go up to pulling the operating certificate of a particular company if they don't appear to be compliant. Or, at any point in time if we find the situation is so grave, we can and we have pulled operating certificates of companies that we feel just aren't up to snuff, and we don't hesitate to do so.

It's probably most mature in the aviation sector that we have these business practices, so I'll let Mr. Eley provide some colour in that regard.

[Martin Eley]

The main point is on suspensions. For example, we would often identify the conditions under which the suspension would be removed. It's quite often dependent on the companies as to how long it takes them to meet those conditions. It's not so much a penalty of a fixed period, but these are things you have to fix before you can go back into business.

[Harold Albrecht, Conservative, Kitchener—Conestoga, ON]

Is there generally a length of time set to the graduated approach for monetary penalties, and so on? Is there a length that you would allow a company to get up to speed, or is that on a case-by-case basis?

[Martin Eley]

Certainly, when we find an issue and we look at the corrective action plan, the length of time they get to actually resolve the problem depends on the severity of the problem. If it's an administrative issue, there's more tolerance than if it's a safety issue, clearly. That's built into the process.

[Harold Albrecht, Conservative, Kitchener—Conestoga, ON]

Thank you.

In terms of how the U.S. manages their safety in terms of the air, marine, and land transport, does the U.S. use an SMS as well, and if so, for what sectors and how is it applied?

[Gerard McDonald]

It depends on the mode, really. I'll let Mr. Eley talk about the air mode, and then Monsieur Roussel and Monsieur Bourdon can talk about the other modes.

[Martin Eley]

The FAA is moving in gradually in a number of areas. In some cases it's still voluntary. The rule is there; it's not necessarily required at this point, but they are moving towards that. We've been doing a lot of sharing of experiences with them. They are committed and they are en route, but I wouldn't say it was mature yet.

[Donald Roussel]

Yes, south of the border any U.S.-flagged vessels that are doing international trips will be facing the same rule, the ISM Code, so we are in sync with their regulations. Domestically, it varies a lot. They are still working on many fronts with smaller operators, ferry operators. They also have the same type of initiative. There are some ferry operators, for example, who are adopting the ISM Code for their purposes, but it varies a lot depending on the area of operations.

[Luc Bourdon]

For rail, the FRA does not require the U.S. carriers to develop an SMS. They are working towards something called a risk reduction program that they are trying to develop. Just to clarify it, in the rail mode, before the amendments in the Railway Safety Act came into force on May 1, we had no authority to impose AMPs or to require rail operating certificates. Now we've had that authority since May 1, and we're currently developing a regulation that hopefully will come into force by the end of the summer.

[The Chair, Conservative, Larry Miller]

Okay, thank you.

I'll move to Mr. Toet for five minutes.

[Lawrence Toet, Conservative, Elmwood—Transcona, MB]

Thank you, Mr. Chair.

Thank you, Mr. McDonald and your team. It's good to have you here. This has been very helpful.

I want to start with a question in regard to your oversight and monitoring. You talk about SMS audits and assessments on page 3 of your slide deck. I would assume that also includes your approval process of operation manuals, etc. I'm wondering if you could walk us through, very briefly, the process you would actually go through for making sure that an operations manual is following the SMS procedure, and also what your follow-up is on that to make sure there is implementation. It's great to have a manual, but what's the implementation process? How do you verify that the actual implementation of the manual is occurring?

[Gerard McDonald]

It varies from mode to mode, so I'll let Mr. Eley start, and then I'll ask Luc to follow up so you get the two.

[Martin Eley]

The way I'd like to characterize it is, generally speaking, if a company is moving into a different field of operation, extending their routes or changing their aircraft fleet, for example, under SMS we would expect them to do an assessment of all the risks to the company. From their point of view that would include the business risk, from our point of view the safety risk. At the point where they came in to change their operational procedures they would have actually identified the risks and the mitigations they put in place. These would then be reflected in their manual. I would suggest that the SMS philosophy drives how well the manual would be prepared when we receive it, as a first—

[Lawrence Toet, Conservative, Elmwood—Transcona, MB]

Given that you verify the update has been done.

[Martin Eley]

Yes. We would look to see whether they've thought of all the aspects, and their analysis would be where they would do that and identify the risk. In some cases companies who have decided not to do something have done an assessment and decided the mitigation is just too much and it's not a worthwhile piece, so we may not even see it.

[Gerard McDonald]

Do you want to talk about the rail side?

[Luc Bourdon]

Yes. We do not approve operation manuals in rail.

For train operation, they have to follow the Canadian rail operating rules. All these rules have been approved by the minister, so they have to follow them. In terms of internal procedure that the railway may develop, usually they're being developed in order to support our rules and regulations that are in place.

We will measure compliance with these rules and regulations, but per se will not approve an internal operating manual.

[Lawrence Toet, Conservative, Elmwood—Transcona, MB]

I guess that leads me to my other question.

Mr. McDonald, you said you don't give a form for safety management systems. I understand that; it makes perfect sense that there's not a form where one checks boxes, etc., but coming back to what Mr. Bourdon was just saying, there's obviously a need for consistency within that. How do you, without having the form aspect of it, follow up and make sure there is consistency from one company to another, that they are doing the same things within that safety management system and we're having the same outcomes?

[Gerard McDonald]

Essentially in safety management what our regulations require is a framework for a safety management system. It will outline the various elements that your safety management has to have. Who's your lead safety officer? You have to have a QA program. You have to have environmental aspects to it. There are a number of elements to the safety management plan. What we would do is go in and look at those various elements, what's required in the regulation, and make sure the organization meets all of the elements that are required as set out in the regulations.

[Lawrence Toet, Conservative, Elmwood—Transcona, MB]

Getting back to Mr. McGuinty's question, it comes back to the international aspect of this. We had a bit of an answer on the marine side on whether there has been a move to SMS internationally. Is that also true for rail and also for civil aviation? Are we seeing that being a direction our international and major trading partners are going in, and that we're working along the same lines as they are so there is a kind of international collaboration on this?

[Gerard McDonald]

Certainly on the air side the international civil aviation organizations have recognized SMS and are putting it in their construct.

On the rail side, rail doesn't work in, I would say, as international a manner as the other two modes, because the railways are obviously landlocked and you don't have the same degree of international interaction. We see the use of safety management systems more prevalent in places like Europe where you have a high degree of passenger traffic. Other areas are looking at it as well, but there's not the same degree of international cooperation.

[Lawrence Toet, Conservative, Elmwood—Transcona, MB]

I have one last question, and if you don't have time to completely answer it, you can table it with us. On page 13 you talk about the 12 components of a safety management system. You list about seven of them and then you go to et cetera. I'm just wondering if you can give us the last five. If you can't give them today, you could actually table them through our chair.

[Luc Bourdon]

We can provide you with the regulations if you want. It's only three and a half pages and you'll have all 12 components of SMS.

[Lawrence Toet, Conservative, Elmwood—Transcona, MB]

That would be very helpful.