Thank you.
The accident rate in the last 10 years has continued to decrease. At the same time, we've seen a significant increase in air traffic. The outcome of that is that the actual number of accidents has gone down year over year. In fact, last year the total number of accidents in Canada declined to the lowest recorded figure in modern aviation history.
As previously mentioned, many of today's air transportation accidents can be attributed to human or organizational factors. Safety management systems offer the most promising means of preventing these types of accidents by requiring companies to have processes that proactively and systematically minimize the risks caused by these factors.
When our inspectors inspect a company, they determine the effectiveness of its safety system, verify its regulatory compliance, and analyze its corrective actions, if applicable. By interviewing employees, managers, and CEOs, and asking how they assess risk, we broaden our scope to help companies minimize risk at every level.
The path to achieving excellence in safety can be entirely different from one company to the next. This is why we have moved toward a systems-based approach that asks companies to have systems in place to identify, assess, and mitigate risks; to acquire safety data; to analyze if the organization is meeting its safety goals; and that support continuous improvement in the organization's safety performance.
It's worth noting that a recent review by the Australian Civil Aviation Safety Authority found that recent studies have demonstrated that well-implemented SMS, especially those where the organization invests effort into the SMS, are associated with enhanced safety performance.
In terms of implementation, Transport Canada is a world leader in SMS requirements for aviation organizations and continues to work with the front-line staff and the industry to further improve the program. At the present time, our level of implementation covers 90% of the fare-paying passenger kilometres in Canada. We're one of the few authorities in the world that have implemented SMS to that extent.
We've conducted SMS assessments of all Canada's airlines and related maintenance organizations to verify that the SMS in these companies are working and contributing to a healthier safety culture within the organization.
In 2008 and 2009 we also introduced regulations for airports and air navigation service providers in Canada. Following implementation in those sectors, a decision was made to further delay implementation in other commercial sectors to make sure we had additional time to refine our own procedures, training, and guidance based on both inspector and industry feedback. Since then, we've begun an assessment on further implementation that will help us determine industry readiness and Transport Canada's capacity to carry out the necessary surveillance.
We are currently considering additional information with respect to the feasibility, timing, and benefits of implementing SMS in these other areas. We will review and communicate proposals for moving forward within the next year.
Since the implementation of SMS, we have also refined our oversight tools. A lot of progress has been made internally to strengthen the oversight of aviation organizations subject and not subject to SMS requirements. We found that many of the tools we had developed were equally applicable in both worlds.
We exercise a systems-based approach to safety oversight that includes assessments, program validation inspections, and process inspections.
Assessment means the surveillance activity conducted to look at the effectiveness of a company's SMS, and the level of compliance with the civil aviation regulations. We use the compliance level for all sorts of companies.
The second form, the program validation inspection, means a systematic review of one or more regulated areas of a company subject or not subject to SMS. It is used to determine if regulatory requirements are documented, implemented, in use, and effective within certified organizations.
Third, the process inspection means an in-depth review of the processes used to produce an output, for example, the maintenance of training records. Other inspection activities occur in the course of delivering services to the industry.
These surveillance tools complement one another and together provide for comprehensive oversight of compliance with safety regulations.
Multidisciplinary inspection teams work together to provide the necessary surveillance of a company's entire operation. On-site inspections are built into Transport Canada's surveillance schedule and can be planned or unplanned. The department conducts thousands of such inspections a year.
Companies with SMS are required to have management tools to analyze whether the company's safety goals are being achieved and processes based on quality management principles that support continuous improvement of its safety performance.
Our own program, our risk-based surveillance program, has brought several benefits to the organization in terms of resource allocation. We are now in a better position to proactively allocate resources to provide the greatest benefits. We can also better achieve a balance between workload and capacity by moving resources and/or moving work around as those priorities are identified necessary.
This new approach links the surveillance of activities to risk profiles of companies, allows flexibility for smaller oversight interventions and unplanned work, and allows us to assess the adequacy of resources to deliver the program. We've also identified specific points in the planning process to make sure that we have adequate management review and we review the data annually in conjunction with ongoing workload and capacity analysis.
From an enforcement perspective, as we introduced safety management system regulations as a means to trigger proactive approach to regulatory compliance, we also needed to make sure that we didn't just react to findings when they arrived from TSB, for example.
Our approach has been two-pronged. One, it focuses on a non-punitive reporting culture in the companies, which encourages companies to take corrective and preventive measures even before we necessarily become aware of an issue. It also provides for punitive measures when TC inspectors do identify non-compliance, and the enforcement action TC takes can include oral counselling, fines, or even suspension or cancellation of the company's certificate. We do not hesitate to take action if we determine such action is necessary.
Enforcement is taken with a firm but fair approach and is based on the examination of surveillance activity, historical records, and informed judgment. When necessary, we may place a company under an enhanced monitoring program that provides for increased surveillance, as well as additional assurance that deficiencies are being dealt with effectively and appropriately. If Transport Canada detects a situation that poses an immediate threat to aviation safety, an inspector may issue a notice of suspension of the organization's certification or detain the aircraft.
Internally, we've developed an action plan to guide the civil aviation program. That was not entirely, but largely, aimed at many of the results that came out of the OAG audit that was released in April 2012. The action plan included many activities to strengthen the civil aviation program, including in areas related to the oversight of aviation organizations and their safety management systems.
Transport Canada has staff instructions that describe the procedures and responsibilities of inspectors when it comes to surveillance and enforcement activities. Beginning last year, we also held oversight workshops with inspectors across the country to discuss surveillance and enforcement. Those staff instructions were revised based on some of the feedback we had during those meetings. TC continues to work with the front-line department employees in industry to improve understanding of the SMS regulatory approach.
In summary, to continue this improvement, as discussed, further analysis is needed prior to moving forward with SMS implementation into other areas of air transportation, and we continue to further refine our processes to ensure that we focus our resources consistently on the areas of highest risk.
Thank you.