Transport Committee on Dec. 4th, 2013

[Jeff Watson, Conservative, Essex, ON]

In fairness, the history of the regulatory framework you have included presumably should at least have talked about whether any regulations or rules were rescinded. Would you not agree with that?

[Michael Ferguson]

The audit was intended to look at what issues exist and how Transport Canada is managing those issues. The intent of the audit was not to try to say that these regulations were added, or these regulations were removed. It wasn't that specific. It was trying to look at specific issues that have been identified around rail safety, the issues that have come to Transport Canada's attention and how it is managing those.

One way they may manage them or deal with a particular issue may be through regulatory framework, which may include adding or removing regulations, but that wasn't the goal of the audit.

[Jeff Watson, Conservative, Essex, ON]

This is just an item of curiosity for me. On page 10 of your report, paragraph 7.13, states:

With continued use of new technology, additional infrastructure, and traffic growth, it is important that Transport Canada oversees whether federal railways maintain effective safety management systems to identify new risks and implement strategies for improving rail safety in Canada.

This follows the introduction of new technologies.

Are you alluding to new technologies creating new risks, or as helping us to identify new risks or to solve risks? I'm not sure of the connection in that paragraph. I just want clarity on that.

[Michael Ferguson]

I think that paragraph is simply contextual, to let people know the environment changes continuously. It's not so much whether new technologies create risks or not, it's that new technologies may cause Transport Canada to have to change how they oversee the systems. They have to be able to react to new technologies.

[The Chair, Conservative, Larry Miller]

Thank you.

We now move to Ms. Sims, for five minutes.

[Jinny Sims, NDP, Newton—North Delta, BC]

Thank you very much, and I want to thank all of you for coming.

It's my first time at this committee, and it's a pleasure to be here, Chair.

I come from the riding of Newton—North Delta, and while I know that much of this report is not directly about Lac-Mégantic and what happened there, I do know that in my riding there's a lot of concern about railway safety and the transportation of coal through the heart of the riding. So we are very worried about that.

When I read and heard your presentation, one of the things that really struck me was when you mentioned the key performance and risk data to target higher-risk railways and that the most significant safety risks were missing. A lot of data just isn't there.

In light of that, what type of data would help Transport Canada better plan safety inspection and audits, and what other kind of data is missing that they obviously need to get on top of?

[Michael Ferguson]

I'll start the answer if I may, and then I'll turn it over to Monsieur Chouinard.

Again, the fundamental issue for us there is risk assessment. When you are overseeing a system to make sure it's operating safely, it's important that Transport Canada has good risk assessment so it can focus its work on the areas of the most importance.

To be able to assess risks, you have to have data, you have to understand the environment you're working in. As for whether we noted any specific data as missing, I'll ask Monsieur Chouinard to respond to that.

[Régent Chouinard]

In our report, Mr. Chair, we indicate Transport Canada had some information. It got information from the Transportation Safety Board and planning.... It also had information or knowledge from inspectors who had been doing inspections in the past, but we noted a number of areas where information was missing.

One thing that we thought was important for Transport Canada to have was the federal railways' own risk assessment. They also didn't have information on the sections of tracks transporting dangerous goods, and making decisions on where and what to audit, and information on the condition of bridges, and also on the financial performance of these organizations. This is in paragraph 7.36 of our report.

[Jinny Sims, NDP, Newton—North Delta, BC]

Thank you very much for giving me such a thorough answer.

I have to say that I was rather alarmed when I went on to read that Transport Canada had only completed 26% of the audits they had planned to do over a three-year period. Obviously we do have some gaping holes here, and I'm just hoping that we can get on top of this, because we don't need more Lac-Mégantic disasters.

Now I'm going to pass it over to you.

[The Chair, Conservative, Larry Miller]

You have two minutes.

[Marjolaine Boutin-Sweet, NDP, Hochelaga, QC]

You said you completed your audit in June 2013. Is that correct?

[Michael Ferguson]

That would be when we completed what we refer to as the field work, so that's when we would have stopped actually collecting data. We would still have been in the report-writing phase after that.

[Marjolaine Boutin-Sweet, NDP, Hochelaga, QC]

So you weren't able to collect any information on the Lac-Mégantic situation, since the accident hadn't happened yet. You weren't able to establish a connection between the safety management systems and the accident.

As you mentioned earlier, in 2007, a report came out containing 56 recommendations. They included improving oversight of the safety management systems of federal railways and collecting data from federal railways to assess their safety performance.

According to your report, only 32 of those recommendations were addressed, meaning that 24 of them were disregarded. And, in fact, some recommendations have not even been fully implemented.

Were you given an explanation as to why it was taking so long to implement the recommendations?

[Michael Ferguson]

When we looked at the number of recommendations, we asked Transport Canada for their assessment of how many they had put in place. The table in exhibit 7.6 is their assessment of what they had put in place. Now, even though they assessed 32 as being completed, I think we also say in the chapter that they're saying that on some of those 32 there's still important work that's ongoing.

As to why it takes this amount of time, I think that's really what we are bringing forward to the committee, and it's really for the department to address. Our concern was that some of these issues had been around for a number of years. They've been trying to make changes in how they do things, and it's taking, as I think as I said in my opening statement, too long to complete. As to exactly why that is, only the department can respond to that.

[The Chair, Conservative, Larry Miller]

Thank you.

Now we'll move to Mr. Komarnicki for five minutes.

[Ed Komarnicki, Conservative, Souris—Moose Mountain, SK]

Thank you very much, Chair.

Thank you, Mr. Ferguson, for a detailed and thorough report.

I know that some critics have criticized the SMS as it moved toward safety deregulation. I didn't get that from your report. I know that the legislation provides that a safety management system must include 12 components, which are set out in there or the components specified. Now, your audit was essentially auditing whether Transport Canada sufficiently understood whether those railways that had SMS were complying with the requirements of what an SMS should include, and whether it was properly implemented. Is that what you were looking at?

[Michael Ferguson]

Certainly, as is normal in our audit practice, we don't audit government policy; we don't question government policy. What we audit is the implementation of policy, the policy around safety management systems, the regulations, the law around safety management systems. What this audit was about was how Transport Canada implements their responsibilities under that framework.

[Ed Komarnicki, Conservative, Souris—Moose Mountain, SK]

And it was also to see how SMS were being implemented by the railway companies relative to the legislation that was provided?

[Michael Ferguson]

Right. What we looked at were all of Transport Canada's responsibilities, to oversee that the rail companies had put in place safety management systems. That's what the audit was about.

[Ed Komarnicki, Conservative, Souris—Moose Mountain, SK]

You said the following in your conclusion: In 2001, Transport Canada moved the Canadian rail industry towards a regulatory framework that includes a safety management system (SMS) approach.

You also said: the Department has made limited progress in shifting from the traditional oversight approach—largely based on inspecting federal railways' compliance with rules and engineering standards—to a system-based approach that integrates oversight of safety management systems into activities.

Did you have a sense, as you did the audit, that there was a changeover requirement from what used to be the old system to the new system incorporating safety management systems?

[Michael Ferguson]

Yes, and I think we outline that it was recognized in 1999 that they needed to make a change. In 2001 it was put in place. When we did the audit over the 2012-2013 time period, we found that there are still many weaknesses in the way Transport Canada is overseeing that change.

[Ed Komarnicki, Conservative, Souris—Moose Mountain, SK]

You're coming from the approach that if you're going to have a safety management system that must be implemented by the railways, do you as Transport Canada have the assurance that this is happening? That's where you then ask whether your audit is sufficiently broad with respect to that. Did you analyze the number of personnel, whether auditors or inspectors?

[Michael Ferguson]

That's right. Given that it's their responsibility to oversee that system, how did they go about doing that? What are their requirements, and what would we expect in good audit planning?

[Ed Komarnicki, Conservative, Souris—Moose Mountain, SK]

Then I guess if you came to a determination that you didn't have sufficient personnel, the next question would be, how many persons do you need? What would their qualifications be? What might it take to train them up to that particular competence?

[Michael Ferguson]

On the human resource side, those were the questions that we asked of Transport Canada. How many inspectors do you need to do the work? What skill sets do they need to have? What training do you offer them? Have they been trained? Those are the questions we asked of Transport Canada, and we found that they hadn't done the analysis to answer those questions.