Transport Committee on Dec. 4th, 2013

[Michael Ferguson]

Objectivity and independence are critical in the conduct of any audit. So, for example, when we conduct an audit in our office, one of the things we do is have every team member who's going to be involved in the audit sign off on an independence form that says whether they have relatives working in the organization, whether they've ever worked for the organization, and those types of things. Making sure there's a good process to ensure that the auditors are objective and independent is important.

In this industry, I think it's also very important, because oftentimes inspectors have come from industry before, so perhaps they've worked in the industry. It is critical to make sure that the department is aware of which organizations it's assigning its inspectors to inspect and it is confident that everything is being done in an objective manner.

[Peter Braid, Conservative, Kitchener—Waterloo, ON]

Thank you.

I want to ask you next about enforcement mechanisms. Did you look at the suite of enforcement mechanisms available to Transport Canada and their effectiveness? What, if anything, did you study with respect to enforcement?

[Michael Ferguson]

It's my understanding that we didn't refer to enforcement in the chapter, and it's my understanding that in the sample of activity we looked at, there were no actual enforcement steps taken in those cases. It's not something we referred to in the chapter.

[Peter Braid, Conservative, Kitchener—Waterloo, ON]

Thank you.

In your opening statement, point five, you say:However, despite discussions with the industry and progress over the past 20 years, a number of long-standing and important safety issues remain, including trespassing, grade crossings....

I wanted to ask specifically about the issue of grade crossings. Could you elaborate on your findings there, and your observations?

[Michael Ferguson]

What we found in terms of grade crossings is summarized in exhibit 7.8, where we summarized the different issues. Under grade crossings we identify some of the steps that have been taken over the last number of years, including the closure of some crossings, spending money on grade crossing improvements, and so on.

In that exhibit we identify some of the things they have done over the last little while, but also we identify that they still need to clarify the roles and responsibilities that the federal railways play in maintaining grade crossings. That's a piece of work that still needs to be completed.

[The Chair, Conservative, Larry Miller]

Your time has expired, Mr. Braid

I now go to Mr. Mai, for five minutes.

[Hoang Mai, NDP, Brossard—La Prairie, QC]

Thank you, Mr. Chair.

In your opening remarks, again number five, you talked about long-standing safety issues, and you also said it's “taking too long to resolve them”.

Can you tell us, in terms of timeframe, when those issues have come up and why it's taking too long?

[Michael Ferguson]

I think the particular example that is easiest to refer to is the safety management system example. It was identified in 1999 that they needed to make a change from a system based on inspections to a system based on audits.

The actual regulatory framework was put in place in 2001. We did the audit in 2013 and still found the significant weaknesses that we've identified here. I think that alone speaks to the length of time.

When you add to that the fact that they are going to have more companies to have to oversee, and the fact that they still aren't where they need to be right now, it makes you wonder how much longer it's going to take to complete the work.

[Hoang Mai, NDP, Brossard—La Prairie, QC]

Since those issues were raised before, what was the government response at that time? Do you know?

[Michael Ferguson]

This is the first time we've done this specific audit, so they haven't replied to us in the past.

We referred in a couple of places to the review that was done in 2007, the previous time the standing committee looked at the issue. Again, we identified the level of progress the department says they have made on these issues. Many of these issues are still outstanding six years later.

[Hoang Mai, NDP, Brossard—La Prairie, QC]

That's a long time.

Maybe, with your experience, we can compare best practices. You're asking the committee, and I think we agree with your recommendation, to look at a system of oversight in terms of how we look at SMS and things like that.

Can you compare with other federal departments where they would have some sort of system or oversight system that we could base it on, or look at?

[Michael Ferguson]

I'm not sure I can pull an example to mind right now, but I think in this particular case, given that they've been working on this for a number of years and have said they are going to complete a number of things in 2016, it's important that there be something other than waiting for us to come back and do a follow-up audit, which we would start in, say, 2017, and maybe report in late 2018. There needs to be some other way of making sure the department itself is meeting its action plan.

[Hoang Mai, NDP, Brossard—La Prairie, QC]

Yes. When we have to look....

Since all of the information regarding safety management systems is not public, for us as parliamentarians to know exactly whether or not an SMS is good, or has been in place, or has been checked, what would you recommend for us that we could use as a tool to make sure those SMSs, if they're not being audited by you, are actually in place?

[Michael Ferguson]

I think what it comes down to is contained in the following questions. What is the department saying in their action plan? How detailed is it? Can you as a committee member understand each of the steps they are saying they are going to do? What could they present as evidence that they have completed? I think the process would be to get a detailed understanding of their action plan and how they can come back and demonstrate that they've met the milestones along the way.

[Hoang Mai, NDP, Brossard—La Prairie, QC]

You also mentioned that not all SMSs have been audited. How often should they be audited to make sure that they're in place and they're good?

[Michael Ferguson]

It's not a question that I can answer. Transport Canada has the responsibility to make sure they have enough evidence that the safety management systems are working. I don't know if the right number of audits is to audit every one of the companies over a three-year time period, or whether it should be some other time period. I can't answer that. They need to make sure they've done the analysis based on whatever level of confidence they want in those safety management systems. So I can't say whether it's the right number—whether it should be more, whether it should less. They need to analyze that and have solid grounds for selecting whatever audit program they feel is sufficient.

[The Chair, Conservative, Larry Miller]

Thank you. Your time has expired.

Now I'm going to go to Ms. Young.

[Wai Young, Conservative, Vancouver South, BC]

Thank you so much for being here this afternoon, gentlemen. I think it's a really important study that we're doing. It's important because Canadians want and expect safe rail service and safe transport. I want to address a couple of key points in your summary, which I think are really interesting.

First of all, I'd like to reconfirm that you conducted this audit entirely independent of the Lac-Mégantic incident. It just happened that you were doing an audit on Transport Canada?

[Michael Ferguson]

We started the work, I guess it probably would have been in 2012, and we completed the fieldwork of the audit in June 2013, which was before the Lac-Mégantic incident.

[Wai Young, Conservative, Vancouver South, BC]

When you say the fieldwork, does that mean you actually had auditors go out to different railyards or train stations to conduct the audit, or do you mean that you were at the headquarters of Transport Canada going through their files?

[Michael Ferguson]

We would have been looking at the work of the individuals in Transport Canada and what they did; some of them would have been in the regions. I believe all of our work would have been done with Transport Canada staff, wherever they are, not just in Ottawa.

[Wai Young, Conservative, Vancouver South, BC]

Can you tell us the scope of your audit? Are you confident that this audit gives this committee the information we need for this report we're conducting?

[Michael Ferguson]

Certainly, that's the goal of all of our audits. We report to Parliament. When we do a report, we report the good things we find and the things that need improvement.

I think this report is a good overall summary of the situation in Transport Canada right now, and I think it should be a good basis for the committee to use to help improve this area of Transport Canada.

[Wai Young, Conservative, Vancouver South, BC]

Given your answer, can we be relatively assured that we don't have to come back and do another audit on this matter with Transport Canada, that you feel confident that the scope of your work encompasses what we're studying here?

[Michael Ferguson]

Remember that what we did was look at a specific period of time. I don't think there should be any reason to have to go back and audit what happened in the period of time we audited. We did a thorough job on that.

What's important for the committee to understand is what's been happening since the time we did the audit.