Transport Committee on April 13th, 2021

[The Chair, Liberal, Vance Badawey]

It's a pleasure to call this meeting to order.

Welcome to all of you to meeting number 24 of the House of Commons Standing Committee on Transport, Infrastructure and Communities.

Today’s meeting is taking place in a hybrid format, pursuant to the House order of January 25, 2021.

The proceedings will be made available via the House of Commons website. So you are all aware, the webcast will always show the person speaking, rather than the entirety of the committee.

To ensure an orderly meeting, I would like to outline a few points to follow. Members and witnesses, you may speak in the official language of your choice. Interpretation services are available for this meeting. You have the choice, at the bottom of your screen, of floor, English or French.

For members participating in person, proceed as you usually would when the committee is meeting as a whole in the committee room in person. Keep in mind the directives from the Board of Internal Economy regarding masking and health protocols.

Before speaking, please wait until I recognize you by name. If you are on the video conference, please click on the microphone icon to unmute your mike. For those in the room, your microphone will be controlled as normal by the proceedings and verification officer.

I remind you that all comments by members and witnesses should be addressed through the chair. When you are not speaking, your mike should be on mute. With regard to a speaking list, as always, the committee clerk and I will do the best we can to maintain the order of speaking for all members, whether they are participating virtually or in person.

Members, pursuant to Standing Order 108(2) and the motion adopted by the committee on March 9, 2021, the committee will now commence its study of the follow-up audit on rail safety.

I would now like to welcome as well as introduce our witnesses for this evening.

For the first hour we're going to have, from the Office of the Auditor General, Karen Hogan, the Auditor General of Canada; Dawn Campbell, principal; and Isabelle Marsolais, director.

In the second hour we're going to have, from the Canadian National Railway Company, Tom Brown, assistant vice-president of safety; from the Canadian Pacific Railway, Kyle Mulligan, chief engineer; and from the Railway Association of Canada, Marc Brazeau, president and chief executive officer.

I'm going to start off the first hour with the Office of the Auditor General.

You have five minutes each, and/or if one is speaking on behalf of all, you have five minutes. Then we can proceed to the questions.

Ms. Hogan, you have the floor for the first five minutes.

[Karen Hogan, Auditor General of Canada, Office of the Auditor General]

Mr. Chair, thank you for this opportunity to discuss the results of our recent follow-up audit of Transport Canada’s oversight of rail safety. Joining me today are Dawn Campbell, the principal responsible for the audit, and Isabelle Marsolais, who was part of the audit team.

In this audit we examined whether Transport Canada implemented selected recommendations from our 2013 audit on the oversight of rail safety. Overall, we found that eight years later, the department had yet to fully address our recommendations and that, in fact, there was still much to do to improve the oversight of rail safety in Canada.

Rail accidents can have serious consequences, including devastating loss of life and environmental damage. To mitigate safety threats, Transport Canada undertakes oversight activities that include inspections, audits of safety management systems and data analysis.

We want to focus today on two fundamental gaps in the department’s oversight activities that require immediate attention.

Our first concern is that Transport Canada was not assessing the effectiveness of railway companies’ safety management systems. These systems are formal frameworks to proactively integrate safety into day-to-day railway operations. In-depth systematic assessments of these systems are called audits. They are meant to verify whether the systems meet the regulatory requirements and integrate safety into daily railway operations.

Over the past 14 years, several reports have recommended that Transport Canada undertake such assessments. I am referring here to three reports from this very committee, a number of other reports from experts in the field and my office’s 2013 audit.

We found that, although the scope of Transport Canada’s audits of safety management systems had included assessing regulatory compliance, the department had not considered whether the systems were effective in improving safety in daily operations. Unless the department makes these assessments and follows up in a timely way, it cannot know whether these systems are having an impact on rail safety.

Our second concern is that Transport Canada was unable to show whether its oversight activities have improved rail safety overall. The department has made important improvements to the way it plans and prioritizes its activities and follows up on railway companies' plans and actions to address deficiencies. However, it did not measure the overall effectiveness of its rail safety oversight activities. When people and time are dedicated to overseeing rail safety, I believe it is reasonable to expect that the department measure if the time and effort invested are making a difference and to adjust its oversight approach as needed.

We encourage Transport Canada to consider what other programs and jurisdictions are doing on this front, both in Canada and in other countries. The Canada Energy Regulator, for example, has established indicators that measure components of effectiveness. In the United Kingdom, the Office of Rail and Road has developed tools to assess railway companies' ability to manage health and safety risks. The resulting information is used to make year-over-year progress comparisons. Furthermore, in the United States, the Office of Transit Safety and Oversight has committed to monitoring the effectiveness of state safety agencies.

The department agreed with all six of the recommendations we made. I can't underscore enough the importance of taking action on these long-standing issues.

Mr. Chair, this concludes my opening remarks. We would be pleased to answer the committee's questions.

Thank you.

[The Chair, Liberal, Vance Badawey]

Thank you, Ms. Hogan.

I'll now pass the floor to Ms. Campbell.

Ms. Campbell, you have five minutes.

[Karen Hogan]

Excuse me, Mr. Chair. I was the only one with opening remarks. We're ready for questions.

[The Chair, Liberal, Vance Badawey]

You're ready for questions. Good stuff. Thank you, Ms. Hogan.

We are now going to move on to our list of speakers. We have first, for the Conservatives, Ms. Kusie for six minutes.

Ms. Kusie, you have the floor.

[Stephanie Kusie, Conservative, Calgary Midnapore, AB]

Thank you very much, Mr. Chair.

I'd like to thank the witnesses for being with us today.

Auditor General, it is an honour to have you here today.

I'm going to start with your statement from the report which I want to read into the record:

We found that Transport Canada had yet to fully address our recommendations from 2013. While the Department has made important improvements to the way it plans and prioritizes its activities and follows up on rail companies’ plans and actions to address deficiencies, it is unable to show whether these actions have contributed to improved rail safety overall. When you devote people and time to addressing issues, you should be able to measure if that investment is making a difference.

As you mentioned in your opening comments:

Rail safety accidents can have serious consequences, causing devastating loss of life and environmental damage. I am very concerned that while Transport Canada has taken some actions to address our recommendations, 8 years after our last audit, there is still much left to do to improve the oversight of rail safety in Canada.

Auditor General, it took four years to build the railroad. Why, in eight years, has this government not been able to implement the recommendations from the 2013 report, if you had to give one broad answer, please?

[Karen Hogan]

I think it's important to note that the department has made some progress. We saw an increase in activities, an increase in the number of inspections, better follow-up on corrective measures taken by railway companies and more audits on the safety management systems. However, those have just stopped short of really measuring the outcome and the effectiveness of all of this increased activity.

I think it's a bit of an unknown area to try to measure effectiveness. We're starting to see the sector head that way. We're seeing, as I mentioned in my opening statement, other countries taking that step, but that's really the fundamentally important step, I think, in order to identify whether or not you've taken the right actions, whether you need to modify those actions and whether you're following up on the right compliance measures.

It really is more than just measuring output. It's really about measuring outcomes, and they just haven't gone that far yet. It really is time to do so. Eight years is a very long time after they made a commitment to do that.

[Stephanie Kusie, Conservative, Calgary Midnapore, AB]

Thank you, Auditor General. I am encouraged to hear you say that it is time to measure effectiveness. I struggle to think of, frankly, any other entity, be it corporate, governmental, non-governmental or otherwise, that does not measure its success by effectiveness.

From your findings, Auditor General, are you concerned for the safety of Canadians based upon the actions that have not been taken by Transport Canada?

[Karen Hogan]

I think it's important to note that any mode of transportation has inherent risks, and that is absolutely true when it comes to rail safety. We saw even in another follow-up audit that was done by the commissioner of the environment and sustainable development, the follow-up on the transportation of dangerous goods, the consequences of potential railway accidents and the devastation that they can have on human life and on the environment.

I am concerned that more concrete steps haven't been taken to make sure that the right actions are happening around rail safety. Every mode of transportation has its inherent issues, so I guess, overall, I would highlight that, yes, I am concerned. Until we can demonstrate that the activities that Transport Canada is doing in coordination with railway companies and other important parties are actually having a difference, we should be concerned.

[Stephanie Kusie, Conservative, Calgary Midnapore, AB]

Thank you, Auditor General, for being so bold as to say that you are concerned that, after eight years, these recommendations have not been fully implemented for the safety of Canadians.

Auditor General, if you had to pick one—and I know that there were many, such as collection of data, measurement of effectiveness—what is your biggest concern coming out of this report, please?

[Karen Hogan]

I think my biggest concern is that Transport Canada increased a lot of its activities, which is great in and of itself if you want to measure outputs. My biggest concern is not being able to demonstrate to Parliament and to Canadians that all of that increased activity is actually making a difference.

Even something as easy as perhaps tracking compliance rates and comparing them year over year would be better than not measuring any type of effectiveness. I think going that last step is fundamentally important. It starts with even measuring the effectiveness of the safety management system audits themselves. Not all of the activities of transport but even just that basic, fundamental day-to-day culture of security that a railway company should have and measuring whether those systems are effective would be a great place to start.

[Stephanie Kusie, Conservative, Calgary Midnapore, AB]

This will be my last question, as I believe I'm running out of time.

I believe that, based upon the report, the fundamental piece that is missing as a result of Transport Canada's shortcomings in implementing the recommendations is data collection. Do you believe that the department has the capacity to get the data, to do proper data collection?

[Karen Hogan]

During our audit, we actually saw that they collected additional data from railway companies about compliance. Where they fell short was in actually then using that data to inform some of their risk-based planning. In fact, when they completed more audits of safety management systems, we didn't see them using the results of those audits to inform future inspections. Those audits might have identified weaknesses and could have informed another risk-based approach to inspections.

We saw that they are gathering better data now, but it's about how you use it. I think that every organization needs to think about a program and think about having a data strategy. You need to know what data you need, why you need it, how you want to gather it, how you store it, how you retrieve it and how you use it to inform decisions. That is really the best step: knowing what data you have and how it informs a smart and comprehensive decision going forward.

[The Chair, Liberal, Vance Badawey]

Thank you, Ms. Hogan.

Thank you, Ms. Kusie.

[Stephanie Kusie, Conservative, Calgary Midnapore, AB]

Thank you, Ms. Hogan.

[The Chair, Liberal, Vance Badawey]

We're now going to move on to our next line of questions.

On behalf of the Liberals, Ms. Jaczek, you have the floor for six minutes.

[Helena Jaczek, Liberal, Markham—Stouffville, ON]

Thank you, Chair.

Thank you, Ms. Hogan, for your presentation.

While we understand that the focus of the audit at this point was very much on looking at the activities that were going on and whether they were, in fact, in accordance with the recommendations made in the 2013 audit, I think what most Canadians are interested in and certainly what I'm interested in is the issue of rail safety in Canada. Is rail safety, in fact, improving? I believe you stated in your report that there has been, and this is a direct quote, “some improvement in the rate of accidents relative to rail traffic volume.”

Also, we know that in 2018, the Railway Safety Act review concluded that the “safety of the rail system has improved in the last 5 to 10 years”. It also stated:

Due to a sustained focus on inspections, compliance and enforcement, as well as technological improvements and investments in rail infrastructure, main train track derailments caused by equipment or track failures have been on the decrease.

It also noted that over the last five years, the number of fatalities resulting from railway operations decreased by 27% and the number of accidents—although I'm not quite sure what the definition of “accident” is—decreased by 12%.

You've made a statement to Ms. Kusie in terms of your impression of safety, but surely some of these statistics are valid and seem to show a decrease in fatalities and accidents.

[Karen Hogan]

I do believe that looking at the statistics is just one part of assessing the safety of railways. You do have to consider, as you mentioned, the number of accidents, the types of accidents and how they relate to rail traffic. That's one indicator. Then you also have to look at other measures that contribute to rail safety. Part of that is the safety management systems that are inherent in a railway company. Those safety management systems are supposed to mainstream and make security a day-to-day thing, an enhanced culture of security, you could say, within a railway company. All of that will contribute to improving the safety of railways.

I don't think we'll ever be in a place where we'll say that it will guarantee there will never be accidents, but we trust the government is doing all it can in order to put the appropriate measures in place to improve safety.

I would argue that you never want an accident where there is a loss of life. That should be the ultimate goal. It isn't just about looking at traffic and statistics, but about ensuring there's this whole sense of culture and attitude towards railway safety in general.

[Helena Jaczek, Liberal, Markham—Stouffville, ON]

I appreciate that, Ms. Hogan. However, there are some fundamental safety measures that surely can be agreed upon by all.

I come from a health background. For instance, if you look at medication errors, some are inconsequential and some could result in a critical incident. I'm more used to an analysis of safety based on risk and what the finding might have been through an inspection or a retrospective review of a situation that could lead to serious damage.

Could you tell us what exactly are the data? What are those indicators of safety that you think should be looked at thoroughly by Transport Canada, and therefore by the railways themselves? Could you elaborate on that a bit?

[Karen Hogan]

Absolutely.

I'll start that off, and maybe I'll ask Ms. Campbell if she would like to join in. She did some consultations with other countries throughout our audit.

As I mentioned in my opening statement, it is a trend in the industry to start measuring effectiveness, and not just to measure actions, and make sure there is corrective behaviour. That whole trend about making sure you're doing the right thing at the right time, and making sure you're enforcing the right compliance measures and measuring the right compliance measures I think is exactly to your point. You have to identify the key safety measures that should be looked at, and then you have to look at them. Right now, Transport Canada isn't measuring that effectiveness and hasn't identified those measures.

I'll turn to Ms. Campbell to see if she would like to add to this in a more concrete way.

[The Chair, Liberal, Vance Badawey]

Ms. Campbell.

[Dawn Campbell, Principal, Office of the Auditor General]

Thank you, Mr. Chair.

As the Auditor General indicated, assessing the effectiveness of safety management systems is an important measure. In addition, I would like to refer to paragraph 5.37 of our report, where we recommended that Transport Canada “should determine the extent to which its inspections and audits have improved the railway companies' compliance with regulations that mitigate key safety risks.”

Taking those two measures together and comparing how they correlate against accident rates, fatality rates, and seeing if there is a good correlation would be important. Those would be key measures.

For example, if the compliance rates are improving but the accident rates are not, then that would be an indicator that the department needs to go back and take a look at whether it is focusing on the right areas or what exactly the nature of the concern is there.

In respect to other jurisdictions, there are certainly examples of good practices, both within Canada and internationally. For example, the Canada Energy Regulator, which we included in our transport of dangerous goods report last fall, has established indicators that measure components of effectiveness. The Canada Energy Regulator has 60 indicators with specific targets, some of which are being used as performance measures for safety and environment oversight.

[The Chair, Liberal, Vance Badawey]

Thank you, Ms. Campbell and Ms. Hogan. Thank you, Ms. Jaczek.

We're now going to move on to the Bloc Québécois and Mr. Barsalou-Duval.

Mr. Barsalou-Duval, you have the floor for six minutes.

[Xavier Barsalou-Duval, Bloc, Pierre-Boucher—Les Patriotes—Verchères, QC]

Thank you, Mr. Chair.

Madam Auditor General, thank you for being with us today.

I'm an accountant by training. During their studies, accounting students are often told that the position of auditor general is the pinnacle of an accountant's career. So I offer you my congratulations on your important responsibilities.

You did a follow-up audit eight years after the last rail safety audit. Do you think the department's efforts have been sufficient to achieve an acceptable level of rail safety?

[Karen Hogan]

Thank you for your question.

In our audit, we found that the department had made significant progress. It increased the number of inspections, ensured that its oversight approach is risk-based and increased the number of audits on the safety management systems. So the department has made a good investment of its time and resources to respond to our recommendations and fill in the gaps identified in 2013.

A final major effort is needed now to measure the impact of all these activities on railway safety. It takes a long time to get there, but it's time well spent.