Follow-up Audit on Rail Safety—Transport Canada

Opening Statement to the Standing Committee on Public Accounts

Follow-up Audit on Rail Safety—Transport Canada

(Report 5—2021 Reports of the Auditor General of Canada)

6 May 2021

Karen Hogan, Chartered Professional AccountantCPA, Chartered AccountantCA
Auditor General of Canada

Madam 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 8 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 2 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 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 3 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.

I 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.

We made 6 recommendations to Transport Canada, and the Department has agreed with all of them. I can’t underscore enough the importance of taking action on these long-standing issues.

Madam Chair, this concludes my opening remarks. We would be pleased to answer the committee’s questions. Thank you.