Video: Canada’s auditor general warns about gaps in a federal oversight that could put Canadians at risk. Shirlee Engel explains.

OTTAWA — As an increasing number of high profile train derailments across the country cause concern for public safety, there are “significant weaknesses” in Transport Canada’s oversight of rail safety, the federal auditor general concluded in a wide-ranging report tabled Tuesday.

READ MORE: Highlights from the auditor general’s fall report

The report was completed just days before safety guidelines regulating Canada’s railways were thrust into the spotlight when tragedy struck Lac-Megantic, Que. The town was devastated July 6 when a train carrying highly volatile crude oil barreled toward the town and exploded, killing dozens and leveling the downtown area.

The weaknesses Auditor General Michael Ferguson identified in Transport Canada’s oversight include a lack of safety auditors, poorly-trained inspectors and an ineffective system for collecting and disseminating data.

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Further, Transport Canada carried out barely more than one-quarter of the audits it had set out to over the past three years—with a majority focusing on the country’s two largest railways, Canadian Pacific and CN.

The train that crashed in Lac-Megantic belonged to a smaller operator, Montreal Maine & Atlantic.

The audit wrapped up before that disaster, and so offers no opinion on it, though it’s difficult to ignore the accident’s effect on public awareness.

“I think any time there’s a serious, significant incident, it’s always going to raise questions,” Ferguson told reporters Tuesday. “Particularly when we come out with an audit that says there are weaknesses in the way the department oversees this system.”

The audit found that despite years of work, Transport Canada has yet to establish an approach to safety oversight that provides “a minimum level of assurance” that federal railways are operating with “adequate and effective” systems to ensure they are complying with federal railway safety rules on a day-to-day basis, Michael Ferguson wrote in his report.

READ MORE: NDP push for immediate rail safety study defeated, hours after Transport Canada hands down new rules

Responding to the audit, Transport Minister Lisa Raitt said the safety of Canadians is a top priority for her department, and that she is working to find ways of improving rail safety and the transportation of dangerous goods.

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“I have made my expectations to my department clear that [the auditor general’s] recommendations will be fulfilled,” she said in a statement Tuesday. “I will not hesitate to ask the auditor general to come back and look at the progress that was made.”

The minister also recently asked the House of Commons transport committee to review the rules surrounding transporting dangerous goods as well as the overall safety management systems.

The auditor general gave Transport Canada credit for working more with federal railways in creating systems for managing risks on a day-to-day basis. But it isn’t enough, he said.

While the department has been in discussions with the industry for 20 years, there remains “a number of long-standing and important safety issues,” Ferguson wrote.

Those issues include trespassing, grade crossings, concerns about the environment, collecting data on safety performance from federal railways, and implementing and overseeing safety management systems, according to the report.

Another problem identified in the report is that while Transport Canada has identified which skills its inspectors should have, it has not determined whether its current roster of inspectors has them.

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READ MORE: Transport Canada extended deadlines imposed to address safety weaknesses

Further, the report notes, the guidance and tools provided to inspectors tasked with assessing railways’ safety management “are missing many key elements.”

Those shortcomings include, for example, few requirements to help inspectors plan, conduct, conclude and follow up on inspections, Ferguson wrote.

Transport Canada’s responsibility with respect to railway safety is two-fold: the department oversees the safe operation of federal railways, and also must determine whether railways are complying with the regulations. When railways are found to have neglected those regulations, it is the department’s responsibility to take appropriate action against them.

Watch: Conservatives ready to accept Auditor General’s recommendations on rail safety



More than a decade ago, Transport Canada recognized the need to shift its safety oversight from an inspection-based approach to one that oversees safety management systems, the auditor general wrote in his report.

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But the shift isn’t happening quickly enough, Ferguson indicated.

“What we said in the chapter in the audit we did was that many times it takes them a lot of time to deal with some of these issues. The history is, taking too long on some of these issues,” he said. “What they need to do is make sure they have a good plan in place, they know what they’re trying to accomplish, and know when they’re trying to accomplish it by.”

READ MORE: AG refutes granting Transport Canada extensions on addressing safety weaknesses

Twelve years ago, the government implemented a requirement for federal railways to establish systems for managing safety risks and complying with regulations. Still, Transport Canada has not established an effective audit system to guarantee that is happening.

While Transport Canada has engaged in inspections and audits to help identify situations when railways haven’t complied with safety regulations and engineering standards, that data isn’t collected and used in a way that would ensure oversight is targeting the most significant safety risks, Ferguson wrote.

Ferguson made 11 recommendations to Transport Canada in Tuesday’s report. They include:

– Establish a formal process with clear timelines to monitor significant safety issues from the moment they are identified until they are resolved.

– Collect relevant risk and safety performance information from federal railways and develop an approach to make better use of the information.

– Provide better documentation tools to inspectors.

– Require federal railways to make whatever changes necessary to fix deficiencies affecting their safety management.

– Set clear expectations for planning and conducting audits and inspections.

– Monitor whether inspectors maintain their independence and objectivity during audits and inspections.

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Transport Canada agreed with all of the auditor general’s recommendations, but it is up to the department to follow through on its commitments to address the recommendations.

This isn’t the first time Transport Canada has been subject to a federal audit.

The environment commissioner in December 2011 released a damning report of the department’s oversight of the transportation of dangerous goods.

While the department agreed with all recommendations made in that report, officials there quietly changed some of the self-imposed deadlines it had set to address the weaknesses.

The commitments were grouped into five broad categories, with deadlines ranging from January 2012 to April 2013.

As of this summer, commitments in three of those categories had yet to be fulfilled, with some deadlines pushed as far as June 2014.

Minister Raitt has indicated a promise to fulfill Transport Canada’s commitments based on the audit findings, and Ferguson said he believes she is serious.

“I think the department is sincere in agreeing with the recommendations and wanting to improve the situation,” he said before issuing a warning. “But this is complex. It’s going to take a lot of work, and they need to manage it in a thorough, vigorous and professional manner.”

Ferguson’s fall report looked into a number of issues that, in his words, the government is “struggling to address, with some significant direct and indirect impacts on Canadians.”

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Some of the other topics covered in the report include the National Shipbuilding Procurement Strategy, offshore banking, online government services, food recalls, illegal entry into Canada and emergency management on First Nations reserves.