INTRODUCTION

• 1.1 Background
• 1.2 Objective

THE ENVIRONMENT

• 2.1 Safety State of the Industry
• 2.2 Environmental Scan
• 2.3 Regulatees and Our Relationship
• 2.4 Alliances

ORGANIZATIONAL RESPONSE

• 3.1 Legislative and Regulatory Changes
• 3.2 Safety Oversight Framework

IMPLICATIONS

• 4. Organizational Implications and Challenges

1. INTRODUCTION

1.1 Background

In September 1997, following a number of railway accidents, the Minister of Transport decided to delay re-introduction of amendments to the Railway Safety Act that failed to complete the legislative process in the spring of 1997. The delay was intended to give the Department an opportunity to review current mechanisms for overseeing railway safety and ensuring regulatory compliance, and examine other possible improvements to the legislation and the safety oversight program. The review was conducted over a four-month period by a project team of railway safety, risk management and regulatory experts under the direction of a Steering Committee of senior departmental officials. The review recommended a number of amendments to the Railway Safety Act as well as modernization of the regulatory regime by:

• requiring railways to implement safety management systems;
• verifying the adequacy of these systems through independent audits;
• tracking the safety performance of the railway system through performance indicators; and
• establishing a formal process for consultation with stakeholders.

The Minister accepted the recommendations of the review and, in the spring of 1998, the Rail Safety program initiated a number of program development projects to implement them.

1.2 Objective

The objective of this Strategic Overview paper is to describe the strategy behind the Rail Safety regulatory program and how new methods and approaches will work together to ensure the safety of the rail transportation system in Canada. 

2. THE ENVIRONMENT

The review initiated by the Minister in the fall of 1997 confirmed that railways in Canada are generally safe but it also concluded that "data available to the regulator are not sufficient to clearly determine past influences on safety nor to predict future safety trends". The review noted Transportation Safety Board (TSB) accident investigation reports that pointed out serious rail system weaknesses which had not been discovered by the regulator through existing data streams.

The review also pointed out that the philosophy of the Railway Safety Act places the primary responsibility for the safe running of railways on the railway industry itself. The accidents that caused the Minister to initiate the review also called into question the adequacy of current railway safety systems and, in particular, the ability of the industry to demonstrate accountability for their safety responsibilities.

In addition, the review noted the changing landscape of the railway industry. Downsizing by large operators and the consequent start-up of smaller, less experienced railways has highlighted the need for more formal mechanisms on the part of railways to manage safety more intentionally and provide assurance to the regulator of their safety management capabilities. These changes in the industry also necessitate new tools for the regulator to monitor safety performance and assess industry capabilities.

2.2 Environmental Scan

In May 1999, an environmental scan was conducted by the Rail Safety Program through interviews with selected stakeholders. Interviewees were asked to look ahead five years and identify expected changes in the Canadian railway industry. They were also asked to predict what the anticipated changes might mean for the Rail Safety Program.

A number of key issues emerged. The most frequently mentioned by far was "continuing shortline activity". Most interviewees believed that the proliferation of shortlines would continue and would enter a new phase of re-alignment, rationalization, consolidation and merger. A number of challenges for Rail Safety were identified:

• the need for a regulatory approach that recognizes shortline railways as different from Class 1 railways;
• the need to resolve differences between federal and provincial railway safety regulatory regimes; and
• the need to determine the level and distribution of resources necessary to provide effective regulatory oversight of both shortlines and Class 1 railways.

Closely linked to the shortline issue was the issue of "jurisdiction". With the proliferation of shortline railways in Canada has come a heightened awareness of the differences in regulatory regimes in place at the provincial and federal levels. The result is a call for Transport Canada (TC) to take the lead in defining a national framework for railway safety and to form alliances with the provinces to resolve jurisdictional issues and establish a consistent national approach to railway safety.

Competition was another frequent theme: both competition within the railway industry and competition between railways and trucking. Competitive forces were expected to result in continued cost cutting by railways, new approaches to doing business, and continued consolidations, acquisitions and mergers. The challenge for the Rail Safety program will be to provide effective railway safety oversight without imposing unnecessary costs on industry.

Interviewees from most stakeholder groups indicated that the railways will increasingly implement new technologies. The challenge for the Rail Safety program will include keeping up-to-date with these new technologies and having the capability to evaluate their safety implications.

Consistency of program delivery was also a recurring theme during the scan, as was the importance of establishing the right balance of traditional and new skills for TC employees. TC’s credibility as a regulator was closely linked to both issues.

The over-arching message was change; rapid, extensive change, for both the industry and the regulator --- and a suggestion that the regulator will be challenged to keep pace and may need to change both its role and program approaches. 

2.3 Regulatees and Our Relationship

Railway companies make up the main group of regulatees within the purview of TC’s Rail Safety Program. In general, railway companies fall into one of four broad categories:

• national carriers (CN, CP and VIA) which are federally-regulated;
• regional and shortline railways under federal jurisdiction for the purposes of railway safety regulatory oversight;
• regional and shortline railways under provincial jurisdiction where the province has entered into an agreement with TC to deliver a railway safety regulatory oversight role; 
• regional and shortline railways under provincial jurisdiction where all of the regulatory oversight is provided by the province.

How TC carries out its safety mandate vis-à-vis a particular railway company is determined, in part, by the broad category into which the railway falls. For example, in the second last category noted above, TC’s roles and responsibilities are determined, in part, by the provincial legislation/regulations and by the terms of the agreement with the province.

The fundamental philosophy of the Railway Safety Act is that the railways are responsible and accountable for the safety of operations while the regulator is responsible for setting safety standards and providing ". . . for the safety of the public and personnel, and the protection of property and the environment, in the operation of railways."

TC personnel currently carry out their Rail Safety roles and responsibilities through a range of activities designed to promote, monitor and enforce compliance and safety including: field operations monitoring, detailed inspections, on-site audits (eg. of Rail Traffic Control Centres), complaint investigation, accident/incident investigation, compliance counselling, formal and informal stakeholder consultations, and safety education and awareness initiatives. It is noteworthy that unlike other modal regulatory programs, Rail Safety personnel do not test, certify or license activities, equipment or personnel. Rather, the regulator establishes and enforces minimum requirements for railway safety, using the tools defined in the Railway Safety Act.

The other major group of regulatees within the purview of TC’s Rail Safety Program are entities or individuals who interface with railway companies including:

• road authorities, municipalities and the public at railway grade crossings;
• municipalities and the public where trespassing issues are involved; 
• contractors hired by railway companies to provide services such as ongoing track maintenance and rail traffic control.

Generally, the relationship between regulator and regulatee in these cases is relatively narrow in scope, with the point of interface with the railway being the point where TC exercises its regulatory oversight; however the number of such regulatees makes the problem complex. There are estimated to be 22,500 public crossings in Canada and an equivalent number of private crossings. These crossings fall within the jurisdiction of approximately 2,500 different road authorities. Many road authorities lack a clear understanding of their responsibilities for crossing safety, believing in many cases that crossing safety is a railway responsibility. As a consequence, since the Railway Safety Act came into effect in 1989, crossing safety has relied heavily on railway safety inspectors to identify safety problems and to convince the parties involved to address them. 

2.4 Alliances

In the interest of enhancing railway safety, the Rail Safety Program has both formal and informal alliances with various public and private sector bodies. The Safety & Security Strategic Plan notes that transportation safety is a shared responsibility and identifies "constructive relationships with stakeholders" as one of the Department’s strategic directions. Within Rail Safety, it is expected that existing alliances will continue to develop and grow and new alliances will begin to take shape in response to the recent amendments to the Railway Safety Act.

A number of key existing alliances are outlined below:

a) Other TC Programs – Rail Safety interacts with a number of other TC programs and business lines including the Transportation of Dangerous Goods Program (TDG), Security and Emergency Planning, the Policy Group, and Programs and Divestiture (on environmental policy). The most significant relationship is with TDG because TDG and Rail Safety have a degree of overlap in their respective mandates. This is probably most evident in the regional offices, where Regional Directors are responsible for the delivery of both programs.

b) Other Federal Government Bodies – Rail Safety necessarily maintains close alliances with several other federal government bodies due to overlapping, shared or assumed responsibilities. The following are of particular note:

Human Resources Development Canada (HRDC) – In 1990, a Memorandum of Understanding between HRDC (formerly Labour Canada) and Transport Canada was signed. This MOU establishes Transport Canada’s roles and responsibilities in administering the occupational safety and health provisions of Part II of the Canada Labour Code for on-board employees on behalf of the Minister of Labour.

Transportation Safety Board (TSB) – In 1994, a Memorandum of Understanding between the TSB and Transport Canada was signed to establish appropriate working relationships (given their respective mandates), and protocols for exchange of information.

Canadian Environmental Assessment Agency (CEAA) – TC ensures that environmental assessments are done where certain decisions must be made on behalf of the Minister of Transport.

Canadian Transportation Agency (CTA) – Despite having had their legislative mandates separated with the coming into force of the Railway Safety Act in 1989, Rail Safety and the CTA (formerly the National Transportation Agency) remain closely aligned, even to the extent that the RSA defines its applicability in terms of the Canada Transportation Act.

c) Provincial Government Bodies – Rail Safety (at both the regional and headquarters levels) has well-established relationships, and communicates regularly, with provincial authorities responsible for railway safety. The individual relationships vary by province according to whether or not there is a formal arrangement in place for the delivery of services on behalf of the province, and the nature of that arrangement. B.C. and Saskatchewan have their own railway safety regimes, so consequently have no arrangements with TC. Alberta, Manitoba, Quebec, N.B., and N.S. have agreements with TC to provide compliance monitoring in accordance with the provincial legislative and regulatory framework. Ontario has an inter-delegation agreement with TC which mandates TC to deliver the federal Rail Safety Program in the province.

In addition, Rail Safety has relationships with provincial emergency preparedness departments and organizations and, through TAC and CCMTA, provincial governments are involved in Direction 2006, a partnership aimed at reducing casualties at crossings and due to trespassing by 50% over the ten year period ending in 2006. Rail safety inspectors work with many of the 2,500 road authorities in the country in order to identify and resolve crossing and trespassing safety issues.

d) Railway Association of Canada (RAC) – Rail Safety and the RAC are joint sponsors of Operation Lifesaver, a program to educate the public regarding hazards associated with railway crossings at grade and trespassing on railway property. The National Operation Lifesaver Advisory Committee is chaired by the president of the RAC and includes representatives of TC, the Canada Safety Council, CN, CP, VIA, the RCMP, the Brotherhood of Locomotive Engineers and two provincial safety councils/leagues. The RAC is also an active partner in Direction 2006.

e) U.S. Federal Railroad Administration (FRA) – Rail Safety has a well-established alliance with the Office of Safety, FRA. This has developed along several lines, both formal and informal, including:

• Railway safety personnel from Canada and the U.S. carry out joint inspections and other co-operative initiatives to identify and resolve cross-border issues;
• TC Rail Safety participates as a non-voting member in the FRA’s Railroad Safety Advisory Committee; and
• TC Rail Safety and the FRA Office of Safety frequently benchmark against each other’s safety regime, and share information regarding emerging safety issues and best practices for resolving them.

f) Federation Of Canadian Municipalities (FCM) – As participants in Direction 2006, the FCM and others have formed alliances with Rail Safety to increase public awareness of the safety issues associated with highway/railway grade crossings and the dangers of trespassing on railway property. The FCM is one of the key conduits for conveying the Direction 2006 message. In addition, the FCM is participating in the development of standards for crossings and access control to the rights of way.

3. ORGANIZATIONAL RESPONSE

3.1 Legislative and Regulatory Changes

An Act to Amend the Railway Safety Act (Bill C-58) was introduced in the House of Commons on November 5, 1998. The Bill received Royal Assent on March 25, 1999 and went into force on June 1, 1999. The amendments are designed to:

• clarify the objectives of the Act;
• streamline some administrative processes;
• allow for greater involvement by interested organizations (typically railway labour organizations) in the process of making and amending of railway rules and regulations and obtaining exemptions to them;
• establish processes and conditions for the cessation of train whistling in communities;
• strengthen and clarify federal regulatory powers over road crossings in order to reduce accidents;
• strengthen and clarify provisions of the Act dealing with railway security;
• clarify and strengthen the powers of railway safety inspectors;
• provide authority to require railways to implement Safety Management Systems; and
• provide authority to regulate railway emissions.

A regulation requiring federally-regulated railways to implement Safety Management Systems is currently being drafted pursuant to the new authority in the Railway Safety Act. The objective of the regulation is to improve safety by requiring railways to adopt more formalized and consistent approaches. In addition, a Safety Management System provides a framework for railways to demonstrate both their commitment to safety and accountability for their responsibilities under the Railway Safety Act.

The Act defines a Safety Management System to be "a formal framework for integrating safety into day-to-day railway operations and includes safety goals and performance targets, risk assessments, responsibilities and authorities, rules and procedures and monitoring and evaluation processes". The regulation will ensure that safety is given management time, corporate resources, performance measurement and monitoring on par with corporate financial and production goals. Increasing the focus on safety is expected to enhance safety culture and heighten safety awareness at every level in a railway company. The specific requirements of the proposed regulation have been influenced by, and are consistent with, safety management approaches that are increasingly common in other industries. The requirements recognize that to achieve maximum effectiveness, a Safety Management System must be consistent with the operating environment and management style of each railway company.

The amendments to the Railway Safety Act have strengthened and clarified federal regulatory powers over road crossings and railway access in order to improve safety. Crossing and trespassing accidents currently represent approximately 95% of railway-related fatalities in Canada. Crossing and trespassing regulations currently under development are expected to reduce fatalities by establishing crossing and access control safety standards as well as clarifying the responsibilities of the railway and the road authority with respect to the construction, inspection, and maintenance of crossing and trespassing safety systems. 

3.2 Safety Oversight Framework

Transport Canada’s Strategic Plan for

Transportation Safety and Security

The Safety & Security Strategic Plan defines the Department’s long-term vision and mission along with "intended outcomes", "intended results" and the methods to be used to get there. The Plan puts the focus squarely on outcomes rather than process, with demonstrating the achievement of results being key. Strategic directions identified in the plan include:

• continuing to develop a new safety culture;
• building constructive relationships internally and with stakeholders;
• implementing a systematic approach to risk management; and
• improving tool, practices and techniques.

In keeping with the Strategic Plan and with recent changes to the Railway Safety Act, the Rail Safety Program is shifting its focus to incorporate more formalized stakeholder consultation, safety performance analysis, risk management, Safety Management Systems (to enhance safety culture), and a new monitoring tool (auditing) into its regulatory regime. The Safety Oversight Framework proposed for the Rail Safety program is shown in Figure 1 and the key components are described below.

a) SMS Submissions – The Safety Management System Regulation will require railways to submit information on their Safety Management Systems on an annual basis. The submissions will include safety targets for the current year, safety performance in the previous year relative to the safety targets, and accident rates. In addition, the regulation will empower the Minister to request information with respect to other safety performance indicators that may be established in future. A project is currently underway within Rail Safety to identify these indicators and how they can be used. It is anticipated that the indicators will include:

• negative outcome indicators (eg. accident and incident rates);
• active failure indicators (similar to negative outcome indicators but including compliance history);
• latent failure indicators (indicators of overall industry safety status); and
• stress indicators (possible predictors of future safety trends, eg. financial ratios, employee turnover rates and demographics, etc.)

b) Accident/Incident Investigation – Accidents and incidents are investigated "for cause" by the TSB and by Rail Safety staff when the TSB has chosen not to investigate. When the TSB has chosen to investigate, Rail Safety may also investigate for the purpose of identifying threats to safety or non-compliance with the Railway Safety Act and regulations, and Transport Canada may appoint a railway safety inspector to act as a "Minister’s Observer". In addition, Rail Safety staff investigate employee accidents and incidents as "safety officers" under the Canada Labour Code.

c) Complaint Investigation – Rail Safety staff investigate complaints from railway employees, members of the public or others to verify the significance of the issue and to determine whether or not it constitutes a threat to railway safety or non-compliance with the Railway Safety Act and regulations.

d) Intelligence Gathering – The intelligence gathering function will consist of collecting qualitative and quantitative information to support both trend analysis and risk management including: safety trends observed in other jurisdictions (both provincial and international); regulatory initiatives or new monitoring/enforcement tools under development in other jurisdictions; staff and stakeholder feedback on safety issues and concerns; information on public risk perceptions and safety concerns; and initiatives under development in other parts of the department that affect the Rail Safety program.

e) Trend Analysis – A trend analysis function will analyse and draw conclusions from data available from a variety of sources including: the safety performance data available from SMS submissions; Transportation Safety Board (TSB) and TC data on the numbers of various types of accidents and incidents, their causes and characteristics; data on the results of inspections, audits and other compliance monitoring activities; and other data collected through the intelligence gathering function. Trend analysis will identify areas where either safety or compliance to safety requirements is or may be declining.

f) Risk Management – A risk management function will combine safety and compliance trends identified through trend analysis with information collected through intelligence gathering, periodic environmental scanning, and research and new technology assessment. The risk management process will include engaging the public and other stakeholders in dialogue about what constitutes an acceptable level of risk. The Railway Safety Consultative Committee and other vehicles will be used for this purpose.

The risk management process will identify the most significant risks (measured in terms of potential fatalities, injuries, property damage and environmental impact) and the areas where there is the greatest potential for reducing risk. The output of the risk management function will include compliance monitoring program priorities, regulatory, rule-making and policy development priorities, and safety issues and/or audiences that should be the focus of safety promotion activities.

g) Compliance Monitoring Programs – A new feature of the Compliance Monitoring Programs is the introduction of an audit approach. An audit is defined to be "an objective and systematic assessment of policies, processes and/or procedures". A program for the audit of railway Safety Management Systems is currently under development. The program will include the submission review and an audit.

Submission review is to confirm that a railway has met the submission requirements of the regulation.

Audit comprised of:

• Pre-audit – a desk audit to confirm that a railway’s documented Safety Management System meets the requirements of the regulation; and
• Verification Audit – to confirm that a railway is operating in accordance with the systems and procedures contained in its Safety Management System and that these systems and procedures are adequate to ensure safety.

It is anticipated that audits will normally be conducted on each federally-regulated railway every three years but this frequency will vary depending on the outcome of the trend analysis and risk management functions.

Audit approaches are also being developed for monitoring compliance with of other regulatory requirements to augment, and potentially replace, traditional inspection activities where appropriate.

Rail Safety Compliance Monitoring Programs will continue to include a range of other compliance monitoring activities, such as inspections, surveys, accident/incident investigation, and complaint investigation (described above). In contrast to an audit, an inspection is defined to be "an examination to monitor compliance with legislated requirements by directly measuring a product, process or activity". Some of these compliance monitoring activities will be conducted as part of an audit and some separately for the purpose of identifying threats to safety and collecting safety and compliance information. In future, these activities will be more strategically targeted and the relative level of effort dedicated to them is expected to decline as the audit program is introduced.

Compliance monitoring of crossing and trespassing safety will be accomplished through the same monitoring activities but will require a somewhat different mix and approach because of the number of regulatees involved and because road authorities are not being required to implement systems analogous to railway Safety Management Systems.

h) Railway Safety Consultative Committee (RSCC) – The purpose of the recently established Railway Safety Consultative Committee is to provide a forum for consultation with stakeholders on railway safety regulatory oversight issues. The Committee is expected to provide input to the Department on new or amended regulations as well as non-regulatory solutions to identified problems. In addition, industry will be encouraged to use the RSCC as a forum for consultation on rule-making initiatives. Issues may be submitted to the RSCC by committee members or by concerned individuals. Technical Sub-committees can be established for in-depth analysis of specific issues. The RSCC is expected to encourage increased involvement in railway safety issues by municipalities and road authorities.

i) Safety Promotion Activities – Safety promotion is currently carried out under the Direction 2006 Program, through funding of Operation Lifesaver, and in the form of regional safety promotion activities. The objective of Direction 2006 is to reduce crossing and trespassing fatalities to 50% of the 1996 level by 2006. Operation Lifesaver is jointly sponsored by TC and the Railway Association of Canada. It is designed to heighten general public awareness of the hazards of rail/highway grade crossings and trespassing on railway property. Safety promotion activities are expected to receive increased emphasis in future with priorities and/or target audiences being identified through the risk management function.

Safety promotion activities also include compliance counselling aimed at ensuring that regulatees are aware of their responsibilities and understand the requirements of rules and regulations. Compliance counselling is also expected to receive increased emphasis in future and be particularly targeted at shortlines.

j) Enforcement Action – The Rail Safety Program has at its disposal a variety of tools for sanctioning non-compliance. These include a Letter of Non-Compliance, a Notice (under Section 31), a Notice and Order (under Section 31), a Ministerial Order (under Section 32), an Emergency Directive (under Section 33) and, ultimately, prosecution. The use of these tools is outlined in the recently drafted Compliance Policy.

Program Management Framework

Overlaid on the Safety Oversight Framework is a Program Management Framework, depicted in Figure 2. Strategic and business planning activities set the overall direction for the program and ensure that the priorities identified in the risk management function are incorporated into annual workplans. In addition, the planning function establishes the basis for acquiring, developing and managing the infrastructure necessary to deliver the program (people, resources and systems). In the short term, particular emphasis will be placed on identifying the necessary new competencies, training staff in these areas, and developing new systems. The delivery of services occurs through the Safety Oversight process shown in Figure 1 and the results achieved by the program are identified through performance measurement. A project is currently underway within Rail Safety to identify tools and techniques to measure program performance. Finally, the effectiveness of the program is assessed through periodic review and evaluation leading to recommendations for changes to the Program Management and Safety Oversight frameworks.

4. ORGANIZATIONAL IMPLICATIONS AND CHALLENGES

The results of the environmental scan and the strategic direction outlined in this paper highlight the need for new and/or enhanced functions within the Rail Safety program including:

• trend analysis and risk management;
• auditing;
• stronger federal/provincial liaison and leadership;
• stronger HQ functional direction to improve inter-regional consistency of program delivery and ensure targeting of activities to identified strategic priorities;
• stronger inter-regional and national operational co-ordination;
• more collaborative planning and project management;
• enhanced safety promotion activities;
• enhanced consultation;
• enhanced new technology assessment; and
• enchanced compliance counselling (coaching, mentoring and advisory roles particularly with shortlines).

In addition, additional effort may be required on environmental issues that have come within the purview of the Railway Safety Act through the recent amendments. The amendments to the Act provide authority to make regulations restricting the release of pollutants from the operation of railway equipment. The approach to be taken on this issue has not yet been determined, but it is expected to involve liaison with Environment Canada.

These new and enhanced functions will require new competencies, shifts in resource allocation and, potentially, additional resources. New competencies in statistical analysis and auditing will be required for program staff. However, traditional technical skills will continue to be important to ensure the credibility of the program in the eyes of industry. Resource shifts will be necessary at headquarters and in the regions in order to take on new functions and increase the emphasis on selected existing functions. Because Rail Safety staff are already stretched and no current activities are going to be entirely abandoned, at least in the short-term, it is expected that additional resources will be required.

In addition, new and/or enhanced data collection and analysis systems and software will be required to capture data from audits, inspections and other compliance monitoring activities as well as safety performance data. More comprehensive operational policies and procedures are also needed to provide guidance to staff and improve inter-regional consistency of program delivery.