Vol. 149, No. 4 — February 25, 2015

Registration

SOR/2015-26 February 6, 2015

RAILWAY SAFETY ACT

Railway Safety Management System Regulations, 2015

P.C. 2015-91 February 5, 2015

His Excellency the Governor General in Council, on the recommendation of the Minister of Transport, pursuant to sections 37 (see footnote a), 47 and 47.1 (see footnote b) of the Railway Safety Act (see footnote c), makes the annexed Railway Safety Management System Regulations, 2015.

TABLE OF CONTENTS

(This table is not part of the Regulations.)

RAILWAY SAFETY MANAGEMENT SYSTEM REGULATIONS, 2015

INTERPRETATION

1. Definitions

OVERVIEW

2. Purpose

3. Organization — Parts

PART 1

RAILWAY COMPANIES

APPLICATION

4. Railway company

SAFETY MANAGEMENT SYSTEM
Processes, Procedures, Plans and Methods

5. Processes

6. Index

7. Procedures, plans and methods

Process for Accountability — Accountable Executive

8. Designation of executive

Process with Respect to a Safety Policy

9. Safety policy

Process for Ensuring Compliance with Regulations, Rules and Other Instruments

10. List of instruments

11. Procedure

Process for Managing Railway Occurrences

12. Procedure

Process for Identifying Safety Concerns

13. Analyses

14. Procedure

Risk Assessment Process

15. Risk assessment

16. Consultation

17. Procedure, plan and method

Process for Implementing and Evaluating Remedial Action

18. Remedial action — implementation

19. Consultation

20. Procedures and plan

Process for Establishing Targets and Developing Initiatives

21. Targets and initiatives

22. Details of initiatives

23. Communication

Process for Reporting Contraventions and Safety Hazards

24. Internal reporting

Process for Managing Knowledge

25. List

26. Other persons

27. Plan and methods

Process with Respect to Scheduling

28. Principles of fatigue science

Process for Continual Improvement of the Safety Management System
Internal Monitoring

29. Monitoring

Internal Audit

30. Scope and frequency

31. Audit report

32. Action plan

RECORDS

33. Review, analysis and evaluation

34. Consultation, communication or collaboration

35. Specified documents

36. Duration

FILING AND NOTIFICATION

37. Filing with the Minister

38. Notification and filing

PART 2

LOCAL RAILWAY COMPANIES

DIVISION 1

MAIN TRACK OPERATIONS
Application

39. Local railway company — main track

Safety Management System
Processes, Procedures and Methods

40. Processes

41. Index

42. Procedures and methods

Process for Accountability — Accountable Executive

43. Designation of executive

Process with Respect to a Safety Policy

44. Safety policy

Process for Ensuring Compliance with Regulations, Rules and Other Instruments

45. List of instruments

46. Procedures

Process for Identifying Safety Concerns

47. Analyses

48. Procedure

Risk Assessment Process

49. Risk assessment

50. Communication

51. Procedure and method

Process for Implementing and Evaluating Remedial Action

52. Remedial action — implementation

53. Procedures

Process for Establishing Targets and Developing Initiatives

54. Targets and initiatives

55. Details of initiative

56. Communication

Process for Continual Improvement of the Safety Management System

Internal Monitoring

57. Monitoring

Internal Audit

58. Scope and frequency

59. Audit report

60. Action plan

Records

61. Review, analysis and evaluation

62. Communication

63. Specified documents

64. Duration

Filing and Notification

65. Filing with the Minister

66. Notification and filing

DIVISION 2

NON-MAIN TRACK OPERATIONS
Application

67. Local railway company — non-main track

Safety Management System
Processes, Procedures and Methods

68. Processes

69. Index

70. Procedures and methods

Process with Respect to a Safety Policy

71. Safety policy

Process for Ensuring Compliance with Regulations, Rules and Other Instruments

72. List of instruments

73. Procedures

Process for Identifying Safety Concerns

74. Analyses

75. Procedure

Risk Assessment Process

76. Risk assessment

77. Communication

78. Procedure and method

Process for Implementing and Evaluating Remedial Action

79. Remedial action — implementation

80. Procedures

Records

81. Review, analysis and evaluation

82. Communication

83. Risk assessment

84. Duration

Filing and Notification

85. Filing with the Minister

86. Notification and filing

PART 3

CONSEQUENTIAL AMENDMENTS, REPEAL AND COMING INTO FORCE

CONSEQUENTIAL AMENDMENTS TO THE RAILWAY OPERATING CERTIFICATE REGULATIONS

87-88.

REPEAL

89.

COMING INTO FORCE

90. April 1, 2015

RAILWAY SAFETY MANAGEMENT SYSTEM REGULATIONS, 2015

INTERPRETATION

Definitions

1. The following definitions apply in these Regulations.

“accountable executive”
« gestionnaire supérieur responsable »

“accountable executive” means the executive referred to in subsection 8(1) or 43(1), as the case may be.

“Act”
« Loi »

“Act” means the Railway Safety Act.

“dangerous goods”
« marchandises dangereuses »

“dangerous goods” has the meaning assigned in section 2 of the Transportation of Dangerous Goods Act, 1992.

“main track”
« voie ferrée principale »

“main track” means a line of railway on which the movement of railway equipment is authorized by a railway company.

“non-main track”
« voie ferrée non principale »

“non-main track” means a line of railway other than a main track.

“railway occurrence”
« accident ferroviaire »

“railway occurrence” means a railway occurrence that is reportable under section 5 of the Transportation Safety Board Regulations.

OVERVIEW

Purpose

2. These Regulations establish the minimum requirements with respect to the safety management system that a company must develop and implement for the purpose of achieving the highest level of safety in its railway operations.

Organization — Parts

3. (1) These Regulations are divided into three Parts:

Organization — processes

(2) The safety management system requirements set out in Parts 1 and 2 are organized into key processes that group together related requirements, including, in most instances, the requirement that a company develop and implement

PART 1

RAILWAY COMPANIES

APPLICATION

Railway company

4. (1) This Part applies to a railway company.

Delayed application

(2) In the case of a railway company that begins railway operations after the day on which these Regulations come into force, sections 21 to 23 do not apply until the day that is six months after the day on which the railway company begins railway operations.

SAFETY MANAGEMENT SYSTEM
Processes, Procedures, Plans and Methods

Processes

5. A railway company must develop and implement a safety management system that includes

Index

6. (1) A railway company must keep an up-to-date index of all the processes referred to in section 5 that it has implemented.

Content of index

(2) The index must indicate the date of the last revision of the railway company’s safety policy and must indicate, for each process,

Procedures, plans and methods

7. Every procedure, plan and method required by this Part must be in writing and must indicate the date of its last revision.

Process for Accountability — Accountable Executive

Designation of executive

8. (1) A railway company must designate an executive who is responsible for the operations and activities of the railway company to be accountable for the extent to which the requirements of the safety management system are met, including its effectiveness in achieving the highest level of safety in its railway operations.

Notice to Minister

(2) The railway company must provide the Minister with the name of the accountable executive as soon as possible after he or she has been designated.

Declaration to the Minister

(3) The railway company must ensure that, within 30 days after the day on which it designates an accountable executive, the accountable executive provides the Minister with a signed declaration accepting accountability for the extent to which the requirements of the safety management system have been met.

Designation of managers

(4) The railway company may, in its safety management system, permit the accountable executive to designate one or more persons to develop and implement one or more of the processes required by this Part. A designated person must occupy a management position within the railway company that includes responsibilities relevant to the process or processes and the authority to make decisions with respect to that process or those processes.

Annual update

(5) If the accountable executive designates a person under subsection (4), the accountable executive must ensure that the person reports to him or her, on an annual basis, with respect to

Process with Respect to a Safety Policy

Safety policy

9. (1) A railway company must include, in its safety management system, a written safety policy that reflects the railway company’s commitment to promoting railway safety. The policy must be approved and signed by the accountable executive.

Annual review

(2) The railway company must ensure that its safety policy is reviewed annually.

Communication

(3) The railway company must communicate its safety policy, and any changes to the policy, to its employees.

Process for Ensuring Compliance with Regulations, Rules and Other Instruments

List of instruments

10. (1) A railway company must include, in its safety management system, a list of the following instruments relating to railway safety:

Date and subject matter

(2) The list of instruments must include

Update

(3) The railway company must keep the list of instruments up to date and must indicate the date of its last revision.

Procedure

11. A railway company must include, in its safety management system, a procedure for

Process for Managing Railway Occurrences

Procedure

12. (1) A railway company must include, in its safety management system, a procedure for

Communication

(2) The railway company must communicate to its employees the procedure for reporting railway occurrences.

Process for Identifying Safety Concerns

Analyses

13. A railway company must, on a continual basis, conduct analyses of its railway operations to identify safety concerns, including any trends, any emerging trends or any repetitive situations. The analyses must, at a minimum, be based on

Procedure

14. A railway company must include, in its safety management system, a procedure for conducting the analyses referred to in section 13.

Risk Assessment Process

Risk assessment

15. (1) A railway company must conduct a risk assessment in the following circumstances:

Components

(2) The risk assessment must

Consultation

16. (1) When identifying the risks that require remedial action and the remedial action to be implemented, a railway company must consult with the bargaining agents representing the employees of the railway company who are affected by any of those risks or, if there is no bargaining agent, with

Communication

(2) The railway company must communicate the risks identified as requiring remedial action, and the remedial action to be implemented, to the employees of the railway company who are affected by any of the circumstances referred to in subsection 15(1).

Procedure, plan and method

17. A railway company must include, in its safety management system,

Process for Implementing and Evaluating Remedial Action

Remedial action — implementation

18. (1) A railway company must implement remedial action with respect to the risks that it has identified in its risk assessment as requiring remedial action.

Remedial action — evaluation

(2) The railway company must evaluate the effectiveness of the remedial action in reducing or eliminating the risks.

Consultation

19. When evaluating the effectiveness of remedial action with respect to a risk, a railway company must consult with the bargaining agents representing the employees of the railway company who are affected by the risk or, if there is no bargaining agent, with

Procedures and plan

20. A railway company must include, in its safety management system,

Process for Establishing Targets and Developing Initiatives

Targets and initiatives

21. (1) A railway company must, for each calendar year,

Basis for establishing targets

(2) The targets must be based on the analyses conducted under section 13 and must take into account the results of any previous analyses.

Details of initiatives

22. A railway company must include, in its safety management system, a written description of each initiative to be implemented in order to achieve each target and a written explanation of how the initiative will contribute to achieving that target.

Communication

23. A railway company must communicate to its employees the targets established and the initiatives to be implemented.

Process for Reporting Contraventions and Safety Hazards

Internal reporting

24. (1) A railway company must include, in its safety management system, a procedure for enabling its employees to report to the railway company, without fear of reprisal, a contravention of the Act or of any regulations, rules, certificates, orders or emergency directives made under the Act in relation to safety, or a safety hazard.

Policy

(2) The railway company must include, in its safety management system, a policy, in writing, for protecting its employees from reprisals for reporting a contravention or safety hazard.

Collaboration

(3) The railway company must develop the procedure and the policy in collaboration with the bargaining agents or, if there is no bargaining agent, with its employees or a representative selected by its employees.

Communication

(4) The railway company must communicate the procedure and the policy to its employees.

Process for Managing Knowledge

List

25. (1) A railway company must establish a list setting out

Employees — skills and qualifications

(2) The railway company must ensure that an employee who performs any of the duties referred to in paragraph (1)(a) has the skills and qualifications referred to in paragraph (1)(c).

Employees — knowledge

(3) The railway company must ensure that an employee who performs any of the duties referred to in paragraph (1)(a) has knowledge of

Other persons

26. A railway company must ensure that any person, other than an employee, who is authorized by the railway company to access the railway and whose activities may affect the safety of railway operations has knowledge of

Plan and methods

27. A railway company must include, in its safety management system,

Process with Respect to Scheduling

Principles of fatigue science

28. (1) A railway company must apply the principles of fatigue science when scheduling the work of the employees referred to in subsection (2), including the principles

Method

(2) The railway company must include, in its safety management system, a method for applying the principles of fatigue science when scheduling the work of an employee who is required to work according to a schedule that

Communication

(3) The railway company must communicate, to any employees who are required by the railway company to work according to a schedule referred to in subsection (2), how the principles of fatigue science have been taken into account when requiring them to work according to that schedule.

Exception

(4) This section does not apply when scheduling the work of employees during an emergency related to the safety of railway operations.

Process for Continual Improvement of the Safety Management System
Internal Monitoring

Monitoring

29. (1) A railway company must, on a continual basis, monitor the implementation of its safety management system to verify

Deficiencies in implementation

(2) Monitoring must include, if applicable, inquiring into

Annual report

(3) The railway company must prepare an annual report setting out the conclusions of its monitoring activities.

Accountable executive

(4) The railway company must ensure that the conclusions of the annual report are brought to the attention of the accountable executive.

Internal Audit

Scope and frequency

30. (1) A railway company must conduct an audit of its safety management system every three years to evaluate

Audit plan

(2) The railway company must include, in its safety management system, an audit plan that

Audit report

31. (1) A railway company must prepare an audit report that includes the findings of the audit.

Accountable executive

(2) The accountable executive must sign the audit report to attest to his or her acceptance of the report.

Action plan

32. (1) A railway company must prepare an action plan setting out the action to be taken to address each finding in the audit report that it identifies as a deficiency in its safety management system.

Approval of action plan

(2) The accountable executive must sign the action plan to acknowledge that he or she approves it.

RECORDS

Review, analysis and evaluation

33. (1) A railway company must keep a record of the factors taken into account in, and the results of,

Date

(2) The record referred to in subsection (1) must include the date on which the review, analysis or evaluation was undertaken.

Consultation, communication or collaboration

34. For each instance in which a railway company, in accordance with this Part, consults, communicates or collaborates with bargaining agents, employees or a representative selected by employees, the railway company must keep a record of the date and subject matter of the consultation, communication or collaboration and the manner in which it was carried out.

Specified documents

35. A railway company must keep the following records:

Duration

36. A railway company must keep the records referred to in sections 33 to 35 for six years after the day on which they are created.

FILING AND NOTIFICATION

Filing with the Minister

37. A railway company must, at the request of the Minister, file with the Minister

Notification and filing

38. A railway company that proposes to make a change referred to in paragraph 15(1)(b) or (c) must, before making the change, notify the Minister of the change and must, at the request of the Minister, file with the Minister the documentation relating to the risk assessment that it conducted with respect to the change.

PART 2

LOCAL RAILWAY COMPANIES

DIVISION 1

MAIN TRACK OPERATIONS
Application

Local railway company — main track

39. (1) This Division applies to a local railway company that operates railway equipment on main track.

Delayed application

(2) In the case of a local railway company that begins operating railway equipment on a railway after the day on which these Regulations come into force, sections 54 to 56 do not apply until the day that is six months after the day on which the local railway company begins operating railway equipment on a railway.

Safety Management System
Processes, Procedures and Methods

Processes

40. A local railway company must develop and implement a safety management system that includes

Index

41. (1) A local railway company must keep an up-to-date index of all the processes referred to in section 40 that it has implemented.

Content of index

(2) The index must indicate the date of the last revision of the local railway company’s safety policy and must indicate, for each process,

Procedures and methods

42. Every procedure and method required by this Division must be in writing and must indicate the date of its last revision.

Process for Accountability — Accountable Executive

Designation of executive

43. (1) A local railway company must designate an executive who is responsible for the operations and activities of the local railway company to be accountable for the extent to which the requirements of the safety management system are met, including its effectiveness in achieving the highest level of safety in its railway operations.

Notice to Minister

(2) The local railway company must provide the Minister with the name of the accountable executive as soon as possible after he or she has been designated.

Declaration to the Minister

(3) The local railway company must ensure that, within 30 days after the day on which it designates an accountable executive, the accountable executive provides the Minister with a signed declaration accepting accountability for the extent to which the requirements of the safety management system have been met.

Designation of managers

(4) The local railway company may, in its safety management system, permit the accountable executive to designate one or more persons to develop and implement one or more of the processes required by this Division. A designated person must occupy a management position within the local railway company that includes responsibilities relevant to the process or processes and the authority to make decisions with respect to that process or those processes.

Annual update

(5) If the accountable executive designates a person under subsection (4), the accountable executive must ensure that the person reports to him or her, on an annual basis, with respect to

Process with Respect to a Safety Policy

Safety policy

44. (1) A local railway company must include, in its safety management system, a written safety policy that reflects the local railway company’s commitment to promoting railway safety. The policy must be approved and signed by the accountable executive.

Annual review

(2) The local railway company must ensure that its safety policy is reviewed annually.

Communication

(3) The local railway company must communicate its safety policy, and any changes to the policy, to its employees.

Process for Ensuring Compliance with Regulations, Rules and Other Instruments

List of instruments

45. (1) A local railway company must include, in its safety management system, a list of the following instruments relating to railway safety:

Date and subject matter

(2) The list of instruments must include

Update

(3) The local railway company must keep the list of instruments up to date and must indicate the date of its last revision.

Procedures

46. A local railway company must include, in its safety management system, a procedure for

Process for Identifying Safety Concerns

Analyses

47. A local railway company must, on a continual basis, conduct analyses of its railway operations to identify safety concerns, including any trends, any emerging trends or any repetitive situations. The analyses must, at a minimum, be based on

Procedure

48. A local railway company must include, in its safety management system, a procedure for conducting the analyses referred to in section 47.

Risk Assessment Process

Risk assessment

49. (1) A local railway company must conduct a risk assessment in the following circumstances:

Components

(2) The risk assessment must

Communication

50. A local railway company must communicate the risks identified as requiring remedial action, and the remedial action to be implemented, to the employees of the local railway company who are affected by any of the circumstances referred to in subsection 49(1).

Procedure and method

51. A local railway company must include, in its safety management system,

Process for Implementing and Evaluating Remedial Action

Remedial action — implementation

52. (1) A local railway company must implement remedial action with respect to the risks that it has identified in its risk assessment as requiring remedial action.

Remedial action — evaluation

(2) The local railway company must evaluate the effectiveness of the remedial action in reducing or eliminating the risks.

Procedures

53. A local railway company must include, in its safety management system,

Process for Establishing Targets and Developing Initiatives

Targets and initiatives

54. (1) A local railway company must, for each calendar year,

Basis for establishing targets

(2) The targets must be based on the analyses conducted under section 47 and must take into account the results of any previous analyses.

Details of initiative

55. A local railway company must include, in its safety management system, a written description of each initiative to be implemented in order to achieve each target and a written explanation of how the initiative will contribute to achieving that target.

Communication

56. A local railway company must communicate to its employees the targets established and the initiatives to be implemented.

Process for Continual Improvement of the Safety Management System

Internal Monitoring

Monitoring

57. (1) A local railway company must, on a continual basis, monitor the implementation of its safety management system to verify

Deficiencies in implementation

(2) Monitoring must include, if applicable, inquiring into

Annual report

(3) The local railway company must prepare an annual report setting out the conclusions of its monitoring activities.

Accountable executive

(4) The local railway company must ensure that the conclusions of the annual report are brought to the attention of the accountable executive.

Internal Audit

Scope and frequency

58. (1) A local railway company must conduct an audit of its safety management system every three years to evaluate

Audit plan

(2) The local railway company must include, in its safety management system, an audit plan that

Audit report

59. (1) A local railway company must prepare an audit report that includes the findings of the audit.

Accountable executive

(2) The accountable executive must sign the audit report to attest to his or her acceptance of the report.

Action plan

60. (1) A local railway company must prepare an action plan setting out the action to be taken to address each finding in the audit report that it identifies as a deficiency in its safety management system.

Approval of action plan

(2) The accountable executive must sign the action plan to acknowledge that he or she approves it.

Records

Review, analysis and evaluation

61. (1) A local railway company must keep a record of the factors taken into account in, and the results of,

Date

(2) The record referred to in subsection (1) must include the date on which the review, analysis or evaluation was undertaken.

Communication

62. For each instance in which a local railway company communicates with its employees in accordance with this Division, the local railway company must keep a record of the date and subject matter of the communication and the manner in which it was carried out.

Specified documents

63. A local railway company must keep the following records:

Duration

64. A local railway company must keep the records referred to in sections 61 to 63 for six years after the day on which they are created.

Filing and Notification

Filing with the Minister

65. A local railway company must, at the request of the Minister, file with the Minister

Notification and filing

66. A local railway company that proposes to make a change referred to in paragraph 49(1)(b) or (c) must, before making the change, notify the Minister of the change and must, at the request of the Minister, file with the Minister the documentation relating to the risk assessment that it conducted with respect to the change.

DIVISION 2

NON-MAIN TRACK OPERATIONS
Application

Local railway company — non-main track

67. This Division applies to a local railway company that operates railway equipment exclusively on non-main track.

Safety Management System
Processes, Procedures and Methods

Processes

68. A local railway company must develop and implement a safety management system that includes

Index

69. (1) A local railway company must keep an up-to-date index of all the processes referred to in section 68 that it has implemented.

Content of index

(2) The index must indicate the date of the last revision of the local railway company’s safety policy and must indicate, for each process,

Procedures and methods

70. Every procedure and method required by this Division must be in writing and must indicate the date of its last revision.

Process with Respect to a Safety Policy

Safety policy

71. (1) A local railway company must include, in its safety management system, a written safety policy that reflects the local railway company’s commitment to promoting railway safety. The policy must be approved and signed by an executive who is responsible for the operations and activities of the local railway company.

Annual review

(2) The local railway company must ensure that its safety policy is reviewed annually.

Communication

(3) The local railway company must communicate its safety policy, and any changes to the policy, to its employees.

Process for Ensuring Compliance with Regulations, Rules and Other Instruments

List of instruments

72. (1) A local railway company must include, in its safety management system, a list of the following instruments relating to railway safety:

Date and subject matter

(2) The list of instruments must include

Update

(3) The local railway company must keep the list of instruments up to date and must indicate the date of its last revision.

Procedures

73. A local railway company must include, in its safety management system, a procedure for

Process for Identifying Safety Concerns

Analyses

74. A local railway company must, on a continual basis, conduct analyses of its railway operations to identify safety concerns, including any trends, any emerging trends or any repetitive situations. The analyses must, at a minimum, be based on

Procedure

75. A local railway company must include, in its safety management system, a procedure for conducting the analyses referred to in section 74.

Risk Assessment Process

Risk assessment

76. (1) A local railway company must conduct a risk assessment in the following circumstances:

Components

(2) The risk assessment must

Communication

77. A local railway company must communicate the risks identified as requiring remedial action, and the remedial action to be implemented, to the employees of the local railway company who are affected by any of the circumstances referred to in subsection 76(1).

Procedure and method

78. A local railway company must include, in its safety management system,

Process for Implementing and Evaluating Remedial Action

Remedial action — implementation

79. (1) A local railway company must implement remedial action with respect to the risks that it has identified in its risk assessment as requiring remedial action.

Remedial action — evaluation

(2) The local railway company must evaluate the effectiveness of the remedial action in reducing or eliminating the risks.

Procedures

80. A local railway company must include, in its safety management system,

Records

Review, analysis and evaluation

81. (1) A local railway company must keep a record of the factors taken into account in, and the results of,

Date

(2) The record referred to in subsection (1) must include the date on which the review, analysis or evaluation was undertaken.

Communication

82. For each instance in which a local railway company communicates with its employees in accordance with this Division, the local railway company must keep a record of the date and subject matter of the communication and the manner in which it was carried out.

Risk assessment

83. A local railway company must keep the documentation relating to each risk assessment conducted under section 76.

Duration

84. A local railway company must keep the records referred to in sections 81 to 83 for three years after the day on which they are created.

Filing and Notification

Filing with the Minister

85. A local railway company must, at the request of the Minister, file with the Minister an up-to-date copy of the index referred to in subsection 69(1).

Notification and filing

86. A local railway company that proposes to make a change referred to in paragraph 76(1)(b) or (c) must, before making the change, notify the Minister of the change and must, at the request of the Minister, file with the Minister the documentation relating to the risk assessment that it conducted with respect to the change.

PART 3

CONSEQUENTIAL AMENDMENTS, REPEAL AND COMING INTO FORCE

CONSEQUENTIAL AMENDMENTS TO THE RAILWAY OPERATING CERTIFICATE REGULATIONS

87. Subparagraph 4(e)(ii) of the Railway Operating Certificate Regulations (see footnote 1) is replaced by the following:

88. Paragraph 7(1)(e) of the Regulations is replaced by the following:

REPEAL

89. The Railway Safety Management System Regulations (see footnote 2) are repealed.

COMING INTO FORCE

April 1, 2015

90. These Regulations come into force on April 1, 2015.

REGULATORY IMPACT ANALYSIS STATEMENT

(This statement is not part of the Regulations.)

Executive summary

Issues: The Railway Safety Management System Regulations (the 2001 SMS Regulations), made under the Railway Safety Act (the Act), came into force in 2001 as a complement to Transport Canada’s rail safety legislative framework. The 2001 SMS Regulations require railway companies to implement and maintain a safety management system for integrating safety into their day-to-day operations. In 2008, the reports of the Railway Safety Act Review and of the Standing Committee on Transport, Infrastructure and Communities (SCOTIC) study on rail safety made several recommendations with regard to improving the implementation of safety management systems in the rail industry. Those recommendations resulted in amendments to the Act, which came into force on May 1, 2013. These amendments, as well as the Rail Safety Program’s more than 10 years’ worth of lessons learned from regulatory oversight of safety management systems, resulted in the need to revise and modernize the 2001 SMS Regulations. Specifically, three key areas required attention: additional detail and clarity to facilitate more effective implementation and enforceability; expansion of the scope of application to local railway companies that operate on federal track; and the inclusion of new provisions stemming from amendments to the Act that clarify the authority of the Governor in Council to establish regulations for an accountable executive, continuous monitoring and regular assessment of safety, non-punitive internal reporting by employees, as well as increased involvement of employees and their unions to enhance rail safety management systems.

Description: Due to the volume of amendments and the significant restructuring that would have been required to amend the 2001 SMS Regulations, the Railway Safety Management System Regulations, 2015 (the 2015 SMS Regulations) instead repeal and replace the 2001 SMS Regulations. Significant changes reflected in the 2015 SMS Regulations include the

  • Application of the Regulations to include local railway companies operating on federally regulated track;
  • Addition of new requirements pursuant to clarified authorities in the Act;
  • Inclusion of more detail on regulatory objectives in order to enhance compliance and enforceability of the Regulations;
  • Addition of clear rules of conduct, clarifying expectations for industry;
  • Addition of new definitions; and
  • Addition of consequential amendments to the Railway Operating Certificate Regulations.

Cost-benefit statement: The overall cost of the 2015 SMS Regulations is estimated to have a present value of $19.33 million over a 10-year period, which corresponds to an annualized value of $2.75 million. In the long term, the 2015 SMS Regulations are expected to increase railway safety by enhancing requirements that compel companies to take responsibility for managing the safety of their operations, including improving their abilities to identify hazards, as well as assess and mitigate risks. These benefits are qualitative in nature and are difficult to monetize given that both the risk and impact (baseline and proposal) are uncertain. It is expected that a safety management system would help reduce the number of accidents, fatalities and injuries, as well as property damage. Therefore, even if the benefits cannot be monetized, it is expected that the 2015 SMS Regulations will result in a net benefit to Canadians.

“One-for-One” Rule and small business lens: Transport Canada has considered the potential impacts of all provisions of the 2015 SMS Regulations on administrative burden, and has determined that the “One-for-One” Rule would apply with the annualized cost to be offset estimated at $255 (total annualized average administrative costs) among 35 local railway companies.

The 2015 SMS Regulations were designed to align compliance costs with underlying risks, so that costs disproportionate to risk were not imposed on the six companies that would be considered small businesses. The flexible approach taken will result in an annual average cost per small business of $25,806 rather than $49,692 under the initial option.

Domestic and international coordination and cooperation: Transport Canada has consulted with provincial counterparts as the 2015 SMS Regulations have an expanded scope of application to include local railway companies. Local railway companies are provincial railways and commuter trains that, when operating on federal track, fall under the requirements of the Act. The addition of local railway companies to federal rail safety jurisdiction occurred when the amendments to the Act came into force on May 1, 2013. In addition, many provinces have harmonized their rail safety legislative framework with that of the federal government. As a result, the provinces were consulted to ensure they were aware of proposed changes to the federal approach to safety management systems.

Background

The Railway Safety Management System Regulations (the 2001 SMS Regulations), created under the Railway Safety Act (the Act), came into force on March 31, 2001, with the objective of establishing, within the rail industry, a more comprehensive way of managing safety. The 2001 SMS Regulations were designed to supplement the existing legislative framework, and require railway companies to take responsibility for managing the safety of their operations, identifying hazards, assessing and mitigating risks, while building a safety consciousness into their day-to-day operations. Basic components of a safety management system include a safety policy, safety targets, a risk assessment process, and internal audit and evaluation procedures. The introduction of the SMS Regulations in 2001 resulted in all federal railway companies implementing and maintaining a safety management system, based on regulatory requirements.

In 2008, the reports of the Railway Safety Act Review and of the Standing Committee on Transport, Infrastructure and Communities (SCOTIC) review on rail safety made a series of recommendations to further enhance the safety of the rail transportation system in Canada. While the reports expressed support and commendation for safety management systems, several recommendations focused on how to improve their implementation and effectiveness.

The bulk of the recommendations made in the 2008 reports resulted in amendments to the Act that came into force on May 1, 2013. The amendments clarified the Governor in Council’s regulatory authority to make regulations requiring the establishment by companies of a safety management system that includes the following:

Among other changes, the amendments to the Act also expanded the scope of the application to include local railway companies.

In August 2014, the Transportation Safety Board released their final response to the investigation of the railway accident in Lac-Mégantic. The report contained two new recommendations, one of which was that “Transport Canada must take a more hands-on role when it comes to railways’ safety management systems — making sure not just that they exist, but that they are working and that they are effective.”

Issues

Legislative amendments, including the addition of local railway companies to the federal regime, as well as more than 10 years’ worth of lessons learned from providing regulatory oversight of safety management systems, have resulted in the need to revise and modernize the 2001 SMS Regulations.

Specifically, three key areas require attention: additional detail and increased clarity to allow for more effective implementation and enforceability; expansion of the scope of application to local railway companies that operate on federal track; and inclusion of requirements stemming from amendments to the Act that clarified the Governor in Council’s regulatory authority in order to enhance rail safety management systems.

Objectives

The changes reflected in the Railway Safety Management System Regulations, 2015 (the 2015 SMS Regulations) operate to

By addressing these matters, the 2015 SMS Regulations are expected to improve the quality of safety management systems, in general, by improving the implementation by the rail industry and enhancing Transport Canada’s oversight, consequently, leading to the improved safety of Canada’s rail transportation system.

Description

The 2015 SMS Regulations repeal the 2001 SMS Regulations and replace them, including the following changes:

Application of amendments to the Act

In response to the amendments to the Act, the 2015 SMS Regulations include new requirements for a company’s safety management system, such as the following:

Key elements of the 2015 SMS Regulations

The full suite of safety management systems components in the 2015 SMS Regulations are as follows:

In addition, the 2015 SMS Regulations set out certain record-keeping requirements as well as require, at the Minister’s request, the filing of specific information with the Minister for the purpose of assessing the effectiveness and improvement of the company’s safety management system. Furthermore, where certain operational changes are proposed, the 2015 SMS Regulations require the Minister be notified in advance of the change being made and, at the request of the Minister, the related risk assessment must be filed with the Minister.

Scope of application

The 2001 SMS Regulations applied only to federally regulated railway companies. As the amendments to the Act include the addition of local railway companies to the federal regime, the 2015 SMS Regulations also apply to those companies.

The scope of application of the 2015 SMS Regulations is divided into three categories:

  1. Federal railway companies, to which the 2015 SMS Regulations apply, will have to comply with the requirements under Part 1 of the 2015 SMS Regulations, which includes all the components listed above.
  2. Local railway companies that operate on federal main track will have to comply with the requirements under Part 2, Division 1, of the 2015 SMS Regulations, which includes many of the components listed above except for a process for managing railway occurrences which, because of a link to federal occurrence reporting requirements, only applies to federal railway companies; and those processes that relate to labour relations (a process for reporting contraventions and safety hazards, a process for managing knowledge and a process with respect to scheduling) which are the exclusive jurisdiction of the province.
  3. Local railway companies that operate solely on federal non-main tracks will have to comply with the requirements under Part 2, Division 2, of the 2015 SMS Regulations, which focus on the following provisions:
    • a process with respect to a safety policy;
    • a process for ensuring compliance with regulations, rules and other instruments;
    • a process for identifying safety concerns;
    • a risk assessment process;
    • a process for implementing and evaluating remedial action; and
    • record-keeping, notification to the Minister of certain operational changes and filing with the Minister upon request of certain information.
More detailed objectives to enhance safety management systems

The 2015 SMS Regulations build on the framework established in the 2001 SMS Regulations by regulating specific matters for companies to address in their safety management systems and setting regulatory requirements for companies to act in a manner that demonstrates implementation of the safety management system that they develop.

Under the 2001 SMS Regulations, only the components are listed, with details and expectations of the components outlined in guidance material. The 2015 SMS Regulations list the components required in a safety management system, and the procedures, plans and methods to be developed and implemented. The 2015 SMS Regulations contain much of the detail previously found in the guidance material to better establish the intent of the requirements in order to improve compliance and contribute to more effective enforcement by Transport Canada. For example, while the 2001 SMS Regulations simply require a process for evaluating and classifying risks by means of a risk assessment and, separately, a process for risk control strategies, the 2015 SMS Regulations add clarity by setting out the elements of the risk assessment, such as listing the circumstances in which a company must conduct a risk assessment; requiring a description of the circumstances that triggered the risk assessment; requiring a description of the risks associated with the circumstances and the factors included in the assessment, requiring considerations of who may be affected and whether property or the environment is affected; requiring an indication of the likelihood of occurrence and the severity of the consequences of any risk; and an identification of required remedial action, as well as requiring that the remedial action be implemented and assessed for effectiveness. This example of risk assessment and remedial action elements demonstrates how the addition of detail and clarity will facilitate effective compliance and set the minimum expectations against which Transport Canada can conduct oversight and enforcement.

Amendments to definitions

The 2015 SMS Regulations remove outdated or inapplicable definitions and add new ones to increase clarity and respond to amendments to the Act. Definitions that have been added are

Consequential amendments to the Railway Operating Certificate Regulations

The 2015 SMS Regulations also contain two consequential amendments to the Railway Operating Certificate Regulations. The first amends paragraph 7(1)(e). Since the 2015 SMS Regulations expand the scope of application to local railway companies, the chief executive officer or most senior officer of a local railway company will also be required to attest that the company has, or will have, an SMS in the application for a railway operating certificate. A further consequential amendment to subparagraph 4(e)(ii) updates the regulatory language to reflect the title of the 2015 SMS Regulations.

Regulatory and non-regulatory options considered

The regulatory approach aims to continue and improve upon the approach first introduced in 2001. Given the lessons learned and the changes to the Act since the introduction of the 2001 SMS Regulations, a regulatory approach is needed to address legislative amendments and provide greater clarity to regulated entities to facilitate more effective and efficient compliance.

The approach will also facilitate enforcement by avoiding undue reliance on unenforceable guidance material in applying and interpreting requirements. Therefore, a voluntary approach was not considered. Regulated requirements for companies to identify their risks and document, coordinate, and oversee the safety of operations, including risk mitigation efforts, were considered the most appropriate and effective approach. Voluntary safety assessments, internal audits and remedial actions could not have been considered as options, as there would be no assurance that safety systems and processes would be optimally managed to mitigate risks and improve safety.

Benefits and costs

Costs

The 2015 SMS Regulations apply to approximately 28 federal railway companies and to 35 local railway companies. A distinction is made between local railway companies that operate on federal main track (18 companies) and local railway companies that operate on federal non-main track (17 companies). The regulatory provisions applicable to local railway companies that operate on federal main track include the minimum requirements of a safety management system but not those requirements that affect labour relations, as these are under the jurisdiction of the province, or those that link to federal occurrence reporting requirements. The focus of the 2015 SMS Regulations for local railway companies that do not operate on federal main track is on five core safety management system components.

The existing level of compliance with the 2015 SMS Regulations has been estimated in consultation with the stakeholders and varies according to the requirements for federal railway companies, local railway companies operating on federal main track and local railway companies operating on federal non-main track. Costs are associated with new roles and responsibilities for company employees and the possible creation of new positions. Assuming an average wage rate of $35.70 (this includes 25% overhead), the present value of the cost to federal railway companies is estimated to be $9.93 million over a 10-year period, which corresponds to an annualized value of $1.41 million. The present value of the cost to local railway companies that operate on federal main track is estimated to be $6.28 million with an annualized value of $894,291, and the present value of the cost to local railway companies that operate on federal non-main track is estimated to be $3.08 million with an annualized value of $438,555. Therefore, the present value of the total cost to industry is estimated to be $19.29 million over a 10-year period, which corresponds to an annualized value of $2.75 million.

Table of estimated costs by provision

Total incremental costs
Proposed Regulatory Provision Federal (PV) Local Main Track (PV) Local Non-Main Track (PV) Total (PV)
Attestation of accountable executive $8,482 $5,453 N/A $13,935
Process with respect to a safety policy $0 $28,186 $26,620 $54,805
Process for ensuring compliance with regulations, rules and other instruments $443,101 $331,677 $313,250 $1,088,027
Process for managing railway occurrences $584,564 N/A N/A $584,564
Process for identifying safety concerns $1,235,713 $1,850,841 $1,748,016 $4,834,570
Risk assessment process $2,124,282 $825,093 $779,255 $3,728,629
Process for the implementation and evaluation of remedial actions $102,703 $65,380 $61,747 $229,830
Annual safety targets and associated initiatives $0 $141,951 N/A $141,951
Process for reporting contraventions and safety hazards $85,133 N/A N/A $85,133
Process for managing knowledge $1,337,315 N/A N/A $1,337,315
Process with respect to scheduling $260,707 N/A N/A $260,707
Process for continual improvement (internal audits) $2,574,781 $2,453,181 N/A $5,027,963
Process for continual improvement (internal monitoring) $924,095 $419,123 N/A $1,343,218
Recording instances of consultation, communication or collaboration with employees (see reference *) $249,266 $160,242 $151,340 $560,848
Total costs to industry $9,930,140 $6,281,126 $3,080,228 $19,291,494

Reference * The cost estimate reflects the compliance burden of documenting instances of consultation, communication or collaboration with employees to demonstrate compliance; it is not an estimated cost of keeping records.

There will be a cost to Transport Canada to update the existing Rail Safety Integrated Gateway (RSIG) system, which is the Rail Safety Program’s national database used to inform risk-based business planning, with the requirements of the 2015 SMS Regulations. This would require the costs for two to three consultants over a two-week period. The present value of the cost to Government is estimated to be $42,000 over a 10-year period, which is equivalent to an annualized value of $6,000.

The overall cost of the 2015 SMS Regulations is estimated to have a present value of $19.33 million over a 10-year period, which corresponds to an annualized value of $2.75 million.

Benefits

The main benefits of the 2015 SMS Regulations will be to provide greater safety to the Canadian rail transportation system by establishing the minimum requirements with respect to the safety management system that a company must develop and implement for the purpose of achieving the highest level of safety and by expanding the scope of its application to local railway companies. The 2015 SMS Regulations also provide more details regarding the various safety management system components that companies must implement and facilitate enforcement.

Safety management is based on the premise that there will always be safety hazards and human errors. A safety management system establishes processes to improve information and communication about these risks and take action to minimize them. It therefore facilitates more informed decision making. Furthermore, risk assessments can allow an organization to evaluate and plan for the mitigation of risk of accidents and could enable better resource allocation, which would result in increased efficiencies and reduced costs. Safety management systems also strengthen corporate safety culture and demonstrate corporate due diligence, thus improving an organization’s overall level of safety in the long term.

The 2015 SMS Regulations are expected to increase railway safety in the long term by requiring railway companies to take additional responsibility for managing the safety of their operations, including refining their ability to identify hazards, assess and mitigate risks, and build a safety consciousness into their day-to-day operations, which should lead to a reduced number of accidents. Additionally, the benefits include fewer resources being spent by anticipating issues and solving problems earlier to avoid costly derailments and accidents.

These benefits are qualitative in nature and are difficult to monetize given that both the risk and impact (baseline and proposal) are subjective and uncertain. However, not only have qualitative benefits been identified, but statistics reflect a correlation between the introduction of the safety management system approach in 2001 and improved safety statistics. Statistical analysis using linear regression indicates a downward trend in accident rates (statistically significant at the p < .05 level) over the past 10 years. (see footnote 3) Moreover, since 2007, train accidents have decreased by 23% and passenger train accidents have decreased by 19%. This decrease can be linked to increased levels of consultation and communication between the three largest railway companies and Transport Canada, enhanced focus on safety management systems, and a variety of new safety initiatives related to operations and infrastructure. It is therefore expected that updates to safety management systems would help further reduce the number of accidents, fatalities and injuries, and property damage. As a result, even if the benefits cannot be monetized, those benefits could be significant.

The 2007 Railway Safety Act Review Panel Final Report asserts that “[a] strong SMS can lead to economic benefits because safety and economic performance are linked . . . [with] direct and indirect cost savings when accidents are prevented . . .” The Final Report also listed a number of benefits including the following:

Overall, it is expected that the 2015 SMS Regulations would have a positive impact on Canadians.

Cost-benefit statement
Cost-benefit statement Base Year (2015) 2019 Final Year (2024) Total (PV) Annualized Cost
A. Quantified impacts ($)
Costs Federal railway companies $2,351,568 $1,268,965 $1,271,964 $9,930,140 $1,413,829
Class 1 federal railways $273,828 $314,214 $314,535 $2,169,769 $308,926
Other smaller federal railways $2,077,740 $954,752 $957,429 $7,760,370 $1,104,902
Local railway companies on federal main track $1,201,983 $846,465 $848,393 $6,281,126 $894,291
Local railway companies on federal non-main track $700,970 $398,278 $398,278 $3,080,228 $438,555
Industry total $4,254,521 $2,513,708 $2,518,635 $19,291,494 $2,746,675
Government $45,000 $0  $0 $42,056 $5,988
Total $4,299,521 $2,513,708 $2,518,635 $19,333,550 $2,752,663
B. Qualitative benefits
  • Regulatory requirements are more easily understood and implemented by industry;
  • Increased safety information and communication improves risk-based decision making by industry; and
  • Safety of the rail transportation system in Canada is further enhanced.

The approach taken for the 2015 SMS Regulations focuses on efficiency, capacity, and proportionality with requirements for either processes or outcomes rather than prescriptive requirements for “how” the objectives of safety management systems should be achieved. This would promote accountability and timely remedial actions in the management of safety, without Transport Canada prescribing one-size-fits-all requirements. An exclusively prescriptive regulatory approach would only ensure compliance with regulations rather than providing for proactive risk assessments and remedial action. Therefore, industry-developed and -monitored safety management systems are intended to more efficiently and effectively supplement the existing regulatory framework by formally requiring companies to be proactive and responsible for safety.

In an effort to minimize the burden on stakeholders, while continuing improvement of safety management system implementation to further increase safety, local railway companies that operate solely on federal non-main track would be required to have fewer requirements, including a safety policy and a process for each of the following: ensuring compliance, identifying safety concerns, assessing risks, and implementing and evaluating remedial actions.

“One-for-One” Rule

Transport Canada has considered the potential impacts of all provisions of the 2015 SMS Regulations on administrative burden, and has determined that the “One-for-One” Rule would apply with the annualized cost to be offset estimated at $255 (total annualized average administrative costs) among 35 local railway companies (18 on federal track and 17 on federal non-main track). When consulted, federal railway companies agreed that despite updates, there would be no incremental effort needed to comply with the requirement to submit information annually to the Minister. This determination was based on the following assumptions: an applicable wage rate of $23.84/hour (2012 dollars), and a time estimate of 0.3 hours per regulated company annually (once a year, ongoing) to submit the required safety management system information to Transport Canada.

Small business lens

The 2015 SMS Regulations were designed to align compliance costs with underlying risks, so that costs disproportionate to risk would not be imposed on small businesses. For the application of these 2015 SMS Regulations to local railway companies, a distinction between main track and non-main track was used to represent the area of highest risk to address. Non-main track includes sidings and rail yards, and main track represents tracks that run across the country through cities and towns. For the 2015 SMS Regulations, a distinction has been made between local railway companies that operate on federal main track and local railway companies that operate solely on federal non-main track. Regulatory provisions applicable to local railway companies that operate on federal main track include all the same obligations as those that apply to railway companies with the exception of those that affect labour relations, as they are under the jurisdiction of the province. The 2015 SMS Regulations encompass 18 local railway companies that operate on federal main track. Requirements for local railway companies that do not operate on main track focus on the minimum safety management system provisions.

The total scope of application includes at least six small businesses as defined by the Treasury Board Secretariat guidance (having fewer than 100 employees and between $30,000 and $5 million in annual gross revenues). Due to the nature of safety management systems, the 2015 SMS Regulations are designed to be proportional to the size and risk of the operations.

With the expanded scope in the Act, Transport Canada could have taken a broader approach to the scope of application for local railway companies. However, this would have imposed a burden disproportionate to the risk associated with local non-main track railway company operations. During consultations, both industry and Transport Canada’s Rail Safety inspectors and officials recommended and/or supported this approach. Industry pointed out that requiring local railway companies who operate on non-main track to comply with the full suite of regulatory requirements would be overly burdensome and costly for what would usually be a smaller or limited railway operation. Rail Safety inspectors and officials acknowledged that the risk represented by such companies on non-main track did not warrant the development and implementation of a full safety management system, but that certain core aspects be applied as a means of instilling a safety culture in those companies.

  Initial Option Flexible Option
Short description Small businesses (6 out of 17 local railways that do not operate on main track) face the same requirements as federal railways and local railways that operate on main track. Small businesses (6 out of 17 local railways that do not operate on main track) do not face the same requirements as federal railways and local railways that operate on main track.
Maximum number of small businesses impacted 6 6
  Annualized Average
($ 2012)		 Present Value
($ 2012)		 Annualized Average
($ 2012)		 Present Value
($ 2012)
Compliance costs $298,097 $2,093,709 $154,784 $1,087,139
Administrative costs $54 $377 $54 $377
Total costs $298,151 $2,094,086 $154,838 $1,087,516
Average cost per small business $49,692 $349,014 $25,806 $181,253

As a result of the focus on only key core safety management system components for local railway companies on non-main track, the approach taken will result in an annual average cost per small business of $25,806 rather than $49,692. The Small Business Lens Checklist is also found at the end of this document.

Consultation

The Railway Safety Act Review Panel and SCOTIC, during their study of rail safety in 2007–2008, consulted a wide range of stakeholders across Canada, including railway companies, railway employees, unions, municipalities, and provincial governments, as well as a host of others. As a result, stakeholders have been aware for a number of years of the initiative, and corresponding details, to revise and modernize the 2001 SMS Regulations.

In developing the 2015 SMS Regulations, Transport Canada’s Rail Safety Program followed an established and formalized stakeholder consultation process. Consultative activities have included the following:

The comments submitted by industry in these initial consultations were considered and addressed during policy development and regulatory drafting processes. No outstanding issues remain. Examples of the issues raised include the following:

Transport Canada also worked closely with industry to develop the cost assumptions for the cost-benefit analysis. Specifically, Transport Canada consulted the Regulatory Development Working Group of the ACRS in its cost assumptions, both secretarially and through conference calls. The comments received from industry were considered and addressed and played a large role in Transport Canada’s development of the cost-benefit analysis.

Consultation following publication in the Canada Gazette, Part I

This regulatory package was published in the Canada Gazette, Part I, on July 5, 2014, followed by a 90-day comment period. Transport Canada also notified stakeholders of the prepublication. Written submissions were received from four stakeholders representing a union, the industry association, and provinces, respectively. One stakeholder submission supported the Regulations outright.

Three of the comments expressed concern regarding the scope of applicability; however, the decision to expand the scope to include local railway companies on main and non-main track was made to carry out the changes made to the Act, and Transport Canada has chosen a risk-based tiered approach to applicability. As a result, core components such as risk assessment apply to local railway companies operating on non-main track for any distance. Although companies may be travelling short distances, the nature of operations could vary among those companies from carrying grain, to carrying passengers or dangerous goods. Therefore, short distances do not necessarily equate to negligible impacts. In addition, with the new scope of application, Transport Canada may take enforcement action directly with the local railway company, rather than relying on federal railway companies to encourage local railway companies to conform to federal obligations while operating on federal tracks. Therefore, Transport Canada has decided that developing a safety management system to increase safety culture and continuous improvement is important for all companies. The safety management system developed will be scalable to the size and nature of operations and Transport Canada is developing tools, templates and guidance to help ease the burden of implementation.

The majority of the comments were seeking clarity or suggesting changes to improve the understanding and ease the implementation of the Regulations. There were over 15 suggestions for these types of modifications. Each of the comments was considered and modifications were made to improve the clarity of the language or the ease of implementation without compromising the intent of the Regulations. For example, the wording in the proposed Regulations required the railway companies to review and date the safety policy annually, when the actual intent of the Regulations was for the railway companies to review the policy annually and document the date of the review; therefore, an adjustment to the Regulations was made.

Two of the components of the Regulations required more noteworthy changes: the process for establishing schedules and the process for continual improvement. Through both internal reviews and stakeholders’ comments, it became apparent that those components would require more considerable wording adjustments to clarify the regulatory intent. In addition, concerns were raised that it would be unreasonable to expect an internal audit of the entire safety management system to be conducted annually. As a result, the revised requirements for a process for continual improvement include clarified annual monitoring requirements that will ensure railway companies conduct annual oversight and improvements to the implementation and effectiveness of their safety management system, while a three-year cycle is being introduced for the internal audits to give railway companies and local railway companies adequate time to conduct a meaningful and quality review through the internal audit process. When consulted, industry expressed general acceptance with the changes proposed to the process for continual improvement.

Transport Canada consulted industry regarding the changes that could impact the cost-benefit analysis and adjusted the estimates as appropriate. The most noteworthy changes to the costing were for the process for managing railway occurrences and the process for continual improvement.  For the process for managing railway occurrences, the costing was reduced to reflect the fact that railway companies are no longer required to separately verify whether employees are reporting occurrences and, when reporting, are doing so in accordance with the required procedure. This is already captured by the internal monitoring and auditing requirements and should not be costed as an additional activity requiring specific dedicated resources. For the process for continual improvement requirement, the costing estimate was reduced due to updated annual monitoring requirements and changing the audit requirement to a three-year cycle. As a result, the total cost estimate had been reduced from $26.8 million to $19.33 million over a 10-year period. This reflects a reduction in estimated total cost for all federal railways from $13.8 million to $9.93 million, and for all local railway companies on main track a reduction in total estimated costs from $9.90 million to $6.28 million over a 10-year period.

Consultation on the consequential amendment to the Railway Operating Certificate Regulations

Stakeholders were informed of the intent of the consequential amendment (i.e. to extend the safety management system attestation in the application for a railway operating certificate to local railway companies) in the Regulatory Impact Analysis Statement published with the proposed Railway Operating Certificate Regulations in Part I of the Canada Gazette on March 15, 2014. No comments were received regarding this proposed change.

Regulatory cooperation

The recent amendments to the Act change its application to now include local railway companies operating on federal track. Before the changes to the Act, those local railway companies operating on federally regulated track were only indirectly subject to federal rules and standards through contract agreements with their host railway companies; however, the requirement for a safety management system did not apply to them. Different provinces took different approaches with respect to the adoption of the federal 2001 SMS Regulations. The 2015 SMS Regulations support the change in scope of the Act by applying the regulatory provisions to these local railway companies. This will also increase national consistency, and reduce complexity in implementation and oversight among regions. However, the provinces that had adopted the federal regime for provincially regulated railways may wish to adjust the provincial regulatory regime to further harmonize with the 2015 SMS Regulations. Transport Canada will work with those provinces to ensure a common understanding the Regulations and oversight approach.

During regulatory development, Transport Canada has been consulting with the provinces through the Federal-Provincial Working Group and through the Regulatory Development Working Group. Transport Canada will continue to work with the provinces to facilitate implementation of the 2015 SMS Regulations.

Rationale

The 2015 SMS Regulations replace the 2001 SMS Regulations to respond to the analysis and recommendations of the Railway Safety Act Review in 2008 and the SCOTIC review of 2008. The 2015 SMS Regulations further address oversight issues in order to

The 2015 SMS Regulations will also improve the overall consistency and quality of companies’ safety management systems by providing

Furthermore, the 2015 SMS Regulations also apply the clarified regulatory authorities in the Act that regulate requirements for the identification of an accountable executive and for a process for non-punitive reporting for employees.

While Transport Canada continues to conduct inspections, the intention of safety management systems is not to replace the existing regulatory and oversight framework, but rather to increase safety by having companies put formal systems in place to identify and address safety concerns before Transport Canada conducts inspections, and before major safety issues arise. In addition, companies implementing safety management systems should not only be looking to comply with the Act and its related instruments, but should also be working to build a safety culture throughout their organization to achieve the highest level of safety.

As an early adopter of the safety management systems approach, Transport Canada, with the help of the third-party reports, has learned lessons about how to improve safety through further progressing safety management system implementation. The 2015 SMS Regulations address those opportunities for improvement by expanding the scope of application to local railway companies operating on federally regulated track, as well as by strengthening and clarifying the regulatory provisions, and by adding new provisions to improve employee involvement in, and awareness of, safety management systems. The 2015 SMS Regulations are intended to increase railway safety by providing more details related to the requirements for implementation of safety management systems by companies and by facilitating Transport Canada oversight and enforcement.

The consequential amendments to the Railway Operating Certificate Regulations align the attestation requirements for a local railway company in paragraph 7(1)(e) with those for a railway company in subsection 4(1) and update references to the 2001 SMS Regulations to the 2015 SMS Regulations. Due to a delay between the coming into force of the Railway Operating Certificate Regulations and the application of the 2015 SMS Regulations to local railway companies, the safety management system provision of the attestation was formerly limited to railway companies to avoid unintended timing problems related to the coming-into-force dates of the two regulatory proposals.

Implementation, enforcement and service standards

The 2015 SMS Regulations will come into force for all companies on April 1, 2015, and will be accompanied by an implementation plan that will, for an initial period, focus on compliance promotion and awareness. When the 2015 SMS Regulations come into force, in accordance with the Rail Safety Oversight Policy, Transport Canada will take a graduated and proportionate enforcement approach used to educate, deter, and, when necessary, penalize those who contravene the Act or its associated instruments. Potential risks to consider would include the company’s behaviour and willingness to comply. This also ties in with the objectives of the Act, particularly the encouragement of collaboration of all parties towards the continual improvement of railway safety, while recognizing that companies are responsible for managing the safety risks associated with their operations.

The 2015 SMS Regulations provide more detail and clarity than the 2001 SMS Regulations. As Transport Canada continues to enhance its approach to oversight of safety management systems, it will continue to develop and refine its methodology for identifying safety risks, performance indicators and safety performance information needed from companies so that oversight activities can be targeted to areas of greatest risk. Transport Canada is working to update and enhance inspector/auditor training and tools to ensure oversight is undertaken by properly trained staff with nationally consistent oversight tools.

Transport Canada is also developing non-regulatory elements such as guidance material, templates, tools and best practices to support the 2015 SMS Regulations. Transport Canada is committed to consulting industry while developing materials, including guidance material to facilitate implementation and compliance.

Performance measurement and evaluation

In keeping with the life-cycle approach to regulating under the Cabinet Directive on Regulatory Management, the effectiveness of the 2015 SMS Regulations will be measured through the oversight activities of the Rail Safety Program. Rail Safety Program officials will monitor whether the 2015 SMS Regulations continue to meet policy objectives via results stemming from inspections and audits. The oversight activities consist of a combination of inspections to verify compliance and audits to verify the effectiveness of a company’s safety management system. Once the 2015 SMS Regulations are in force, Transport Canada will continue to conduct a minimum baseline audit every five years for both railway companies and local railway companies. This audit cycle would be complemented by an emergent audit program where audits are conducted at any time during a year. Analyses would be based on the results of inspections and audits to both continually inform the oversight activities of the Rail Safety Program to achieve regulatory compliance, as expressed in Transport Canada’s Report on Plans and Priorities, and to identify whether the intended results of the 2015 SMS Regulations are being achieved. For example, industry trends in non-compliance or safety management system deficiencies will be analyzed to determine if increased oversight would be necessary, or if the regulatory requirement should be amended to clarify objectives or whether the requirement no longer enhanced safety and would warrant repeal.

Contact

Any questions related to the 2015 SMS Regulations should be directed to

Susan Archer
Director
Regulatory Affairs
Rail Safety
Transport Canada
427 Laurier Avenue West
Ottawa, Ontario
K1R 7Y2
Telephone: 613-990-8690
Email: susan.archer@tc.gc.ca

Small Business Lens Checklist

1. Name of the sponsoring regulatory organization:

Transport Canada

2. Title of the regulatory proposal:

Railway Safety Management System Regulations, 2015

3. Is the checklist submitted with a RIAS for the Canada Gazette, Part I or Part II?

unchecked check box Canada Gazette, Part I   checked check box Canada Gazette, Part II

A. Small business regulatory design

I Communication and transparency Yes No N/A
1. Are the proposed Regulations or requirements easily understandable in everyday language? checked check box unchecked check box unchecked check box
The Regulations are written in commonly used safety management system terminology and plain English when possible.
2. Is there a clear connection between the requirements and the purpose (or intent) of the proposed Regulations? checked check box unchecked check box unchecked check box
Yes, there is a clear connection with the purpose of further enhancing the safety of the rail transportation system in Canada and the requirements, particularly the requirement for risk assessments and remedial actions.
3. Will there be an implementation plan that includes communications and compliance promotion activities, that informs small business of a regulatory change and guides them on how to comply with it (e.g. information sessions, sample assessments, toolkits, Web sites)? checked check box unchecked check box unchecked check box
Yes, Transport Canada will develop tools to assist railway companies with implementation.
4. If new forms, reports or processes are introduced, are they consistent in appearance and format with other relevant government forms, reports or processes? checked check box unchecked check box unchecked check box
If new forms, reports or processes are introduced, they will be consistent with other relevant government forms, reports or processes where possible.
II Simplification and streamlining Yes No N/A
1. Will streamlined processes be put in place (e.g. through BizPaL, Canada Border Services Agency single window) to collect information from small businesses where possible? unchecked check box checked check box unchecked check box
Transport Canada will provide tools and templates to help small businesses comply with the regulatory requirements, including reporting.
2. Have opportunities to align with other obligations imposed on business by federal, provincial, municipal or international or multinational regulatory bodies been assessed? checked check box unchecked check box unchecked check box
These Regulations help to promote national consistency by including local railway companies under federal regulations. Many of the provinces have adopted the existing SMS regulations within their own legislation or through an agreement with the federal government. The Regulations, in these cases, would apply automatically to the provincial shortlines operating on provincially regulated lines.
3. Has the impact of the proposed Regulations on international or interprovincial trade been assessed? unchecked check box unchecked check box checked check box
Increased railway safety would benefit international and interprovincial trade.
4. If the data or information, other than personal information, required to comply with the proposed Regulations is already collected by another department or jurisdiction, will this information be obtained from that department or jurisdiction instead of requesting the same information from small businesses or other stakeholders? (The collection, retention, use, disclosure and disposal of personal information are all subject to the requirements of the Privacy Act. Any questions with respect to compliance with the Privacy Act should be referred to the department’s or agency’s ATIP office or legal services unit.) unchecked check box unchecked check box checked check box
The information that would be requested pertains only to the requirements proposed in these Regulations.
5. Will forms be pre-populated with information or data already available to the department to reduce the time and cost necessary to complete them? (Example: When a business completes an online application for a licence, upon entering an identifier or a name, the system pre-populates the application with the applicant’s personal particulars such as contact information, date, etc. when that information is already available to the department.) unchecked check box unchecked check box checked check box
The information being requested would be produced as a result of compliance with the regulatory provisions.
6. Will electronic reporting and data collection be used, including electronic validation and confirmation of receipt of reports where appropriate? checked check box unchecked check box unchecked check box
Information and documentation may be electronic. The format is not specified by the Regulations.
7. Will reporting, if required by the proposed Regulations, be aligned with generally used business processes or international standards if possible? unchecked check box unchecked check box checked check box
The format is not specified in the regulatory provisions.
8. If additional forms are required, can they be streamlined with existing forms that must be completed for other government information requirements? unchecked check box unchecked check box checked check box
The information being requested would be produced as a result of compliance with the regulatory provisions.
III Implementation, compliance and service standards Yes No N/A
1. Has consideration been given to small businesses in remote areas, with special consideration to those that do not have access to high-speed (broadband) Internet? unchecked check box unchecked check box checked check box
The format for reporting is not specified in the Regulations.
2. If regulatory authorizations (e.g. licences, permits or certifications) are introduced, will service standards addressing timeliness of decision making be developed that are inclusive of complaints about poor service? unchecked check box unchecked check box checked check box
There is a service standard in the Railway Safety Act. The right to appeal the Minister’s decision is also laid out in the Act.
3. Is there a clearly identified contact point or help desk for small businesses and other stakeholders? checked check box unchecked check box unchecked check box
Small businesses may contact their Transport Canada regional office for assistance.

B. Regulatory flexibility analysis and reverse onus

IV Regulatory flexibility analysis Yes No N/A
1.

Does the RIAS identify at least one flexible option that has lower compliance or administrative costs for small businesses in the small business lens section?

Examples of flexible options to minimize costs are as follows:

  • Longer time periods to comply with the requirements, longer transition periods or temporary exemptions;
  • Performance-based standards;
  • Partial or complete exemptions from compliance, especially for firms that have good track records (legal advice should be sought when considering such an option);
  • Reduced compliance costs;
  • Reduced fees or other charges or penalties;
  • Use of market incentives;
  • A range of options to comply with requirements, including lower-cost options;
  • Simplified and less frequent reporting obligations and inspections; and
  • Licences granted on a permanent basis or renewed less frequently.
 checked check box unchecked check box unchecked check box
Due to the nature of safety management systems, the Regulations would be proportional to the size and risk of the operations. With the expanded scope in the Railway Safety Act, Transport Canada could have taken a broader approach to the scope of applicability for local railway companies, however, this would impose a burden disproportionate to the risk associated with local non-main track railway company operations.
2. Does the RIAS include, as part of the Regulatory Flexibility Analysis Statement, quantified and monetized compliance and administrative costs for small businesses associated with the initial option assessed, as well as the flexible, lower-cost option?
  • Use the Regulatory Cost Calculator to quantify and monetize administrative and compliance costs and include the completed calculator in your submission to TBS-RAS.
 checked check box unchecked check box unchecked check box
3. Does the RIAS include, as part of the Regulatory Flexibility Analysis Statement, a consideration of the risks associated with the flexible option? (Minimizing administrative or compliance costs for small business cannot be at the expense of greater health, security or safety or create environmental risks for Canadians.) checked check box unchecked check box unchecked check box
Due to the nature of safety management systems, the Regulations would be proportional to the size and risk of the operations. Rail Safety inspectors and officials acknowledged that the risk represented by such companies on non-main track did not warrant the development and implementation of a full SMS, but that certain core aspects should be applied as a means of further instilling a safety culture in those companies.
4. Does the RIAS include a summary of feedback provided by small business during consultations? unchecked check box unchecked check box checked check box
The feedback is not specifically attributed to small businesses, however, industry was represented by the industry association and all feedback was considered through the policy development and regulatory drafting stages.
V Reverse onus Yes No N/A
1. If the recommended option is not the lower-cost option for small business in terms of administrative or compliance costs, is a reasonable justification provided in the RIAS? unchecked check box unchecked check box checked check box