Summary of 2019-2020 Safety Management System Oversight Activities

A safety management system (SMS) is a documented framework for integrating safety into day-to-day company operations. A safety management system generally includes several elements such as a safety policy, safety targets, a risk assessment process and monitoring procedures.

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An SMS is important because it provides a proactive approach to identifying safety risks and to taking action to eliminate or mitigate those risks in order to prevent accidents and other dangerous situations. Once fully integrated in an organization, an SMS becomes part of the culture and the way people do their jobs.

An SMS is not self-regulation. It does not eliminate or replace any other regulatory requirements. Rather, it increases safety by having companies put formal processes in place to proactively identify and address safety concerns before Transport Canada's intervention, and before concerns become major safety issues.

The Railway Safety Management System Regulations, 2015, which came into effect on April 1, 2015, provides a framework for companies to integrate safety into their day-to-day railway operations. They build on 12 years of lessons learned in providing regulatory oversight of safety management systems in the rail industry.

The Regulations establish the minimum SMS requirements a company must develop and implement for the purpose of achieving the highest level of safety in its railway operations. The scope of application of the Regulations is divided into three categories of companies (i.e., railway companies; local railway companies on main track; and local railway companies on non-main track) with a corresponding list of processes they must develop and implement.

Oversight Cycle

Transport Canada has a responsibility to oversee the SMS regulations through comprehensive audits.

Railway companies and local railway companies are on a 3 to 5 year cycle, or more frequently if needed. For some railway companies, a comprehensive audit may be conducted over multiple years, with several processes audited each year.

During an audit, a safety system oversight inspector may find a non-compliance. If this happens, the railway company must respond with a corrective action plan. The plan identifies actions the company will take to correct the non‑compliance, the person responsible for each action and when the company will correct the situation. The inspector verifies whether or not the company has corrected the non-compliances.

Failing to comply with the findings of an SMS audit is a serious matter. Transport Canada uses a graduated enforcement approach to address non-compliances.

This approach ties into the Railway Safety Act's emphasis of all parties working to improve railway safety, even though companies must manage the risks associated with their operations.

When considering an enforcement action, rail safety inspectors or officials start with the most appropriate tool. They may escalate an action based on necessity or risk. The range of tools include:

  • Letter of non-compliance
  • Letter of warning: administrative monetary penalty
  • Notice of violation
  • Letter of warning: suspending or cancelling a Railway Operating Certificate
  • Prosecution and/or suspending or cancelling a Railway Operating Certificate

To be clear, if the level of risk warrants it, an inspector or official can use a more serious enforcement tool right away. For example, they could:

  • Issue an administrative monetary penalty
  • Suspend or cancel a company's Railway Operating Certificate

Factors they consider when deciding which tool to use include the company's behaviour and willingness to comply.

Results and statistics for 2019-2020 oversight activities

In 2019-2020, Transport Canada completed 19 of 21 planned audits; two audits were delayed due to COVID 19. With the exception of these two audits, all comprehensive audits were completed within four years of the five year timeframe established by the Department.

  • A deficiency is a situation where a railway company hasn't fully implemented a process from their safety management system
  • A non-compliance occurs when a railway company's safety management system doesn't meet the requirements of the regulations

Companies send Transport Canada a corrective action plan that outlines how and when they will deal with the audit findings. All companies sent action plans to address the issues that were found in the 2019-20 audits.


In addition to successfully completing the planned 2019-2020 audits, the program has significantly enhanced its oversight toolset and training. This has put the program in a stronger position moving forward.

The program developed the "Targeted Audit Framework" and piloted a targeted audit focusing on systemic track-related issues. This will help move the program to the next phase to address high risks and systemic issues and assess the effectiveness of the railways' SMS processes.

Staff work through inter-regional and HQ coordination and cooperation. This coordination and cooperation has benefit of mutual learning and improved national consistency.

Transport Canada continues to focus on the use of safety management systems by Canada's rail industry, and respond to the recommendations of the 2017-2018 Railway Safety Act Review.


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