OTTAWA -- A rail-safety audit completed just days before the deadly July train crash in Lac-Megantic, found "significant weaknesses" in Transport Canada's oversight of federally regulated railways.

Those weaknesses include a lack of knowledge of rail routes used to transport dangerous goods, too few safety auditors, poorly trained inspectors and an absence of follow-up or sanctions when safety problems are identified.

The auditor general found that only 14 safety audits of Canada's 31 federally regulated railways had been completed in the previous three years -- just a quarter of the audits Transport Canada had expected to carry out.

Eight of those 14 audits focused on just the two largest operators, CN and Canadian Pacific, leaving Canada's smaller operators largely unchecked.

One of those small rail companies was the Montreal, Maine and Atlantic, whose unattended, single-operator train carrying 7.6 million litres of volatile crude oil derailed and exploded in Lac-Megantic on July 6, killing 47 people.

The auditor general's report, which was wrapped up barely a week before the crash, explicitly states it makes no assessment of the Lac-Megantic disaster.

However it concludes that "Transport Canada needs to address significant weaknesses in its oversight of safety management systems implemented by federal railway companies to manage safety risks on a day-to-day basis."

Among the issues identified:

  • Transport Canada lacks information on which routes are used to transport dangerous goods.
  • The department is not getting the internal risk assessments conducted by railway companies.
  • Information on the condition of railway bridges is missing, as is financial information on privately owned railways.
  • The department hasn't properly developed regulations to establish when a railway gets an operating certificate.

"The department did not take any enforcement action to require railways to maintain adequate and effective systems in place, even when inspectors identified deficiencies that could affect the safety of railway operations," says the audit.

Many of the problems are long-standing issues that have been previously flagged, dating back a dozen years to when the federal government adopted a new rail safety regime called Safety Management System, or SMS.

The SMS program relies on Ottawa doing in-depth safety audits to ensure rail operators are complying with whole-system safety protocols, rather than just spot checks for ad hoc deficiencies.

Instead, the auditor general has found that Transport Canada still carries out tens of thousands of poorly designed inspections by under-trained inspectors. Safety audits, meanwhile, languish.

In 2009, the department estimated it needed 20 systems auditors to do the work properly -- even though the auditor general found this estimate was not based on audit methodology or other key determinants of work load. Be that as it may, the department has just 10 auditors.

It will take years to audit all 31 federally regulated railways, says the report, and Ottawa has just added responsibility for another 39 non-federal rail operators to its safety workload.

Some 40 per cent of Transport Canada's inspectors, meanwhile, are eligible to retire in 2015.

The report found that only a third of managers and two-thirds of inspectors had attended key training course in 2012 and 2013.

"These rates might help to explain the weaknesses we found in our review of Transport Canada audit files."

Transport Canada agreed with all the report's findings and said it is working to put in place fixes, starting this winter and running into 2016.

"In our view, it is taking too long to resolve significant safety issues," the audit general concluded.