The deadly Lac-Mégantic train crash — and this week's safety board report into what happened — raises questions not only about government oversight of the rail industry but of other sectors like air, marine and food as well, engineers and transportation experts say.

On Tuesday, the Transportation Safety Board released its final report on the worst rail disaster in Canada's history. In it, the watchdog agency criticized how the federal government ensures regulated companies follow safety rules.

TSB called on Transport Canada, the "guardian of public safety," to audit railway companies more thoroughly and frequently, saying Montreal, Maine & Atlantic Railway ran "largely unchecked."

Pointedly, TSB chair Wendy Tadros said federal auditors weren't "pulling back the curtains" to see what was actually happening inside a company.

"It's a pretty sweeping set of findings from the Transportation Safety Board," said David Jeanes, founding president of Transport Action Canada, a non-profit group that monitors rail safety. "It isn't just the rail mode. It's really about the whole process of safety regulation."

At the heart of the TSB criticism is a sometimes controversial approach called safety management systems, or SMS for short.

Under SMS, companies create their own safety plans, which are then checked by government officials, and they monitor their own safety performance, with occasional inspections by the regulator.

The rail industry adopted the approach in 2001, while large ships followed suit the year after and airlines started using it in 2005.

Reading binder vs. in-field checks

Critics suggest the move to SMS was driven by government cost-cutting measures, and stressed that it can only be effective if done in conjunction with sufficient checks by regulators on the companies.

In the case of Lac-Mégantic, TSB says Transport Canada looked at MM&A's safety plan on paper, but didn't dig deep enough into whether they were following the rules.

I think this is a game changer. It'll bring safety management systems to the forefront. -Jean-Paul Lacoursière

"What [the TSB] said is [Transport Canada was] satisfied to look at the binder and didn't verify that this binder, or the content of that binder, implemented physically in the field.

"And that's a big difference," says Jean-Paul Lacoursière, a chemical engineer at the University of Sherbrooke who specializes in risk assessments.

TSB's Lac-Mégantic report isn't the first time the watchdog raised concerns with how the government has rolled out SMS. But those who follow these developments closely suggest the accident, which killed 47 people, could finally spur change.

In 2006, a runaway freight train near Lillooet, B.C., prompted the agency to call for Canadian National to do a better job of following its own safety rules.

In 2010, the agency highlighted SMS as a concern not only for the rail industry, but for the other modes of transportation that Transport Canada also oversees.

"Transport Canada does not always provide effective oversight of transportation companies transitioning to SMS, while some companies are not even required to have one," the TSB wrote. It also put the issue front and centre by placing it on the agency's "watch list" of problems for marine safety.

Last year, the federal auditor general also targeted Transport Canada's oversight of rail. It found "significant weaknesses" in its supervision of companies, saying the department had done "very few audits" of the 31 federal railway operators under its jurisdiction.

Lacoursière says he was surprised but glad to see the TSB delve into the larger issues around safety culture in the Lac-Mégantic report. He's hopeful that the agency's criticism of the federal department could lead to significant changes for how it oversees rail, as well as marine and aviation.

"I think this is a game changer," said Lacoursière. "It'll bring safety management systems to the forefront."

Safety culture key

Lacoursière says the tragedy in the small Quebec town demonstrates how important the overall safety system can be. And the TSB stressed that point as well.

Despite identifying 18 factors that contributed to the crash, it also said, "take any one of them out of the equation and this accident may not have happened."

TSB chair Wendy Tadros said auditors at Transport Canada weren't "pulling back the curtains" to see how companies were ensuring safety. (CBC)

Even a well-trained worker like the MM&A locomotive engineer in the Lac-Mégantic case can make mistakes, says Lacoursière. "You need more than just relying on that person to actually prevent accidents. You need real systematic ways of doing things."

"And it's not only in that industry, but other industries that are under the federal jurisdiction are doing the same thing," he said.

NDP Leader Thomas Mulcair raised that same concern.

"The basic problem is self-management doesn't work when the government's not holding up its end of the bargain," Mulcair said on Tuesday following the release of the report. "Governments are supposed to be inspecting and regulating in the public interest."

"In the case of Lac-Mégantic and in the case of food inspections, we realize this is not working," he added.

Jeanes says that SMS has also come under considerable scrutiny in the airline industry, particularly in regards to smaller companies and their ability to implement such a complex, costly system.

As the federal government introduced the approach to the airline industry, retired justice Virgil Moshansky, who headed a three-year inquiry into one of Canada's worst air disasters (the 1989 crash of an Air Ontario flight that killed 24 people), was quite critical of the system.

In 2007, he warned it would be a struggle for cash-strapped smaller carriers, "where the greatest risk already resides," to implement SMS and monitor their own safety.

The retired justice worried that SMS relied on self-reporting of violations by airline personnel, which is inherently problematic because workers hesitate to report problems for fear of losing their jobs.

SMS 'works internationally'

MM&A was also a smaller company. The U.S.-based regional railway operator owned 820 kilometres of track across Maine, Vermont and Quebec.

While MM&A submitted its SMS documentation to the government in 2003, and was deemed compliant, it wasn't until seven years later that Transport Canada did its first audit of the company's safety system and found the system wasn't actually implemented.

In 2012, the government did a second audit, focusing on a limited aspect of MM&A 's safety system, but it never followed up.

"If TC does not audit the SMS of railways in sufficient depth and frequency and confirm that corrective actions are effectively implemented, there is an increased risk that railways will not effectively manage safety," the TSB report said.

As a result, MM&A developed a "weak safety culture" that led to continuing unsafe practices, and Transport Canada knew there was an elevated risk, including problems with securing trains since 2005 and with track conditions since 2006, the TSB said.

On top of that, the company was dealing with a dramatic jump in dangerous goods transported on its tracks, an increase of 280 per cent from 2011 to 2012, almost entirely because of crude oil. That raised the risks, but the company didn't address them, even though it knew about the risks; and nor did the government.

Jeanes says the huge increase in crude transported on rail lines stretched transportation inspectors even further.

Meanwhile, Transport Minister Lisa Raitt says the government has made sure that the department is properly resourced and trained to ensure auditors are "auditing appropriately."

The minister said use of the approach comes down to a "fundamental fact: there's 46,000 kilometres of rail track in this country. And you can't possibly ever have enough inspectors at every way point on every train at every single moment to have that kind of continuous oversight."

"So SMS has been developed, and it has been recognized and it has worked internationally."

The government has 90 days to respond to the watchdog's report, and Jeanes hopes that the TSB's strong criticism of the government's oversight leads to changes in the way it operates.

"Given that we've seen how catastrophic consequences can result from a failure of SMS, we must make sure it doesn't happen again," said Jeanes.