A new safety approach aimed at getting airlines to police themselves could endanger passengers, particularly those flying with smaller airlines, aviation experts warn.

In 2005, Transport Canada began changing over to a system that critics say essentially leaves airlines to regulate themselves, instead of primarily relying on federal inspectors to oversee airplane safety as they had before.

The federal department says the new approach, called safety management systems (SMS), makes flying safer, but critics disagree.

Dave Winter quit his job as a federal aviation inspector over frustration with the new system. ((CBC))

"If we don't have proper oversight, in effect, people are going to do bad things," said Dave Winter, a former federal aviation inspector who quit over frustration with the new system.

As an inspector, Winter used to board planes to monitor flying skills, check log books, speak with a range of people including engineers and pilots, and even conduct undercover surveillance to check for unsafe practices.

"I think we prevented a lot of accidents from happening," Winter told CBC News. "It kind of kept everybody in line."

Under the SMS approach, when a mistake happens, the airline employee is responsible for filling out an internal safety report. But there is no requirement for the company to report the infraction to Transport Canada. Federal inspectors are now responsible for reviewing the overall system.

Transport Canada's detailed audit program ended with the introduction of SMS to major airlines, and shortly after the federal department dramatically cut back on inspections.

A ‘classic example’ Debbie Wolsey says her husband's death was the "classic example of SMS not working." For months, Capt. Rick Wolsey and his junior co-pilot hadn't been getting along. Despite complaints, SMS wasn't used properly to deal with the situation and Transwest Air continued to schedule the pilots to fly together. On Jan. 7, 2007, the crew was on a routine flight in northern Saskatchewan. As the two got ready to land the plane, it was apparently not in the proper position. A decision was made to abandon the landing and try again. In a communication problem, the co-pilot assumed that Wolsey had taken over the controls but apparently he hadn't. The plane crashed into the trees. A review by the Transportation Safety Board found the main cause of the crash was the pilots' failure to work together and found the airline's SMS system had failed.

System 'good on paper'

Martin Eley, director general of civil aviation, says compliance is now the responsibility of airlines.

"You need to have systems in place to make sure you’re compliant," Eley said. "We're going to come in and look at those systems but it's not our job to make sure you’re compliant."

Winter argues that the new system fails to spot potential problems.

"All they are really inspecting is their system of how they operate, not what they're actually doing," the former aviation inspector said. "They could be doing all types of bad things but their systems could look good on paper."

Critics of the new system concede that self-policing works relatively well with Canada's major airlines because they often have a protective union environment and face greater public scrutiny, but that's not the case for smaller airlines.

These airlines are also currently operating in a grey zone. While major airlines now comply with SMS, Transport Canada has delayed the implementation of SMS for smaller airlines.

And because the government has reduced its hands-on inspections, those carriers face even less oversight.

"They're free to do whatever they want right now," Winter said.

Need SMS and inspectors: expert

Transport Canada documents reveal that questions were raised internally about the safety of moving to the new approach.

Martin Eley, director general of civil aviation, says data shows that accident rates have fallen in the past five years. ((CBC))

An internal risk assessment conducted in 2006 warned that foreign countries may "lose confidence" in Canada’s air safety and that unsafe conditions could develop.

Canada is the only country to implement safety management systems without maintaining its traditional hands-on federal inspections program.

Virgil Moshansky, a world-renowned aviation safety expert and retired judge, recommended the use of SMS during a public inquiry into the deadly 1989 Dryden plane crash — one of Canada's worst air disasters — but only in conjunction with the old system.

"What we disagree with is introducing safety management systems and at the same time delegating regulatory authority and enforcement to the carriers themselves," said Moshansky.

Eley said the accident rates — which have declined over the past five years — speak for themselves.

Air safety Read about Canada's rate of airplane accidents and fatalities over the past decade.

"Nothing is telling us that those decisions that we made were wrong," Eley said.

However, Transportation Safety Board statistics reveal that the overall accident rate began declining before SMS was introduced in 2005 and levelled off in the following years. But the rate of fatalities has recently increased, particularly in the last two years when it rose to 1.6 deaths for every 100,000 flight-hours.

Safety the primary concern: Transport Canada

Transport Canada documents also show that cost-saving measures played a role in the decision to move toward SMS.

Other SMS-related accidents Nov. 11, 2007 A Jetport-owned private jet carrying Tim Horton’s co-founder Ron Joyce landed in Fox Harbour, N.S., short of the runway. All 10 passengers survived. A Transportation Safety Board review found the crew didn't have proper training to fly that type of aircraft and that the company’s SMS failed to identify that risk. March 28, 2008 A single-engine aircraft crashed near Wainwright, Alta., killing all five people on board. Some of the privately operated plane’s key equipment failed due to lack of proper maintenance. A review found a number of deficiencies in the company’s SMS that should have identified the risks. Also, the company didn’t conduct an annual risk assessment, as required by SMS. Feb 4, 2009 A Transwest Air Twin Otter crashed into trees in Laronge, Sask., shortly after takeoff. All seven people on board escaped with minor injuries. A review found that SMS should have detected problems with a wing and stopped the pilot from using an unauthorized take-off technique.

One document, dated Oct. 22, 2001, notes that the department has a $17.3-million shortfall in safety oversight. One of the main solutions proposed to solve the dilemma is SMS since it would result in "reduced regulatory burden, Crown liability [and] oversight requirements."

"They certainly had uppermost in their minds reducing the costs of the operations of Transport Canada. The easiest place to reduce this was by cutting the number of inspectors," Moshansky said.

A July 30, 1999, memo, written by the director of commercial aviation, expresses concerns about a "critical" shortage of inspectors and increasing demands.

Transport Canada insists increased safety was always the main objective of SMS, but admits the department couldn’t afford to police the industry to the same degree as it continued to grow.

"We knew that our resources were not going to grow above and beyond what we had — that we would not be able to maintain inspecting at a detailed level," Eley said.

Instead, he said, the department decided to focus on a more effective use of resources.

Transport Canada also stresses that there hasn’t been as much need to conduct detailed inspections as in the past because SMS helps inspectors detect problems in the way airlines operate.

However, Moshansky compared the system to a police officer trying to reduce speeding by waving a sign at passing motorists that says, "Let me know if you’re speeding and I'll write you a ticket."

"No other country has done that," Moshansky said. "And some of them are actually amazed that this is happening in Canada."

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