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Appendices

Appendix A - Reports Released by the TSB in 2006-2007 by Sector
Appendix B - Assessment of Responses to Recommendations Issued in 2005-2006
Appendix C - Glossary
Appendix D - Links to Other Organizations Involved in Transportation Safety
Appendix E - Audited Financial Statements

Appendix A -

Reports Released by the TSB in 2006-2007 by Sector

Marine Reports Released in 2006-2007

DATE	LOCATION	VESSEL(S)	TYPE	EVENT	REPORT NO.
2003.12.06	Off Saint-Jean, Île d'Orléans, Que.	Yong Kang	Bulk carrier	Grounding	M03L0148
2003.12.20	Fraser River near Mission, B.C.	Mistral Packmore 4000 Tiger Shaman	Pleasure craft Barge Tug	Collision	M03W0265
2004.01.11	Horseshoe Bay Terminal, B.C.	Queen of Surrey    Charles H. Cates V	Roll-on/roll-off vehicle/passenger ferry Assist tug	Collision	M04W0006
2004.01.23	Sand Cove, N.B.	Lo-Da-Kash	Small fishing	Sinking and loss of life	M04M0002
2004.06.17	Off Natashquan, Que.	Persistence I	Fishing	Flooding	M04L0065
2004.09.19	Cape Bonavista, N.L., 5 nm E	Ryan's Commander	Small fishing	Capsizing and loss of life	M04N0086
2005.06.03	South Shore Canal, St. Lawrence Seaway, Que.	Federal Sakura	Bulk carrier	Striking	M05C0019
2005.06.29	Off Savary Island, Northern Georgia Strait, B.C.	Morning Sunrise	Fishing	Sinking	M05W0110

Pipeline Report Released in 2006-2007

DATE	LOCATION	COMPANY	EVENT	REPORT NO.
2005.10.18	Near Empress, Alta.	Foothills Pipe Lines Ltd.	Programmable logic controller failure	P05H0061

Rail Reports Released in 2006-2007

DATE	LOCATION	COMPANY	EVENT	REPORT NO.
2004.01.14	Whitby, Ont.	Canadian Pacific Railway	Main-track derailment	R04T0008
2004.07.08	Bend, B.C.	Canadian National	Uncontrolled movement of railway rolling stock	R04V0100
2004.07.25	Burton, Ont.	Canadian National	Derailment	R04T0161
2004.10.06	Castleford, Ont.	Canadian Pacific Railway	Crossing collision	R04H0014
2004.10.24	Near Blackie, Alta.	Canadian Pacific Railway	Crossing accident	R04C0110
2005.01.12	Winnipeg, Man.	Canadian National	Derailment	R05W0014
2005.02.17	Brockville, Ont.	Canadian National	Pedestrian fatality	R05T0030
2005.02.23	Saint-Cyrille, Que.	Canadian National	Main-track derailment	R05Q0010
2005.05.02	Maxville, Ont.	Ottawa Central Railway	Runaway and main-track train collision	R05H0011
2005.07.04	Prescott, Ont.	Canadian National	Main-track derailment	R05H0013
2006.05.15	Lac Bouchette, Que.	Canadian National	Main-track train derailment	R06Q0046
Various	Various	Canadian Pacific Railway	Safety Issues Investigation, Analysis of secondary main-line derailments and the relationship to bulk tonnage traffic	SII R05-01

Air Reports Released in 2006-2007

DATE	LOCATION	COMPANY	EVENT	REPORT NO.
2004.01.17	Pelee Island, Ont.	Cessna 208B Caravan	Loss of control	A04H0001
2004.06.11	Bob Quinn Airstrip, B.C.	MD Helicopters (Hughes) 369D	Engine power loss	A04P0206
2004.06.13	Québec/Jean Lesage International Airport, Que.	Airbus A320 and Cessna 172	Risk of collision	A04Q0089
2004.08.19	Saint John Airport, N.B.	Piper PA-31-350 (Navajo)	Collision with terrain	A04A0099
2004.08.31	Greater Moncton International Airport, N.B.	Boeing 727	Runway excursion	A04A0110
2004.10.14	Halifax International Airport, N.S.	Boeing 747-244SF	Reduced power at take-off and collision with terrain	A04H0004
2004.10.29	Vancouver International Airport, B.C.	Britten Norman BN2P Islander and de Havilland DHC-8	Risk of collision	A04P0397
2004.12.01	Saint-Georges, Que.	Beech B300 (Super King Air)	Runway excursion on landing	A04Q0188
2004.12.19	Gaspé Airport, Que.	Piper PA-31-350	Landing beside the runway	A04Q0196
2005.01.24	La Grande-4, Que., 60 nm SE	Eurocopter AS 350 BA (helicopter)	Collision with terrain	A05Q0008
2005.02.21	Bromont Airport, Que.	Hawker Siddeley HS 125-600A	Landing beside the runway	A05Q0024
2005.06.02	Toronto/Lester B. Pearson International Airport, Ont.	Raytheon/Hawker 800XP	Misrigged elevator trim tabs	A05O0112
2005.06.07	Tofino, B.C., 5 nm W	Bombardier DHC-8-402	Loss of oil pressure on two engines	A05P0132
2005.06.10	Lethbridge, Alta., 41 nm SE	Bombardier CRJ705	Inadvertent stick shaker at high altitude	A05W0109
2005.06.10	Richards Landing, Ont.	Bell 212 (helicopter)	Main rotor blade failure	A05O0115
2005.06.15	Abbotsford, B.C., 15 nm N	Bombardier DHC-8-402	In-flight engine shutdown	A05P0137
2005.06.18	Thompson, Man.	Stinson 108-1	Hard landing and aircraft overturned	A05C0109
2005.06.19	Abbotsford International Airport, B.C., 2 nm S	Two Piper PA-44-180 Seminole	Air proximity - safety not assured	A05P0143
2005.06.25	Oshawa Airport, Ont.	SeaRey (amphibious)	Power loss and collision with terrain	A05O0125
2005.07.10	Sudbury, Ont.	Bell 204B (helicopter)	Difficulty to control	A05O0142
2005.07.18	Constance Lake, Ont.	Cessna A185F (seaplane)	Collision with water	A05O0147
2005.07.18	Orillia, Ont., 5 nm E	Cessna 185F (seaplane)	Engine power loss	A05O0146
2005.08.02	Terrace, B.C., 35 nm NW	MD Helicopters MD500D	Loss of control	A05P0184
2005.08.22	Mount Burns, Alta.	Cessna 180H	Controlled flight into terrain	A05W0176
2005.09.01	Schefferville, Que., 20 nm NW	de Havilland DHC-2 Beaver (seaplane)	Flight into adverse weather and collision with terrain	A05Q0157
2005.09.29	Lac Ouimet, Que.	Cessna 185 (seaplane)	Capsizing at take-off	A05Q0178
2005.09.30	Kashechewan, Ont.	Piper PA-31 (Navajo)	Controlled flight into terrain	A05O0225
2005.10.06	Winnipeg, Man.	Cessna 208B Caravan	Loss of control and collision with terrain	A05C0187
2005.11.03	South Bentick Arm, B.C.	Boeing Vertol BV-107-II (helicopter)	In-flight break-up	A05P0269
2005.11.15	Hamilton Airport, Ont.	Gulfstream 100	Runway overrun	A05O0257
2005.11.20	Brantford, Ont.	Ryan Aeronautical Navion B	Loss of control and collision with terrain	A05O0258
2005.12.07	Marystown, N.L., 2.5 nm E	Messershmitt-Bolkow-Blohm (MBB) BO105 (helicopter)	Collision with water	A05A0155
2005.12.19	Edmonton, Alta., 70 nm N	Boeing 737-700 and Bombardier CL-600-2B19	Loss of separation	A05W0248
2005.12.26	Winnipeg International Airport, Man.	Airbus A319-112	Runway excursion	A05C0222
2006.03.08	Powell River, B.C.	Piper PA-31-350 (Chieftain)	Runway overrun and collision with terrain	A06P0036
Various	Various	Various	Safety Issues Investigation, Post-impact fires resulting from small-aircraft accidents	SII A05-01

Appendix B -

Assessment of Responses to Recommendations Issued in 2005-2006

Marine Recommendations

Capsizing and Loss of Life, Small Fishing Vessel Ryan's Commander, off Cape Bonavista, Newfoundland and Labrador, 19 September 2004 Report No. M04N0086
RECOMMENDATION	M05-04 The Department of Transport ensure that the Board's previous recommendations M03-05 and M03-06 are immediately implemented.
RESPONSE	The Minister of Transport, Infrastructure and Communities agrees with the intent of the recommendation. Until such time as the new Fishing Vessel Safety Regulations come into force, Transport Canada (TC) has established an interim measure for determining, based on a list of risk factors, whether a small fishing vessel requires a stability booklet. This interim measure will take effect immediately, and will also serve to remind vessel owners of their responsibility to make safe operational decisions that ensure an adequate margin of safety.
BOARD ASSESSMENT OF RESPONSE	TC issued Ship Safety Bulletin 04/2006 (Safety of Small Fishing Vessels: Information to Owners/Masters about Stability Booklets). The bulletin describes the interim safety measure and the process for determining whether a small fishing vessel requires a stability booklet and what to do if it does. The bulletin applies to all owners and operators of fishing vessels, new and existing, that are between 15 and 150 gross tons, or not more than 24.4 m in length.
BOARD ASSESSMENT RATING	Fully Satisfactory

Engine Room Fire and Subsequent Failure of the CO2 Distribution Manifold, Ro-Ro Passenger Ferry Queen of Surrey, Queen Charlotte Channel, British Columbia, 12 May 2003 Report No. M03W0073
RECOMMENDATION	M05-05 The Department of Transport, in conjunction with other stakeholders, review Canadian and international marine regulations respecting fixed fire-extinguishing systems to ensure that their design, maintenance, inspection, and testing regimes effectively demonstrate continued structural and functional integrity.
RESPONSE	The Minister of Transport, Infrastructure and Communities agrees with this recommendation. As part of the regulatory reform regime initiative, TC will review international marine regulations and standards respecting fixed fire-extinguishing system design, maintenance, inspection, and testing. The goal of this review will be aimed at determining whether the proposed Fire Safety Regulations will involve additional requirements to address potential deficiencies that may arise with fixed smothering system installations. The review will assess all aspects of maintenance, testing, and inspections to demonstrate continued structural and functional integrity. These regulations are scheduled to come into force in 2007.
BOARD ASSESSMENT OF RESPONSE	It is anticipated that TC will undertake a review as indicated in its initial response to verify that the proposed regulations meet all necessary requirements. TC has begun work to develop the proposed Fire Safety Regulations.
BOARD ASSESSMENT RATING	Satisfactory in Part

RECOMMENDATION	M05-06 The Department of Transport require Canadian passenger vessels over 500 gross tonnage to meet a standard of structural fire protection that ensures a level of safety equivalent to International Convention for the Safety of Life at Sea (SOLAS)-compliant vessels.
RESPONSE	The Minister of Transport, Infrastructure and Communities agrees with the intent of this recommendation. The proposed Fire Safety Regulations will require that new passenger vessels over 150 gross tons meet and in some areas exceed the SOLAS standards for structural fire protection. The proposed regulations will also address modifications made to existing vessels. As a result, any major modification will have to comply with the most recent requirements for structural fire protection.
BOARD ASSESSMENT OF RESPONSE	It is anticipated that TC will undertake a review as indicated in its initial response to verify that the proposed regulations meet all necessary requirements. TC has begun work to develop the proposed Fire Safety Regulations.
BOARD ASSESSMENT RATING	Satisfactory in Part

Air Recommendations

Cessna 208 Operation into Icing Conditions, Morningstar Air Express Inc., Winnipeg, Manitoba, 06 October 2005 Occurrence No. A05C0187
RECOMMENDATION	A06-01 The Department of Transport take action to restrict the dispatch of Canadian Cessna 208, 208A, and 208B aircraft into forecast icing meteorological conditions exceeding "light," and prohibit the continued operation in these conditions, until the airworthiness of the aircraft to operate in such conditions is demonstrated.
RESPONSE	To address the subject of Cessna 208 operation into icing conditions, the Federal Aviation Administration (FAA) issued Airworthiness Directive (AD) 2006-06-06 on 10 March 2006. This mandatory corrective action allows dispatch into forecast icing meteorological conditions exceeding "light," but requires pilots to exit moderate or more severe icing conditions if such conditions are encountered in flight. Cues are provided to enable pilots to determine when they must depart the icing conditions. The AD discusses the actions necessary to remove the restrictions imposed for flight in icing conditions. The FAA AD became effective 24 March 2006. On 24 January 2006, Transport Canada (TC) issued Service Difficulty Alert 2006-01. Service Difficulty Alert 2006-01R1 was released on 01 February 2006 and the latest revision 2006-01R2 was released on 24 March 2006. TC also reviewed FAA AD 2006-06-06. The Department supports the FAA's determination that these actions are necessary for safe operation. FAA AD 2006 06-06 has been accepted and is mandatory in Canada.
BOARD ASSESSMENT OF RESPONSE	TC has essentially adopted the response from the FAA, who issued AD 2006-06-06. Action taken by the FAA will reduce, but not substantially reduce or eliminate, the deficiency raised in Board Recommendation A06-01. The response from TC does not address the issue of restricting the dispatch of the Cessna 208 into icing conditions forecast to exceed "light."
BOARD ASSESSMENT RATING	Satisfactory in Part

RECOMMENDATION	A06-02 The Department of Transport require that Canadian Cessna 208 operators maintain a minimum operating airspeed of 120 knots during icing conditions and exit icing conditions as soon as performance degradations prevent the aircraft from maintaining 120 knots.
RESPONSE	To address the subject of Cessna 208 operation into icing conditions, the FAA issued AD 2006-06-06 on 10 March 2006. FAA AD 2006-06-06 was issued to implement the content of this recommendation. This mandatory corrective action specifies the minimum speed in icing conditions of 120 knots indicated airspeed (KIAS) in the flaps UP condition, and requires that the pilot depart icing conditions if 120 KIAS cannot be maintained in level flight. On 24 January 2006, TC issued Service Difficulty Alert 2006-01. Service Difficulty Alert 2006-01R1 was released on 01 February 2006 and the latest revision 2006-01R2 was released on 24 March 2006. TC also reviewed FAA AD 2006-06-06. The Department supported the FAA's determination that these actions are necessary for safe operation. FAA AD 2006-06-06 has been accepted and is mandatory in Canada. TC agreed with Recommendation A06-02. TC reviewed FAA AD 2006-06-06, accepted the AD, and it is now mandatory in Canada.
BOARD ASSESSMENT OF RESPONSE	In its response, TC adopted the action of the FAA, who issued AD 2006-06-06. Action taken by the FAA will substantially reduce or eliminate the deficiency raised in Board Recommendation A06-02.
BOARD ASSESSMENT RATING	Fully Satisfactory

RECOMMENDATION	A06-03 The Federal Aviation Administration take action to revise the certification of Cessna 208, 208A, and 208B aircraft to prohibit flight into forecast or in actual icing meteorological conditions exceeding "light," until the airworthiness of the aircraft to operate in such conditions is demonstrated.
RESPONSE	On 27 September 2006, the Board received a letter dated 18 September 2006 in which the FAA responded to Recommendation A06-03. The response stated that the FAA agreed with the intent of the recommendation, and has taken action by issuing AD 2006-06-06, which limits the operation of Cessna 208 and 208B in icing conditions. The response also indicated that the FAA assessed its response as fully meeting the intent of this TSB recommendation.
BOARD ASSESSMENT OF RESPONSE	FAA AD 2006-06-06 will require that pilots exit moderate or more severe icing conditions, when such conditions are encountered. In addition, AD 2006-06-06 provides a definition of icing conditions of moderate or greater intensity as they apply to the Cessna 208 and 208B type, identifies several cues to enable pilots to determine when they must depart such icing conditions, and provides guidance on how to exit icing conditions exceeding "light." Notwithstanding, the results of the FAA flight tests and review of accident data have not demonstrated that a Cessna 208 or 208B can successfully exit from such icing conditions. Effectively, the action taken by the FAA still allows the dispatch of aircraft into forecast icing conditions exceeding "light." The FAA action taken will reduce, but will not substantially reduce or eliminate, the deficiency raised in Board Recommendation A06-03.
BOARD ASSESSMENT RATING	Satisfactory in Part

RECOMMENDATION	A06-04 The Federal Aviation Administration require that Cessna 208 operators maintain a minimum operating airspeed of 120 knots during icing conditions and exit icing conditions as soon as performance degradations prevent the aircraft from maintaining 120 knots.
RESPONSE	Although the FAA has not yet provided the TSB with a direct response regarding its actions taken in response to TSB Recommendation A06-04, the FAA letter dated 13 March 2006, in response to National Transportation Safety Board Recommendation A-06-01, is pertinent to the risks identified in TSB Recommendation A06-04. To address the subject of Cessna 208 operation into icing conditions, the FAA issued AD 2006-06-06 on 10 March 2006. FAA AD 2006-06-06 was issued to implement the content of this recommendation. This mandatory corrective action specifies the minimum speed in icing conditions of 120 KIAS in the flaps UP condition, and requires that the pilot depart icing conditions if 120 KIAS cannot be maintained in level flight. On 19 May 2006, the FAA advised the TSB that Recommendation A06-04 had been forwarded to the Wichita Aircraft Certification Office for review and evaluation. The FAA Office of Accident Investigation is waiting for a reply from the Wichita Aircraft Certification Office.
BOARD ASSESSMENT OF RESPONSE	FAA AD 2006-06-06 effectively mandates that 120 KIAS be the minimum Cessna 208 speed for flight in icing conditions as recommended in TSB Recommendation A06-04. The action taken by the FAA will substantially reduce or eliminate the deficiency raised in Board Recommendation A06-04.
BOARD ASSESSMENT RATING	Fully Satisfactory

Rudder Separation in Flight, Air Transat, Airbus 310-308, Varadero, Cuba, 06 March 2005 Occurrence No. A05F0047
RECOMMENDATION	A06-05 The Department of Transport, in coordination with other involved regulatory authorities and industry, urgently develop and implement an inspection program that will allow early and consistent detection of damage to the rudder assembly of aircraft equipped with part number A55471500 series rudders.
RESPONSE	In its 14 June 2006 letter, TC provided the following comments: - TC concurs with the TSB suggestion that the current A310-300 inspection program may not be adequate to provide timely detection of defects to the rudder assembly. This may be caused by either inappropriate inspection intervals or inadequate inspection techniques. - At the time of this occurrence, composite materials in general were, from a maintenance perspective, believed to have a no-damage growth design philosophy. It was also believed that, from a fatigue point of view, more frequent inspections of composite materials would not prove to be more effective. In addition, these concepts were an industry-accepted philosophy during the development of maintenance programs using the Maintenance Review Board (MRB) process. - As a result of this occurrence, and the additional findings based on the Airbus All Operators Telex, TC now believes that there is potential for damage growth. Following this determination, the Department inspected additional Canadian-registered A310-300 series aircraft in order to evaluate the effectiveness of the current Airbus maintenance program. The following corrective actions are currently being taken by TC: - TC will send a letter to Airbus Industries and the Direction Générale de l'Aviation Civile (DGAC) of France detailing the results of our additional inspection on a Canadian-registered A310-300 series aircraft. - TC will recommend that a detailed inspection of the drainage path of the rudder for blockage be added to the current inspection program to ensure that there is adequate drainage. - TC will request that Airbus Industries review the current inspection program for the vertical stabilizer and rudder assembly for the A300/A310 aircraft series. - Because a tap test, a scheduled inspection of the rudder required at the time of the occurrence, is potentially not effective in determining smaller areas of delamination or disbond of composite materials, TC is currently working with the National Research Council of Canada to identify suitable inspection techniques that will detect failures in composite materials. - To better identify failures in composite material, TC will coordinate with the International MRB Policy Board to review the logic used in developing maintenance programs.
BOARD ASSESSMENT OF RESPONSE	In its 14 June 2006 response, TC stated that it is currently working with the National Research Council of Canada to identify suitable inspection techniques that will detect failures in composite materials. TC will recommend that a detailed inspection of the drainage path of the rudder for blockage be added to the current inspection program to ensure that there is adequate drainage. TC will also request that Airbus Industries review the current inspection program for the vertical stabilizer and rudder assembly for the A300/A310 aircraft series, and will work with the International MRB Policy Board to review the logic used in developing maintenance programs.
BOARD ASSESSMENT RATING	Satisfactory Intent

RECOMMENDATION	A06-06 The European Aviation Safety Agency, in coordination with other involved regulatory authorities and industry, urgently develop and implement an inspection program that will allow early and consistent detection of damage to the rudder assembly of aircraft equipped with part number A55471500 series rudders.
RESPONSE	In its response, the European Aviation Safety Agency (EASA) stated that it agreed with the Board recommendation and that AD 2006-0066 issued on 24 March 2006 requiring a mandatory one-time inspection satisfactorily addressed the Board recommendation. On 21 December 2006, following a TSB conference call with the EASA, the latter stated that all elements that may have potentially caused the damage growth were still being investigated. Furthermore, the EASA stated that, within the continued airworthiness process and in cooperation with Airbus Industries, it continues its efforts to determine the most appropriate corrective actions. Subsequently, the EASA will consider mandating those actions, including amending the maintenance program to require repetitive inspections.
BOARD ASSESSMENT OF RESPONSE	Although the EASA agreed with the Board recommendation, AD 2006-0066 referenced in its 22 November 2006 response does not provide for a repetitive inspection cycle that will allow early and consistent detection of damage, as is implied in the core of Recommendation A06-06. Nevertheless, the TSB assessed that the EASA is well positioned to take a leadership role within the industry in advocating for the development and integration of an inspection program dealing with composite materials. On that basis, the 20 December 2006 conference call was initiated. The 17 January 2007 response reflects EASA's commitment to continue to develop corrective actions that may include amending the maintenance program to require repetitive checks.
BOARD ASSESSMENT RATING	Satisfactory Intent

Appendix C - Glossary

Accident		in general, a transportation occurrence that involves serious personal injury or death, or significant damage to property, in particular to the extent that safe operations are affected (for a more precise definition, see the Transportation Safety Board Regulations)
Incident		in general, a transportation occurrence whose consequences are less serious than those of an accident, or that could potentially have resulted in an accident (for a more precise definition, see the Transportation Safety Board Regulations)
Occurrence		a transportation accident or incident
Recommendation		a formal way to draw attention to systemic safety issues, normally warranting ministerial attention
Safety Advisory		a less formal means for communicating lesser safety deficiencies to officials within and outside the government
Safety Information Letter		a letter that communicates safety-related information, often concerning local safety hazards, to government and corporate officials

Appendix D -

Links to Other Organizations Involved in Transportation Safety

More information on transportation safety in Canada is available from other federal government agencies who play a role in this area. The main organizations are as follows:

Transport Canada
National Energy Board
Canadian Coast Guard
Canadian Transportation Agency
Royal Canadian Mounted Police
Human Resources and Social Development Canada
National Defence

Information on transportation safety in selected countries is available on the following Internet sites:

United States

National Transportation Safety Board

Federal Aviation Administration

Australia

Australian Transport Safety Bureau

France

Bureau d'Enquêtes et d'Analyses pour la Sécurité de l'Aviation Civile

United Kingdom

Air Accidents Investigation Branch

Marine Accident Investigation Branch

International

International Civil Aviation Organization

International Maritime Organization

International Transportation Safety Association

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Appendix E - Audited Financial Statements

Transportation Safety Board of Canada
Statement of Management Responsibility

Responsibility for the integrity and objectivity of the accompanying financial statements for the year ended March 31, 2007 and all information contained in these statements rests with management of the Transportation Safety Board of Canada (TSB). These financial statements have been prepared by management in accordance with Treasury Board accounting policies which are consistent with Canadian generally accepted accounting principles for the public sector and year-end instructions issued by the Office of the Comptroller General.

Management is responsible for the integrity and objectivity of the information in these financial statements. Some of the information in the financial statements is based on management's best estimates and judgement and gives due consideration to materiality. To fulfil its accounting and reporting responsibilities, management maintains a set of accounts that provides a centralized record of the TSB's financial transactions. Financial information submitted to the Public Accounts of Canada and included in the TSB's Departmental Performance Report is consistent with these financial statements.

Management maintains a system of financial management and internal control designed to provide reasonable assurance that financial information is reliable, that assets are safeguarded and that transactions are in accordance with the Financial Administration Act, are executed in accordance with prescribed regulations, within Parliamentary authorities, and are properly recorded to maintain accountability of Government funds. Management also seeks to ensure the objectivity and integrity of data in its financial statements by careful selection, training and development of qualified staff, by organizational arrangements that provide appropriate divisions of responsibility, and by communication programs aimed at ensuring that regulations, policies, standards and managerial authorities are understood throughout the TSB.

The financial statements of the TSB have been audited by the Auditor General of Canada, the independent auditor for the Government of Canada.

Wendy A. Tadros Chair	Jean L. Laporte, CGA Senior Financial Officer

Gatineau, Canada
July 13, 2007

Auditor's Report

Transportation Safety Board of Canada Statement of Financial Position
At March 31
(in thousands of dollars)

		2007	2006
ASSETS
	Financial assets
	Due from the Consolidated Revenue Fund	$1,812	$2,290
	Accounts receivable and advances (Note 4)	329	59
	Total financial assets	2,141	2,349
	Non-financial assets
	Prepaid expenses	53	52
	Inventory	80	130
	Tangible capital assets (Note 5)	5,062	5,225
	Total non-financial assets	5,195	5,407
Total assets		$7,336	$7,756
Liabilities
	Accounts payable and accrued liabilities	$2,099	$2,296
	Vacation pay and compensatory leave	1,045	1,125
	Employee severance benefits (Note 6)	4,020	3,860
	Total liabilities	7,164	7,281
Equity of Canada		172	475
Total liabilities and equity of Canada		$7,336	$7,756
Contingent liabilities and contractual obligations (Notes 7 and 8 respectively)
The accompanying notes form an integral part of these financial statements.

Wendy A. Tadros Chair	Jean L. Laporte, CGA Senior Financial Officer

Gatineau, Canada
July 13, 2007

Transportation Safety Board of Canada
Statement of Operations
For the Year Ended March 31
(in thousands of dollars)

		2007	2006
Expenses
	Salaries and wages	$ 20,266	$ 19,890
	Employee benefits	5,151	5,119
	Professional and special services	3,031	2,814
	Transportation and communications	2,017	2,179
	Accommodation	1,850	1,821
	Amortization	998	995
	Repairs and maintenance	626	532
	Utilities, materials, supplies and equipment	427	523
	Information	150	232
	Rentals	117	118
	Other expenses	55	13
Total Expenses		34,688	34,236
Revenues
	Other non-tax revenues	11	66
	Sales of goods and services	7	9
Total Revenues		18	75
Net Cost of Operations before administration of cost-shared activities		34,670	34,161
	Other Expenses (Note 9c)	338	279
	Other Income (Note 9c)	370	279
Net Cost of Operations		$34,638	$34,161
The accompanying notes form an integral part of these financial statements.

Transportation Safety Board of Canada
Statement of Equity of Canada
For the Year Ended March 31
(in thousands of dollars)

	2007	2006
Equity of Canada, beginning of year	$ 475	$ 285
Net cost of operations	(34,638)	(34,161)
Net cash provided by Government	31,294	31,132
Change in due from the Consolidated Revenue Fund	(477)	(84)
Services received without charge by other government departments (Note 9)	3,518	3,303
Equity of Canada, end of year	$ 172	$ 475
The accompanying notes form an integral part of these financial statements.

Transportation Safety Board of Canada
Statement of Cash Flow
for the Year Ended March 31
(in thousands of dollars)

		2007	2006
Operating activities
Net cost of operations		$ 34,638	$ 34,161
Non-cash items:
	Services provided without charge by other government departments	(3,518)	(3,303)
	Amortization of tangible capital assets	(998)	(995)
	Loss on disposal and write-down of tangible capital assets	(5)	(24)
		(4,521)	(4,322)
Variations in Statement of Financial Position:
	Increase (decrease) in accounts receivable and advances	270	(578)
	Increase in prepaid expenses	1	13
	Increase (decrease) in inventory	(50)	12
	Decrease in liabilities	116	285
Cash used by operating activities		30,454	29,571
Capital investment activities
	Acquisitions of  tangible capital assets	842	1,590
	Proceeds from disposal of tangible capital assets	(2)	(29)
Cash used by capital investment activities		840	1,561
Net cash provided by Government of Canada		($ 31,294)	($ 31,132)
The accompanying notes form an integral part of these financial statements.

Transportation Safety Board of Canada
Notes to the Financial Statements

1. Authority and Objectives

The Canadian Transportation Accident Investigation and Safety Board (CTAISB) was established in 1990 under the Canadian Transportation Accident Investigation and Safety Board Act and is a departmental corporation named in Schedule II to the Financial Administration Act. In its day-to-day activities the CTAISB is also known by the name Transportation Safety Board of Canada, or simply the TSB. The objective of the TSB is to advance transportation safety. It seeks to identify safety deficiencies in transportation occurrences and to make recommendations designed to eliminate or reduce any such safety deficiencies. In addition to investigations, including where necessary public inquiries into selected occurrences, the TSB may conduct studies into more general matters pertaining to transportation safety. The TSB has the exclusive authority to make findings as to causes and contributing factors when it investigates a transportation occurrence. The TSB's operating expenditures are funded by a budgetary lapsing authority whereas contributions to employee benefit plans are funded by statutory authorities.

2. Summary of Significant Accounting Policies

The financial statements have been prepared in accordance with Treasury Board accounting policies which are consistent with Canadian generally accepted accounting principles for the public sector and year-end instructions issued by the Office of the Comptroller General.

Significant accounting policies are as follows:

(a) Parliamentary appropriations - the TSB is financed by the Government of Canada through Parliamentary appropriations. Appropriations provided to the TSB do not parallel financial reporting according to Canadian generally accepted accounting principles since appropriations are primarily based on cash flow requirements. Consequently, items recognized in the statement of operations and the statement of financial position are not necessarily the same as those provided through appropriations from Parliament. Note 3 provides a high-level reconciliation between the two bases of reporting.

(b) Net Cash Provided by Government - The TSB operates within the Consolidated Revenue Fund (CRF), which is administered by the Receiver General for Canada. All cash received by the TSB is deposited to the CRF and all cash disbursements made by the TSB are paid from the CRF. The net cash provided by Government is the difference between all cash receipts and all cash disbursements including transactions between departments of the federal government.

(c) Due from the Consolidated Revenue Fund - represents the amount of cash that the TSB is entitled to draw from the CRF, without further appropriations, in order to discharge its liabilities.

(d) Revenues - Revenues are accounted for in the period in which the underlying transaction or event occurred that gave rise to the revenues.

(e) Expenses - Expenses are recorded on an accrual basis:

Vacation pay and compensatory leave are expensed as the benefits accrue to employees under their respective terms of employment.

Services provided without charge by other government departments are recorded as operating expenses at their estimated cost.

(f) Employee future benefits

Pension benefits: Eligible employees participate in the Public Service Pension Plan, a multiemployer plan administered by the Government of Canada. The TSB's contributions to the Plan are charged to expenses in the year incurred and represent the total TSB obligation to the Plan. Current legislation does not require the TSB to make contributions for any actuarial deficiencies of the Plan.

Severance benefits: Employees are entitled to severance benefits under labour contracts or conditions of employment. These benefits are accrued as employees render the services necessary to earn them. The obligation relating to the benefits earned by employees is calculated using information derived from the results of the actuarially determined liability for employee severance benefits for the Government as a whole.

(g) Accounts receivables are stated at amounts expected to be ultimately realized; a provision is made for receivables where recovery is considered uncertain.

(h) Inventories - Inventories consists of parts, material and supplies held for future program delivery and not intended for re-sale. They are valued at cost. If they no longer have service potential, they are valued at the lower of cost or net realizable value.

(i) Tangible capital assets - All tangible capital assets and leasehold improvements having an initial cost of $2,000 or more are recorded at their acquisition cost.

Amortization of tangible capital assets is done on a straight-line basis over the estimated useful life of the asset as follows:

Asset class	Amortization period
Buildings	30 years
Furniture	10 years
Office equipment	5 years
Laboratory equipment	10 years
Informatics hardware	4 years
Informatics software (purchased)	3 years
Informatics software(in&nbsphouse developed)	10 years
Motor vehicles	7 years
Other vehicles	15 years
Leasehold improvements	Lesser of the remaining term of the lease or useful life of the improvement

(j) Measurement uncertainty - The preparation of these financial statements in accordance with Treasury Board accounting policies which are consistent with Canadian generally accepted accounting principles for the public sector and year-end instructions issued by the Office of the Comptroller General, requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses reported in the financial statements. At the time of preparation of these statements, management believes the estimates and assumptions to be reasonable. The most significant items where estimates are used are the useful lives of capital assets, the assumptions underlying the employee severance benefits liability and the assessment of contingent liabilities. Actual results could significantly differ from those estimated. Management's estimates are reviewed periodically and, as adjustments become necessary, they are recorded in the financial statements in the year they become known.

3. Parliamentary Appropriations

The TSB receives its funding through annual Parliamentary appropriations. Items recognized in the Statement of Operations and the Statement of Financial Position in one year may be funded through Parliamentary appropriations in prior, current or future years. Accordingly, the TSB has different net results of operations for the year on a government funding basis than on an accrual accounting basis. The differences are reconciled in the following tables:

a) Reconciliation of net cost of operations to current year appropriations used:

			2007	2006
(in thousands of dollars)
Net cost of operations			$ 34,638	$ 34,161
Adjustments for items affecting net cost of operations but not affecting appropriations:
	Less:
		Services provided without charge	3,518	3,303
		Amortization of tangible capital assets	998	995
		Vacation pay and compensatory leave	-	144
		Employee severance benefits	160	94
		Other	5	24
			4,681	4,560
	Add:
		Vacation pay and compensatory leave	80	-
		Non-tax revenue	43	53
		Refund of previous years expenses	11	30
			134	83
Adjustments for items not affecting net cost of operations but affecting appropriations:
	Less:
		Inventory used (purchased)	50	(12)
			50	(12)
	Add:
		Acquisitions of tangible capital assets	842	1,590
		Prepaid expenses	1	13
			843	1,603
Current year appropriations used			$ 30,884	$ 31,299

b) Appropriations provided and used

			2007	2006
(in thousands of dollars)
	Vote 10 - CTAISB Operating expenditures		$ 25,486	$ 24,039
	Governor General's special warrants #2		-	1,288
	Governor General's special warrants #3		-	2,015
	Supplementary Vote 10a		1,674	-
	Transfer from Treasury Board - Vote 15		1,096	-
	Spending of  revenues as per FAA section 29.1		4	6
	Statutory amounts:
		Contribution to employee benefit plans	3,403	3,707
		Spending of proceeds from disposal of surplus Crown assets	4	30
	Plus or minus:
	(Lapsed) or over-expended appropriations: Operating		(783)	214
	Current year appropriations used		$ 30,884	$ 31,299

c) Reconciliation of net cash provided by Government to current year appropriations used

		2007	2006
(in thousands of dollars)
Net cash provided by Government		$ 31,294	$ 31,132
Non-tax revenue		43	53
Change in net deposit in the Consolidated Revenue Fund
	(Increase) decrease in accounts receivable and advances	(270)	578
	(Increase) in prepaid expenses	(1)	(13)
	Decrease (Increase) in inventory	50	(12)
	(Decrease) in accounts payable and accrued liabilities	(197)	(523)
	(Decrease) Increase in accrued vacation pay and compensatory leave	(80)	144
	Other adjustments	45	(60)
Current year appropriations used		$ 30,884	$ 31,299

4. Accounts Receivable and Advances

		2007	2006
(in thousands of dollars)
	Receivables from other Federal Government departments and agencies	$ 316	$ 42
	Receivables from external parties	5	9
	Employee advances	8	8
	Total	$  329	$ 59

5. Tangible Capital Assets (in thousands of dollars)

Capital Asset Class	Historical Cost March 31, 2006	Acquisitions	Work in progress transfers	Disposals and write-offs	Accumulated Amortization March 31, 2007	Net Book Value March 31, 2007	Net Book Value March 31, 2007
Buildings	$2,854	$ -	$ -	$ -	$2,165	$689	$806
Furniture	1,117	169	-	305	481	500	415
Office equipment	275	9	-	72	209	3	28
Laboratory equipment	2,381	26	-	-	1,819	588	640
Informatics hardware	3,351	193	-	130	2,820	594	836
Informatics software (purchased)	579	91	-	-	534	136	110
Informatics software (in house developed)	-	-	2,002	-	117	1,885	-
Informatics software (in development)	1,918	354	(2,002)	-	-	270	1,918
Motor vehicles	837	-	-	-	516	321	388
Other vehicles	103	-	-	-	27	76	82
Leasehold improvements	34	-	-	-	34	-	2
Total	$13,449	$842	-	$507	$8,722	$5,062	$5,225

6. Employee Benefits

(a) Pension benefits: The TSB's employees participate in the Public Service Pension Plan which is sponsored and administered by the Government of Canada. Pension benefits accrue up to a maximum period of 35 years at a rate of 2 percent per year of pensionable service, times the average of the best five consecutive years of earnings. The benefits are integrated with Canada/Quebec Pension Plans benefits and they are indexed to inflation.

Both the employees and the TSB contribute to the cost of the Plan. The 2006-07 expense amounts to $2,508,000 ($2,743,000 in 2005-06), which represents approximately 2.6 times the contributions by employees.

The TSB's responsibility with regard to the Plan is limited to its contributions. Actuarial surpluses or deficiencies are recognized in the financial statements of the Government of Canada, as the Plan's sponsor.

(b) Severance benefits: The TSB provides severance benefits to its employees based on eligibility, years of service and final salary. These severance benefits are not pre-funded. Benefits will be paid from future appropriations. Information about the severance benefits, measured as at March 31, is as follows:

		2007	2006
(in thousands of dollars)
	Accrued benefit obligation, beginning of year	$ 3,860	$ 3,766
	Expense for the year	608	241
	Benefits paid during the year	(448)	(147)
	Accrued benefit obligation, end of year	$ 4,020	$ 3,860

7. Contingent Liabilities

In the normal course of its operations, the TSB becomes involved in various legal actions. Some of these potential liabilities may become actual liabilities when one or more future events occur or fail to occur. To the extent that the future event is likely to occur or fail to occur, and a reasonable estimate of the loss can be made, an estimated liability is accrued and an expense recorded on the TSB's financial statements.

As at March 31, 2007, there are various outstanding legal actions against the TSB. No liability has been recorded in the financial statements since management of the TSB considers them unlikely to be successful.

8. Contractual Obligations

The nature of the TSB's activities can result in some large multi-year contracts and obligations whereby the TSB will be obligated to make future payments when the services/goods are received.

Significant contractual obligations that can be reasonably estimated are summarized as follows:

(in thousands of dollars)	2008	2009	Total
Acquisition of goods and services	$ 1,546	$ 252	$ 1,798

9. Related Party Transactions

The TSB is related as a result of common ownership to all Government of Canada departments, agencies and Crown corporations. The TSB enters into transactions with these entities in the normal course of business and on normal trade terms. Also, during the year, the TSB received services which were obtained without charge from other Government departments as presented in part (a).

(a) Services provided without charge:

During the year the TSB received without charge from other departments, accommodation, administration of worker's compensation, the employer's contribution to health and dental insurance plans, and external audit services. These services without charge have been recognized in the TSB's Statement of Operations as follows:

		2007	2006
(in thousands of dollars)
	Accommodation	$ 1,850	$ 1,821
	Employer's contribution to health and dental insurance plans	1,593	1,425
	External audit services	60	40
	Administration of worker's compensation	15	16
	Total	$ 3,518	$ 3,303

The Government has structured some of its administrative activities for efficiency and cost-effectiveness purposes so that one department performs these on behalf of all without charge. The costs of these services, which include payroll and cheque issuance services provided by Public Works and Government Services Canada, are not included as an expense in the TSB's Statement of Operations given that a reasonable amount for those types of services cannot be determined.

(b) Payables outstanding at year-end with related parties:

	2007	2006
(in thousands of dollars)
Accounts payable to other government departments and agencies	$ 197	$ 364

(c) Administration of costs-shared activities:

The TSB is responsible for coordinating the financial management of funds for the networks of small federal agencies. The revenues consist of contributions from all agencies to the cost sharing. The expenses are the disbursements made on behalf of the group. Each government department will report its respective portion of expenses in its financial statements. During the year, TSB administered $370,000 in revenues ($283,000 in 2005-06) and disbursed $338,000 in expenses ($279,000 in 2005-06). This year revenues exceeded expenditures by approximately $32,000. Due to the low value of this balance the excess revenues were not returned to contributing agencies, but were simply credited to the Conolidated Revenue Fund.

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1.   While the Board's operations are for the 2006-2007 fiscal year, occurrence statistics are for the 2006 calendar year. Please note that, in a live database, the occurrence data are constantly being updated. Consequently, the statistics can change slightly over time. Comparisons are generally to the last 5 or 10 years. For definitions of terms such as accident, incident and occurrence, see Appendix C.

2.   Investigations are considered complete after the final report has been issued. See Appendix A for a list of reports released by the TSB in 2006-2007 by sector.

3.   For definitions of terms such as recommendation, safety advisory and safety information, see Appendix C.

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