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Public Safety in Private Hands: Rethinking the TSSA model Published in the Toronto Star, August 2008

The early morning explosion on August 10th at the Sunrise propane facility in Toronto has prompted a host of questions about the structure, role and effectiveness of the industry’s principle safety regulator in Ontario, the Technical Standards and Safety Authority (TSSA). The results of the belated inspection ‘blitz’ of propane facilities launched by the authority in the aftermath of the sunrise explosion have reinforced these concerns.

Prior to the Sunrise incident few Ontarians had even heard of the TSSA.
Yet it is virtually impossible go through a day without encountering something regulated by the TSSA - elevators, escalators, gas stations, amusement rides, even boilers in the basement of buildings where residents live, work or go to school. On the surface all of these devices and facilities seem mundane, but, as was demonstrated on August 10th, they can kill or cause serious injury if they fail or are operated improperly.

The TSSA was born in the heart of Mike Harris’s ‘Common sense revolution.’ The authority was set up in 1997 as a private non-for-profit corporation and assumed the consumer safety and standards functions of the then Ministry of Consumer and Commercial Relations. The authority was to be self-financing though the collection of fees for the approval and inspection services it provided, removing the costs of these activities from the government’s books. A similar model had been adopted a few years earlier for the regulation of the same types of industries in Alberta as part of the ‘Klein Revolution,’ and there were precedents in the United Kingdom and New Zealand as well.

A close examination of the application of the model in Ontario reveals three fundamental flaws in its design.

First, as a non-governmental entity the TSSA escapes the accountability structures that normally apply to government agencies carrying out regulatory functions. These structures include oversight by the provincial auditor general and ombudsman, the application of freedom of information and privacy protection legislation and the requirements of the Lobbyist Registration Act and a host of other mechanisms that ensure transparency and accountability in government operations.

The more general blurring of lines accountability when things do go wrong compounds the loss of these formal accountability mechanisms. The confusion that Ontarians have witnessed over the past two weeks among ministers and TSSA over who was accountable and responsible in the aftermath of the Sunrise explosion and fire echoed scenes in England and New Zealand when there were comparable failures involving similar types of entities.

Secondly, the design of the TSSA was based on the flawed premise that it was possible and even desirable to separate operational and policy-making functions within regulatory agencies. Inspections, approvals and similar functions were seen to be so routine and unimportant that they could be handed off to non-governmental entities, while policy making remained in governmental hands. Governments could “steer” while others “rowed.” In reality inspections and approvals are the core of a regulatory system for public safety. These activities are also crucial sources of information about what is happening in the real world that inform the formulation of policy. Their separation is neither practical nor desirable in a public safety context for these reasons.

Third, the design of the TSSA envisioned the authority as a self-regulatory partnership with the industries it was to oversee. Indeed, the TSSA’s board of directors continues to include strong representation from individuals with backgrounds in the industries it regulates. The risk of effective regulation being compromised by an excessively close relationship with the regulated industries is particularly acute in case of the TSSA, where there are virtually no organized public watchdogs in its areas of responsibility.

The authority needs to be brought under the same accountability framework that would apply to a governmental agency carrying out regulatory functions of such importance, including oversight by legislative officers such as the provincial auditor general and ombudsman and the application of freedom of information legislation.

The events of the past two weeks have also made it apparent that the model raises too many questions to be extended to other regulatory functions affecting public safety. The government of Ontario has apparently been contemplating applying the TSSA model to the approvals functions of the Ministry of the Environment. Such a move would clearly be profoundly ill-advised.

In the longer term, Ontarians need an objective external and public assessment of the TSSA’s overall performance, with an eye to whether the TSSA’s functions should be brought back within the normal structure of a government agency. The principal advantage of TSSA model (a secure revenue source for carrying regulatory functions) can be obtained without resorting to exotic institutional models that raise fundamental challenges to well-established norms of accountability and responsibility.