Michael Ferguson said the department has developed a rigorous aviation-safety system that meets international standards, but falls short when it comes to inspecting high-risk flying operations.
"Transport Canada needs to be diligent in its oversight of the safety systems of aviation companies," Ferguson wrote in his spring report to Parliament.
Aviation-safety oversight has been transformed in recent years from a traditional surveillance approach to what is called safety management systems, which puts much of the onus on the aviation companies.
Transport Canada is charged with ensuring that companies have proper safety policies and procedures in place.
The auditor, though, said Transport falls short in some respects.
"For example, information for accessing the risk indicators that Transport Canada uses to identify high-risk aviation companies that should be inspected is not always available or kept up to date," he wrote.
"A minimum acceptable level of surveillance has not been clearly established to indicate how long aviation companies can operate without being inspected and only two-thirds of planned inspections have been carried out."
The report said Transport agrees with the criticisms and is taking steps to improve its safety oversight.
Overall, however, Ferguson found that aviation in Canada remains safe. He points out that in 2009 and 2010 the total number of air accidents was the lowest in 10 years. Between 2001 and 2010, the large carriers, which represent more than 95 per cent cent of revenue-generating passenger miles, had few mishaps and no fatalities.
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