Bill C-273 (Historical)

An Act to amend the Competition Act and the Canadian Environmental Protection Act, 1999 (right to repair)

This enactment adds a definition of “product” in section 75 of the Competition Act to make it clear that that term includes technical information that is required by a person in order to provide a service to a customer. This ensures that the Competition Tribunal is able to require a supplier to provide this information to a customer in accordance with section 75 in cases where the supplier has previously refused to do so.
The enactment also amends the Canadian Environmental Protection Act, 1999 to provide that companies that manufacture motor vehicles in Canada or that import motor vehicles into Canada are required to make available to Canadian motor vehicle owners and repair facilities the information and diagnostic tools and capabilities necessary to diagnose, service and repair those motor vehicles.

[Marc Garneau, Liberal, Westmount—Ville-Marie, QC]

Mr. Speaker, as a new member of Parliament I have to say that I was somewhat surprised by the amount of discussion generated by this private member's bill within my party and by the number of representations made to me in the last several weeks. Certainly Bill C-273 has generated a great deal of debate, and I think this is something we should welcome.

I would like to commend the member for Windsor West for bringing forward this bill, because I think at its heart is the desire to offer a greater choice to the consumer.

It is also clear that on the face of it, the bill is commendable in the sense that it argues that implementing the bill will provide us with safer, cleaner cars and that the consumer will have a greater choice.

At the same time, obviously there are always two sides to every coin and to every argument, and certainly in the last week I have heard many arguments from groups that do not support Bill C-273.

I certainly welcome the opportunity to hear more, because I think it is important for us to have a full debate. The bill was presented before, but it did not get as far as it will hopefully get this time.

I think what is important here is that we allow a full airing of all issues. One of the things that has surprised me, I must admit, is that diametrically opposite viewpoints are being presented on the same issues. On the one hand, one group will argue that we will end up with safer cars, while on the other hand, those who are against it are arguing that we will end up with cars that are less safe. On the environmental side, arguments are presented by one side that we are going to end up with cleaner cars. On the other side are groups that say we will end up with cars that are less clean. If one looks at the cost side, on the one hand there are groups who say that this is ultimately going to cost the consumer less, while the other group, predictably, is saying that this will actually end up costing the consumer more.

Therefore it is very clear to me, as the hon. member of the government pointed out, that this is a very complex issue. Strong arguments have been brought forward by both groups.

I personally would like to see this debate continue. I would like us to air it more fully and bring the groups together. I believe that one way to do so is through the legislation proposed in this private member's bill.

I would like to argue that what is important at this point is that we bring all the players together and continue to discuss the bill. Hopefully we can come to some arrangement, perhaps through modifications to the bill, that will satisfy all the groups. Ultimately I think it is important for us to always be mindful of the importance of trying to make a bill that will offer the consumer a greater choice.

[Brian Masse, NDP, Windsor West, ON]

moved that Bill C-273, An Act to amend the Competition Act and the Canadian Environmental Protection Act, 1999 (right to repair), be read the second time and referred to a committee.

Mr. Speaker, it is a pleasure to speak to Bill C-273, affectionately known as the right to repair and affectionately because it would bring in a set of rules that would be very appropriate for this country to have. It deals with the aftermarket situation with regard to fixing automobiles and repairing them. It is an environmental issue, a consumer issue and a safety issue.

The bill seeks to make some changes to the Competition Act and the Canadian Environmental Protection Act. I want to read into the record some elements that are very important. However, before I do that, it is important to outline that I have been working on this bill for a couple of years. It is not a bill that just came out of the blue. It has been dealt with in terms of hearing from people across the country, ensuring the issue was something that needed addressing and ensuring there would be a required element of Parliament to move on the bill. I hope all members will look at this bill and the merit of it and endorse bringing it to committee for study and further work.

When I think about this bill and one of the key elements of it, I think of Nancy Suranyi. I went to her garage in Namao, Alberta, and that facility really showed another level to this. It is not only just about making sure consumers have the right to choose, but I found the public safety element very significant. In this facility, which requires this bill to move forward, there is everything, not only with regard to just vehicles for personal recreational use but also school buses and other types of public service vehicles where safety is required.

What is the consumer's right to a repair bill? The vehicle manufacturers are restricting access to tools, training and software to the aftermarket industry due to the increased sophistication of today's vehicles. It is gradually becoming more difficult for independent repair facilities to access the information and develop the skills required to service vehicles. By resolving some of this information for dealership networks, vehicle manufacturers are putting the aftermarket industry at an unfair disadvantage. The aftermarket market has made significant efforts in recent years to negotiate with vehicle manufacturers in order to find a solution to this problem. Unfortunately, the majority of vehicle manufacturers in Canada are unwilling to negotiate an industry-led solution and have little impetus to do so. The AIA has exhausted industry-led solutions and is now requesting the Government of Canada to intervene in order to restore the balance between the dealership network and the independent repair facilities.

It is important to note that the intent here, especially if we look at other parliamentary action we are taking, is to help the dealers as well. One of the things we are requesting is to pursue a new vehicle purchasing and procurement policy as part of a stimulus package to get more automobiles on the road that are more modern and will actually help the dealers. Therefore, this is very much done in balance.

What is the problem? Vehicle manufacturers are restricting access to the tools, training and diagnostic and repair codes to independent installers, preventing them from repairing late model vehicles. This effectively eliminates choice.

Over 18 million vehicles are on the road in Canada today and approximately 59% of them are equipped with onboard diagnostic capabilities, referred to as OBD-II. The ratio will increase over time. The number of vehicle components monitored by the OBD-II will also continue to increase. The tools and the software required to access the computer control units on vehicles have become increasingly proprietary. Vehicle design processes are also more sophisticated. The use of exotic materials and the changes in welding and assembly technologies make it necessary for independent repair shops to access factory specific training and tools. Consumer choice is evaporating and the impact of growing dealer monopoly is significant.

Fewer choices mean higher repair costs and many repairs will be delayed or ignored altogether, putting highway safety at risk and increasing the risk of poor quality emissions. Also, fewer choices mean lower productivity. The existing dealer network does not have the capacity to repair all vehicles on the road today. This means longer waiting times and increased travel distances for consumers, especially in rural communities.

Fewer choices mean instability. Independent repair facilities are primarily small enterprises found across Canada and many are located in small towns and rural areas. If this problem is not solved, many small businesses may be forced out of business within the next five years.

Fewer choices mean that emission standards for vehicles will not be maintained, leading to more pollution and contributing to other environmental problems.

Fewer choices endanger public safety because the safety mechanisms and the functions on the vehicle will be at risk of not being properly maintained, putting not only drivers and passengers at risk but also pedestrians and property owners.

It is important to note that this is a situation unique to Canada. I live very close to the border. When I walk down the front steps of my house and look to the left I can see Detroit, Michigan. It is literally two miles away. The river is two miles wide. Ironically, I could get my car repaired at an independent garage in Detroit within a matter of minutes and yet I could not do the same in Canada. What is also ironic is the fact that the repair technician working on my vehicle in the United States could have less training than a repair technician in Canada because Canada has some of the highest qualification requirements. Our technicians get their training in independent garages.

I want to thank Danielle Grech, Andre Chamberlain and Daniel Clement who attended the press conference here. These technicians had never done a public press conference before and, despite that, came to the nation's capital and took part in the public forum. They talked about the fact that even though they were professionally trained, they found it difficult to service people's vehicles. They talked about the fact that they had gone to school and received the necessary training and met the necessary requirements, but because of technical problems related to an industry that could not find consensus, they were not able to compete in a fair and open process.

What is at stake here is the thousands of people who are affected by this industry. They know they will see diminished opportunities, not because of competition or because of other issues, but because they do not have the ability to be in a market that allows them to do so, which is why Canada needs to change this.

The U.S. environmental protection act requires the manufacturer to provide this kind of information.

I want to ensure all members in the House understand that I am not asking for something free. The legislation would require a fair payment system. We want to protect intellectual property. We want to ensure these things will be maintained. There is a clear effort from the groups supporting the bill to have a basic set of principles that will be accountable.

In the United States, people can easily download any of the software they need for a vehicle with just a credit card purchase. In Canada, a vehicle in an independent shop would need to be towed to a dealership because independent shops cannot simply download a simple program.

Vehicles now have increased computerization that require more of this type of atmosphere. Things like tire pressure could be affected in terms of whether a vehicle can be serviced at a particular facility or not.

The bill has been looked at through a lot of different lenses. I want to read some of names of the organizations that are supporting the bill: the Retail Council of Canada; Pollution Probe; the Canadian Association of Retired Persons; Corporation des Carrossiers Professionnels du Québec; the Canadian Independent Automotive Association; the Barrie Automotive Repair Association; the Grey Bruce Independent Automotive Repair Association; Association des marchands de véhicules d'occasion du Québec; the Ontario Tire Dealers Association; Motorist Assurance Program; Automotive Oil Change Association; Atlantic Tire Dealers Association; Independent Garage Operators Association; Western Canada Tire Dealers Association and the Windsor Professional Automotive Repair Association. The list also includes associations in Kawartha, Sudbury, and western Canada.

I would be remiss if I did not thank John Sawatsky and Dave Santing from my local riding who have been pushing this issue and have been doing some very good work in terms of public policy.

The bill is not just about being fair to consumers, it is also about public safety. Repairs to municipal vehicles, ambulances and regular vehicles are being done In Dave's garage, in my riding. To keep his business going, he specializes in certain vehicles, as well as regular vehicles in order for him to make ends meet. It is important to note that not all car companies are like this but some are better than others.

I would note that General Motors is not opposing this bill and is one of the better companies that has provided information about this. There needs to be a clear accountability system. People need to access some of these programs, services and tools.

I spoke with Nancy Suranyi in Edmonton, Alberta. She had recently sent a team of employees to the United States to get the training, qualifications and equipment because they were not available here. There is a grey market aspect. Companies would love to train Canadians on their own soil. That is part of what is necessary to make sure we have a modernized fleet and will continue to see the issues addressed.

One of the issues is emissions. In Ontario there are a number of different clean air and drive programs. We need to make sure that small and medium size businesses are certified as well so that greenhouse gas emissions are lowered. A lot of vehicles will stay on the road for many years and they need to be function as cleanly and efficiently as possible. It is critical for controlling smog and greenhouse gas emissions.

Pollution Probe is supporting the bill. I want to read a statement that it generously provided to me:

Pollution Probe supports the “Right to Repair” Act presented by...M.P., Windsor West. Minimizing emissions of air pollutants and greenhouse gases from vehicles into the environment is a responsibility shared by government, automakers and drivers. An important step that drivers can take to minimize emissions is to keep their vehicle in a state of good repair and ensure that their vehicle's emissions control system is functioning properly. It is important that drivers have effective access to required vehicle maintenance and service in this regard. To the extent that the “Right to Repair” Act facilitates this objective, Pollution Probe supports this action.

That was written by Mr. Bob Oliver, executive director of Pollution Probe.

That is important recognition as we move toward cleaner running vehicles. There are more on the market. Hopefully we will see some of the newer models. Some of the better vehicles are emerging but many Canadians will not be able to purchase new vehicles. What do we do about that situation? Do we allow a slow strangulation of independent associations, or do we provide a set of rules so they can compete? It is critical for consumers who have bought vehicles. They may have extended warranties or they may decide to go to an independent facility later on to obtain that service.

It does not make any sense for our air quality that because a simple program cannot be downloaded in one facility, a tow truck has to be hired to transport a vehicle across the city to a dealership. That does not make any sense. It is also a drag on productivity in Canada. We need to make sure the individuals working in the facilities are doing so in an efficient way. Adding extra hours of labour on top of a simple procedure like that is not helpful to anyone. It is not going to make Canada competitive. It is certainly going to cause more congestion and will lead to more problems. It does not make any sense.

Nobody understands our roads better than the CAA. The CAA has been a very active element in Canadian society. It has provided the following statement:

CAA represents over 5 million motorists across the country. Our main concern on the “Right to Repair” issue is to ensure that automobile owners have the opportunity to choose and get the best possible service at a fair price. This bill will benefit the consumer by allowing for increased competition and consumer choice.

I want to thank all the individuals who have put their support behind this bill. The bill is intended to make significant improvements in terms of our economy and create a level playing field. Other countries have done so and I do not think Canada should be put at a disadvantage because other people cannot get their act together.

I have spoken about the automotive industry in the House for a number of years. I have been pushing for a greener, stronger automotive industry in Canada. The bill fits with that. That is why I hope it will pass this stage and go to committee. I believe it is an improvement for Canadians.

[Mike Lake, Conservative, Edmonton—Mill Woods—Beaumont, AB]

It's Bill C-273, the right to repair—Mr. Masse's bill.

[Mike Lake, Conservative, Edmonton—Mill Woods—Beaumont, AB]

The CADA folks commented on Bill C-273, and I want to give everybody the chance to quickly give their own thoughts on it while we're going through this process, because it is something that is up for debate.

[Richard Gauthier, President and Chief Executive Officer, Canadian Automobile Dealers Association]

Thank you, Mr. Chairman. From speaking with a few of your colleagues earlier, I understand and obviously I can see tonight that you're working late hours, so all I can say is that if your constituents all were aware of how many hours you put in on their behalf and on behalf of the country, some of the election campaigns might be a little less stressful. We certainly commend you for that.

Good evening. My name is Richard Gauthier. I'm president and chief executive officer of the Canadian Automobile Dealers Association. CADA is the national association for franchise automobile dealerships that sell new cars and trucks. I would like to point out that we represent dealers of all brands, and all manufacturers manufacturing and selling vehicles in Canada are represented through our association.

So our 3,500 dealers represent a vital sector of Canada's economy. Through our dealers, we are represented in nearly every community in the country. With me tonight I have our director of public affairs, Huw Williams, as well as our chief economist, Michael Hatch.

Mr. Chairman, tonight I'll outline the key issues facing our dealer network in these most challenging times. To begin with, let me provide a few facts about the automotive industry in Canada. Canada's auto industry is more than a hundred years old and in Ontario alone is the leading jurisdiction for auto production in North America and is the tenth largest globally. Each of Canada's assembly jobs provides seven to 10 spinoff jobs, and this is the highest such ratio of any manufacturing industry sector. Tax revenues from the auto industry to all levels of government in this country exceed $10 billion annually, and since 2002, Canadian vehicle assemblers and parts manufacturers have invested over $10 billion in production and research and development. Canada's auto industry exports--you heard some of that earlier--85% of all its production, roughly $100 billion annually, and every $1 million in exports creates or sustains five jobs.

Canadian automotive companies are global leaders in R and D, in lightweight materials, alternative fuel technologies, and occupant safety. We should be very proud of that fact.

Canada's auto industry procures more than $40 billion annually from Canadian suppliers, which is more than twice the total annual amount of the Canadian federal government's procurement, and it also accounts for over 10% of Canada's manufacturing GDP and over 20% of Canada's total yearly merchandise trade, in excess of $150 billion annually. The industry also accounts for over $30 billion in parts and components shipments annually and conducts over $500 million in R and D related to assembly, innovation, new vehicle development, alternative fuels, and vehicle safety every year.

Now, I cannot emphasize enough that the current automotive downturn will have a ripple effect in every community in Canada. The cold reality facing decision-makers today, you yourselves, is that if Canadian-based manufacturers are not provided a bridge across the current economic crisis, then Canada's 3,500 small business dealers located in every community of the country will bear the brunt of that downturn.

The retail automotive sector employs over 140,000 people in Canada and directly contributes a huge portion of its gross domestic product. As economic cornerstones of almost every community in the country, the pain of auto dealers will be felt on main streets and in other small businesses and households from coast to coast.

Parliament needs to remember that dealerships are not company stores. Dealers are independent businesses that make significant investments in land, buildings, equipment, and personnel and provide manufacturers with a retail presence in thousands of communities across the country. Dealers do not take cars or parts on consignment from their manufacturers. Dealers assume the risk of financing that inventory. No manufacturer has the resources to internalize the costs that dealers bear every day.

It will come as a shock to no one in this room tonight, I'm sure, that given the huge costs of financing dealer floor plans and operations that can run into tens of millions of dollars per store, predictable and accessible credit is the oil in the retail auto industry's motor. In my daily contact with dealers from one end of the country to the other, without a doubt, the number one problem facing their businesses today is the deterioration in credit conditions. Not only is this happening to dealers on the brink, but this is happening to sound, solvent businesses, often with decades-long relationships with their financial institutions and the very communities represented at this table this evening.

Given what's going on in the credit markets in the past year, I'd like to congratulate the government on the $12 billion Canadian secured credit facility announced in January's budget. CADA communicated the need for such a facility in the pre-budget period, and the government delivered.

But as parliamentarians, you will know that the easiest part of any program is announcing it. Dealers across the country are still facing tight and unpredictable credit conditions from captive finance companies and chartered banks. While we recognize the need for diligence in designing any program that allocates tax dollars, we must stress the urgent nature of the problems facing Canada's auto dealers as we speak.

The government has to find a way to get credit flowing again and to do so as soon as possible. Credit is the biggest problem facing our dealers, and the government has recognized this. We will continue, as we have to date, to work closely with the government in its implementation of the $12 billion secured credit facility, but there are also other ways to stimulate the industry and, with it, the entire economy.

Canada's car fleet is older than that of its American counterpart. As you all know, old cars are much less efficient, more polluting, and less safe than new vehicles. This committee is charged with addressing the crisis in the auto sector. Drastic times call for bold measures and bold but targeted economic stimulus. This is the approach taken by other G7 countries. Vehicle scrappage or vehicle retirement programs have been adopted by several countries throughout the world, including Canada, over a number of years. In recent months, these programs have taken on added momentum as economic woes cripple vehicle sales worldwide.

Scrappage programs have existed in this country in one form or another since 1996. Simply put, a scrappage program offers cash incentives to consumers who retire old vehicles and purchase new ones. These incentives serve a much sought-after dual economic and environmental policy objective, since on average a 20-year-old car pollutes 37 times more than a new one. Providing incentives for purchasing new cars drives the economy and helps the environment.

The current economic challenges facing the automotive industry present an opportunity for an effective national vehicle scrappage program to complement other economic stimulus initiatives. With roughly five million vehicles on the road that were built in 1996 or before and with new car sales in decline, there exists today a powerful opportunity to enact a scrappage program that has real teeth. Today's program, worth only $300 per vehicle, does not provide enough incentive to get any more old cars off the road than would occur anyway through natural attrition.

Canada can look to other countries for models in designing such a program. In fact, it was mentioned a little earlier in previous testimony that in Germany, for example, consumers are given incentives worth €2,500, or roughly $4,000 Canadian, for retiring old cars and buying new cars or cars that are less than one year old. The program works on a first-come, first-served basis. Funding for the program is capped. Once the cap has been reached, the program will be terminated.

This measure is expected to increase light vehicle sales by 200,000 units for 2009 and should push the German car market just above three million units. Now, applied to the Canadian market, which is about half its size, a similar program could increase sales by more than 100,000 units this year.

Let me add that the members of this committee should also recommend that the government take a very simple step to stop the dumping of high-polluting older vehicles into the Canadian market. This is an easy common-sense fix. Members may not be aware that we have seen a recent rise in the number of older right-hand-drive vehicles on Canadian roads. These vehicles are imported under a current loophole in the Canadian regulations allowing vehicles more than 15 years old to enter the country without complying with the Canadian motor vehicle safety standards or national environmental standards. These vehicles pose a risk to Canadian citizens and undermine the pursuit of our country's safety and environmental goals. We urge government to close these loopholes in order to ensure safer roads, stronger new vehicle sales, and not further undermine our collective desire to clean up the environment.

Now let me turn to another issue of great concern to our dealer network, the so-called right to repair issue. As you are aware, Bill C-273 is currently before Parliament. This bill would effectively require auto manufacturers to share all diagnostic and repair information as well as equipment with the aftermarket. This is unacceptable to CADA. This information represents intellectual property developed by manufacturers at a cost of billions of dollars. Forcing them to disclose this information on a non-voluntary basis would destroy the value of this property and inhibit the innovation that drives the country.

There's currently healthy competition for car owners' non-warranty service work, with aftermarket repair facilities receiving the bulk of the business, even after the introduction of proprietary onboard diagnostic computers almost two decades ago. The aftermarket has the lion's share of the business with 75% of that market, and this is due to the fact that, for all but the newest of vehicles, repair information is readily available from a variety of sources, be it for a small, independently owned garage, a national aftermarket chain, or even do-it-yourselfers.

I understand that you're trying to move this along, so I would just like to address one final consumer concern. We must not let the current market conditions facing manufacturers and dealers distract consumers from the fact that it is a very good time to buy a car in Canada. In fact, the two sides of this situation are closely related. Cars have not been as affordable as they are today in a generation. In fact, Statistics Canada has just reported that the price to buy or lease a car has declined to its lowest point in 24 years as a ratio of disposable income. Add this to the fact that all manufacturers are aggressively seeking new business, and the end result is a very favourable set of conditions for consumers in the marketplace. Quite simply, there's never been a better time to buy a car, and I have been in this business for 40 years.

I'd like to thank the committee for giving us an opportunity to speak with you this evening.

Thank you for your attention. I will be happy to answer your questions, if time allows. Thank you.

[Mike Lake, Conservative, Edmonton—Mill Woods—Beaumont, AB]

I have a very short question, if I could. I want to touch on an issue that's kind of timely right now.

On Friday we're going to be discussing Mr. Masse's private member's bill on the right to repair, Bill C-273. Of course the bill would give auto repair shops access to certain information that they may require in order to repair cars, and it makes certain associated amendments to the Competition Act and CEPA.

I just wonder if you might be able to comment on how that particular bill would impact your business.

Competition Act

[Brian Masse, NDP, Windsor West, ON]

moved for leave to introduce Bill C-273, An Act to amend the Competition Act and the Canadian Environmental Protection Act, 1999 (right to repair).

Mr. Speaker, I am proud to bring forward a bill that I believe all members can support. It is the right to repair bill and it looks at two different acts: the Competition Act and the Canadian Environmental Protection Act. This bill is important because of the changes in the auto industry with regard to on-board diagnostic equipment. That change has led to a number of different servicing requirements that are necessary yet difficult to obtain.

I would point out that the Canadian auto industry is not alone in terms of the consequences of this bill. Similar legislation in the United States and Europe has adapted different techniques to deal with the fact that the new types of technology create problems for people and consumers who service their vehicles. Hence, this bill would allow the proper process and procedures so that independent automobile associations can procure the data, tools and materials necessary to fix vehicles.

It is important for competition as well as for the environment. That is one of the reasons why Pollution Probe and the Canadian Automobile Association are supporting this bill. I would suggest that all members of the House get behind this bill in order to have a good, progressive change that will protect Canadian jobs.

(Motions deemed adopted, bill read the first time and printed)