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.

Competition Act

[Dona Cadman, Conservative, Surrey North, BC]

Mr. Speaker, I would like to take a few moments to speak to Bill C-273, An Act to amend the Competition Act and the Canadian Environmental Protection Act, 1999 (right to repair).

This government takes private members' business seriously. In the case of Bill C-273, the spirit of the bill is in the right place and, for this reason, the government wishes to support it. The government will, however, be seeking amendments should the bill progress to committee stage.

Before I get into the details of some of the reasons that the government will be seeking amendments, I would like to acknowledge the work that the member for Windsor West has done on this bill.

I also would like to highlight some areas in which, I think, all parliamentarians can agree.

First, I am sure that all members of Parliament are concerned with the recent economic challenges and the effects of these challenges on Canadians and Canadian businesses. The government has acted quickly in addressing these concerns through the Budget Implementation Act.

Second, members opposite must recognize the government's commitment to protecting Canadians and businesses from crime, abuse and economic uncertainty through its ambitious legislative agenda. In these times of economic uncertainty, it is important for the government to act in a manner that directly addresses what is most important to people's lives and economic security.

Third, all members of the House were elected to represent our constituents' interests to the best of our ability. This does not mean that parliamentarians will always agree but I would hope that members opposite will accept my remarks today in that spirit.

Finally, I am sure that all members believe in supporting a competitive economy that benefits businesses and consumers. The government has been working hard to support Canadian businesses to be stable and more efficient.

Let us be clear on one thing: healthy competition is the best way of empowering consumers and that is what the Competition Act sets out to do.

When companies compete with one another for a consumer's dollar, it opens the door to lower prices, better services and wider product selection, all of which benefit consumers.

There are many who believe a voluntary system rather than a legislated approach to aftermarket issues would satisfy the needs of the Canadian aftermarket auto repair industry. There are benefits to establishing a voluntary system, aside from the obvious benefit of keeping government out of regulating how businesses run their affairs. A voluntary system would, for example, have the flexibility to evolve over time so it addresses changes in technology as they arise, which is one of the root causes of the aftermarket concerns.

With that in mind, in April of this year, the Minister of Industry sent a strongly worded letter to all automakers calling on them to develop a voluntary accord here in Canada. I am pleased to say that there has been progress. Representatives of the vehicle manufacturers and aftermarket industries met last month to begin discussions on the development of a voluntary accord. Most parties have signed on to a process and timeframe to draft this agreement.

One of the signatories is the National Automotive Trades Association, or NATA. NATA represents a large portion of the aftermarket repair shops across the country. It had this to say in a recent letter to its members and to the public:

NATA has publicly stated that in absence of a voluntary agreement it would participate in the legislative process. Now that we have a commitment from the Canadian auto manufacturers, we do not believe legislation is necessary.

I would like to more directly address some of the government's concerns with this private member's bill. The bill seeks to amend the Competition Act and the Canadian Environmental Protection Act. I will be focusing my comments today on concerns raised by amending the Competition Act in the way that the bill proposes.

As members opposite know, the Competition Act is framework legislation, the enforcement of which has wide-ranging implications for the Canadian economy.

Even before the recent improvements contained in the Budget Implementation Act, the Competition Act was generally considered to be effective legislation.

Consultations on changes to the act have taken years to complete and have assisted the competition policy review panel in its assessment of Canada's competition and investment policies. This government has acted on the recommendations of the panel to ensure that the Competition Bureau has the tools it needs to continue to be effective in the years to come.

As all members of the House know, Bill C-273 proposes an amendment to section 75, refusal to deal, of the Competition Act by adding to the definition of product, for the purpose of that section, technical information that is required by a person in order to provide a service to a customer.

The member opposite may believe that this small change to the Competition Act will help to address the issues in the auto repair sector but this is not the case. This amendment to the Competition Act is problematic in at least two significant ways.

First, the amendment could have serious, unintended consequences. Bill C-273 has not been drafted in a way that applies only to the automotive industry to strictly address the right to repair issue. The proposed change to the definition of product could impact on all industries and all relevant bureau investigations under section 75. Such an amendment could raise questions regarding safety issues or intellectual property rights, which could cause other concerns that I do not intend to address today.

Second, amending the Competition Act to address the right to repair issue is not necessary. This issue can already be reviewed under section 75 or section 79, abuse of dominance, of the Competition Act. In the case of section 75, refusal to deal, if a party could establish that the inability to obtain the technical information was the result of another's refusal to provide a product as currently defined would satisfy the other elements of section 75. They would be able to address those concerns under the act.

Either the Competition Bureau or the affected party could make an application to the Competition Tribunal for a remedy. Another way to address this is that the bureau could make an application to the Competition Tribunal for a remedy if a party could establish that the refusal to supply the technical information was an anti-competitive practice and could establish the other elements of section 79, abuse of dominance.

Given the avenues already existing under the Competition Act to review the right to repair issue in the appropriate case and given the unintended consequences that could result from the proposed change to the definition of product, the government will be seeking to remove this Competition Act amendment during the committee stage.

We look forward to more debate on this issue and I am sure t all members will act in the best interests of their constituents.

[LaVar Payne, Conservative, Medicine Hat, AB]

Mr. Speaker, I am pleased to rise in the House today to discuss this important issue.

The automotive industry in North America is facing major challenges due to the worldwide economic downturn. The automotive sector is a key component of the Canadian economy. More than 2 million vehicles were assembled in Canada in 2008. The auto industry employed over 140,000 workers directly, with another 230,000 in the aftermarket sector. It also provided employment at more than 30,000 service and repair shops across the country.

As for the aftermarket sector, according to data shared by automotive consultant, Dennis DesRosiers, the average age of vehicles on the road in 2008 was over eight years and it is estimated that over the course of a vehicle's life it will accumulate $14,000 in aftermarket repairs and service. The demand for aftermarket services is forecast at $19.2 billion in 2010.

The government agrees with the idea that all aftermarket service providers should have access to the diagnostic information on the fleet of vehicles on Canada's roads and highways. However, the way in which the bill attempts to achieve this is flawed in a number of ways, ranging from jurisdictional questions to the issues of intellectual property and vehicle security.

I want to reassure Canadians that the federal government is committed to fostering a fair, equitable and competitive marketplace, while balancing this with our duty to protect consumer interests.

I will jump right into the crux of the matter that has brought this proposed legislation before us. Independent aftermarket service providers want the manufacturers to provide them with the same information they provide their dealerships. They say that failure to do so threatens the long term competitiveness of the independents. On the other hand, many car makers tend to believe they already share the necessary information for their customers and legislating beyond this affects their dealer networks.

Dealers also have concerns about this issue. They believe that this information sharing will cut into their revenues. In fact, the Canadian Automobile Dealers Association, which represents some 3,500 dealers in Canada, opposes legislation on this issue.

The government is working overtime with the auto industry, affected provinces and related stakeholders. A thriving, successful auto industry in Canada means a thriving, successful parts industry and a thriving, successful aftermarket industry. We cannot have one without the other.

We will always have an auto aftermarket industry, even if the assembly business is scaled back. However, a healthy aftermarket starts with a healthy economy. The federal government has a broad approach to assisting the auto sector here in Canada that is built on four key measures: continuing to sustain a fiscal and economic framework that keeps the industry competitive; supporting an integrated North American auto sector; investing in automotive research; and investing through our new automotive innovation fund.

Through Advantage Canada, our long term economic plan and recent budgets, the government is promoting long term investment, innovation and job creation across all sectors of the Canadian economy, including the auto sector. The government has provided more than $1 billion in tax relief for the automotive industry sector through lower federal corporate taxes and higher write-offs for investment in machinery and equipment.

In total, over the six-year period, including 2008-09, the government will have provided more than $12 billion in tax relief to the manufacturing sector. In the recent economic action plan, the government extended the temporary 50% accelerated capital cost allowance rate. This applies to investments in manufacturing or processing machinery and equipment that are undertaken in 2010-11, enabling manufacturers' investments in productivity-enhancing machinery and equipment.

Second, the government is supporting an integrated North American auto sector by increasing the compatibility of automotive regulations with the U.S. and continuing to improve border security and access. Improvements to the Windsor-Detroit crossing remain a priority, where 40% of Canada's commerce with the United States passes across a single, privately-owned bridge that was built in 1928. The goal is to have a new crossing by 2013.

Third, the government is investing in science and technology. Overall, Canada's economic action plan provides for more than $1.5 billion toward science and technology initiatives.

The government is allocating $200 million over two years to the National Research Council industrial research assistance program to enable it to temporarily expand its initiatives for small and medium size companies.

The government has already set aside $34 million per year for new research through the Natural Sciences and Engineering Research Council of Canada, targeting the needs of key industries, such as the auto sector.

In addition, $23.2 million in federal support has been committed for the auto 21 network of centres of excellence in support of more than 260 researchers and 500 students working on 41 auto-related R and D projects.

Science research and experimental development tax incentive policies and procedures have also been aligned with current business practices to encourage even more business investment.

As a fourth pillar, the government established the $250 million automotive innovation fund, supporting strategic, large scale R and D projects. The automotive innovation fund will help the auto industry retool for a new environmentally conscious fuel efficient age.

We have an integrated North American market and Americans have stopped buying cars. Some are deciding not to buy due to the slowdown in the U.S. economy. With credit markets frozen, those who do want to buy cars do not have access to competitive financing to purchase or lease vehicles, thus further reducing sales. This has led to a serious liquidity crisis for U.S. automakers.

Canada's economic action plan increases Canada's account limit from $13 billion to $20 billion to ensure the government has the capacity to directly provide credit and meet the financing requirements of business and strategic hard-hitting sectors of the Canadian economy.

Canada's economic action plan has also committed the government to creating a $12 billion Canadian secured credit facility to improve credit availability for consumers to purchase and lease new vehicles. This will help dealerships move cars off their lots and renew demand for the production of vehicles.

The Government of Canada has two established financing instruments that are available to the automotive sector, Export Development Canada, EDC, and the Business Development Bank of Canada, BDC. I would also like to add that both the federal and Ontario governments confirmed their overall commitment to ensuring the viability of the automotive industry by making up to $4 billion in short-term interim loans available to both GM and Chrysler while they continue to restructure their long-term business plans.

Last week the governments of Canada and Ontario provided General Motors of Canada an interim loan of $500 million. We also recently provided funding to Chrysler as part of the holistic approach we have adopted for the industry to enable it to restructure toward a viable, sustainable future. We asked for a significant commitment from all stakeholders, and we are pleased they made the tough decisions necessary to put the company on a more steady footing. A new restructuring plan, including new labour agreements with the CAW as well as completion of a deal with Fiat, gives us the assurances needed to commit taxpayer dollars to help Chrysler--

[Brian Masse, NDP, Windsor West, ON]

Mr. Speaker, on a point of order, I am just questioning the relevance of the member's comments to Bill C-273.

[The Acting Speaker, Barry Devolin]

As the member for Windsor West knows, the Chair is in the habit of giving a great amount of leeway to members to talk about a piece of legislation. If the member will remember the piece of legislation that we are dealing with and keep his comments relevant, it would be appreciated. The hon. member for Medicine Hat.

[LaVar Payne, Conservative, Medicine Hat, AB]

Mr. Speaker, the Government of Canada also recently announced the Canadian warranty commitment program under which the federal government committed to honouring consumer warranties on new vehicles purchased from GMCL and Chrysler Canada Inc. for a limited time period while improved restructuring plans are put in place.

Budget 2009 included at least $5 billion in new financing through EDC and BDC that aims to enhance cooperation with private sector financial institutions under the new business credit availability program. EDC has a number of services specifically designed for the auto sector, including financing and insurance capacity in that sector. As can clearly be seen, the federal government understands the urgency of the challenges facing the economy and the auto sector in particular.

In recognition of the auto sector's crucial importance in generating wealth for all Canadians, we need to stay the course and focus on the big picture, and not unnecessarily add further pressures to an industry fighting for its survival.

I would like to congratulate the hon. member for bringing forward the right to repair issue before the House. However, there is concern the bill has some fundamental legal and policy issues. I look forward to further discussion on how to address these issues going forward.

[Paul Szabo, Liberal, Mississauga South, ON]

Mr. Speaker, I am pleased to add my comments to the debate on Bill C-273.

I might just say that with respect to the issue of relevance, I did a little research the last time I heard the Chair suggest that we give a lot of latitude. The relevance issue is there because the time of Parliament is very important and valuable and should be used for the purpose for which it is intended. That is why there is an order paper. It is really up to the members to keep relevant. Unfortunately, sometimes members like to push the envelope a little further. However, I think we had better ensure that the important points about a piece of legislation before the chamber are known to all members who are going to have to vote on it. It is actually a little more difficult now, given the recent developments within the auto industry, and that is what I want to talk about.

So that everybody knows what we are talking about on Bill C-273, the member for Windsor West has introduced a bill to amend the Competition Act and the Canadian Environmental Protection Act. He had a bill in the last Parliament, and the bill is back now, and it has received a lot of attention. It is one of the reasons I wanted to speak to this. Auto repair shop owners in my riding of Mississauga South have spoken to me many times over the last number of years about this problem, that as the automobile technology changes, the normal work done by automotive repair shops that are not associated with a car manufacturer gets a little more difficult. They need the manuals to know how to work on the equipment they are going to deal with. They also need the diagnostic equipment, in some cases, and they need some of the specialty tools. Without those they cannot service the automobiles. If they cannot service the automobiles, repair shops will find themselves in jeopardy with regard to staying in business. That is their argument.

The other part of the equation is the automobile industry itself. The dealers are in the business of selling cars, but they are also in the business of servicing them. If they continue to provide the full cycle of maintenance and service for automobiles, that is good and healthy for the automobile business. The technology is amazing. A 10-year-old car, as I recall, pollutes 37 times more than one of the brand new cars. It is phenomenal. All of this is because of the changes in technology. It makes this debate and this bill more relevant because it has to do with the consumer, with small businesses and with big businesses and how the interests of those parties are reconciled.

In the last Parliament, the debate might have been different because the automobile industry was not in jeopardy. Now the automobile industry is in jeopardy. There is going to be a massive rationalization of the auto industry. There is going to be a massive rationalization of dealerships, of plants, of places for people to get their automobiles serviced. The neighbourhood auto repair shop may become much more important than it has been in the past simply because there are not going to be as many dealerships to go to anyway. The debate in the last Parliament would have been different from this one. Now we have to balance the interests.

I have often thought that the best arrangement for consumers is to ensure that there is healthy competition within the service and repair sector so that they can choose. That would help to keep the costs fair and reasonable. Right now there is not that choice to the same extent there would be if the independent repair shops had access to the information, the diagnostic equipment and the tools they need to properly and professionally repair the vehicles and to maintain them. It is a dilemma.

The industry in the United States adopted a voluntary agreement to provide, and the right to repair is the generic name. In the United States there has been a facility whereby shops can have access to this. It is done on a voluntary basis; it is not legislated. We are talking about a bill that wants to legislate it. It appears with all of the dynamics that have occurred in the auto sector with the rationalization and changes yet to come, the industry has reached some agreements with regard to voluntarily providing the information, tools and diagnostic equipment, although I do not know to what extent because I have not seen all the details.

This issue is evolving. I wanted to bring to the attention of the House that this matter seems to be fairly fluid. There is a lot going on. We do not have the latest information but I think it is important that this bill survive and that it go to committee so that we can get the representations from the auto industry as well as the after market businesses that provide services.

We have to look at the impact on people and their jobs. This is a very important aspect. We have to look at the other implications of competition law and the rights of a person, organization or legal entity. We have to look at the implication of that person, organization or legal entity being forced to release that information to another so another can take business away. This is a very interesting problem. There is a model in the United States which I think is useful to look at.

With only two hours of debate in private members' business it is very difficult for all of the information to get out. My recommendation to my colleagues is that the bill go to committee. I would like all of the information to be brought to the committee so it can study it carefully to determine whether or not the voluntary deal that is evolving and may be taking place in Canada is the best thing on behalf of all stakeholders, whether it be the industry, the after market suppliers and the consumers.

We want to make sure there is a balance. I think this is our opportunity to look into this because how we approach this problem probably will be the same way that we approach similar problems in other sectors.

Having said that, I congratulate the member for bringing the bill forward. I know the auto sector is very important in his riding and that it is a very difficult time for the auto sector. There is a great deal of work to do. This is part of it. Let us send this bill to committee.

[Brian Masse, NDP, Windsor West, ON]

Mr. Speaker, first, I want to thank all members for participating in this debate at first and second readings and bringing their thoughts forward. It is an important part of what has happened.

This issue has been around for a number of years. In fact, I researched the bill for a couple of years, going across the country and having people looking at it. The former minister of industry is here today. He took an interest in it. I am sure if he would have remained as minister of industry, perhaps Bill C-273 would not have been necessary.

We are here today because there is a problem with our current system. If we continue to ignore it, it will affect the environment, consumer choice and public safety. Bill C-273 attempts to address that.

I want to touch upon a couple of things that are important and that have been part of the debate. There are voluntary agreements in the Canadian automotive industry right now, but they are still based on the Consumer Protection Act. This bill would specifically address the issue through government legislation.

We have to be clear. In the United States, under the EPA, because of its environmental laws, it created an operating agreement with the original manufacturers so there would be a clear definition. The United States legislation creates the operating agreement as a solution. It still needs to be some work on it because there are some issues with it, but at least it is available to the manufactures. Canada does not have a voluntary agreement or a legislative agreement.

I know NATA, the National Automotive Trades Association, has promised a solution, which is important to recognize. All it can do is promise it might have a voluntary agreement in 2010 at best. It is not worth the paper on which it is printed because, at the end of the day, there could be manufacturers that would opt in or opt out at different times and resolution processes would not available through any type of legislation.

It is also very important not to forget that the automobile industry right now is revolutionizing in many respects. There will also be new entrants into the market. How can we have a voluntary agreement that would be based upon a group of businesses that are all foreign companies? They would have no Canadian legislative backstop to deal with any of the problems. There will be other ones, for example, China, as it emerges into the Canadian market with the Chery. China has over 100 different automotive assembly companies. Not all of them will get into our market, but some will and they could decide not to get into some type of agreement.

This dissipates the reality of having a rules-based system that is fair, open and transparent. The Competition Bureau would then be the arbitrator. The rules could be applied and there would be fairness. There is a whole process in place that could evolve.

That is why we want to get this to committee. We want to see Canadians have the same opportunity. It is important for Canadians to understand that, as things stand right now, they would be treated differently in the United States than in Canada. It is based on nothing more than the fact that it has chosen not to bring this forward to the Canadian public at this time.

When we look at our Canadian technicians in the after-market, it is interesting to note that the men and women have the same training as those in the dealerships, unless they get additional training later on. They have to go through the same type of schooling. In fact, our standards in Canada are better.

Ironically, someone could take a trip to the United States, have something go wrong with the car and go to a facility to have it repaired by a technician with fewer qualifications than a technician in Canada. We are denied that because the proper programs cannot be downloaded or the schooling or training is not provided by the company.

This is not fair, nor is it healthy. One of the reasons we want to deal with this is it is good for the environment. We want to ensure that vehicles are clean and well maintained. It is good for public safety, that cars are fixed and in good operating condition, especially in rural communities where people have to drive hundreds of kilometres to get to an facility. It is also about the consumer's right to choose.

Therefore, we hope the bill will go to committee. I appreciate the fact that there has been a lot of input, both from those who have concerns about it and those who support it. I look forward to working with everyone to ensure we have a fair, rules-based system based on Canadian legislation to protect Canadians.

[The Acting Speaker, Barry Devolin]

It being 12:02 p.m., the time provided for debate has expired. Therefore, the question is on the motion. Is it the pleasure of the House to adopt the motion?

[Some hon. members]

Agreed.

[The Acting Speaker, Barry Devolin]

I declare the motion carried.

[Some hon. members]

Oh, oh!

[The Acting Speaker, Barry Devolin]

When I called the vote, I could not hear a nay, but an hon. member has stated nay was said. I stand corrected. On that basis, I will call for yeas and nays on this matter.

All those in favour of the motion will please say yea.

[Some hon. members]

Yea.

[The Acting Speaker, Barry Devolin]

All those opposed will please say nay.

[Some hon. members]

Nay.