Strengthening Motor Vehicle Safety for Canadians Act

An Act to amend the Motor Vehicle Safety Act and to make a consequential amendment to another Act

Status

This bill has received Royal Assent and is, or will soon become, law.

Summary

This is from the published bill. The Library of Parliament often publishes better independent summaries.

This enactment amends the Motor Vehicle Safety Act for the purpose of strengthening the enforcement and compliance regime to further protect the safety of Canadians and to provide additional flexibility to support advanced safety technologies and other vehicle innovations. It provides the Minister of Transport with the authority to order companies to correct a defect or non-compliance and establishes a tiered penalty structure for offences committed under the Act. The enactment also makes a consequential amendment to the Transportation Appeal Tribunal of Canada Act.

Elsewhere

All sorts of information on this bill is available at LEGISinfo, provided by the Library of Parliament. You can also read the full text of the bill.

Votes

Jan. 31, 2018 Passed 3rd reading and adoption of Bill S-2, An Act to amend the Motor Vehicle Safety Act and to make a consequential amendment to another Act

Strengthening Motor Vehicle Safety for Canadians ActGovernment Orders

September 19th, 2017 / 11:25 a.m.
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NDP

Robert Aubin NDP Trois-Rivières, QC

Mr. Speaker, I thank my colleague for her question.

I think the main issue is the time factor. If this bill is supposed to improve vehicle safety, how is it going to shorten the time between the discovery of a potential problem and the recall work to ensure road safety? That is the key issue: making sure that months or even years do not go by between the time the industry becomes aware of a problem and the time it issues the recall to rectify that problem. If we can shorten the time that whole process takes, I think Bill S-2 will truly represent a major step forward, but we are not there yet.

Strengthening Motor Vehicle Safety for Canadians ActGovernment Orders

September 19th, 2017 / 11:30 a.m.
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Winnipeg North Manitoba

Liberal

Kevin Lamoureux LiberalParliamentary Secretary to the Leader of the Government in the House of Commons

Mr. Speaker, the member made reference to the time factor being a major issue or concern of the New Democratic Party on Bill S-2.

Let me give a specific example. Let us say that a year after a model of a vehicle has been in production, we find out there are some issues with the side-door airbag. From the moment of discovery to the moment of a recall, would the member not agree that this legislation would give the minister a better opportunity to ensure that the consumer and in fact Canadians would be better protected by this legislation, because there would be more teeth in the legislation to ensure that we are able to address things in a more timely fashion? Would he not agree that the principle of the bill deals with the issue that the NDP seems to be most concerned about?

Strengthening Motor Vehicle Safety for Canadians ActGovernment Orders

September 19th, 2017 / 11:30 a.m.
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NDP

Robert Aubin NDP Trois-Rivières, QC

Mr. Speaker, I thank my colleague for his question.

I would say that I probably agree with him in principle, but I would remind the member of the disconnect that I mentioned earlier between the powers this bill gives to the minister and the minister's management of his department. For instance, when a defect is discovered, if Transport Canada does not have the means to quickly study the problem at the same time as the industry, it might take longer for the industry to address the problem for all kinds of reasons.

If the minister really wants to be able to use his powers to compel a recall and repairs, he needs to be able to base his decisions on scientific evidence. This relates to the department's expertise capacity. Over the past few years, cuts at the department have been running counter to the specific objectives of the powers set out in Bill S-2.

Strengthening Motor Vehicle Safety for Canadians ActGovernment Orders

September 19th, 2017 / 11:30 a.m.
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NDP

Anne Minh-Thu Quach NDP Salaberry—Suroît, QC

Mr. Speaker, my other question pertains to funding. In previous years, the Conservatives made considerable cuts in the area of motor vehicle safety. Apparently, 59% of the budget allocated to that aspect has been cut. In addition, employees responsible for safety audits have also been laid off.

Does Bill S-2 do anything to restore that funding and reinvest in that area, to hire more staff to ensure motor vehicle safety and the safety of Canadians on our roads?

Strengthening Motor Vehicle Safety for Canadians ActGovernment Orders

September 19th, 2017 / 11:30 a.m.
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NDP

Robert Aubin NDP Trois-Rivières, QC

Mr. Speaker, I thank my colleague for her interest in Bill S-2.

I will say two things in response. First, the cuts to the Department of Transport are not the sole purview of the Conservatives. This continued after the Liberals were elected in 2015. To answer the second part of my colleague's question, no, there is no mention in Bill S-2 of an increase in the budget or staff. The powers of people like inspectors and enforcement officers are being increased. The minister will have the power to hire new enforcement officers, but will he have the budget to do so? That is the big question.

Will the next budget talk about a supplementary budget allocated to the Department of Transport, or will there be a transfer in the envelope within the department? That remains to be seen. Are we borrowing from Peter to pay Paul, or will there really be new amounts, fresh money, to achieve the objectives of Bill S-2? That remains to be seen.

Strengthening Motor Vehicle Safety for Canadians ActGovernment Orders

September 19th, 2017 / 11:35 a.m.
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Kanata—Carleton Ontario

Liberal

Karen McCrimmon LiberalParliamentary Secretary to the Minister of Transport

Thank you, Mr. Speaker.

Mr. Speaker, I am going to share my time with the hon. member for Central Nova.

I am pleased to speak today to Bill S-2,an act to amend the Motor Vehicle Safety Act and to make a consequential amendment to another act. I think safety is of paramount importance, and I am sure it is equally important to all members of Parliament. This bill, as tabled by the government, will help improve the safety of Canadians.

The importance of motor vehicle safety and a strong motor vehicle safety regime is clear. Millions of Canadians rely on that regime as they travel on our roads every single day. Large vehicle recalls in recent years highlight the importance of motor vehicle safety. This importance placed on safety is why we are pursuing the proposed changes to the Motor Vehicle Safety Act. Those changes will, if passed, address key gaps in the regime and help ensure the safety of Canadians.

The proposed measures include new order powers for the Minister of Transport to order a company to correct safety defects at no cost to the consumer, an administrative monetary penalty regime and consent agreements to help promote compliance, measures that will help foster the introduction of innovative technologies, and many other proposed changes. These provisions have been envisioned as a suite of changes to strengthen our current safety regime and help ensure Canada can benefit from new technologies.

This is a significant overhaul of these legislative provisions. The motor vehicle safety regime is not as robust as it should be in terms of the protections it provides to Canadians. Should a vehicle have a defect that would threaten safety but a company does not want to repair the defect, there is very little the Government of Canada can do.

This situation could endanger Canadian drivers.

This is not an acceptable situation. While our vehicle manufacturers have a good track record here in Canada, we do not want to be in a situation where there is a safety issue for which we do not have the proper tools or authorities to address the situation. It is our desire to pass this legislation as quickly as possible to ensure that this safety gap is addressed. This is not to state that safety recalls will not occur in the future or that unforeseen risks and problems will not arise, but that we are taking concrete steps to improve safety by including new tools in the legislation that will be available to help address issues when they arise.

As part of the review of the bill, an amendment was brought forward from the other House that would provide additional financial protections to automobile dealers above and beyond those available to purchasers in the event that the minister of transport orders a company to correct a defect or stop a sale. As outlined in the amendment, these protections would ensure that dealers would receive from the vehicle manufacturer or importer the parts needed to correct a defect or the manufacturer or importer would repurchase a vehicle at full price plus transportation costs and compensate the dealer at the rate of 1% per month of the price paid.

I must state from the outset that vehicle dealers are an important component of the Canadian economy. They employ thousands of people across the country. They help to ensure that our vehicles are well maintained, and they are valuable members of the communities in which they operate. The changes introduced in the other chamber were motivated by a sincere desire to protect them from financial harm. This is a perfectly understandable goal, and I would like to thank our colleagues in the other chamber for raising awareness about the concerns that dealers had with Bill S-2.

The purpose of the Motor Vehicle Safety Act, however, is to protect the safety of Canadians. It is not designed to regulate the commercial relations between automobile manufacturers and importers and their dealers.

Furthermore, the strengthening motor vehicle safety for Canadians act, as originally introduced, already included provisions that would require manufacturers and importers to be financially responsible for correcting or repairing a defective or non-compliant vehicle. This applies to dealers as well. To clarify, vehicle safety defect repairs would be covered by the manufacturer. This applies to importer vehicle owners, including dealers. I stress that these provisions include dealers because I think that this point was not always fully understood when the bill was initially considered or by the dealers themselves during previous study of this bill.

The originally proposed protections include repairing the vehicle or equipment, replacing the vehicle or equipment with a reasonable equivalent, reimbursing the reasonable cost of repairs to the vehicle or equipment that have already been undertaken before a notice of defect or non-compliance has been given, or reimbursing the sale price of the vehicle or equipment less reasonable depreciation on return of that vehicle or equipment.

The addition of dealer protections above and beyond those available to other purchasers, as well as the generous payment to this particular stakeholder group, would lead to an unbalanced regime that could raise significant risks of disputes between dealers and manufacturers. While the amendment introduced by the other House does impose some minimal obligations on dealers, as written, it would be challenging to enforce. Lacking any recourse mechanism, the involved parties would likely look to Transport Canada to mediate their commercial disputes. These powers are also not part of the amendment, and such activities are not in Transport Canada's mandate.

We believe that this amendment, as written, has many potential unforseen complications. It should be noted that it would actually remove some of the protections that were already built into the act. For example, it would create a mismatch of powers and may mean that dealers who had repaired their vehicle before would not be eligible for reimbursement.

Our overwhelming priority with this bill, as it is more broadly for the minister and across the entire transportation sector, is the safety of Canadians. Passage of the bill as introduced by the government as quickly as possible will help close some key gaps in the motor vehicle safety regime and help ensure the continued safety of Canadians.

Strengthening Motor Vehicle Safety for Canadians ActGovernment Orders

September 19th, 2017 / 11:40 a.m.
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Conservative

Kelly Block Conservative Carlton Trail—Eagle Creek, SK

Mr. Speaker, earlier I had the opportunity to ask the minister specific questions around the difference between Bill C-62 and Bill S-2. I do not believe he answered the question I asked specific to proposed section 16, which speaks to issues of compliance, making violations public, and powers of the minister. I wonder if my hon. colleague would speak to those changes in proposed section 16 that make the difference between Bill C-62 and Bill S-2.

Strengthening Motor Vehicle Safety for Canadians ActGovernment Orders

September 19th, 2017 / 11:40 a.m.
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Liberal

Karen McCrimmon Liberal Kanata—Carleton, ON

Mr. Speaker, the member is right to point out that Bill S-2 does build upon Bill C-62. It actually goes further by adding extra mechanisms for the minister to use, and one of those is this consent agreement, which would allow him to negotiate and mediate long-term solutions. Right now, the minister does not have the power to compel any manufacturer or dealer to address issues. This is why there is a need for this bill and why there needs to be a little flexibility in how we address these issues.

It all comes back to the same issue over and over again. It is about what we need to do to protect consumers. We need to be able to do this proactively instead of always being reactive. We need to be part of the solution and negotiate or mediate a solution for Canadians.

Strengthening Motor Vehicle Safety for Canadians ActGovernment Orders

September 19th, 2017 / 11:45 a.m.
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NDP

Robert Aubin NDP Trois-Rivières, QC

Mr. Speaker, I would like to get some mileage from the question posed by my colleague from Salaberry—Suroît to which I responded with a hypothetical and theoretical answer. By redirecting the question to the government, perhaps we will get a real answer.

The question was about Bill S-2, which also makes it possible for the minister to hire new enforcement officers.

How are we going to implement such measures, which require funding, when Transport Canada is in budget-cutting mode?

Is there a paradigm shift on the horizon?

Strengthening Motor Vehicle Safety for Canadians ActGovernment Orders

September 19th, 2017 / 11:45 a.m.
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Liberal

Karen McCrimmon Liberal Kanata—Carleton, ON

Mr. Speaker, my hon. colleague knows it is very difficult to respond to hypotheticals and to speculate.

I understand the member's concern, to make sure that we have a viable enforcement regime in place. I know the minister understands this as well. There are many ways of encouraging compliance, and I think that is what we want, a multi-functional approach to actual compliance.

Strengthening Motor Vehicle Safety for Canadians ActGovernment Orders

September 19th, 2017 / 11:45 a.m.
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Liberal

Filomena Tassi Liberal Hamilton West—Ancaster—Dundas, ON

Mr. Speaker, my colleague mentioned the importance of the new powers that the minister would have in and through this legislation to correct safety defects.

I would just like her to expand on why that is needed to protect the safety of Canadians. How is that going to have impact in providing Canadians with safer security on the road?

Strengthening Motor Vehicle Safety for Canadians ActGovernment Orders

September 19th, 2017 / 11:45 a.m.
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Liberal

Karen McCrimmon Liberal Kanata—Carleton, ON

Mr. Speaker, the member is right. The way the legislation currently sits, the minister has absolutely no ability to compel a manufacturer or a dealer to address an issue. That is what we need to do.

We have not had to use those powers. Here in Canada, our dealerships, manufacturers, and importers have been quite responsive to the demands of the government. However, in case something like that ever happens, having those powers and for the minister to be able to use them would be very important.

Strengthening Motor Vehicle Safety for Canadians ActGovernment Orders

September 19th, 2017 / 11:45 a.m.
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Liberal

Sean Fraser Liberal Central Nova, NS

Mr. Speaker, it is my pleasure to rise to offer a few remarks on Bill S-2, an act to amend the Motor Vehicle Safety Act.

Before I begin, I was under the impression I would have 20 minutes, so I will give the Coles Notes version of a longer speech.

Before I get too deep into the weeds on this one, I will explain in broad strokes what the bill is about.

Currently, motor vehicle safety is a priority, and I think that is shared by every member in the House. When we look at the impact motor vehicle defects can have, there is a paucity of laws that allow the government to take action to correct a very serious problem. Over the course of my remarks, I hope to outline roughly the scope of this problem, that it is a priority, and then address three key points built into the legislative mechanisms that would help improve the government's ability deal with this problem, specifically dealing with the power to order recalls, compliance mechanisms, and, finally, the flexibility to deal with emerging technologies.

First and foremost, if I am to argue that this is a problem in Canada, I need to look no further than some of the very positive news coverage from last year that highlighted the impact that manufacturers' defects had on vehicles on the roads in Canada today. If I am to believe the content of a Globe and Mail article from December of last year, one in six Canadian vehicles is currently subject to a manufacturer's recall in Canada. That means millions of vehicles on are on the roads today that manufacturers have acknowledged are not safe enough to meet Canadian standards. I urge anyone watching, and I know that on CPAC during House proceedings there is a massive audience, to visit Transport Canada's website, use the searchable database, and determine whether their vehicles are subject to existing manufacturers' recalls about which they may not know. These things can fly under the radar when Canadians have other priorities and things to worry about in their lives. However, they are important and pose safety risks.

We can safely assume that manufacturers' defects are a safety concern in Canada today. The legislation proposes a number of things to deal with them.

Let me first deal with the power of the minister to order a recall when becoming aware of defects, which is a power provided for in Bill S-2. There are really two categories in which the minister would be empowered. One deals with consumers and the other with dealers, though perhaps I am simplifying it a little too much.

On the consumer side of the equation, right now the minister does not have the same power that exists elsewhere in the world, including the U.S., to order a recall. Importantly, the remedy would exist where consumers would not have to cover the costs of having their vehicles repaired or replaced. This is a burden that can and should be borne by the manufacturer responsible for the defect. This would enhance safety by allowing more consumers to have their vehicles fixed at no cost.

The second side of this equation has to do with dealers, and I will spend a little more time on this.

Right now in Canada, there is no law that says a dealer cannot sell a car with a defect. In fact, not enough information flows for dealers to know when defects may exist to ensure vehicles do not make it onto the roads. If I am dealing with a leaky roof at my house, the first thing I will do is find a bucket to stop the water from damaging my floor. The second thing I will do is try to fix the pipe causing the leak. If we are only dealing with the consumer side of the equation, we are going to maybe prevent more drops from hitting the floor, but we will have to keep replacing the bucket if we do not do something to prevent the sale of defective vehicles getting onto the roads in the first place.

This puts dealers in an admittedly difficult position. This could put dealers in a position where they are going to be left carrying inventory on their lots that they cannot sell, and that is not right. I want to draw attention to a discussion the upper chamber had on the issue and proposed amendments specifically on Bill S-2.

Before I do that, I want to extend my gratitude to our colleagues in the other chamber for their thoughtful deliberations on this legislation, and many others, and for drawing attention to an important issue that has caused me to think very deeply about this. However, I must respectfully disagree that the suggested amendment is the appropriate mechanism to correct the social harm we all want to fight.

The mechanism proposed in the amendment seeks to address compensation for dealers that are left with inventory on their lots that they cannot sell. The amendment proposes a 1% interest rate on vehicles, based on the price of vehicles, per month. If I do the math in my head, this becomes very expensive for manufacturers and does compensate dealers somewhat.

When I was trying to understand whether this was the right policy, I had to think back to some of my work before where I had the opportunity to work in a litigation practice with a bit of a constitutional influence and back to law school and what we have the authority to do in this chamber.

My first obstacle, and reason why I cannot bring myself to support the amendment, is a constitutional issue. I do not know that we have the constitutional authority to legislate the terms of a commercial arrangement between contracting parties at the federal level. Sections 91 and 92 of the Constitution say what the federal government and provinces can do respectively and there is no question we can tackle issues that touch on public safety. However, when it comes to the contracting arrangements between commercial parties, this is exclusively within the purview of the provinces. In fact, there is a lot of sale of goods legislation in place in provinces specifically to deal with these issues. I cannot overcome this barrier and I cannot in good conscience support an amendment that I do not believe we have the authority to pass and adopt in the House.

The second and more practical stumbling point for me on the proposed amendment is the possibility we could be creating an unintended consequence that I do not believe our colleagues in the upper chamber had specifically drawn their attention to, again, with great respect and deference.

What we might be doing is creating an economic incentive for manufacturers to fix cars that are in dealers' lots today before they fix cars that are on the roads. If we assume. just to make the math easy, there is a recall that applies to 100,000 vehicles at a price of $25,000, we are looking at interest payments on the part of the manufacturer to dealers in the realm of $25 million a month. This is a great motivator for companies. If they are looking at a severe penalty like this, they are going to change their behaviour, and this might inspire them to fix cars sitting on dealers' lots more effectively. However, I do not want them to do that at the cost of cars travelling on Canadian roads today. Creating this incentive to deal with cars that have not yet been sold over cars that are owned by Canadians could pose a public safety hazard.

Finally, there are remedies available today for dealers. Bill S-2 puts dealers on the same footing that consumers are on. They will have access to have their vehicles repaired at no cost like consumers will. They will also have the protection of any negotiated provisions in a commercial contract that allocates risk as between the parties and they will have the protection outlined in provincial sale of goods legislation that deals with merchantable quality and fitness purpose for any goods that are sold in our provinces. Respectfully, for those reasons, I cannot support the Senate amendment, but I do believe the legislation is sound.

Very quickly in the remaining minutes that I have, the compliance regime put in place is going to replace one that more or less does not exist today. Today, if we want to enforce violations of the Motor Vehicle Safety Act when it comes to defects, there is an expensive and lengthy criminal prosecution, and many of the violations do not warrant a criminal prosecution. We are implementing a monetary administrative penalty regime that is going to be more like a speeding ticket. It is going to punish those wrongdoers and encourage them to change their behaviour, but often to the tune of thousands or hundreds of thousands of dollars per vehicle per day.

Though I do not have time to cover it, knowing we are on the precipice of emerging technologies in the motor vehicle sector, we want to ensure we do not stifle innovation, particularly when it comes to driverless vehicles. There has not been a disruptive technology in the motor vehicle industry in over a century. Knowing we are about to embrace this change, we need to ensure there is flexibility that allows the minister to encourage innovation in this exciting industry, without compromising our safety.

With these features in mind, I am very proud to support Bill S-2 because it will improve safety on Canadian roadways, with the caveat that I mentioned at length about the proposed amendment in the legislation.

Strengthening Motor Vehicle Safety for Canadians ActGovernment Orders

September 19th, 2017 / 11:55 a.m.
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Conservative

Kelly Block Conservative Carlton Trail—Eagle Creek, SK

Mr. Speaker, I always appreciate the member's very thoughtful interventions not only in this place but at committee. I would like to pose a similar question to him that I posed to both the minister and the parliamentary secretary.

Perhaps I could be accused of asking fairly technical questions, but this is a technical bill. I am focusing on some of the changes that we should be very familiar with between Bill C-62 and Bill S-2, because there are not very many, except for the amendment that has been spoken to quite a bit during the debate so far.

I will get more specific about the measures in proposed section 16, on which I have asked for some clarification. Proposed section 16.24 establishes that following the issuing and service of a notice of violation, the minister can make the nature of the violation and other related details public. What is the purpose of that measure and why it has it been included? This is to frame it for me going forward in this debate.

Strengthening Motor Vehicle Safety for Canadians ActGovernment Orders

September 19th, 2017 / 11:55 a.m.
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Liberal

Sean Fraser Liberal Central Nova, NS

Mr. Speaker, I appreciate the hon. member's kind remarks and her thoughtful deliberations, both in our shared committee assignment and in the House.

I do not hazard to speak for the government, being merely a member of the governing party and not a member of the government proper, but the ability to make public information about the quality of defects and the extent that it may impact Canadians is important. When we operate in an environment with full information, people tend to behave the way we hope they will behave. If I know the world is watching me do my job, and with the great audience we have on CPAC perhaps it is, we tend to be more conscious of our record. It creates accountability when we know the information about our safety record is being watched, particularly in an industry where safety is so important.

I do not mean to suggest that manufacturers today are not operating in a safe manner and being accountable to an acceptable degree, but we can always be better. Shedding a light on the information that pertains to different companies' safety records is going to help save lives.