Bill S-2 (Historical)

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

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.

Strengthening Motor Vehicle Safety for Canadians Act

[Marc Garneau, Liberal, Minister of Transport]

moved that Bill S-2, an act to amend the Motor Vehicle Safety Act and to make a consequential amendment to another act, be read the second time and referred to a committee.

Mr. Speaker, today I would like to introduce Bill S-2, the strengthening motor vehicle safety for Canadians act. The safety of the travelling public is of paramount importance to Transport Canada and to this government. Road safety is an issue that touches every Canadian in some manner. Many of us have either been directly involved or have loved ones who have been involved in a traffic accident. Collisions and the associated injuries, deaths, and costs are tragic. However, to a great extent, they are preventable.

We are determined to pursue the continued improvement of motor vehicle safety because we want to help Canadians avoid tragedy on our roads. We believe that the Motor Vehicle Safety Act and its associated regulations and standards are key reasons why progressively fewer people have been killed and injured on our roads despite the fact that more people are driving. Improving the motor vehicle safety regime is part of our commitment to the safety of Canadians.

The purpose of the Motor Vehicle Safety Act is to address safety issues related to vehicles on Canadian roads. The proposed amendments to the Motor Vehicle Safety Act would provide the government with new and better tools for making our roads safer.

The Canadian motor vehicle safety regulations are applicable to all vehicles designed to operate on public roads, from motorcycles to heavy trucks. They also apply to some off-road vehicles that are occasionally driven across or along the sides of roadways or on trails. The federal government uses the Motor Vehicle Safety Act and its attendant regulations to regulate vehicle and equipment manufacturers and importers, and to instil confidence in our stakeholders, including the provinces, territories, interested public organizations, and the general public.

The government has been heavily involved in improving and delivering vehicle safety for many years. The Motor Vehicle Safety Act came into effect in 1971. To keep the act current and effective, it has been updated at various times throughout the years. As innovations and technologies continue to evolve, there remains a continuing need to improve the act to ensure it remains current.

The act regulates the safety requirements that apply to new and imported motor vehicles and to new motor vehicle equipment in order to reduce the risk of death, injury, and damage to property and the environment. The act enables the development of regulations and safety standards for new and imported vehicles, new tires, and new equipment used in the restraint of children and disabled persons within motor vehicles.

In addition to creating robust regulations, the increasingly rapid advent of innovative vehicle technologies requires that the legislative framework be agile so that it does not inhibit the adoption of new safety technologies. Canada risks losing ground in this very important market unless we take the opportunity to add some flexibility to the act.

Continual improvement and adaptation to the environment help keep Canadians safe. That is why we are proposing further changes to the Motor Vehicle Safety Act.

Proposed amendments to the Motor Vehicle Safety Act were tabled in the House of Commons for the first time in June 2015 as Bill C-62 to address safety gaps. The bill attained first reading before Parliament was dissolved. With a few additional provisions, the bill was introduced to the other House as Bill S-2. It has completed its process there and is now being brought before this House.

While there are a number of proposed amendments that I will outline, the most significant ones have to do with motor vehicle and equipment recalls. Generally, the major vehicle manufacturers and importers have a good history of addressing safety defects in Canadian vehicles. However, if a situation arose today with a vehicle, tire, or child seat where there was clear evidence that the product contained a safety defect that could put the safety of Canadians in jeopardy and the company did not agree and was not voluntarily issuing a recall, there would be little that could be done except to take the company to court. This would result in delays in addressing safety concerns.

Therefore, it is proposed to amend the act to authorize the minister of transport to be able to order a company to correct a defect or non-compliance in a vehicle or equipment if the minister considered it to be in the interests of public safety. Under such an order, there would be three options available for companies to correct the defect or non-compliance. The first option available to companies would be to repair the vehicle or equipment. The second is that the company could replace the vehicle or equipment with a reasonable equivalent. Finally, the company could choose to reimburse either the repair costs to the vehicle or equipment that have already been undertaken or the sale price of the vehicle or equipment less reasonable depreciation.

In addition, the bill includes the power to order companies to pay the costs of correcting a defect or non-compliance in a vehicle or equipment. These provisions can have a significant impact on safety.

The combined order powers are are designed to prevent situations where the owner of a defective or non-compliant vehicle does not want to or is unable to pay to repair it. Such situations would place an unreasonable financial burden on Canadians, and potentially place other Canadians at risk, should their fellow citizens be unable to undertake the necessary repairs. Provisions have been drafted to help ensure that manufacturers would be responsible for costs pertaining to the repair of known safety defects.

To help ensure that new vehicles or equipment with safety defects or non-compliances do not reach Canadians, the bill also contains a provision for the minister to order companies to ensure that defects and non-compliances are corrected before the vehicles are sold to consumers. This measure will help keep vehicles with safety issues from being driven on Canada’s roads.

These order powers complement the existing powers to order a company to issue a notice of defect or non-compliance. They address major gaps in the motor vehicle safety regime and, once passed, will help ensure that the motor vehicle safety issues are corrected.

Beyond these powers, other powers would be introduced into Canada's motor vehicle safety regime. Vehicles on Canada's roads are incredibly sophisticated machines, with complex and proprietary computers and software. Their complexity is only going to increase in the years to come. This complexity could make it challenging to obtain information relating to defects or collisions or verifying compliance with the Motor Vehicle Safety Act. Therefore, this bill includes the authority for the minister to order companies to conduct tests, analyses, or studies on a vehicle or equipment and to require them to provide those results to Transport Canada. This new ability to order additional studies would be very valuable to help determine details around safety issues.

As part of the proposed amendments, there will also be a requirement for companies to provide a contact person within the company to whom we can reach out for information and to verify compliance with the Motor Vehicle Safety Act. This requirement would help in the establishment of clear lines of communications between companies and Transport Canada.

While Transport Canada has good lines of communication with the major manufacturers and importers in Canada, which will continue, complete reliance on these informal mechanisms is risky.

Formal, clear lines of communication will help ensure and increase the safety of Canadians. The proposed changes to the legislation will also increase the ability of Transport Canada to verify compliance with the Act and identify and analyze defects and collisions. The bill clarifies where and how Transport Canada's inspectors may access sites in the discharge of their duties. Bill S-2 also adds the ability to require the presence of persons who may be questioned on matters relating to an inspection and to require that all reasonable questions be answered.

The proposed changes will help ensure that our inspectors get the information that they need to ensure that companies are complying with the Motor Vehicle Safety Act, while the authorities, requirements, and tools mentioned will help ensure Canadians' safety. However, there remains a gap in terms of the enforcement of the Motor Vehicle Safety Act and its regulations.

Currently, the act only has limited enforcement tools to encourage compliance from companies. If a violation is suspected, Transport Canada notifies the company, and later follows up to monitor that any corrective action has been taken. If corrective action has not been taken, the only current option available to the department is criminal prosecution. This is time consuming and costly for industry and the government, and in some instances, may not be fully appropriate for a given violation.

Accordingly, the proposed changes introduce an administrative monetary penalty regime that will help encourage compliance from companies as an efficient, effective and less costly alternative to criminal prosecution. Companies will also have the ability to appeal an administrative monetary penalty to the Transportation Appeal Tribunal of Canada.

The review process will examine if the company or person has committed a violation under the act and, if so, whether the penalty that was levied was appropriate. In specific cases, actions rather than fines may be more appropriate or have greater benefit for Canadians, such as a safety promotion campaign or changes to a company’s safety culture.

A newly proposed tool known as consent agreements would create that authority. These agreements would authorize the minister to negotiate mutually acceptable agreements that would result in enhanced motor vehicle safety for all Canadians. These agreements would be registered in the Federal Court and published. Once published, they would have the status of a court order.

Together, the addition of administrative monetary penalties and consent agreements would dramatically increase the enforcement options available under the Motor Vehicle Safety Act. The proposed additions to the act are not, however, exclusive to the enforcement and compliance regime. As noted, vehicle technologies are advancing at an ever-increasing pace. This is particularly an issue as the automation and connectivity of vehicles increases and as new environmental technologies are further examined and developed.

As these new technologies emerge, there may be benefits in terms of safety, innovation, or the environment. However, sometimes our regulations may not be able to keep with these changes. As such, it is proposed to adjust the interim order and exemption provisions of the Motor Vehicle Safety Act to help ensure the flexibility to support these innovations while concurrently maintaining safety for Canadians.

An interim order allows the temporary suspension or modification of an existing regulation while a permanent regulatory change is being developed. It can signal to industry and Canadians that a regulatory change is in progress that allows the early implementation of such advances. It is proposed to amend the interim authority to extend the period of such an order from one year to three years to allow sufficient time to complete the formal regulations and allow the earlier adoption of new technologies that could benefit Canadians.

In addition, it is proposed to make the current exemption process more efficient. This would support the adoption of new technologies or vehicles. The proposed powers would authorize the minister to grant an exemption from current standards in instances where it would support new safety measures or new kinds of vehicles and technologies but would not compromise the safety of Canadians.

Exemptions would be available to companies that applied for them and could demonstrate that the safety of Canadians would not be compromised. The exemptions would be made public, ensuring a transparent and fair process.

These measures will help to ensure that the Motor Vehicle Safety Act continues to protect the safety of the driving public, while not hindering innovation and technologies that can also benefit Canadians and their safety. This powerful suite of much-needed changes to the act will increase the tools available to the government and industry requirements while still keeping the focus on the safety of Canadians on our roads.

The other place amended the bill to add further protections for dealers. We appreciate the good intentions behind these amendments, as they have helpfully drawn our attention to certain concerns that dealers have about the impact of recalls on their industry. I would like to thank our colleagues in the other place for their efforts.

However, we also believe that these provisions, as they currently appear in the amended Bill S-2, are beyond the authority and the purpose of the act, which is to protect the safety of the driving public, not to manage contractual financial matters or the relationship between dealers and manufacturers.

If such an amendment remains in the legislation, it may create imbalances between dealers and other buyers. Some could have advantages over others. It could generate legal challenges when it comes to enforcement authority over dealers and cause unintended consequences such as leaving no recourse for manufacturers when dealers do not meet their obligations. These types of issues could potentially have consequences on the commercial relations and agreements that dealers have with manufacturers. The amendment also does not take into account that there are other mechanisms to protect the commercial interests of dealers.

Again, I recognize that the amendments made by the other place are well-intentioned and reflect healthy dialogue between our two houses. We believe that it is possible to address dealers' concerns while avoiding those unintended consequences. We know that dealers care about safety and that they will want to work with our government and parliamentarians to modernize the Motor Vehicle Safety Act in a way that benefits Canadians.

It is imperative, now more than ever, to have rapid action on the part of elected officials to move Bill S-2 forward. Canada's ability to more fully address its oversight role and its ability to properly assess the safety aspects of new technologies depends on the success of this bill.

I look forward to the bill going to committee for the study of its provisions, including the implications and consequences of the proposed dealer amendment. I support and vote for the committee to undertake a thorough analysis. I look forward to testifying in front of the committee with departmental officials and to working with parliamentarians to strengthen the act to make the roads safer for all Canadians.

Business of the House

[Bardish Chagger, Liberal, Waterloo, ON]

Mr. Speaker, tomorrow the House will debate Bill C-49, on transportation modernization, at second reading.

On Monday we will debate our changes to the Standing Orders. Following that debate, we will resume second reading debate on Bill C-51.

Tuesday the House will debate Bill S-3, on Indian registration, at report stage and third reading.

Following that debate, we hope to make progress on the following bills: Bill S-2, the bill respecting motor vehicle recalls, at second reading; Bill C-17, respecting the environmental assessment process in Yukon, at second reading; Bill C-25, on encouraging gender parity on the boards of federally regulated organizations; Bill C-36, the bill to give Statistics Canada greater independence; Bill C-48, the bill to impose a moratorium on oil tankers off the B.C. coast; and Bill C-34, the bill to reinstate sensible conditions for public service employment.

Transportation Modernization Act

[Kelly Block, Conservative, Carlton Trail—Eagle Creek, SK]

Mr. Speaker, I am pleased to rise this evening to debate Bill C-49, the transportation modernization act, at second reading.

The bill could simply be renamed the transportation omnibus act for the number of different bills being amended, with many of changes being more than just technical in nature. The Air Canada Public Participation Act, the Canada Transportation Act, the CN Commercialization Act, the Railway Safety Act, the Canadian Transportation Accident Investigation and Safety Board Act, the Canadian Air Transport Security Authority Act, the Coasting Trade Act, the Canada Marine Act, the Bankruptcy and Insolvency Act, the Competition Act, the Companies' Creditors Arrangement Act, the 2009 Budget Implementation Act, and the Fair Rail for Grain Farmers Act are all being amended.

How this squares with the Liberal election promise not to use omnibus legislation is beyond me. Do not get me wrong, I am not complaining about an omnibus bill, just the fact that the Liberals did and then made a promise they knew they would not keep. Furthermore, when I introduced a motion in transport committee last week calling on the committee to write to the Minister of Transport and his government House leader to ask them to split the bill into the following sections, rail shipping, rail safety, air, and marine, to provide an enhanced and possibly expedited scrutiny, every single Liberal member voted against it without even a single comment as to why.

I found this vote particularly ironic, as it was the Liberal member for Niagara Centre who raised the idea of expediting the passage of the bill in the first place, in order to provide grain farmers with a greater amount of certainty as they negotiate contracts for future shipping seasons.

The more measures that a bill contains, the more time it takes to provide adequate scrutiny. Separating the bill would be the easiest way to facilitate expedited passage, and thus my motion calling on the bill to be split into several parts.

Unfortunately, Liberal members were unwilling to split the bill into these natural divisions. This does not inspire confidence that when the bill eventually does reach committee, the Liberal Party members will be open to any amendments. While Bill C-49 is supposed to be the Minister of Transport's legislative response to the 2015 Canada Transportation Act review led by the Hon. David Emerson, it would appear that what we have before us is a bill that is designed to change the channel from some of the bad news that keeps piling up for the Liberals.

The government's communications strategy for this legislation has overwhelmingly concentrated on the air passenger compensation regime that is being introduced, and not the other very consequential measures. Here is what the Minister of Transport posted on his Twitter feed as he introduced this legislation, “These air passenger rights will ensure that travellers are treated like people, not just a number.”

Like many members here, I travel a lot and only have positive things to say about all the employees working for the airlines and at our airports. Of course, on occasion, flights do not go as we hope, but the Minister of Transport appears to be willing to pit passengers against airlines rather than fixing the structural problems in Canada's aviation regime.

This legislation does not spell out what the compensation regime will be, just that there will be one. The bill states that after consulting with only the Minister of Transport, the Canadian Transportation Agency will make regulations concerning carriers' obligations toward passengers. However, for even greater clarity, subsection (2) of proposed section 86.11 states that the Canadian Transportation Agency must comply with any instruction from the minister with regard to setting regulations concerning carriers' obligations to passengers.

What this means is that the Canadian Transportation Agency is tentatively responsible for setting what financial penalties a carrier would have to pay to the passenger in the case of a service breach, unless the minister is dissatisfied with the level of prescribed compensation that the CTA decides is appropriate, in which case he or she can dictate what that level of compensation will be.

It is noteworthy that the agency will, by law, only be allowed to consult with the Minister of Transport concerning the setting of these regulations, and not with consumer advocate groups, airlines, airports, Nav Canada and other stakeholders in the sector.

I do not understand what the purpose of consulting only the minister is. If the Canadian Transportation Agency is to be an arm's-length organization, this legislation clearly diminishes its independence. If the minister will not allow the agency to independently set the parameters of the passenger compensation regime, he should just spell out in legislation what it will be and let members of Parliament and stakeholder groups decide whether this is a good proposal or not.

If this legislation were truly aimed at reducing the cost of travel for the passenger, while increasing service and convenience, the minister would immediately lobby to have the government's carbon tax, which will make every single flight more expensive, withdrawn. He would reform the air passenger security system, which was universally identified as a major irritant for all passengers during the Canada Transportation Act review by all the organizations that participated in the process.

While it would be preferable to have the sections of the bill dealing with air and rail examined as stand-alone pieces of legislation, I can only surmise that the government's complete mismanagement of the House's agenda has led us to the point where an omnibus transportation bill is what we have in front of us today. At least we have finally begun debating something in the transport sector, now that we are two years into the government's mandate. So far, the only achievement the minister has to show in terms of legislation is the act to amend the Air Canada Public Participation Act.

Let us talk about Bill S-2, an act to amend the Motor Vehicle Safety Act and to make a consequential amendment to another act. This was first introduced by the government's representative in the Senate 13 months ago and passed third reading in the Senate on February 2. The minister claimed that Bill S-2 was a priority in his speech to the Montreal Chamber of Commerce in November 2016, yet it has not been touched since.

On May 12, just days before the introduction of the legislation we are debating today, the Minister of Transport introduced the oil tanker moratorium act, a bill that his own officials conceded would only impact the future development of Canada's oil sands and no other activity in northern British Columbia. Equally concerning about this oil tanker moratorium, which could be renamed the oil pipeline moratorium, is that there is considerable support among first nations on B.C.'s coast for energy development opportunities, but the wishes of these first nations are being ignored. For the Liberals to move forward with this tanker moratorium without properly consulting coastal first nations is extremely hypocritical.

The Liberals go to painstaking lengths to emphasize the amount of consultation they undertake, but it is becoming more and more apparent that their interest in consulting is about being told what they want to hear and not about listening to differing views. If anyone needs further proof that Bill C-48 was introduced only for political purposes, it is that this moratorium has been introduced as a stand-alone bill and not as part of this omnibus package we are debating today.

The Minister of Transport's silence and inaction on critical and time-sensitive transport issues, especially rail transport, is leading to uncertainty for both shippers and the railroads, which both want certainty as they negotiate shipping rates for the season.

That is why over the past several months I have asked many times whether the government intends to renew the sunsetting measures in Bill C-30 before they expire on August 1, 2017. The response I have been given time and time again is that the government recognizes the urgency to get this done and that legislation is forthcoming. Unfortunately, the Liberals have made a muck of this, and the key measures in Bill C-30 will sunset before any replacement legislation can receive royal assent and become law.

Last week in the transport committee, a Liberal member moved a motion calling on the committee to begin its consideration of this bill, Bill C-49, in September, before the House begins sitting, to expedite the study of the sections of the bill that deal with the shipping of grain. While Conservatives have no objection to considering this legislation in September before the House returns from the summer break, government members fail to realize that our producers needed them to turn their attention to this months ago, as the measures will sunset on August 1 of this year. At best, there will be a two-and-a-half-month gap between when the measures in Bill C-30 sunset and replacement legislation is in place.

By the time this legislation has passed, the majority of contracts for this year will have been negotiated with the law in flux. Because of the government's mismanagement of the legislative agenda, these popular measures will sunset without replacement, and shippers will be the worse off.

This is important to note, because for a combination of reasons, including a lack of rail capacity, preparedness by railways and shippers, weather, and the size of the crop, western Canada's 2013-14 grain crop did not get to market in a timely manner. Consequently, the previous Conservative government introduced Bill C-30, which gave the Canada Transportation Agency the power to allow shippers access to regulated interswitching up to 160 kilometres, mandated that CN and CP both haul at least 500 tonnes of grain per week, and introduced a new definition of adequate and suitable service levels. With this extension, the number of primary grain elevators with access to more than one railroad with the extended interswitching limits increased from 48 to 261.

These measures were met with universal support from the members of the shipping community, because even if they did not use interswitching, they could use it as a tool to increase their negotiating position with the railways, as the shippers knew exactly how much the interswitch portion of the haul would cost them.

At the same time, the government announced that the Canada Transportation Act statutory review would be expedited, and it began a year early to provide long-term solutions to the grain backlog of the 2013-14 shipping season and other problems in the transport sector within Canada. The hon. David Emerson, a former Liberal and Conservative cabinet minister, was tasked with leading the review. This review was completed in the fall of 2015 and was on the Minister of Transport's desk shortly before Christmas. The minister then tabled this report in mid-February 2016 and promised wide consultations on the report. As the key measures of Bill C-30 were going to sunset on August 1, 2016, and parliamentarians were hearing from the shipping community that it would like to see these extended, Parliament voted in June 2016 to extend those provisions for one year.

In the fall of 2016, the Standing Committee on Transport, Infrastructure and Communities undertook a study of Bill C-30 and held a number of meetings on the merits of these measures and whether they should be allowed to sunset. We were assured that if we lived with this extension, these issues would be dealt with by August 1, 2017.

The vast majority of the testimony heard was supportive of maintaining the 160-kilometre regulated interswitching limit at committee, which is why the committee's first recommendation was the following:

That the Canadian Transportation Agency retain the flexibility provided under the Canada Transportation Act by the Fair Rail For Grain Farmers Act to set interswitching distances up to 160 km, in order to maintain a more competitive operating environment for rail shippers with direct access to only one railway company.

Anyone who has read this bill will know that the government ignored the committee's main recommendation. At some point during this debate, I hope to hear from Liberal members on the transport committee about whether they believe that the government was right to ignore the committee's recommendations, and if so, whether the entire committee study was just a waste of time.

Basically, what the government is proposing with this legislation is to replace the 160-kilometre interswitching limit with the creation of a new long-haul interswitching tool that would be in effect between Windsor and Kamloops on hauls of up to 1,200 kilometres, or up to 50% of the length of the entire haul. Shippers would be charged the regulated interswitching rate for the first 30 kilometres of the haul and then a Canada Transportation Agency-determined rate, which would be determined on a case-by-case basis based on the price of a similar haul, for the remainder of the distance to the interswitch point. Shippers would only be able to interswitch at the first available interswitch point within the zone.

What the government has done is take a little-used existing remedy, called a competitive line rate, and rename it long-haul interswitching.

Under a competitive line rate, a shipper could apply to the agency to set the amount of the competitive line rate, the designation of the continuous route, the designation of the nearest interchange, and the manner in which the local carrier would fulfill its service obligations. We know from history that this remedy was infrequently used because of the prerequisite that the shipper first reach an agreement with the connecting carrier, and the two main carriers effectively declined to compete with one another through CLRs. What we do not know is what the difference will be at a practical level between this new long-haul interswitching and the existing competitive line rates.

Like competitive line rates, long-haul interswitching is a much more complicated system for shippers to use, and the jury is still out on whether this will achieve the minister's stated objective of improving rail access for captive shippers. When Bill C-30 was first introduced, there was universal support among shippers for the extended interswitching. So far, very few organizations I have spoken to can say that this tool is better.

In conclusion, this much is certain: the key measures in Bill C-30 will be allowed to sunset on August 1, before this legislation receives royal assent. The Liberals have had nearly a full year to get new legislation in place but failed to do so, and shippers will suffer the consequences.

Canada remains one of the most expensive jurisdictions in which to operate an airline, and it is about to become even more so with the imposition of a national carbon tax. This bill does nothing to address the systemic cost issues, which are passed on to passengers, that were identified by the Transportation Act review. As has been the case with almost everything with the current government, optics trump everything, and this bill exemplifies that.

[Phil McColeman, Conservative, Brantford—Brant, ON]

It just has to do with Bill S-2, because I know it's at first reading in the House. I know it's a government bill, but can you give us the estimated ongoing financial cost of Bill S-2 if it becomes law?

[Michael Keenan]

The minister has a number of priorities for Transport Canada. They start with safety in all domains. They include modernizing the organization. The comprehensive review process referred to a few minutes ago has been an extensive effort over the last year to identify areas where we can improve our regulatory processes and modernize our oversight practices.

I would say that Transport Canada overall does a great job in many areas, but there are areas where we need to do better. The Auditor General has found some in motor vehicle safety. We're committed to doing it in responding to the Auditor General's recommendations.

We're also committed to improving the overall performance of the department as we modernize and transform. We are administering 52 acts, federal pieces of legislation, and 350 sets of regulations. There is a need to modernize a number of those regulations and to improve the speed by which we revise regulations, because in all domains the Auditor General has, I think, correctly noted that in the world of vehicles with the advent of connected automated and autonomous vehicles, the world is changing rapidly. In this area, we're improving our internal management processes in the seven areas the Auditor General recommended. We're also seeking new legislative authorities under Bill S-2 to be able to deliver more effectively on a safety mandate in the context of a motor vehicle world that's being transformed before our eyes.

We are striving on multiple fronts to improve our performance because, quite frankly, if you want to be world class in regulating something, you always have to be improving, and you always have to take on board where things aren't working as they should, as the Auditor General discovered in this area—

[Michael Keenan]

If you'll permit it, Mr. Chair, I'll take a shot at answering this.

This was a clear request. The companies are complying on a voluntary basis. So far we're tracking who is and who is not.

This speaks to Bill S-2. Should Bill S-2 receive royal assent, then Transport Canada would have a much stronger set of authorities and powers to compel information from manufacturers. We put the regulations into place to effect that. For example, there is a new administrative monetary penalty scheme in Bill S-2. Once we've put the regulations in for the information requirements, should a manufacturer refuse, then they would be subject to administrative monetary penalties by the department. That would only after Bill S-2 comes into force, though.

[Paul Lefebvre, Liberal, Sudbury, ON]

Thank you, Mr. Chair.

I'd like to continue the question that my colleague Mr. Badawey raised with respect to the manufacturers' processes to identify and report defects. I know a projet de loi is going through the House, Bill S-2.

Mr. Ferguson, I'm looking at your comments when it comes to the manufacturers. In paragraph 10 of your opening remarks, you say:

...manufacturers issued 318 recalls between 2010 and 2015 for safety-related issues that were not brought to the Department's attention...the Department did not have the authority to assess whether manufacturers implemented effective processes for identifying and reporting safety defects. This limited the Department's ability to investigate defects and better protect Canadians.

If they don't have that ability, you recommended that they “should request information from manufacturers on their internal processes for identifying and reporting safety defects”, and the transport department said they would try to do that. This recommendation was to be implemented by January 2017. That date has passed. I would like to know if you have implemented this recommendation. It's recommendation 4.94 of the Auditor General's report.

[Michael Keenan]

I do this very gingerly because if you're not careful here, you could find yourself contemptuous of Parliament. Bill S-2 is actually coming back, I think, for the transport committee in the near future, and we cannot presume the final result of Parliament's treatment of Bill S-2.

However, should Parliament give royal assent to Bill S-2 in something close to its current form, as the member indicated, one of the areas under consideration would be the ability to compel companies to provide safety information on products sold in Canada but distributed by these companies in their worldwide activities. This is particularly important, for example, in the evolution of new automated autonomous vehicles deployed for the first time in Canada. We have no safety information on them, but they have it in other countries. We will finally have the ability to pull that in.

As to the regs, they would lay out the exact conditions under which the minister could order this, including the kind of data the minister could order as well as the form. Legislation provides an enabling provision, but it doesn't provide all of the details. I'll give you an example. At Transport Canada, we have 52 acts we administer, and we have 350 sets of regs. We try to put the details in the regs. Otherwise, we would be inundating Parliament with 1,000-page bills left, right, and centre. This would be a poor use of your time and result in a poor regulatory structure.

[Michael Keenan, Deputy Minister, Department of Transport]

Mr. Chair, thank you very much for the welcome. I'm happy to be here today, and look forward to the opportunity to discuss the Auditor General's 2016 “Report 4, Oversight of Passenger Vehicle Safety”.

I'd like to thank the Office of the Auditor General for a very thorough and comprehensive review of our motor vehicle safety program. The department welcomes this review. It's a key opportunity for us to improve the performance of our safety program by rigorously identifying areas for improvement. The safety of Canadians and their confidence in the motor vehicle safety regime is a key priority for the Government of Canada.

The safety of motor vehicles in Canada has been steadily improving over the past three decades. In the early 1970s, there were approximately 6,000 deaths and 25,000 serious injuries every year from motor vehicle collisions. At the time, there were approximately 12 million registered vehicles and about 13 million drivers. In 2014, the last year for which there is complete data, Canada had about double that, 25 million drivers and 23 million vehicles, but the number of fatalities had declined to 1,800 and serious injuries to 9,600. In essence, the number of vehicles, drivers, and number of kilometres driven have about doubled, and the number of Canadians killed or injured has fallen by 60% to 70%.

To support continued improvement to motor vehicle safety, Transport Canada develops standards and regulations for new and imported vehicles, tires and child restraints. The department also has a robust safety defect program, which entails the assessment and investigation of public complaints and other indicators that help the department identify vehicle safety issues.

It also has a recall program to oversee manufacturer defect notifications, and follow-up to ensure that defects are remedied. The audit focused on these three areas.

In general, the audit noted that there were some areas where the department did a good job and other areas where there was clearly a need for improvement. The audit noted that not all standards and regulations were developed in a timely manner. In addition, it was felt that the department did not consult widely enough on proposed changes, often just consulting manufacturers in the early development of regulations.

In response, Transport Canada has committed to publishing additional information on planned regulatory amendments on its website, and to seeking broader involvement of other stakeholders and experts, such as the insurance industry and other key players, in the pre-consultation phase of the process.

Another concern identified by the audit was that the department did not have complete and timely collision and injury data and did not demonstrate how research informed the development of safety regulations. In Canada, the collection of collision data, such as basic collision characteristics, crash configuration, vehicle type, etc., is conducted by police officers and reported to provincial and territorial governments, who provide Transport Canada with data to populate the national collision database.

The department is assessing this data against its regulatory needs and developing an action plan to improve data quality and timeliness. Transport Canada is also committed to increasing the transparency of the use of data in the development of regulations. The process to codify this transparency has been implemented, and a summary of the assessment of evidence and research will be more clearly outlined in the regulatory impact analysis statements that are published as part of the regulatory process in the Canada Gazette.

The report noted a need for a long-term operational plan and stable sustainable funding. The department is working on the development of such a plan for the crashworthiness research program. The development of this plan will include an assessment of the linkages between research and the regulatory planning processes, and a review of program priorities. This longer-term operational plan is intended to improve the funding sustainability of the program.

One always likes to look on the positive side, where I would note that the OAG indicated that Transport Canada adequately assessed complaints from the public to identify vehicle safety defects. In particular, it recognized that in 2016, departmental officials identified a potentially dangerous defect in the rear seat belts of the Toyota Rav4 vehicles. The implicated seat belts had the potential of rupturing during collisions and causing death or serious harm. The discovery of this defect led to a recall of nearly 150,000 Rav4s in Canada. Globally, over 2.7 million vehicles have been affected by the discovery of this issue in Canada. The OAG found that the program adequately assessed and tracked manufacturers' efforts to complete safety recall campaigns.

Transport Canada also continues to work to identify means to help improve those completion rates, including the development of improved messaging on the importance of having the remedy completed. It is also envisaged that the proposed changes to the Motor Vehicle Safety Act contained in Bill S-2 will help to improve recall completion repair rates, by providing the minister with the ability to order the manufacturer to bear the financial burden of conducting the repair to the vehicle.

An issue with the defect program that was noted in this audit is the lack of information regarding manufacturers' internal investigations to identify safety defects. This is an area that needs to be addressed, and the issue is one of the major ones that would be addressed through the passage of Bill S-2. That bill is working its way through the parliamentary process, and the department continues to support it to help ensure that the safety benefits of the changes in that legislation can be realized.

It was also recommended that the department request manufacturers to provide information on their safety processes. We have made the request to manufacturers and will review the information as it is received to determine how to incorporate it into the defect program.

Motor vehicles are very important to the social and economic well-being of Canadians. The social costs of these collisions are estimated at $36 billion annually, to say nothing of the impact on Canadian families.

Transport Canada works to help limit the impact of vehicle defects on this number and to support new vehicle safety technologies, which can help mitigate the severity of a crash, should a crash occur, or ideally increase the collision avoidance capabilities of the driver/vehicle operation.

In addition, we will work with our provincial and territorial partners to improve road safety through the road safety strategy 2025. With these efforts, including the action plan and response to the Auditor General's report, together we can make Canada's roads safer as we work toward our aspirational goal of zero fatalities on our roads.

Mr. Chair, we look forward to the committee's questions and comments. Thank you very much.

[Michael Keenan]

The short answer is that I agree completely with you. I think a major change is coming. There's a lot of upside promised by both of those, and there is a lot of work going on in terms of regulation and new innovation programming in order to, if you will, seize the upside and protect against the downside.

The minister, as late as just two weeks ago, announced interim regulations for UAVs. There are more measures coming for UAVs.

Bill S-2, which I believe may be coming to this committee, has key provisions in it that will enable us, from the point of view of motor vehicle safety, to deal with new technology in cars. We see that as a key piece of legislation, enabling us to move forward while grabbing the upside and protecting against the downside of the disruptions that are arriving through both UAVs and autonomous vehicles.

[The Chair, Liberal, Judy Sgro]

We also have the main estimates and the supply that are going to be coming to us. We have Bill S-2 coming to us.

[The Chair, Liberal, Judy Sgro]

We'll go ahead with four meetings. That would be the intent and the planning, we'd do it in four meetings. If for some reason it requires a fifth, I think the committee is open and flexible. That will be on Bill S-2. If we can include clause-by-clause, great, but let's see what the interest is, the witness lists and so on.

Before I forget, we have an informal meeting request from a delegation from Indonesia for a meeting with us on May 2. This would be an additional meeting to our regular committee meeting. Is there interest in the committee meeting with this delegation?

Ms. Block.

[The Chair, Liberal, Judy Sgro]

That's a great suggestion.

We will move on to the next item of committee business, which is Bill S-2, an act to amend the Motor Vehicle Safety Act and to make a consequential amendment to another act. It hasn't been referred to us yet, and based on information I was able to get, the earliest we would have it before the committee is possibly March 20, or even later.

We still don't have it, but when we get it, we need to discuss that. We had informally talked about three meetings. The Senate held three meetings on Bill S-2. If we continue to move forward with three meetings as we had previously talked about, is that acceptable to the committee at this particular time?

Ms. Block.

[The Chair, Liberal, Judy Sgro]

No, because it will have to fit in with all of the other things we have on our agenda.

When we come back we'll be dealing with the NPA study. We'll have to fit this in when we can, because we have other things that take priority.

Bill S-2 is the next thing coming to us that we need to discuss, so I'm not quite sure when we will fit this in.

We have plenty of time, so we can hold off, I believe, until the appropriate time when we need to get that information.

Okay, that takes care of that.

Is everybody okay then with the direction we're taking with the Bratina motion?

Motor Vehicle Safety Act

[Lawrence MacAulay, Liberal, Cardigan, PE]

moved that Bill S-2, An Act to amend the Motor Vehicle Safety Act and to make a consequential amendment to another Act, be read the first time.

(Motion agreed to and bill read the first time)