Environment Committee on Dec. 9th, 2020

[The Chair, Liberal, Francis Scarpaleggia]

Thank you.

We'll go to the second round now.

Mr. Albas, go ahead for five minutes, please.

[Dan Albas, Conservative, Central Okanagan—Similkameen—Nicola, BC]

Thank you.

Mr. Malas, is there any evidence that suggests individuals who file complaints with authorities are not having their complaints investigated? You mentioned your own case.

[Muhannad Malas]

Yes. In my case, after about two years—I think it was 22 months exactly since the investigation had been launched—we were worried about nothing happening from that investigation, given that no public updates were provided in that period. Also, I believe there's a statute of limitations in CEPA in terms of the two-year limit. If somebody doesn't bring forward an environmental protection action as a citizen within the first two years of an offence, then they can't do it afterwards. That's why I filed that request under section 17 for the minister to launch an investigation.

We were troubled that, out of the four violations I outlined in my request, three of which were critical—the import and the sale of those cars and also misleading and lying to the government and to the regulator—and were absolutely essential in terms of what happened with VW, the minister refused to launch an investigation, citing the ongoing investigation as a reason. That basically kept the public in the dark about what was happening.

Also, not to repeat myself, but just to highlight an important point, in terms of the investigation that the minister did open based on my request, which was on the continued sale of the 2015 half-fixed vehicles, over almost three years I received 12 progress update reports, and there was no information in those update reports about the status of the investigation. The report often just told me that officers were collecting evidence and, in many cases, the report would provide a timeline for when the investigation was predicted to be completed. In those 12 instances, whenever a time was provided, in most cases timelines were not met.

It was really a very puzzling process. It just made it very difficult to understand why the investigation was taking so long, and it was against the spirit of CEPA in terms of providing a mechanism for people to be able to take part in the enforcement.

[Dan Albas, Conservative, Central Okanagan—Similkameen—Nicola, BC]

You've mentioned your own process quite a bit today, and I appreciate that. I'm sure there are others who may come forward on how they view this working.

You've mentioned the 2017 CEPA report. In response to the standing committee's report, then Minister McKenna noted that amending the act to allow citizens to use the courts to enforce the act may fundamentally alter the way that CEPA is enforced. Do you think the government's response to the previous report was incorrect?

[Muhannad Malas]

I think an important thing to realize about how enforcement, and specifically civil enforcement, works in CEPA is that we do have mechanisms in CEPA for civil enforcement. I mentioned some of those mechanisms, but they're just not working. They're not functional and they need to be improved.

In terms of whether that would alter the fundamental way that CEPA is enforced, I would disagree with that. I would say that in a way it would improve it and make it better, because civil enforcement usually comes in to complement government enforcement. In a case when government fails to enforce, or is delayed, or the enforcement is not reasonable, then citizens could step in and bring an environmental protection action.

It's important to also note that this is not a criminal proceeding. This is a civil proceeding. It's something that exists in most federal and environmental laws in the U.S. and in Australia and has worked very well in those jurisdictions.

[Dan Albas, Conservative, Central Okanagan—Similkameen—Nicola, BC]

That's great.

I would just like to thank the witnesses. I appreciate their interventions today.

[The Chair, Liberal, Francis Scarpaleggia]

We will continue with Mr. Baker.

Mr. Baker, you have the floor for five minutes.

[Yvan Baker, Liberal, Etobicoke Centre, ON]

Thank you very much.

I want to thank all the witnesses for being here today.

Mr. Sharpe, prior to being elected federally, I was a member of the provincial legislature in Ontario and I did a lot of work on consumer protection issues. One of the things I learned about consumer protection is that if you want to prevent violations of the Consumer Protection Act—things like people who are duping consumers or selling things door to door, which is now illegal in Ontario—there are two factors that someone who's about to breach the law considers. One is what's the likelihood of getting caught. Number two is what the penalty is if one does get caught.

If we're thinking about those two categories and about CEPA, do you have any thoughts or advice in those two categories? Are there things within CEPA that could be improved to increase the likelihood that violators are caught? Is there anything you would suggest needs to be done in terms of making sure that we strengthen the penalties for those who are?

[Ben Sharpe]

It's an excellent question and absolutely something that we have continually made a tenet of our work at the ICCT. It's not good enough just to have strong regulations on the books. You have to have effective compliance, enforcement and penalties, so that these companies don't just see fines as the cost of doing business. It has to be a meaningful deterrent for ceasing that behaviour.

In terms of the specific actions that Canada can take, I think one is working with colleagues at the U.S. federal level to strengthen the in-use testing requirements for vehicles. As I mentioned previously, we've offered up several concrete ways in which remote sensing can be mobilized to start collecting lots of data about how vehicles are actually performing in the field and to actually pinpoint and find defeat devices or models that have defeat devices very cost-effectively. We're really excited to have governments start to use that method.

Absolutely, penalties have to be stringent. There has to be a commitment on behalf of the government to pursue those penalties, particularly in cases like these where the actions were just unprecedented and over several years.

[Yvan Baker, Liberal, Etobicoke Centre, ON]

That's helpful, Mr. Sharpe. I will just follow up on that. I would like to step back and look at not just this case, but in general. CEPA covers a range of harmful and toxic substances. You talked about in-use testing of vehicles, but CEPA covers a whole range of things. We regulate dry cleaning, for example.

In terms of that “likelihood of getting caught” category that I talked about, and stepping back in general, is there something more we should be doing to increase the likelihood that people who violate CEPA get caught, regardless of the sector?

[Ben Sharpe]

Yes, absolutely. I can say with confidence that, at a very high level, compliance and enforcement should be the bedrock of any regulatory program, whether it's vehicles, dry cleaning as you mentioned, or water quality. Across the board, it's not enough to have that strong regulation in place. Governments have to be verifying that manufacturers and companies are doing what we expect them to do. Our mantra has been “trust, but verify”.

[Yvan Baker, Liberal, Etobicoke Centre, ON]

Okay. Again, I'm just stepping back and looking at CEPA in general as it covers all sectors and all potential infractions. What are your thoughts about the penalties of CEPA?

[Ben Sharpe]

I can't say with specifics as to the penalty levels in CEPA. I don't have that information offhand. I would say that at a high level, I think there has to be a commitment on behalf of the Canadian government, particularly in this case, to go after Volkswagen in a way that's commensurate with what happened in the U.S.

[Yvan Baker, Liberal, Etobicoke Centre, ON]

I want to thank all the witnesses for being here today.

[The Chair, Liberal, Francis Scarpaleggia]

Thank you.

Madame Pauzé, please go ahead.

[Monique Pauzé, Bloc, Repentigny, QC]

Thank you, Mr. Chair.

I'm going to put my question to Mr. Wright.

You've talked at length about what's been done in Canada, and the failures. What did Canada stand to gain by behaving in this way? There were much more severe fines in the United States. Canada was aware of the situation.

Do you understand why Canada behaved in this way?

[David Wright]

I do not. I can normally go by the court record that was made available to me. The Crown prosecution team should be asked what was going on and why they agreed to a penalty that was significantly less than the one meted out in the United States.

[Monique Pauzé, Bloc, Repentigny, QC]

Even when exploring avenues to better understand motivations, deep down, we can't know. As you say, the Crown prosecutor would know.

I have another question, this time for Mr. Malas.

We talked about what happened in the United States. There were fines. There is a reparations aspect that I discussed earlier with Mr. Sharpe. An engineer was sentenced to 40 months in prison. Clearly, standards are not harmonized with those in the United States. Yet pollution has no borders.

Isn't there a way to harmonize standards for this sector?

[Muhannad Malas]

I'm not sure I am prepared to answer that question in terms of harmonization within that specific sector, assuming that's the auto sector, considering that is not my area of expertise. If there's something else that I can answer with respect to this issue, I am happy to do that.

[Monique Pauzé, Bloc, Repentigny, QC]

I wanted to see if what applies in the U.S. could apply here. I was talking about the automotive sector.

[The Chair, Liberal, Francis Scarpaleggia]

Thank you.

Ms. Collins now has the floor.

[Laurel Collins, NDP, Victoria, BC]

Thank you, Mr. Chair.

I want to go back to this question that has been raised a few times about the proportionality of the Canadian fine.

Mr. Sharpe, in your opening remarks, you mentioned that it works out to about $55,000 per vehicle in the U.S. versus $2,800 per vehicle in Canada. It's much smaller in Canada than the multi-billion dollar fine paid in the U.S.

It's really a question both for Mr. Sharpe and Mr. Malas. Do you think the Canadian fine is proportional to the scale of the crime committed and its impact on the environment and human health? If either of you want to take a moment, if it seems relevant, what is the impact on the environment and human health, and how was that, or wasn't it, taken into account in the Canadian plea agreement?

[Muhannad Malas]

I absolutely think that the fine was not proportional to the scale of this crime. As I mentioned, this is one of the worst environmental crimes in the history of Canada. If we want to just compare it proportionally to the U.S., we had 128,000 affected vehicles that were rigged, sold, and imported here. That was about a fifth of the number of vehicles that were affected in the U.S. Even though the U.S. has 10 times the number of our population, in terms of the VW cars that were impacted, they were five times higher than us. Then, if you look at the fines that they levied, they were much higher and greater in proportion than what we did here.

One thing I wanted to share—I'm going to look at my notes here because there are some numbers that I jotted down—is the way that the charges were packaged was, I think, really troubling because, for example, 10,269 2011 Volkswagen Jettas, the importation of all of those cars were packaged under one offence. That basically limits the number or the amount of fine that could be levied for that specific charge. I think that was troubling for us to see.

[The Chair, Liberal, Francis Scarpaleggia]

Thank you.

We now go to the Conservatives.

Is it Mr. Albas again?

[Dan Albas, Conservative, Central Okanagan—Similkameen—Nicola, BC]

Mr. Chair, I would like to share my time with Ms. Collins. I think she's on a roll.