Finance Committee on April 11th, 2024

[The Chair, Liberal, Peter Fonseca]

We can continue, and we'll all vote virtually here.

Thank you.

[Dr. Leah Temper]

There's a list of practices. You cannot use offsets to make claims of carbon neutrality. No generic terms or claims to carbon neutrality and net zero are permitted, and and so on.

One interesting example I would like to highlight is the case of Norway, which actually has a specific rule. As you know, Norway is the world leader in the sales of electric vehicles; I believe more than 70% of the cars sold there are electric. Since 2017, I believe, Norway has had a rule that no green or environmental terminology can be used to sell vehicles. A car cannot be described as “green” or “clean”; it doesn't even matter whether it is electric or not. What they say is that, fundamentally, cars are polluting.

This is another really interesting and useful example of what we can learn about how to market highly polluting sectors. There's no need to use environmental terms and green terms to describe them, and they're fundamentally misleading to consumers. We see in the example of Norway that this has not harmed the sale of electric vehicles.

In Canada, we currently have absolutely no guidance for companies on making green claims. The Competition Bureau had some guidance, but it has been archived since 2021. Right now there is no guidance for companies, and, as I mentioned, that has led to a huge surge in greenwashing.

Of course, we would have liked to have seen even more substantial changes to competition policy to address the greatest challenge to the economy in the coming decades, which will be the transition to a green economy. I believe Bill C-59 is a starting point. If possible, Bill C-59 should also highlight the need for complementary regulations and draw from some of the examples I put forward of what other jurisdictions are doing.

[Patrick Weiler, Liberal, West Vancouver—Sunshine Coast—Sea to Sky Country, BC]

Thank you, Doctor.

I think you have just given me some inspiration for a question to ask the Competition Bureau when they come to speak at the committee on this legislation.

The changes we have announced in this legislation so far do relate to specific products, but they don't look at forward-looking statements that companies make. Those, of course, are difficult to test, because we can't predict the future. The Quebec Environmental Law Centre mentioned that it would be useful to have evidence to back those up and to release that evidence proactively and publicly so that the public can do that type of assessment. I would be curious if you would agree with that testimony.

[The Chair, Liberal, Peter Fonseca]

Please answer briefly, Dr. Temper.

[Dr. Leah Temper]

Of course I would be in favour of all evidence for claims being available to consumers. However, for future and forward-looking claims, I would actually be in favour of those being considered misleading in all circumstances. Companies can clearly state what they are doing in the present that will impact their future environmental behaviour. There is no need to allow future environmental claims, that, as you say, cannot be verified.

[The Chair, Liberal, Peter Fonseca]

That is the time. Thank you, MP Weiler.

Thank you, Dr. Temper.

Members, we have about two minutes before the call of the vote. If we do vote virtually, but we are all in the room, then we would be able to come back to let the Bloc and the NDP ask their questions in the time remaining.

Is everybody good with that?

We are. Great.

We are going to suspend now.

[The Chair, Liberal, Peter Fonseca]

We have enough time so that the Bloc and the NDP get their full time for the round that we have.

We are going to start with MP Ste-Marie, please, for six minutes.

[Gabriel Ste-Marie, Bloc, Joliette, QC]

Thank you, Mr. Chair.

I would like to welcome all the witnesses and thank them for being here.

Ms. Temper, I was very happy with your testimony. We will be trying to make amendments to Bill C‑59 to improve it as you would like to see.

Because my speaking time is limited, I am going to reserve my questions for the LKQ representatives, Mr. Threadgill and Mr. Willshire.

It is really important to make sure there is real competition in the automotive repair sector, and so I want to thank you for being here and for your testimony. To my knowledge, unfortunately, the committee has still not distributed your brief. I imagine it is being translated and we will be able to get it. The clerk is indicating to me that this is the case.

Mr. Willshire, I invite you to take my six minutes of speaking time to explain your proposals for amending and improving Bill C‑59 to provide for a real right to repair, real competition, and access to information in the automotive sector.

[Derek Willshire]

Thank you, Mr. Ste-Marie.

For the fine details, I invite everyone to consult the brief that has been submitted. However, I can provide you with a summary, and I will let Mr. Threadgill add to my remarks afterward.

We know that it is increasingly difficult to access information relating to diagnosing, maintaining and repairing vehicles. Today's vehicles are much more technological, and that information is often transmitted to servers that are owned by the manufacturers, which further complicates repairing or doing basic maintenance on a vehicle. Consumers are increasingly required to go to the dealership, and this may involve travelling long distances for people who live in somewhat more remove areas. That means that consumers will have to pay higher prices as well as wasting their time.

Our reasoning is based on the fact that a car is the second most expensive item any Canadian family will buy. We would like to see more teeth and more specifics in the wording of Bill C‑59.

We hear a lot about the CASIS agreement, which dates from 2009 and was on a voluntary basis. I think my colleague referred to it. However, not all manufacturers are part of that agreement.

In addition, let's face it: today's cars have changed a lot. We are not opposed to technology and all of the safety-related aspects; they are very important and we are very glad of it. What is important to us, however, is to persuade you to reconsider access to that information so that repairs can be less burdensome. The choice should be up to consumers, because the vehicles belong to them.

Let's be clear: as our brief and our recommendations very clearly state, what we are interested in is the technical information related to diagnosing and repairing vehicles. We are not interested in consumers' habits or other information that might be recorded by the vehicles.

What we are asking for does not jeopardize any of the 135,000 jobs in the automotive manufacturing sector. What it does is protect consumers and give them a choice, in addition to protecting the 492,000 jobs in the secondary market. Obviously, I am referring to all the small mechanical repair shops and body shops in this great country, from coast to coast. That is becoming increasingly important.

Tyler, is there anything you would like to add?

[Tyler Blake Threadgill]

Sure, Derek, I can add to that.

I'd first say we very much appreciate that Bill C-59 highlights that there is a problem. What we would like to see from it broadly is the onus being taken off the consumer or the small shop, so that if they don't get access, they do not need to appeal. We think that the burden should not be on a small shop. If you take your car to your local mechanic and they say, “Give me a couple of weeks. I need to appeal to get this information”, you're going to go somewhere else. We want to avoid that.

We'd like to see it mandated that the car companies will allow the car owner to decide where they take the car and not have to go through that process each time they need an oil change or a brake change or when winter comes and they need to change their tires.

We're seeing instances now in which simply rotating tires requires access to data that some repair shops don't have. Specifically, we'd like amendments to include one to section 75 to make a means of diagnosis or repair available to a person within a specified period and on such terms as the tribunal considers appropriate.

Also, we'd like to have the trade secrets carve-out in subsection 75(2.1) struck down. We think that could just be used as a loophole. Obviously we have no interest in any of the car companies' trade secrets or intellectual property or access to any data other than for repair and maintenance, but we do see that as a slippery slope, in that the car companies could claim that any of that information was a trade secret.

Third, we'd like to see “maintenance and calibration” included in the proposed definition of “means of diagnosis and repair”.

[Gabriel Ste-Marie, Bloc, Joliette, QC]

Thank you.

[The Chair, Liberal, Peter Fonseca]

Thank you, Mr. Ste‑Marie.

We go now to our final questioner, MP Davies.

Please go ahead for our last six minutes.

[Don Davies, NDP, Vancouver Kingsway, BC]

Thank you, Chair.

Thank you to all the witnesses.

Dr. Temper, how prevalent is greenwashing? Can you give us a general idea of how widespread this practice is in Canadian society?

[Dr. Leah Temper]

I don't have all of the polls in front of me, but the practice is extremely widespread in terms of the number of companies that are now making green claims. We actually see that this is highly concentrated in sectors that are some of the most polluting.

There was a study, an analysis, done of advertising by different fossil fuel industries—and I will be happy to send all of these studies to the committee—and I believe something like 60% to 70% of the ads were making some sort of green claim. We know that these are the most polluting industries. That's a significant issue.

Other polls and studies have looked at and examined green claims. In different studies, from 40% up to 80% of the claims could not be verified, were not verifiable and would not withstand scrutiny.

[Don Davies, NDP, Vancouver Kingsway, BC]

Thank you.

Can you expand on the harms to citizens and public policy that you see as a result of greenwashing?

[Dr. Leah Temper]

Yes. The harms of greenwashing are really substantial.

As I mentioned, they're very different from other misleading and deceptive claims. You know that if you buy a product such as a razor, and they say it's going to last, if it doesn't last or it doesn't work well, obviously it's easy for you to spot that and to know.

The issue with greenwashing is, as I mentioned, that consumers have no means of verifying these claims. They often simply do not have the necessary understanding, for example, of how carbon offsets work or what net zero or carbon neutrality means. Most people do not understand scope 1, scope 2 and scope 3 emissions. You call a product “net-zero”, but of course 80% of the emissions are being released at the tailpipe.

This is a huge issue.

We also know that the green claims, as I mentioned, are impacting the environment for everybody. Companies are saying that they are greening their practices, and they're not. This means that the Competition Act is designed to deal with what are sometimes called “market externalities”, and pollution is one of the biggest externalities. It's sometimes said that climate change is the greatest market failure known to humanity.

Companies say they're green, but they're continuing to pollute. We know this harms us all—

[Don Davies, NDP, Vancouver Kingsway, BC]

Thank you—

[Dr. Leah Temper]

Second, this lowers competition, as we know, for companies that are genuinely green. They can no longer compete in the marketplace and they end up closing. This undermines the transition to a green economy.

Third—

[Don Davies, NDP, Vancouver Kingsway, BC]

Thanks, Dr. Temper. I'm going to interrupt you because I want to get in one more question, if I could.

The tobacco industry has a history of deceptive marketing, hiding the harms of its products and misleading consumers. I think your organization has done some work on that issue.

How would you compare modern greenwashing with that historic practice of the tobacco industry?

[Dr. Leah Temper]

Yes, we've drawn a lot of similarities with how oil and gas companies have been covering up and denying climate change. We know they had knowledge of climate change since the 1950s. Of course, this is the same way that tobacco companies had been marketing and pushing cigarettes as healthy for many years.

Greenwashing is sometimes called the new denial. Instead of continuing to deny the impacts of climate change, which they know is no longer possible, they are proposing and putting forward false solutions.

Another option I hadn't mentioned in what other jurisdictions are doing is completely banning the advertising of some highly polluting products. There are products, such as tobacco, that we know should not be promoted at all.

This would be another very effective mechanism for addressing greenwashing by the most polluting sectors.

[Don Davies, NDP, Vancouver Kingsway, BC]

Chair, do I have any time?

[The Chair, Liberal, Peter Fonseca]

Yes, you have about a minute.

[Don Davies, NDP, Vancouver Kingsway, BC]

Dr. Temper, on March 1, in his letter to the committee, Canada's commissioner of competition said, “While we welcome this new tool to address certain forms of “greenwashing”, in our view, it may prove to be a limited change that is more in the vein of clarifying the law than expanding it.”

Do you agree with that assessment? Why or why not?

[Dr. Leah Temper]

I'm sorry. I don't exactly understand the question.

I would be of the opinion, on what we can achieve under clause 236.... I urge you all to strengthen it as much as you can within your capacity, but I do believe that complementary actions are needed, if that is the question. In that, I would agree with the commissioner.

[The Chair, Liberal, Peter Fonseca]

Thank you, Dr. Temper, and thank you, MP Davies.

I want to thank all the witnesses for coming before our committee today and for your opening remarks and testimony. This will help us inform Bill C-59. Thank you so much. We really appreciate it and wish you the best with the rest of your day.

At this time, members, we are going to transition to our second panel. I am going to suspend.