Industry Committee on Oct. 28th, 2009

[The Chair, Conservative, Michael Chong]

Welcome to the 40th meeting of the Standing Committee on Industry, Science and Technology this Wednesday, October 28, 2009.

We're here today pursuant to the order of reference of Wednesday, May 13, 2009, concerning Bill C-273, an act to amend the Competition Act and the Canadian Environmental Protection Act, 1999, otherwise known as the “right to repair act”.

Today we have in front of us two groups of witnesses. The first witness is our esteemed colleague, Mr. Masse, the MP for Windsor West, who moved this bill in the House.

The second group of witnesses includes representatives from four different organizations: the Automotive Industries Association of Canada, the National Automotive Trades Association, the Canadian Vehicle Manufacturers' Association, and finally, the Association of International Automobile Manufacturers of Canada.

We have Mr. Smith, Mr. Adams, Mr. Finch, Mr. Wilson, and Mr. Brazeau representing those various organizations. Welcome to you all.

We're going to begin with 15 minutes of opening remarks and comments from Mr. Masse.

Go ahead.

[Brian Masse, NDP, Windsor West, ON]

Thank you, Mr. Chair, and thank you to my colleagues.

I may not take the full 15 minutes, but I do want to take an opportunity to at least introduce this bill, Bill C-273, which, as you noted, is affectionately known as “the right to repair”, and to provide the public with some background as to why the bill was brought forth, what's taken place, and what's going to happen in the future.

This has been an exciting opportunity for me, coming as I do from the auto sector of Windsor, Ontario, the capital of the auto sector of Canada, and being able to work on another auto issue. I've spent a lot of time in the House of Commons working on issues related to the production and distribution of vehicles.

What came about was that I was presented with a case of problems in the aftermarket with regard to onboard diagnostics that were introduced in 1996. There was a concern related to people getting the proper equipment, training, and software. I quickly found through some research that there were some concerns about this issue. As I went around and visited my local shops in the Windsor-Essex county area, I confirmed some of the concerns that were being brought forth. Some were for very legitimate reasons and some were for reasons that I thought were not necessarily fair.

I felt it was important for the bill to come forward in order to engage good public debate, as well as to look at this issue not only through the eyes of the consumer, but also from an environmental point of view and in terms of protection of the standards on the roads.

What was happening was that some vehicles couldn't get repairs in the aftermarket shops, repairs that were happening in Detroit, Michigan, two miles across the water from my hometown. It's interesting to note that some of those repairs were being done by people who were less trained, because the qualifications of the technicians in Canada are actually superior to those of technicians in the United States.

When we introduced this bill, it attracted a lot of public interest. I would like to thank all those who took part in that debate on both sides, as well as the general public who started to step forward and raise the issues. The bill moved through the House of Commons, as everyone knows. Recently it passed with 247 in favour, so the House of Commons obviously noted that this was going to be a very significant issue that we should look at.

To be clear, I also had an opportunity to go across this country. When I went to Edmonton, I found the same problems that were in my community with, for example, certain software not being available. When I went out to British Columbia, it was the same thing. Most recently I was out in the Halifax area, where I met with technician Ken Pickles. He went through a series of demonstrations of technology that had been purchased but wasn't capable of being used successfully. What that meant for consumers was that they had fewer options. I also found out that there were some real solutions that could take place.

Recently, as we all know, because of this activity and public debate, the minister signed on, together with the auto industry and the aftermarket, to a voluntary agreement that came forward. I had some concerns with that voluntary agreement, because I felt that legislation was the place the bill should be at the end of the day. At the same time, from that voluntary agreement announcement, there's also been additional inclusion of others, including the AIA, in issues that appear to be headed towards resolution.

Today I want to put thanks on the public record. We're going to move into some deliberations with the groups that are here today, but I want to read some names, Mr. Chair. Since I have 15 minutes, I want to read these names, because people worked hard and came forward. That's how I would like to spend my time. We can delve into the issues later.

I want to thank John Strickey of Midas Automotive in Halifax, Nova Scotia; Ron Jones of Mid-Island Automotive, Nanaimo, B.C.; Bob Oliver, executive director of Pollution Probe; Bento from Bento Automotive; Dave Santing from OK Tire and the Windsor Professional Auto Repair Association; John Sawatsky from MSJ Automotive and the Windsor Professional Auto Repair Association; Nancy and Roger Suranyi of Namao Automotive in Edmonton; Mario Schuchardt from Canadian Tire; Art Wilderman, Devon Jacobs, and Scott Smith from AIA; Chris White from CAA; Eric Lamoureux from CAA; Cynthia Lee from CAA; Dan Houle from ASPQ; Andrea Chamberlain from NAPA, Rockland; Cindy Wolfe from NAPA, Morrisburg; Bob Blakely from BTC; and Daniel Grech, who is one the technicians who came forward for a press conference. I will make sure the translators have all these names and information, Mr. Chair.

I would like to conclude by also thanking the thousands of Canadians who sent in e-mails, made suggestions for improvements to the bill, and debated it. It's very important that we had that contact.

I know there was intense lobbying on the Hill, on both sides--those who had concerns about the bill, but also those who very much supported the bill--and we appreciated that input.

Additionally, I would like to thank CVMA, AIAMC, and AIA for their efforts in terms of the discussion and debate over the last few weeks as this bill has moved forward.

Should we have what I'm hopeful will be a good solid presentation and some solutions in front of us, then I have a motion I will be moving that could conclude this process.

I want to thank, once again, all those who have participated, the upcoming witnesses, and of course the committee for taking this interest.

Thank you, Mr. Chair.

[The Chair, Conservative, Michael Chong]

Thank you, Mr. Masse.

We'll now begin with about five minutes of opening comments from each of the four groups.

We will first hear Mr. Brazeau.

[Marc Brazeau, President, Automotive Industries Association of Canada]

Thank you, Mr. Chair.

I am grateful for the opportunity to address the committee this afternoon concerning Bill C-273.

My name is Marc Brazeau, and I am the president of the Automotive Industries Association of Canada. With me is Scott Smith, our director of government and industry relations.

AIA is a national commercial association that represents the automotive aftermarket industry of Canada, a $16.7 billion industry that employs more than 410,000 Canadians. The industry is comprised of companies that produce, distribute and install parts, accessories, tools and equipment for the automotive sector. In addition to its members that are spread out among 18,000 establishments and subsidiaries, AIA Canada encompasses more than 7,000 service and auto repair shops that are directly affiliated to our members.

I am here to present AIA Canada's position on the matter of access to maintenance information, training and tools by the automotive aftermarket in Canada, in other words by the people who do the maintenance and repair work on your vehicles.

I am also here to set out the Automotive Industries Association of Canada's position with regard to the situation surrounding Bill C-273, also known as the “right to repair“ act.

I will be very clear. AIA does not believe that the adoption of the Bill is necessary. An agreement has been negotiated between the vehicle manufacturers and the aftermarket, and AIA has expressed its wish to participate by signing this agreement.

It has been a long road to get to where we are right now. With the indulgence of the committee, I would like to provide a brief explanation of how we arrived at this point and why we believe that legislation is no longer necessary.

In 1996, onboard diagnostics capabilities for emission systems was mandated in the United States for all vehicles 1998 and newer. The system is referred to as OBD II.

The platforms designed by the car companies to meet the requirements of OBD II have allowed the evolution of electronic repairs or software-based repairs. Industry lexicon refers to those software-based repairs as “flash downloads”. The term “flash downloads” can refer to a variety of procedures that can relate to the updating or recalibrating of the vehicle's computer or control modules, or to the initializing of various newly installed parts. Access to this flash download information is not available to the aftermarket from all car companies, nor are the factory-specific tools and training required to service modern vehicles available from all car companies.

As technology and the utility of the OBD II platform evolved as a key component of the repair process, so too did the urgency for the aftermarket to have access to this information. On late model vehicles there are many repair procedures that are not possible to complete without access to Reflash software. In a February 2006 report commissioned by AIA, DesRosiers Automotive Consultants estimated that the loss of business to the aftermarket should access to information remain unresolved could be as high as $4 billion by 2010.

The issue of access to information was addressed first in the United States through what was referred to as the Arizona Project, an attempt to legislate access to emissions-related repair information in the state of Arizona. Ultimately this resulted in regulations under the Clean Air Act, which mandated vehicle manufacturers to provide emissions-related repair information to the automotive aftermarket and the general public over the Internet.

In the context of a parallel process, vehicle manufacturers and representatives of the aftermarket have structured an alternate voluntary approach for the distribution of vehicle maintenance information. The agreement relating to the standards led to the creation of an organization called the National Automotive Service Task Force.

While it impacts businesses, the right to repair is fundamentally an issue of consumer choice. The aftermarket consistently ranks high in consumer satisfaction in an annual survey by J.D. Power and Associates. Our goal has always been to protect the businesses that provide that consumer choice.

The issue is worldwide, and references to the right to repair issue exist in Europe, the United States, South America and the Caribbean.

AIA identified access to OEM service information, tools, and training as a priority issue for its members in 2004. A coalition of industry stakeholders agreed on a path forward at the time that focused on securing industry consensus and the voluntary distribution of information for fair market value compensation.

From 2004 to 2006, AIA and its partners tried to engage vehicle manufacturers in a dialogue with a view to establishing in Canada an organization similar to the NASTF, the National Automotive Service Task Force. Despite numerous attempts at launching a dialogue, including a letter from the then Industry Minister, Maxime Bernier, the vehicle manufacturers did not recognize the existence of a problem nor follow up on our wish to arrive at a voluntary solution.

In 2007, Bill C-425, a private member's bill, was introduced in the House of Commons by the member of Parliament for Windsor West, Mr. Brian Masse. Due to the lack of progress with a voluntary solution, the concept of a legislated solution was endorsed by AIA and its partners. After the federal election in the fall of 2008, Bill C-425 was reintroduced to Parliament as Bill C-273, in January 2009. As no progress had been made on a voluntary solution up to that point, AIA and its partners fully endorsed Bill C-273 and asked all members of Parliament to consider its merits.

In April 2009, the Minister of Industry, Hon. Tony Clement, issued a letter to the vehicle manufacturers asking them to consider the creation of a voluntary option to resolve the differences within the automotive industry. On April 29, AIA participated in a meeting with the vehicle manufacturers, their associations, and other aftermarket representatives. This meeting terminated in an expectation to sign a letter of intent that made demands that AIA could not agree to at that time.

Although AIA did request to be included in the discussions regarding the formulation of an agreement, AIA did not participate in the creation of the CASIS document.

No matter how this agreement finally came to be, it rests on the central principle that the information, training and tools are to be made available to the aftermarket in a format that is compatible with that used by the vehicle manufacturers' authorized dealerships. This is what we had been asking for since 2004.

During a meeting between AIA and the signatories to the agreement, on October 15th, the reactive architecture of the agreement was expressed in the form of an interpretation guideline that clarified a fundamental concern of AIA with regard to the agreement. It is this gesture that convinced AIA of the agreement's validity.

To conclude my remarks, I offer the following.

AIA believes the most expedient and reactive way to manage access to information is through the committed structure provided by CASIS. We also believe that because of the commitment demonstrated by the signatory parties, that legislation is no longer necessary. AIA looks forward to a more collaborative and open partnership within the automotive industry, particularly with the Canadian Vehicle Manufacturers' Association, the Association of International Automobile Manufacturers of Canada, and the National Automotive Trades Association.

I would like to take this opportunity to thank all members of Parliament, as well as the committee members, for their indulgence and their assistance over the past years in raising the awareness of this issue. I would like to particularly thank Mr. Brian Masse for his courage and passion on this issue and for helping bring this to a fair and workable conclusion.

Mr. Chairman, those are my remarks.

[The Chair, Conservative, Michael Chong]

Merci, monsieur Brazeau.

Now we'll go to Mr. Finch, from the National Automotive Trades Association.

[Dale Finch, Executive Vice-President, National Automotive Trades Association]

Thank you, Chair.

I'd like to begin by thanking all the members of the committee for inviting the National Automotive Trades Association to express its views with respect to Bill C-273.

I would also like to commend Mr. Masse for bringing this issue to the forefront. It has brought us to this position today.

NATA is an association of associations. It is made up of major provincial and regional automotive associations across Canada. Collectively, our group represents some 5,000 grassroots repair and service facilities that employ approximately 50,000 Canadians. Our membership has a high contingent of collision repairers.

NATA has been involved in the search for a solution to information access, commonly known as right to repair, since 2001. Our preference, which has always been an industry-led voluntary process rather than legislation, has been proven successful in the United States.

For clarity, I would like a moment to describe the issue from our perspective and why it is important that a solution be achieved.

Back in 2001, a technical instructor working with our Ontario affiliate, the Automotive Aftermarket Retailers of Ontario, discovered that Canadians were unable to subscribe to a number of the OEM technical information websites that were set up to address the same issue in the United States. I'm referring to the websites overseen by the National Automotive Service Task Force, commonly known as NASTF.

Obviously, if an independent repair facility cannot access tools, training, and repair information, it cannot complete services and repairs to a vehicle. Instead, it must send the customer to the nearest dealership for those repairs. In many parts of Canada, particularly in rural areas, not all manufacturers have a franchise dealership close by, so our members are the ones Canadian consumers turn to for automotive service. Even in urban centres Canadians want freedom of choice when it's time to take their vehicles for service or repair. The number of dealerships with collision repair facilities is even smaller.

Public safety is an important factor in collision repair. Vehicles must be repaired properly so they're returned to original specifications that can be counted on to react to a subsequent collision impact the way the manufacturer intended. This requires the proper tools, training, and repair information.

To address this issue, NATA decided to emulate the work done by its counterpart, the Automotive Service Association in the U.S. Representing the automotive aftermarket service and repair industry, the ASA worked with U.S. car companies to reach a voluntary agreement. NASTF was formed to oversee the system and resolve any identified gaps in information. This system has been operating successfully for nearly a decade.

I will now explain why a voluntary agreement can do the job much better than legislation.

We see the legislation as an imperfect last resort, only to be used if a satisfactory voluntary agreement could not be achieved. NATA believes that, due to its technical complexity, the issue cannot easily be addressed by a legislative solution. Because of its rigidity, legislation would likely lead to interpretation or compliance issues. This would lead to litigation, which is an expensive and lengthy process.

The flow of information from automakers to the independent repair facilities would stop while awaiting the outcome. This would not serve the interests of the automotive aftermarket industry or the consumer because vehicles would still have to be taken to authorized dealerships for certain types of repairs.

This is the route of the issue Bill C-273 seeks to remedy, but if passed, the bill could inadvertently cause information access issues to become protracted. The industry-led voluntary agreement is flexible and could be amended quickly and easily to changes in technology, stakeholder concerns, and government policy. A voluntary agreement anticipates and circumvents foreseeable issues that could affect its implementation and execution.

NATA's specific concerns regarding Bill C-273, as written, are outlined in our prepared brief. I will not go into them at this time unless the committee has an appetite to hear them.

An agreement between Canadian automotive manufacturers and the aftermarket service and repair industry, called the Canadian Automotive Service Information Standard, CASIS, was signed on September 29, with the endorsement of the Minister of Industry, the Honourable Tony Clement. The CASIS will be fully implemented by May 2010. It provides all automotive service professionals with access to the information and tools required to diagnose and repair today's vehicles. This allows independent repair shops to compete in a fair marketplace and it provides consumers with freedom of choice.

In conclusion, NATA would like to suggest that the voluntary agreement now in place, Bill C-273, is redundant and therefore unnecessary. NATA recommends that the committee not proceed any further with Bill C-273.

On behalf of our members, I thank you again for allowing us to present our views to this committee.

I would also like to thank Mark Nantais, from the CVMA, David Adams, from AIAMC, Mathew Wilson, from CBMA, and Jason Vanderheyden, from AIMC.

It has been a long five months. We have worked tremendously hard to get to this position and present this agreement to this committee.

Thank you.

[The Chair, Conservative, Michael Chong]

Thank you very much, Mr. Finch.

Now we'll go to Mr. Wilson of the Canadian Vehicle Manufacturers' Association.

[Mathew Wilson, Director, Consumer and Industry Affairs, Canadian Vehicle Manufacturers' Association]

Thank you, Mr. Chair, and good afternoon, everyone. Thank you for having us here today.

I'll discuss our opinion of Bill C-273 a little, but will talk a bit more about the CASIS itself and why we view the voluntary solution as being the best approach for our industry at this time and moving forward.

Since 1926, CVMA has represented Canada's leading automobile manufacturers and sellers across Canada. Today our members include Chrysler, Ford, GM, and Navistar, who collectively have over 40 Canadian vehicle parts, manufacturing, head office, sales, and distribution facilities, over 1,000 dealers across Canada, and significant research and development facilities and programs in Canada. Most importantly, they directly support about 75,000 Canadian employees and retirees and additional hundreds of thousands of families through their extended supply chain across the country.

The issue of right to repair has had a difficult history in our industry and our association. Historically, we have always been advised by our members to remove ourselves from discussion on the subject because of concerns over impropriety under the Competition Act, something we always take very seriously. Furthermore, some of our member companies have historically provided the information being requested on this issue, while others did not. There was never a consensus on an approach—something that, in an association, is critical.

While everyone shared the joint concern over the necessity to protect their own corporate intellectual property as well as the rights of their franchise dealers, at the same time it was recognized that over 65% of all vehicle service and repair was being done through independent repair shops.

Given this background, September 29 marked an important date for our association and for our industry as a whole. As you have heard from the co-presenters so far, the announcement of the CASIS signalled the end of roughly six months of intense negotiations on the industry-led solution that results in all auto makers in Canada providing Canadian independent service and repair providers access to emission- and non-emission-related service information, diagnostic tools, and training information by no later than May 1, 2010. This was delivered as promised to the minister and to each of you in our original letter of intent dated May 1, 2009.

While we are now focused on the implementation of the CASIS, we must consider why we are here today and why we are confident that CASIS is the right solution for our industry.

Firstly, Mr. Masse, you are to be congratulated for your efforts in promoting the concerns and interests of Canadian consumers. It was the original purpose of Bill C-273, as you pointed out, to provide increased information, so that consumers had increased choice in auto repair in Canada. The industry itself used this as the basis for the development of CASIS. It was also the legislation, along with Mr. Clement's writing to all of our member companies and associations requesting an industry-led solution, that led us here today. Without both of these actions, we would not be focused on implementing the agreement as the industry-led solution to this challenge today.

Aside from the similarities of intent, however, we saw several challenges with the draft bill, and we saw an opportunity, with the minister's direction and the support of many in this committee and other members of Parliament, to negotiate and implement a voluntary solution.

Based on our members' and industry's strong history of pragmatism in designing and implementing industry-led agreements, we firmly believed that in this instance an industry-led solution could be successfully developed to accomplish a shared, desired outcome, while at the same time avoiding possible legal challenges, to the benefit of the industry and Canadian consumers.

We have included for your information a long list of the industry's voluntary actions over the last couple of decades. They cover a wide range of issues, including vehicle safety, vehicle emissions, fuel efficiency, and general consumer, environmental, and industry issues. These actions were typically implemented to either take the place of regulations or legislation or as a stop-gap measure to assist governments while regulations were being developed.

For example, in response to a 1989 letter from the Minister of Transport, manufacturers voluntarily began installing airbags in Canadian vehicles on the same timetable as in the U.S., in the absence of any Canadian regulatory framework.

Another example of consumer protections is from the early 1990s, when vehicle manufacturers, the Ontario government, and consumer groups established an Ontario motor vehicle arbitration plan, or OMVAP, to provide a fast, free arbitration program for consumers who felt that their new vehicle warranties were not being honoured. This program negated the need for provincial “lemon laws”, which are popular but very problematic in the U.S. Due to its success, OMVAP evolved into a nation-wide program called CAMVAP, which has the support of all governments across the country.

We have also created industry-only agreements similar to this one, such as the national automobile dealer arbitration program, or NADAP, under which the industry—manufacturers and dealers together—can independently settle disputes regarding dealer franchise issues.

Regardless of the structure of the arrangement, our history in this regard has always been that through a constructive partnership and cooperation we can effectively address public policy goals together through industry-led agreements. In every instance, our members and our sector as a whole have either met or exceeded the commitments made and agreed to.

But let's go back to CASIS. In the U.S., the auto industry went through a similar process by creating an industry-led solution to the challenge of right to repair through the establishment of NASTF, as you've already heard. The history with NASTF is similar to the history with previous Canadian industry-led solutions. It has successfully created a spirit of cooperation and partnership between OEMs and the aftermarket that has provided independent service and repair shops with the information they require to fix vehicles, while allowing OEMs to protect their intellectual property rights and the rights of their franchise dealers. This is why, when crafting the CASIS, NASTF was the primary model: we knew it would work.

Now that CASIS is signed, we are aggressively working on the implementation of the agreement, with a target date, as mentioned, of May 1, 2010, for full implementation by all auto manufacturers across Canada.

Part of this implementation will include clarifying the intentions of the parties to the agreement, should questions arise. One specific issue that was brought to our attention after the signing of the CASIS was the use of the term “engine calibrations”. Due to the language borrowed from the NASTF agreement, at first glance it appears that engine calibrations are excluded from the provisions under the agreement; however, it was only our intent to protect intellectual property of the OEMs and not to restrict access to the information actually necessary to fix vehicles. To resolve this misunderstanding, the CASIS task force has already issued an interpretation guideline, which has fully clarified the issue to the satisfaction of all groups. A copy of this guideline has also been given to you in your information package, for your reference.

However, the details aren't what's really important. What's important to note with this guideline is that an industry-led solution such as the CASIS has a significant advantage over other processes in being able to quickly address concerns that arise from the industry, to the mutual benefit and satisfaction of all parties. The CASIS provides this framework of understanding and intent, which can provide us flexibility moving forward, if other issues and concerns arise within the industry.

The members of the CBMA are fully supportive of the CASIS and its content and have confirmed, in a letter to the Minister of Industry, their intention to abide by the terms and conditions spelled out in the agreement. Again a copy of these letters has been submitted to the committee for your information.

Our members have a successful history in using agreements such as the CASIS and, like other manufacturers operating in Canada, have committed themselves to ensuring that this agreement is a success. In light of the CASIS, our positive history of voluntary agreements, and the progress of the industry since the current legislation was referred to this committee, the CBMA, on behalf of its members, is recommending that the agreement be given the opportunity it deserves to succeed and that Bill C-273 not proceed any further.

Thank you again for the invitation to be here. I look forward to the discussion.

[The Chair, Conservative, Michael Chong]

Thank you very much, Mr. Wilson.

We'll finish our opening round of statements with Mr. Adams, from the Association of International Automobile Manufacturers of Canada.

[David Adams, President, Association of International Automobile Manufacturers of Canada]

Mr. Chairman and committee members, thank you very much for the invitation to appear before the committee today to review Bill C-273.

My name is David Adams, and I'm the president of the Association of International Automobile Manufacturers of Canada. Our association represents 14 member companies, which sell over 51% of the vehicles in Canada and 64% of the passenger cars in Canada. They are responsible for about 77,000 direct and indirect jobs in Canada.

The problem with going last in a panel on which people are all saying pretty much the same thing is that much of what is in my presentation has already been said. With that in mind, I'm going to make my remarks brief, because I think the real benefit will come from the questioning from the members.

I have a few points I wish to make, though, if I could, with respect to Bill C-273 and CASIS. I think it's important for committee members to understand that at the time Bill C-273 was introduced by Mr. Masse, on January 27, 2009, and when the House of Commons passed second reading of the bill by a vote of 248 to 17 on May 13 of this year, there was no other option, besides legislation, that existed to address the issue of aftermarket access to vehicle manufacturer service and repair information. At that point, all any of you would have been aware of was that AIAMC, CVMA, and NATA had signed a letter of intent, dated May 1, that, in effect, represented a promise to develop and then implement an agreement among the vehicle manufacturers on the aftermarket.

Where are we today? Simply put, today there is a viable option to legislation--CASIS--which had not been developed when the House of Commons last dealt with this issue. All stakeholders now see the merit of proceeding with an agreement that the industry developed itself, without the need for government intervention.

While access to service and repair information has never been a consumer protection issue, as some have characterized it, consumers do stand to benefit from the CASIS agreement. CASIS will allow independent repair and service providers to conduct all repairs, which will decrease the amount of time a consumer's vehicle will spend in the shop. And consumers will enjoy greater opportunity to have their vehicles serviced at more locations.

CASIS will be fully implemented on May 1, 2010. In the interim, we have populated the task force and subcommittees that will govern the implementation and administration of the CASIS agreement with senior executives from the vehicle manufacturers. The CASIS parties have also invited the director general of the automotive and transportation industries branch at Industry Canada to sit as an observer on the task force to ensure transparency and accountability, which is important to the parties and to you, as members of Parliament.

Additionally, we have met with groups and organizations that had previously supported Bill C-273 to ensure that they were aware of CASIS and its goals and objectives. Overall, these organizations have been supportive of CASIS and have viewed it as a viable alternative to legislation. Importantly, we have met with the Canadian Automobile Dealers Association, CADA, which has lobbied members on the issue of access to service and repair information from a slightly different angle. CADA is fully supportive of the CASIS agreement.

So where are we going? We're moving forward collectively and constructively with the implementation of CASIS. We have spent a significant amount of time and effort putting together an agreement that all stakeholders now believe is the most effective means of addressing the issue of automotive aftermarket access to vehicle manufacturer service and repair information. We do not anticipate making any changes to the agreement until experience after implementation dictates that the agreement needs to be amended. Our agreement has provisions for amending it in a fashion that is straightforward and is much simpler than amending legislation.

The three CASIS parties have also laid out a process for bringing the AIA into CASIS as a full partner. My presentation, which you will receive a copy of eventually, in both official languages, outlines a number of the concerns and issues we have with Bill C-273. For the sake of time, I'm not going to deal with those unless the committee wants to delve into those concerns.

In summary, the members of the AIAMC believe that Bill C-273 is not only unworkable, it cannot even be reasonably amended into legislation that will provide the automotive aftermarket with the same access to service and repair information as the CASIS agreement will provide. The development of CASIS is the first step. Implementation in May 2010 is the next step. Garnering real life experience with the agreement following implementation is the most appropriate way of dealing with this issue.

Clearly, if the industry cannot collectively manage the issue of providing service and repair information, training information, and tooling and equipment to the automotive aftermarket, then government intervention is one possible alternative.

To consider legislation, especially bad legislation at this point, is to put the cart before the horse. We therefore make the following recommendations.

In recognition that the CASIS agreement has been signed among the aftermarket and the vehicle manufacturers, effectively resolving all the issues that gave rise to Bill C-273, and Bill C-425 before it, we recommend to the committee that the bill be referred back to the House of Commons with a recommendation from this committee not to proceed with the bill.

In recognition of the provision for government to monitor the ongoing work of the task force in both implementing and administering the CASIS on a go-forward basis, we recommend that this committee recommend to the House of Commons that the CASIS agreement is the most effective tool to address the issues of the automotive aftermarket access to service and repair information.

Mr. Masse has stated in regard to Bill C-273, that he bill ensures a level playing field and creates the mechanism for disclosure”. We do not believe Bill C-273 could achieve that goal. However, we do believe that goal has been achieved through the CASIS.

Thank you for your time, and I look forward to your questions.

[The Chair, Conservative, Michael Chong]

Thank you very much, Mr. Adams.

We'll begin now with Mr. Valeriote.

[Frank Valeriote, Liberal, Guelph, ON]

I don't know whether to ask questions or come over and shake your hands, but I can say that it's a privilege to be able to ask the first question, and in doing so, compliment and congratulate you all for the voracity with which you pursued a voluntary agreement. I remember speaking in the House in the spring, urging that you pursue that voluntary agreement, get it done, and get it done in time, and you were able to achieve that.

I also want to acknowledge the preference for an agreement over legislation, which, I agree with Mr. Finch, is costly, intrusive, and burdensome in interpretation and maintenance. Where people can voluntarily agree to things, it is always preferable to legislation.

I think there is always recognition of that delicate balance between consumer rights and a manufacturer's right to intellectual property, and you seem to have achieved that. At the same time, I think we should acknowledge all those quiet intervenors around the table who I think helped you, or beat you, into an agreement--I'm not sure which.

That said, I still feel that I have some due diligence to undertake here, and I have three short questions.

Firstly, if AIA does not ultimately join this agreement, will that change anything? I know they're not currently signatories. So perhaps David Adams can answer that.

Secondly, section IX, on page 15 of the CASIS agreement, talks about providing 60 days' written notice and 30 days to discuss that party's intent to terminate. What happens if AIA does become party to the agreement, or not, or if any one of you, with your many acronyms, decide that you're going to terminate? Does that mean the whole agreement fails, or is it possible that the agreement can survive, notwithstanding that one party decides to pull out? Frankly, I'd hate for an organization that's currently a party or becomes a party to say, “Now we've changed our minds; six months have gone by and we want out,” and everything fails.

My third question is to whoever wishes to answer—and please, I do want an answer.

The agreement says it will be in force upon signing. However, each individual OEM has until no later than May 1, 2010, to implement the terms and commitments contained therein. So I'd like one of you to tell me, what have you undertaken at this point to make sure that you meet that deadline of May 1, 2010?

Those are my three questions, and David, you may want to go first.

[David Adams]

Again, just to make sure I understand your question, the first question was, if AIA does not join the CASIS, will that change anything?

As the three parties to the CASIS, I think we've been clear all along with those of you we've had the opportunity to meet with--and I think we've met with probably all of you--that this agreement is going to go forward regardless of whether AIA is on board or not. The agreement speaks to the fact that it's applicable to all the automotive aftermarket regardless of association. I think we've always said from day one, going back to that meeting on April 29, that our preference would be to have AIA involved in the agreement. AIA chose not to participate in the letter of intent and in the work in developing the agreement, and we are where we are today.

If you'd like me to try to address your other questions, I think I'll invite my colleagues to chime in as well. I think your second question was around termination. If one party terminates, does that mean the whole agreement falls apart? From my perspective, and I think from the perspective of all of us, no, that wouldn't be the case. If one party decided to pull away from the agreement, the agreement would still stay in force. I guess you could look at it in some ways as having AIA on board with the agreement as a strength because then we have two aftermarket parties. If one of them pulls away, then there's still an agreement in place. The intent is not for the agreement to be terminated if one party pulls away from that agreement.

That said--and I think it needs to be perfectly clear, and I only speak for my own members--my own members are not going into this agreement with a view to even looking at terminating the agreement at any time.

I'll let somebody else answer the third question, which I think was related to the May 1 implementation. Matt.

[Mathew Wilson]

Sure.

Thank you, Mr. Valeriote, for your question.

I have a couple of things; one is on the termination. Our view is that even if someone did leave the agreement, it does not mean the agreement is destroyed. All it would really take is for us to sign the identical agreement with whoever is left or whoever wanted to participate. We have discussed that inside our own organization. That's certainly our sense. The agreement would still live on and it would be applicable to everyone. I think it's important to note that it isn't association specific; it covers everyone regardless of affiliation.

One question you asked that is really important is about what has been done since we've signed this agreement. I can happily announce that one important step that was taken was that the Ford Motor Company, which previously did not offer any of this information, has turned on access to the U.S. site to Canadian service providers. It only took them about a week from the beginning of negotiations, knowing what the outcome would be. They were working with their own internal processes to get that ready.

I know from our perspective that was a big step forward, and it really shows you the commitment from the automakers. That brings us up to somewhere probably around 60% to 65% of the total market in Canada that is providing that information today. I know the rest of the companies out there are all working for it, and Dave can speak for his members. There are a number of issues that each one of them has to do internally to get this right. This is not as simple as flipping a switch, but they are working on it. They have till May 1, so there is a lot of work to be done.

[Frank Valeriote, Liberal, Guelph, ON]

Do I have any more time?

Mr. Smith, I think we met before, and you had expressed concerns to me about engine calibrations, which I took quite seriously, including the ability to even turn on the car after a third-party service repairman did all the work. I understand with that access to engine calibrations, other things could be done to a car, including maybe even changing its horsepower, which is frankly not something I support because that's not what you paid for; you paid for the car with the horsepower it had. I'm told now that you have received assurances, through information bulletins, that you can turn on the car and access other information.

At this time, are you completely satisfied with the concerns you had, which kept you from participating in this agreement to date?

[Scott Smith, Director, Government and Industry Relations, Automotive Industries Association of Canada]

Just to elaborate briefly on what's meant by engine calibrations, that was the only reference in the agreement to what we were looking for all along, which were the flash downloads, which as you heard from Mr. Brazeau, were a central component of what the aftermarket has been looking for, and you've heard it from the rest of the witnesses as well.

There was no other reference to flash downloads. So our interpretation of the agreement when it first came out--and we only got a copy of that on September 29--was that the relationship between engine calibrations and flash downloads was synonymous. Since then we have had several meetings with the AIAMC, CVMA, and NATA, and they have issued what they refer to as an interpretation guideline. That interpretation guideline is very clear on the fact that flash downloads will be available to the aftermarket. So to answer your question, yes, we are satisfied.

[Frank Valeriote, Liberal, Guelph, ON]

I see that you wrote a letter to Mr. Garneau, whose seat I am occupying right now, and it's a very large seat indeed. I'm just curious—

[Mike Wallace, Conservative, Burlington, ON]

What are you saying about Mr. Garneau?

[Frank Valeriote, Liberal, Guelph, ON]

I notice that the letter says you're prepared to sign the CASIS agreement as is and commit to working under those terms for at least six months. Is there anything about the six months? Can somebody talk to me about that?

I want to know that your heart's in this, and that in six months' time something isn't going to change.

[Scott Smith]

The reference to six months, to answer your question, was in direct response to Mr. Garneau's letter, which was a request, from what I understand, from David.

[Frank Valeriote, Liberal, Guelph, ON]

Can that be clarified, then, Mr. Adams? Why is there reference to six months?

[The Chair, Conservative, Michael Chong]

Go ahead, Mr. Adams, and then we're going to go to Monsieur Bouchard.

[David Adams]

I'm happy to answer that question. I think it may have been you, Mr. Valeriote, who referred to this earlier.

There have been a number of intervenors around the table trying to get to the point where everybody could be brought into this agreement. I was asked what it would take from our perspective, as AIAMC, to get AIA onboard. I think that was partially out of frustration—because we're hearing from intervenors, and not necessarily from the AIA themselves, what the conditions would be—and to open up lines of communication.

I made it very clear when I was speaking with Mr. Marc Garneau that from my own personal perspective we didn't want any changes to this agreement for any length of time, and at a minimum for six months. I think we're all of the view that we worked very hard to put an agreement together that makes sense to everybody.

You've just heard from Mr. Smith that AIA is comfortable with the agreement and from Mr. Brazeau earlier that they're comfortable with the agreement. So from my perspective, there should be no need to change the agreement any time soon.

[The Chair, Conservative, Michael Chong]

Thank you, Mr. Adams.

Thank you, Mr. Valeriote.

Monsieur Bouchard.

[Robert Bouchard, Bloc, Chicoutimi—Le Fjord, QC]

Thank you, Mr. Chairman.

Thank you also to the witnesses for having come here to appear in harmony. We can consider that your participation here is good news, given that there is agreement between the groups involved in this whole vehicle repair dimension.

My first question is for whomever might wish to respond. How is Bill C-273 different from the agreed accord? I know that there is a difference with regard to the voluntary aspect of the agreement, but if we leave that aspect aside, in what way is Bill C-273 different from your agreement?