Industry Committee on Oct. 31st, 2022

[David Adams]

I can't confirm that every one of my members complies in the same way. In terms of consequences, I think what we have established is that the agreement has been working well for the last dozen years. The incidents of people saying they can't get service and repair information have been few and far between.

[Brian Masse, NDP, Windsor West, ON]

That's not what I'm hearing, just so you know, and we'll get more testimony, hopefully, about those things. I'm glad you're here to say that.

Do you feel that CASIS needs to be updated or made mandatory and maybe have some consequences? Right now we have a good example in Tesla. They don't even participate. How do we deal with that issue in others that are coming into the market?

[David Adams]

When we set CASIS up a dozen years ago, I think that was an issue that we recognized we were going to have to deal with down the road, as is security information, for instance. I think you know, Mr. Masse, that security information was not part of the CASIS agreement, because we had no mechanism to be able to deal with it in Canada at the time.

Two years after CASIS was established, we did establish a vehicle security professional mechanism that was better than in the U.S. Then what happened was that the individual who was tracking all that for the aftermarket unfortunately passed away, and there was a gap in the system, and there was no way to address it. Canadians no longer enjoy that opportunity.

[Brian Masse, NDP, Windsor West, ON]

I'll go over to Ms. Baker.

One of the things that I'm concerned about.... I have a dealer. I go to a Ford dealership. I also go to the aftermarket as well. I can tell you that I hear enough testimony from people who can't get the information, and I've actually been the victim of that.

What does it say to young people who want to get into this profession in the future? As vehicles change, one thing I'm concerned about is that the dealers know that they can't perform all the maintenance and the types of things that are necessary, and the aftermarket is critical.

I'm concerned about young people who are investing the cost of education and their time and then getting into an unstable market. That's one of the reasons I think that the CASIS agreement needs at least either modernization or enforcement.

[Alana Baker]

I agree on CASIS. Again, this is an agreement that is now outdated. It's over a decade old, and information access must keep pace with the advancements in technology. Today we see automotive professionals who are dealing with vehicle systems and components that simply did not exist back in 2009 when CASIS was created.

Contrary to what you are hearing, CASIS does not work and it does not solve the problem, for a number of reasons.

First, it's not enforceable. There's no legally binding enforcement mechanism in place.

Second, as you mentioned, automakers are not required to participate, and some, like Tesla, do not.

Third, it applies to on-board diagnostic systems, or OBD. This is a technology that's becoming outdated. Again, an example is Tesla. Some Tesla models do not come equipped with standard OBD equipment. CASIS doesn't apply to vehicle telematics systems, which I spoke to earlier. This is a technology that's found in 60% of vehicles worldwide, and it will be in an estimated 95% by 2030.

Last, I would say that the agreement provides a framework for automakers to share repair information with the auto care industry on a level equivalent to that of their authorized dealers; however, some automakers have moved to a direct sales model, so that eliminates the traditional dealers altogether, along with their obligation to independent automotive shops.

[Brian Masse, NDP, Windsor West, ON]

Yes, and that's what I wanted to follow up with. All you're asking for is to be treated fairly and consistently, which has been the past practice, the norm, for this country, before requiring the aftermarket voluntary agreement. You're not asking for anything special. You're not asking for anything free. You're not asking to be unaccountable. You just want a proper, transparent, consistent process. Is that correct?

[Alana Baker]

That is correct.

As per the CASIS agreement, independent auto care shops are prepared to pay commercially reasonable prices for repair information. We did see a 2019 survey of independent auto care shops across Canada. It found that just shy of 90% of respondents purchased some type of subscription.

Independent shops just simply want to have the right to fix the vehicle. No one is asking for anything free or for government handouts. They will pay for the training and the access to information. What they don't want is to have to pay a dozen different OEMs a dozen different fees. It would be more effective and efficient to have a centralized control for this information.

[Brian Masse, NDP, Windsor West, ON]

Yes. I come from the auto sector, where, ironically, OEMs have actually received significant public financing and support in the past and also for the future for the innovation we're doing. The public is actually vested in these great operations that we do have in our country.

[The Chair, Liberal, Joël Lightbound]

Thank you Mr. Masse and Ms. Baker.

Mr. Généreux, you have the floor now for five minutes.

[Bernard Généreux, Conservative, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

Thank you, Mr. Chair.

Thank you, witnesses, for being here and for your very interesting testimony. It's very important for us to hear everyone's point of view.

Ms. Baker and Mr. Séguin, what about warranties? That's something that really interests me.

When you buy a vehicle, it usually has a warranty for something like three, four or five years. You can also purchase an extended warranty on certain types of vehicles.

If someone has their car repaired somewhere other than from where it was purchased, or from the dealership, what's the status of warranties at the moment?

In the future, what will happen to this warranty if a third party repairs the vehicle using original parts? It's important to specify that, because there are also aftermarket parts. Do you think that the warranty will still be valid?

[Sylvain Séguin]

At the moment, there are certification programs for that. Many manufacturers participate. They supply the information and support training to ensure that vehicles are repaired in accordance with manufacturer's specifications. It works very well.

I'd like to raise another point, however. After a collision, the dealership doesn't necessarily have what it takes to make body repairs. In such instances, the dealership signs an agreement with an independent body shop or with one of our members for things like body or rust repairs. There are never any problems from that standpoint, and the person carrying out the repairs always has access to the manufacturer's standards for the particular vehicle to be repaired. As I mentioned, many manufacturers work with us and provide us with that information. Unfortunately, some do not, and that's where a problem arises.

As for warranties, provided that repairs are made in accordance with manufacturer specifications, the warranty is approved.

[Bernard Généreux, Conservative, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

In other words, the warranty remains valid.

[Sylvain Séguin]

Yes, that's right.

[Bernard Généreux, Conservative, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

Okay.

For a century, basically ever since it was invented, the automobile has evolved enormously. We are inevitably headed into a time when all cars will be using the new technologies. In fact, that's already the case for virtually all of them. As you mentioned, cars are computers on wheels.

Personally, I have my car repaired two minutes away from where I live. I go to the local mechanic, who took the shop over from his father, and is trying to keep his garage going as best he can. I've never asked him, but I would imagine he's a member of an association like yours and that he undergoes training.

As we know, new technologies are going to be used at one point or another. As Mr. Miao, the sponsor of the bill, said earlier, even his refrigerator has become a four-legged computer. I don't understand how it's going to be possible to repair all these cars that have become computers on wheels without the essential information.

[Sylvain Séguin]

I agree with you. It's important to have information, but also to have training.

I can tell you that your corner garage owner has to be trained and have the equipment required to be able to repair vehicles. However, access to this information should be available at a reasonable price. In a manner similar to what Ms. Baker was saying earlier, a somewhat more general certification program should be available rather than having each manufacturer using their own tools and equipment, thereby generating higher and higher costs.

I had a conversation with a manufacturer last week. He told me that only 30% of his vehicles, following a collision, were repaired in accordance with manufacturer specifications, because there wasn't enough capacity and the program is extremely expensive.

I can understand a manufacturer wanting to control marketing aspects, but without readier access to the training and equipment needed, the kind we are asking for now, it will become difficult to repair vehicles properly.

[Bernard Généreux, Conservative, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

Mr. …

[The Chair, Liberal, Joël Lightbound]

Thank you very much, Mr. Généreux. I have to interrupt you because we're running out of time.

I am now giving the floor to Mr. Gaheer for about three minutes.

[Iqwinder Gaheer, Liberal, Mississauga—Malton, ON]

That's great. Thank you, Chair.

Thank you to the witnesses for making time for the committee.

My question is for Mr. Drury.

You said this bill could threaten important environmental gains by circumventing embedded restrictions or permitting unseemly engine modifications or providing more horsepower than what's recommended.

My question is this: Aren't there other regulations or laws that prevent this from happening? Certainly the Copyright Act can't be the only thing standing in the way. If someone's already violating these laws and regulations, then what's this bill going to change if they're already violating it?

[Craig Drury]

You're right. They are already violating it. We just feel that this is going to make it easier and proliferate the problem.

[Iqwinder Gaheer, Liberal, Mississauga—Malton, ON]

Do you agree that there are other laws and regulations in place that prevent that from happening?

[Craig Drury]

Yes.

By the way, we do agree that with some consumer products, that makes sense. If you can keep these things running, keep phones and stuff from going to landfill, then we're all about keeping those going. In our particular industry, we are trying to keep the machines running into a 20-year life cycle. We need them repaired.

[Iqwinder Gaheer, Liberal, Mississauga—Malton, ON]

Thank you.

We know that, for example, calibration procedures for advanced driver assistance systems can be very costly on vehicles. Some Audis, for example, require an eight-hour calibration process. If we applied a cost per hour of $125, that implies a cost of over $1,000.

I think Mr. Masse raised the point of the reason we are here today. Wouldn't you agree that the reason we're here today is costs? Compared to independent repair shops, dealerships charge consumers 36% more for repairs.

That's a question for all the witnesses.

[David Adams]

Maybe I could start.

If you look at the representation in the marketplace currently in terms of installed market parts, you see that dealers have 28% of that market. The aftermarket has 59% of that market. In terms of DIY parts, the dealers have 4.5% of that market. The aftermarket has 67.6% of that market. If you look at just the composition of the market right now and the growth in the market, you see it's not an issue of whether or not there's competition out there. There's clearly competition.

The questions were posed earlier: What are we all here for? What are we all concerned about? I think fundamentally the issue is more about the future and what's going to happen in the future. It's concerns about that. I think everybody in the automotive industry shares the concern about what's going to happen in the future, because technology is changing so rapidly, whether you're a manufacturer, a dealer of that manufacturer or part of the aftermarket.

The solution is not to put in place a bill such as the one we're talking about today, which opens up not just the consumer but society as well to far greater risks associated with cybersecurity, safety and emissions. That was already mentioned.

[Iqwinder Gaheer, Liberal, Mississauga—Malton, ON]

I think you already answered this question earlier. To reiterate, you would support this bill, with certain modifications that would address your concerns.

[David Adams]

If you can find a way that's going to address the cybersecurity concerns....

Let me put it another way. If the automotive aftermarket is prepared to accept all of the liability associated with those rights that you are suggesting, then that's an entirely different equation.

Right now what happens in lots of cases is that vehicles will go to the aftermarket for repairs. The consumer doesn't go back to the aftermarket dealer when they have a problem with their vehicle; they go back to the manufacturer. How do we have a record of all of the servicing on that vehicle when that information is not shared between the aftermarket dealer and the manufacturer?

We're all for the ability of the consumer to get their vehicle repaired, but the rights and liabilities need to be balanced.