Industry Committee on Oct. 31st, 2022

[David Adams]

I think the reality is that what's before the committee currently opens up a host of problems and challenges with respect to, as both Mr. Drury and I have enunciated, potential risk to safety, potential risk to environmental compliance and various other issues that are problematic.

[Craig Drury]

Yes, I agree with that. I think the answer to your question is yes, we would support it if our issues around safety and emissions were....

The other one that we're not talking a lot about is machine performance. Software is there to control how the machine is designed to operate in a safe way from a performance perspective. That could easily be modified so that the machine was working in an unsafe way. We're concerned about that as well.

[Ed Fast, Conservative, Abbotsford, BC]

All right.

Ms. Baker, thank you for your presentation as well.

Did I hear you say that you believe auto owners, not automakers, should be the owners of their data, including diagnostic data?

[Alana Baker]

Yes, it's our view that it's your vehicle, so it's your data as the auto owner.

[Ed Fast, Conservative, Abbotsford, BC]

Okay.

How do we protect the OEMs with respect to the issues that have been mentioned by both Mr. Drury and Mr. Adams?

[Alana Baker]

To start, we've heard a lot about privacy and cybersecurity. This has always been a priority for the aftermarket. Cybersecurity and privacy should not become reasons to justify limiting serviceability. I would say notably, as an example, the National Highway Traffic Safety Administration in the U.S. recently released updated cybersecurity practices for motor vehicles and recommended that the automotive industry provide strong vehicle cybersecurity protections that do not unduly restrict access by alternative third-party repair services authorized by the vehicle owner. The aftermarket wants repair information to be accessible through an interoperable, standardized, open system.

It's also worth mentioning that we have seen among IT experts an opinion that a multi-layered architecture of interoperable open systems might offer better protection against cybersecurity attacks in closed systems.

Also, cybersecurity and privacy risks can be managed. They can be managed throughout the vehicle's life cycle through collaboration among automakers, the aftermarket, and industry and regulatory experts. I would say that implementing industry standards can be safe. They can create secure, direct and standardized access to the vehicle data, which can then be directed to the repair facilities of the consumer's choosing. At the end of the day, it comes down to consumer choice.

[Ed Fast, Conservative, Abbotsford, BC]

You also mentioned that there were some changes to the Competition Act that you felt might be required to ensure that the OEMs don't circumvent the right of repair. Perhaps you could expand on that.

[Alana Baker]

Sure. We believe there are some amendments that can be made to this bill, Bill C-244, that would strengthen its intention. That would truly pave the way for the right to repair in Canada. Parallel changes to the Competition Act would help to reinforce the manufacturer's requirement to allow access to diagnostic and repair information, which would address some of the systemic issues around data ownership and allow our small and medium-sized businesses to truly compete.

We did see Bill C-231, which was brought forward by MP Brian Masse. I want to thank Mr. Masse for bringing this bill forward in February 2022. That bill contains a number of amendments to the Competition Act that would help to access the data. In particular, we are proposing a new section be added after section 75 of the Competition Act, proposed section75.1, “Vehicles—Access to Information and Service Parts”. I would be happy to provide members of the committee with the specific text after the presentation today.

[Ed Fast, Conservative, Abbotsford, BC]

Could you just explain to the committee how this bill will actually improve competition in the marketplace?

[Alana Baker]

Let me bring it back to the consumers for a minute. Consumers today are grappling with high levels of cost-of-living expenses. The type of monopolistic control and behaviour we're seeing from manufacturers is frankly unacceptable, particularly during these times when it adds to the burden of increased costs.

Governments have a responsibility. It's time to modernize our laws and bring them up to date so that they can keep pace with the rapid advancements in vehicle technology and are fitted to the wireless world we are currently living in today. This is not just about ensuring fair competition. This is about the preservation and protection of consumer choice and ensuring that consumers have continued access to reliable, essential and affordable vehicle service and repair.

[Ed Fast, Conservative, Abbotsford, BC]

Thank you. Those are all my questions.

[The Chair, Liberal, Joël Lightbound]

Thank you very much, Ms. Baker and Mr. Fast.

And now it's over to Ms Lapointe for six minutes.

[Viviane LaPointe, Liberal, Sudbury, ON]

Thank you, Mr. Chair.

My question is for Mr. Drury.

I'm from Sudbury, a global mining centre. We know that the mining industry uses a vast amount of equipment in their operations. Can you describe for the committee the impact that Bill C-244 would have on this sector? I'm specifically interested in learning about the economic impact as well as the environmental impact on the mining industry.

[Craig Drury]

I'm not directly in the mining industry, so I'll talk just generally about this. For example, there's a project in Fort McMurray right now, where a number of autonomous truck fleets are running that require very sophisticated software and control systems to operate in a safe way.

The other comment I would make is again a general comment. I am sure that in all mining operations in Canada today, there is software going back and forth. There will be trained technicians on those jobs, on behalf of the OEMs as well as the dealers and the customers themselves, to make sure that those machines are as productive as possible. The mining industry is probably the one where production is very important. Just due to the sheer numbers, if machines are down, it's a big deal. There's a lot of support going on to make that work.

From an economic perspective, just anecdotally, from the stories I've heard, it drives jobs for all three of those—the dealers, the OEMs and the sites themselves.

[Viviane LaPointe, Liberal, Sudbury, ON]

Thank you.

This summer we held a round table in Sudbury with the Minister of Agriculture when she came to visit and some of our local farmers. One of the challenges they cited for farmers, especially in rural areas, is the increasing lack of access to mechanics and to mechanical parts for their farming equipment. Is it your view that Bill C-244 could help address this challenge for rural farmers?

[Craig Drury]

I'm going to say no. Today we are sharing, again, as much information as possible. In fact, I need to take a little issue with the remarks at the beginning. There really aren't tractors down right now because they don't have the information. The good dealers out there are supplying information to keep those machines running. I have people on staff right now who are getting fault codes on their phones before the customer even knows about it. The parts are on the way so that the customer can do the repair themselves, before they even know there's an issue.

That's the reality of what's going on in the field today, regardless of how remote it is. I would suggest that if the customers have good relationships with their dealers, they'll probably be just as productive as they would be if they tried to do it on their own.

[Viviane LaPointe, Liberal, Sudbury, ON]

Thank you.

Ms. Baker, I read your submission to the committee. I would like you to expand on your statement regarding protecting consumers “by legislation that reflects the new reality of vehicles in Canada”. I think you also speak about “the aftermarket direct, remote, and real-time access to diagnostic data”.

[Alana Baker]

I'll say that we are seeing rapid advancement in vehicle technology.

As I said, vehicles on today's roads are effectively computers on wheels. Cars today are now equipped with vehicle telematic systems. These systems refer to the computer hardware that is embedded in a vehicle. It collects, stores and processes all the data on the health of the vehicle's systems, including the data that's needed for diagnostics and repair. This data is then transmitted directly from the vehicle to a back-end server, wirelessly, where it's under control and ownership of the automaker.

The problem that we're seeing now is that the telematic systems that are installed in the vehicles by the automakers are going to replace on-board diagnostics as the source of vehicle diagnostic data. Because the automakers own the telematic systems through which this data is collected, stored, processed and wirelessly transmitted, they are the de facto owners of the data and control access to it. When it comes to the consumer, they do not have a choice on where, ultimately, they bring their vehicle for service and repair. If our shops do not have access to that data, they simply can't fix the car.

[Viviane LaPointe, Liberal, Sudbury, ON]

I have a question for all members of the panel.

Is it your sense that the repair industry will benefit from this legislation? Will it be proportional to the loss that technology companies will experience?

[David Adams]

I would say that the risks with this particular bill before us now, for the automotive industry in any event, outweigh the gains if the bill moves forward, for the reasons I enunciated in my testimony.

[Craig Drury]

I would generally agree with that.

In the instances where we have shared some of this higher-level machine information so that customers can fix something themselves, they have generally gotten themselves into more trouble than they were in to begin with, which makes their machines less productive, so I would agree with that.

[Sylvain Séguin, President – Fix Network, Canada, Automotive Industries Association of Canada]

I would add that on my site I represent 600 franchisees, whether for collision or mechanical issues. We totally agree with certification programs and training programs, and we actually have three training centres across the country. Unfortunately, as of today, we don't have access to all the repair data. To that point, it's highly important that when the vehicle is fixed, it's fixed as per the OE certification. If we don't have access to that data, I'm highly afraid that some of the vehicles are being fixed without following the right procedure.

That's my point of view on that.

[Viviane LaPointe, Liberal, Sudbury, ON]

Thank you.

[The Chair, Liberal, Joël Lightbound]

Thank you very much, Ms. Lapointe.

Mr. Lemire now has the floor for six minutes.

[Sébastien Lemire, Bloc, Abitibi—Témiscamingue, QC]

Thank you, Mr. Chair.

Ms. Baker and Mr. Séguin, the arrival of electric vehicles on the market must be seriously disrupting your industry, because the mechanical design of an electric vehicle is of course very different.

In terms of interoperability, are there currently any design features of electric vehicles that could complicate repair and maintenance?