Industry Committee on Oct. 31st, 2022

[The Chair, Liberal, Joël Lightbound]

You have about a minute, Mr. Fast.

[Ed Fast, Conservative, Abbotsford, BC]

Mr. Miao, could you explain in greater detail what has changed in the repair industry environment that necessitates a specific bill to create the right of repair?

Right now, we have third parties doing work on all kinds of equipment, but something must have changed in the legal landscape or in the digital landscape that now makes it necessary for you to bring forward a bill like this.

[Wilson Miao, Liberal, Richmond Centre, BC]

I would use this as an example. I was shopping for a new fridge for my family. The intended use of a fridge is to store produce in a cool environment, but now fridges come with all these new technologies—touch screens or a reminder to buy milk if there's no milk detected in the fridge. They come with a lot more digital components. In the past, there weren't as many digital components in the devices that we use.

At this time, I think there's a lot more to consider, because we are in the stage where the Internet of things is very common. Although computer programming falls under the work of the Copyright Act, the act does not look at the prospect of a TPM being circumvented.

[Ed Fast, Conservative, Abbotsford, BC]

Thank you.

[The Chair, Liberal, Joël Lightbound]

Thank you very much, Mr. Miao.

We'll move to Mr. Gaheer for five minutes.

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

Thank you, Chair.

Thank you to MP Miao for making an appearance before the committee. Congratulations.

We know that an extraordinary amount of e-waste is generated. That's only getting worse with manufacturers making it increasingly hard to repair equipment, including iPhones, for example.

What impact would the bill have on the environment?

[Wilson Miao, Liberal, Richmond Centre, BC]

There's definitely a big impact on the environment, because rather than throwing away a product that can easily be repaired, we can consider the alternative of repairing it. We are able to reuse the materials and allow a second life and extend the lifespan of the product.

Imagine how much we are shopping online right now. All of those products are being thrown away because of a minor defect or because of a malfunction that is caused by something that cannot be controlled by the consumer. They can't access it and make the repair themselves or even bring it to a third party repair shop to do that.

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

That's great. Thank you.

Are there risks associated with allowing people to circumvent TPMs for the purposes of repair? For example, when I look at farm equipment and at allowing someone who doesn't have specific expertise on that piece of equipment, wouldn't it be dangerous if they tamper with it?

[Wilson Miao, Liberal, Richmond Centre, BC]

Of course, and you've brought up a very important point.

If a technician does not have the skills and licence to conduct a repair, there can be a potential risk related to safety or the use of the equipment. That may cause severe consequences. That is why it's important for us to keep that in consideration when a TPM is circumvented. I'm happy to discuss any amendment that can improve the bill to have that consideration as well.

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

We know that cars are very smart nowadays with the amount of technology they have in them and, for example, with what they're recording about your behaviour as you drive. Technology companies have also made it so that they have exclusive access to that data. What do you have to say about the data piece of it?

[Wilson Miao, Liberal, Richmond Centre, BC]

As I mentioned previously about how our world is filled with the Internet of things, these devices are communicating with each other through a network. I believe that a member of the opposition has brought forward Bill C-294in discussing the interoperability of devices. This is something that we can look into further to see how we can be more secure and consider the effects and the consequences when computer programs are talking with each other.

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

Thank you so much.

[Wilson Miao, Liberal, Richmond Centre, BC]

Thank you.

[The Chair, Liberal, Joël Lightbound]

Thank you very much, MP Gaheer.

Thank you very much, MP Miao, for bringing this bill forward and joining us in committee today.

This is the end of the first hour. I will have to now suspend briefly so that we can bring in witnesses for the second hour.

Again, thanks a lot, MP Miao.

I now suspend the meeting.

[The Chair, Liberal, Joël Lightbound]

Good afternoon, everyone. Welcome back to the Standing Committee on Industry and Technology.

For the second hour of our meeting, we have Mr. Craig Drury, former chair of Associated Equipment Distributors.

From the Automotive Industries Association of Canada, we have Alana Baker, senior director of government relations.

The association is also represented by Sylvain Séguin, the president of Fix Network Canada

We also have David Adams, president and chief executive officer of Global Automakers of Canada.

Without further ado, it's over to Mr. Drury for five minutes.

[Craig Drury, Past Chair, Associated Equipment Distributors]

Thank you.

Good afternoon. Thank you for inviting the Associated Equipment Distributors to present on Bill C-244. It is an honour to appear before you today as AED's immediate past chair and as vice-president of operations at Vermeer Canada.

AED is an international trade association representing companies that sell, rent, service and manufacture construction, farm, mining, energy, forestry and industrial equipment and related supplies. AED's Canadian members account for more than $8.7 billion in annual sales and services and employ over 27,000 workers at 400 locations across the country.

“Right to repair” is a simple slogan. However, the policy proposals surrounding the issue are complex, with significant consequences.

At the outset, I want to make it clear that AED members support customers' right to repair their machinery and the right of distributors to make available diagnostic tools, repair information, parts and remote customer support. Idle, non-functioning equipment equals lost time and money. Whether it's on a farm during harvest or on a road-building project, there is absolutely zero incentive to not do everything we can as equipment dealers and manufacturers to keep the machine running. That can mean repairs completed by a dealership service technician, the customer or a third party provider. The equipment industry is highly competitive. If Vermeer Canada isn't providing proper and timely service, nothing is stopping the customer from moving to one of my many competitors and their products.

However, we don't support unfettered access to critical on-board software and information pertaining to environmental and safety protections or key operational functions, which is what Bill C-244 would ultimately do. While customers can complete most repairs to their machinery, environmental and safety functions, as well as technological developments that have made equipment more efficient and productive, necessitate restrictions in access to source code and software that ensure that key operational functions aren't modified or disabled.

Manufacturers of equipment rely on a network of independent small and medium-sized companies, many of which are family-owned, to sell, rent and service the equipment. These dealers make significant investments in their employees, including training service technicians to repair and maintain the latest high-technology machinery. Many AED members' facilities are located in rural and underserved areas, creating well-paying jobs and economic opportunities.

The equipment industry has invested significant time and resources to mitigate environmental harm, resulting in a substantial reduction in emissions. Of great concern is that Bill C-244 threatens important environmental gains, as it would permit unfettered access to embedded software to circumvent emissions protections.

Similarly, modern equipment has numerous safety features to protect both equipment operators and the public, the latter oftentimes driving or walking past construction sites and other areas while machinery is in use. Granting access to override safety features, as Bill C-244 would do, poses undue risk for operators and bystanders.

Additionally, equipment dealers invest countless resources to train certified technicians to work on complex machinery. By this mandating of access to embedded source code, unqualified individuals will attempt to repair the world's most advanced and sophisticated equipment at significant risk to themselves, operators and the public.

The aforementioned raises this question: Why would someone want to circumvent emissions or safety protections? The answer is simple: It's for machine performance. Limits on horsepower and other functions that the machine might be able to carry out are necessary to ensure that the equipment is environmentally friendly and safe. A simple Google search yields a plethora of vendors offering products and services to assist equipment owners to modify their machines. Requiring access to source code and embedded software will only proliferate this practice, with significant negative ramifications for the environment and safety.

Proponents of Bill C-244 tout the environmental benefits, because customers won't need to discard products as readily if they are able to fix products themselves. However, heavy equipment is among the most durable manufactured products commercially available. Equipment will oftentimes be sold to a customer, traded in when the customer purchases a new machine and subsequently either resold or rented. Improper maintenance or modifications related to granting unfettered access to source code jeopardize a machine's operation and longevity, which may cause negative environmental and safety impacts and shorten its productive life.

Simply put, for the equipment industry, the right-to-repair proposals are a solution in search of a problem. AED members provide customers and third party repair providers with parts, tools and other resources to complete the overwhelming majority of equipment repairs. It's bad business not to do so. Out-of-service equipment isn't merely an inconvenience; it can ruin a farmer's harvest or delay completion of a bridge or roadway.

Thank you again for the honour of appearing before you today. I look forward to answering any questions you may have.

[The Chair, Liberal, Joël Lightbound]

Thank you very much, Mr. Drury.

Before giving the floor to the representatives of Global Automakers of Canada, I would simply like to advise members that I will not be allowing them to speak unless they are using equipment provided by the House.

I think that answers Mr. Généreux's question.

Ms. Alana Baker has the floor now.

[Alana Baker, Senior Director of Government Relations, Automotive Industries Association of Canada]

Thank you, Mr. Chair.

Thank you, honourable members of the committee, for the opportunity to appear before you to speak to Bill C-244.

I'm going to give my presentation in English, but we'll be happy to answer any questions in French as well.

My name is Alana Baker, and I am the senior director of government relations for the Automotive Industries Association of Canada, otherwise known as AIA Canada.

I am joined today by Sylvain Séguin, president of Fix Network Canada, a global leader in collision, glass and mechanical repair services, operating over 2,000 points of service worldwide.

AIA Canada represents, supports and leads innovation in Canada's $32.2-billion auto care sector. Our more than 4,000 members, located in every riding across Canada, help keep the country's fleet of almost 30 million vehicles on the road. Whether you have been in a collision or require maintenance, our members help vehicles last longer, pollute less and keep drivers safer by offering Canadians any product or service a vehicle may need after it rolls off the dealership's lot.

I want to begin my remarks by making clear the automotive aftermarket support for the intention and principles behind this bill. Bill C-244 is a step in the right direction when it comes to levelling the playing field for service and repair of consumer goods, something that is of importance not just to the automotive sector but to many others.

Having the flexibility to repair your goods or have them maintained by third party providers is critical in a price-conscious market, as it allows Canadians to shop around for competitive pricing. Given persistent levels of inflation, ensuring a competitive marketplace does not just help businesses but consumers as well.

This bill comes at a critical moment when manufacturers of goods, including vehicles, have become increasingly sophisticated in their ability to create a closed loop for service diagnostics and repair. The more complex an item is to repair, the more challenging it is to service. This is increasingly the case for vehicles on our roads, which are effectively computers on wheels.

However, while addressing digital locks is important, there are still loopholes that can be exploited by manufacturers to prevent third parties from repairing or servicing goods. Any legislation that proposes to address this issue should contain clear verbiage that eliminates manufacturers from the ability to circumvent the sharing of data to prevent independent shops from obtaining diagnostic repair or maintenance information for the purposes of legitimate repair.

To that end, we believe that there are some amendments that can be made to this bill that would strengthen its intention and that would truly pave the way for the right to repair in Canada. These amendments, which include parallel changes to the Competition Act, would help reinforce a manufacturer's requirement to allow access to vehicle data. I would be happy to speak about this in greater detail during the question-and-answer session.

Without access to a vehicle's diagnostic data, independent auto repair shops cannot service a vehicle. This makes it harder to make sure vehicles are operating as efficiently as possible, and we expect this problem to grow significantly over the years ahead. Without intervention, automakers will continue to control the terms through which independent auto shops access this data.

Lawmakers around the world have recognized the importance of the right to repair, including through legislation that gives consumers the right to repair their vehicle, and 83% of Canadians agree that automakers should be required by law to share data with independent auto repair shops. Canada cannot afford to be left behind. Government must act quickly to advance right-to-repair principles through forthcoming legislative efforts.

Stories are emerging every day about the inability of our members to service vehicles because manufacturers make it difficult or sometimes impossible to access essential data and information. One example was highlighted during our recent advocacy day by another member of Parliament. The auto repair shop that this member typically goes to purchased brake pads to fix his vehicle, but was unable to access the repair information from the manufacturer, Volvo, to complete the repair. The repair shop then gave the member of Parliament the brake pads they had purchased and had the car towed to the Volvo dealership. The dealership then told the customer that they would not repair the car with aftermarket brake pads, meaning the customer had to pay more money for original equipment manufacturer parts.

Stories like this are all too frequent, and they will become more common without intervention by legislation. It is critical that vehicle owners and not the automakers be the owners of their vehicle data so that they can continue to choose where they bring their vehicle. Addressing this issue will allow our small and medium-sized enterprises to remain competitive and continue to serve as the primary provider of essential vehicle services to Canadians.

I want to thank MP Wilson Miao once again for his work on this bill, and thank committee members for the opportunity to present today.

We look forward to answering your questions.

[The Chair, Liberal, Joël Lightbound]

Thank you very much, Madam Baker.

We will now turn to Mr. Adams for five minutes.

[David Adams, President and Chief Executive Officer, Global Automakers of Canada]

Thank you, Mr. Chair and members of the committee, for the opportunity to speak to you today on behalf of the 15 member companies of the Global Automakers of Canada.

Our manufacturing members, Honda and Toyota, represent 55% of the Canadian light-duty vehicle production through September 2022, while all members, as exclusive Canadian distributors of some of the world's largest global automakers, were responsible for 62% of Canadian sales in 2021.

My members recognize the importance of having an open, fair and competitive repair industry while maintaining safety and quality standards for the benefit of consumers. That is what the Canadian Automotive Service Information Standard provides to the automotive industry.

That said, some in the automotive aftermarket have utilized this bill to try to secure more rights, which we have yet to understand. We have serious concerns about Bill C-244 because it exposes vehicles to the prospect of theft, hacking, and compromised vehicle safety and emissions standards on which vehicle manufacturers are stringently regulated before they can put a vehicle on the road and afterward. The bill allows the circumvention of technological protection measures in a computer program if the circumvention is solely for the purpose of diagnosis, maintenance or repair of a product. In practical terms, how does an ordinary person circumvent technological protection measures? More importantly, what are the ramifications of anyone's being provided the capability of legally circumventing TPMs for any reason?

For an automobile that operates on public roads at potentially high rates of speed, we believe the risks of injury or death for the user and the general public are obviously exponentially greater than are those from other products when TPMs are removed. Critically, how would a consumer, the manufacturer or potentially the courts know who had circumvented the TPMs and for what reasons? What would be the due diligence undertaken to ensure that the individual undertaking the circumvention of any TPMs had the appropriate certification and training to undertake the diagnostic repairs? Will the circumvention of TPMs be recorded on a consumer's bill of sale so consumers understand their potential consumer protection recourse? Will the repairer also take on the responsibility and liability associated with the circumvention of TPMs? Will the repairer provide a full and complete record of repair work undertaken to the manufacturer, to establish continuity of service in the event liability issues arise with respect to safety or emissions non-compliance or cybersecurity attack?

When MP Bryan May brought forward a previous iteration of this bill, it was made clear that the automotive industry was not the subject of the bill, because we have had a solution in place that has worked since 2010, known as the Canadian Automotive Service Information Standard, or CASIS for short. Under that voluntary agreement, manufacturers are required to provide the service information, training tools and equipment to the aftermarket so that any qualified mechanic can repair a consumer's vehicle. We're proud of the support, expert advice and help desks that our industry makes available to automotive mechanics across the country. We are open to exploring ways to improve upon this.

For the automotive industry, the right to repair clearly exists. Repair statistics bear this out when comparing repairs done by the aftermarket vis-à-vis OEM dealers. Therefore, members have been aggressively lobbied by the automotive aftermarket for so-called “rights” that already exist.

Finally, Bill C-26, an act respecting cybersecurity, is before Parliament. It will introduce more stringent standards and monitoring to ensure that Canadians are protected from cybersecurity risks and threats, yet the bill before this committee would open up opportunities for cybersecurity risks and hacking. It is not only incongruent but also puts consumers at unnecessary risk.

Indeed, consumer protection is at the heart of this issue. Consumers need to be assured that when their vehicle is serviced and repaired, it is done so to OEM service and repair standards, and that those repairing the vehicle are accountable and liable, both to the consumer and to regulatory authorities, for such repairs.

We are on board with right-to-repair solutions. We have been for the last dozen years, since CASIS was established. This solution benefits consumers and the aftermarket without creating dangerous safety and cybersecurity vulnerabilities.

Thank you very much for your time. I look forward to your questions.

[The Chair, Liberal, Joël Lightbound]

Thank you very much, Mr. Adams.

Mr. Fast now has the floor for six minutes.

[Ed Fast, Conservative, Abbotsford, BC]

Thank you very much to all of the witnesses for appearing before us.

Let me start off with a very general question to both Mr. Drury and Mr. Adams. Does either one of you support any right to repair by third parties?

[David Adams]

I can speak for myself. I think the fact that we have a voluntary agreement in place, and have for the last dozen years, speaks for itself that we do support a right to repair.

[Craig Drury]

It is AED's position that we do support right to repair as well. As I said before, it's just that we need to keep equipment running in order to be the solution of choice for our customers to come to us—so yes, we do.

[Ed Fast, Conservative, Abbotsford, BC]

Do I understand either one of you to say that if a right-to-repair bill came before Parliament that actually addressed some if not all of your concerns, you might support it?