Industry Committee on Nov. 14th, 2022

[Brad Vis, Conservative, Mission—Matsqui—Fraser Canyon, BC]

Thank you.

Mr. Kingston, quickly, can you differentiate between a modification and a repair and, if possible, define both?

[Brian Kingston]

Yes. We do see modifications similar to what was mentioned by my colleagues from the equipment dealers association with respect to things like chipping. Those are the types of modifications that you see occurring in vehicles, and they can cause—

[Brad Vis, Conservative, Mission—Matsqui—Fraser Canyon, BC]

I'm sorry: What is a modification?

[Brian Kingston]

Modification would be circumventing a system that is in place to protect and keep the vehicle compliant with CEPA regulations—for performance reasons, for example. That does occur.

Repair is what we see through CASIS. Automakers and the aftermarket share information with respect to diagnostics and doing repairs on a vehicle and ensure that both the dealer and an aftermarket can do those repairs.

[Brad Vis, Conservative, Mission—Matsqui—Fraser Canyon, BC]

Do you think that the current version of this legislation would encompass modifications as well as repairs?

[Brian Kingston]

It's not clear.

[Brad Vis, Conservative, Mission—Matsqui—Fraser Canyon, BC]

Thank you.

[The Chair, Liberal, Joël Lightbound]

Thank you, Mr. Vis.

We'll now turn to Mr. Fillmore for six minutes.

[Andy Fillmore, Liberal, Halifax, NS]

Thank you, Chair.

Thanks to all the witnesses for your time and for sharing your experience today.

It's clear that we have two perspectives from the panellists today. Our job is to understand those two perspectives and try to navigate down the middle there and try to make sure that everybody's position is covered.

I want to start by saying that the author of the legislation and the previous author of the previous legislation are both really clear that this is legislation that is founded on the right to repair, not the right to modify and not the right to harvest data. It's really about repair. It's about really respecting, in a technological context, the evolution of your industries, the parties to CASIS, in a way that I think they've been left behind by CASIS right now.

On the concern about modification, obviously we don't want want to.... You painted some dire pictures there, Mr. Schmeiser, but where is that coming from? I have to say that it seems a little overstated, given what's actually in the bill. This is really about the right to repair. What is causing your concern that there might be these modifications from these honourable parties to CASIS?

[John Schmeiser]

Our concern is really based on what we're seeing already happening in the industry. If a dealer reports to me that over 50% of the equipment is already modified, this legislation really opens the door to open access to the software, so that we could look at 100% of the farm equipment out there violating the Canadian Environmental Protection Act. I don't think that's good for the economy or for the industry, and I don't think it's good for agriculture.

It's the same thing on chipping. We are seeing this, and we come here with a message that there's a lack of enforcement on the emission standards controls that are in place. If that isn't looked at and this legislation passes in its current form, I think we're going to have a worse problem on our hands than we have now.

[Andy Fillmore, Liberal, Halifax, NS]

The committee has heard testimony on.... I'll give you one example. It was the owner of a Volvo who could no longer take the Volvo to the neighbourhood repair guy and instead had to go, for many times the price, to the dealer. Do you think it's possible in the context of this increasingly tight hold by the manufacturers on the technology that one of the outcomes of it could be that people are actually seeking these modifications because of the heavy hand of the restrictions?

[John Schmeiser]

I can't speak for colleagues sitting at the table here, but I can speak for our industry, and our industry commitment is very clear: A third party repair shop or a farmer customer can get access to the same tools—diagnostic tools, special tools, training manuals, error codes, everything—that a farm equipment dealer can get right now.

They have to pay for it—fair enough—but we've stepped up as an industry to make this available to assist our customers in the repairs. Part of the reason we do this is that we have a workforce development challenge within our industry. We can't find enough mechanics. No matter what we've done and even with what I stated earlier in providing scholarships and training, we still need to fill that void, so it's in our best interests for the customers to be able to repair their own equipment. That's why we support them with this industry commitment.

[Andy Fillmore, Liberal, Halifax, NS]

Okay. Thank you.

I'd like to go to LKQ.

Regarding CASIS, can you characterize from your perspective the current state of CASIS? Does it need to be updated, and what are the weak points?

[Derek Willshire]

Thank you for your question.

First of all, it's a voluntary agreement. It needs to be enforced.

Again, I think we stated clearly that a lot of the technology has evolved. We're good with that. That's great. However, anything that's transmitted right now on servers is not accessible through the OBD-II port. Sixty per cent of cars have this new technology. We believe that before 2030, 95% of those cars are not going to be....

It would need to be mandatory. It would need to be rewritten and tightened up a little, in my humble opinion.

[Tyler Blake Threadgill]

It would also need to have real enforcement mechanisms. Unfortunately, with it being voluntary, not every manufacturer is a part of it, and there's no requirement that they be there. If they are not following it, there's no real enforcement for that.

Do we think there's a path forward for CASIS? There could be, but it would need to be, as my colleague mentioned, very much strengthened, made mandatory and given some actual teeth.

[Andy Fillmore, Liberal, Halifax, NS]

If that were to happen, would your group be amenable to some of the amendments that the manufacturers are talking about to circumvent TPMs? Is there a middle ground here between CASIS and what the manufacturers want?

[Tyler Blake Threadgill]

As we stated, the importance for us is that repair and maintenance data are made available. We are not interested in all of the other data that's out there. We also are very concerned about safety. Nobody wants their car to be repaired and not done in a safe fashion.

I think we would share the concerns that were mentioned. What we want is true right to repair, a regime that allows consumer choice and option. The average car on the road now is over 12 years old. With most people, it's a third-owner or fourth-owner vehicle. There needs to be choice. People need to have the option of whether they go back to the manufacturer or go to their local mechanic.

[Andy Fillmore, Liberal, Halifax, NS]

Is the historical status quo for your members to repair being eroded right now?

[Tyler Blake Threadgill]

Yes, it is.

[Andy Fillmore, Liberal, Halifax, NS]

All right, thank you.

[The Chair, Liberal, Joël Lightbound]

Thank you very much, Mr. Fillmore.

Mr. Lemire now has the floor for six minutes.

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

Thank you, Mr. Chair.

I'd like to thank all the witnesses for being here.

I'm going to turn to Mr. Willshire and Mr. Threadgill from LKQ Corporation.

In the United States, the Federal Trade Commission produced a report for which it sought LKQ's advice. One of the concerns raised is VIN burning, a manufacturer's practice where a part can only work for one car because the vehicle's on‑board software would prevent the part from being used for another vehicle. This practice is reportedly used by General Motors, among others, as well as a number of European luxury brands.

Is there a similar repair problem here in Canada?

[Derek Willshire]

Absolutely.

Thank you for your question, Mr. Lemire. I'd ask Mr. Threadgill to answer it.

[Tyler Blake Threadgill]

It's a very good question. VIN burning is taking place here as well, with what we're seeing.

LKQ, in addition to distributing new parts, aftermarket parts, OEM parts, is also the largest recycler of cars in the world. We recycle over 900,000 cars in North America alone.

Often what we will see is.... Take a side-view mirror, for instance. It may be perfectly good, in great standing, and it's a very good option to replace a side-view mirror, but it has a VIN number that might be burned when you put it on a new car. The mirror no longer is just a mirror, right? It has a motor. It may have a heater. It has sensors. It needs to be able to be properly put on and calibrated. Unfortunately, even though it is a part from the original manufacturer, in many cases it's not allowed to work properly.

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

So it's a widespread problem.

How do you respond to vehicle or equipment manufacturers who say that Bill C‑244could also create safety or compliance gaps?