Industry Committee on Dec. 5th, 2022

[Ian Boxall]

Thank you for the question.

I think that's absolutely it. As the dealership network becomes bigger, with individual dealers owning more dealerships across, they close some. Areas become under-serviced. That is exactly why we're here today. It's to present the fact that we don't have the necessary dealer network that we used to have to support the equipment in those remote and rural areas. We need to be able to do it ourselves or we need to be able to allow third party people to do it for us. They need to have access to the software and the computers that they need to do it.

A combine costs a million-plus dollars right now. Are you going to tell me that we don't have the ability to fix it ourselves, after we spent a million dollars? There's something wrong with the system. I think we need to fix that.

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

Absolutely. Thank you very much.

[The Chair, Liberal, Joël Lightbound]

Thank you, Mr. Lemire.

Mr. Masse, you have the floor.

[Brian Masse, NDP, Windsor West, ON]

Thank you, Mr. Chair, and to all of our witnesses today.

Mr. Hanvey, about 10 years ago I worked with the AIA here, your sister organization—I still do work with them—on original right-to-repair legislation focusing on the automotive aftermarket. Since that time, subsequent bills have come forth, and I have another one. It passed first reading in the House of Commons. We got it to committee. It was going to go for a final vote, but then the automakers, at that time the OEMs, decided they could live with the voluntary agreement. The aftermarket association said, fine, we'll try that first. We knew there was a major hole with regard to the digitalization of vehicles coming up, but it was voluntary. Tesla has opted out now, and there have been ups and downs.

I'm curious to know what's happening in the United States right now and what your thoughts are about mandatory versus voluntary. I proposed new legislation to make it mandatory, because we just can't keep fooling around like this.

[William Hanvey]

Exactly. The voluntary agreement that was reached in Canada and the United States.... We signed a memorandum of understanding with the automakers in 2013. While these agreements are good in spirit, they're not necessarily good in enactment.

The first thing is the voluntary agreements do not address the telematics aspect, which is the wireless transmission of the data from the car. Thus, the current MOUs that are in place don't apply to the current technology that is on the road today.

Secondly, the voluntary agreements are not enforceable. There's no legally binding enforcement mechanism that requires the OEMs to comply. The automakers are not required to participate. You mentioned Tesla, and that's a perfect example. They're not providing data to anybody at this point, other than to their own network.

The MOU framework requiring OEMs to share the same data with authorized dealers and independent repair shops doesn't work in a direct sales model, so the OEMs are trying to actually shut out some of their own independent dealers and work with only their authorized dealers.

The fact of a voluntary agreement, as I mentioned, is that it's good in spirit; it does not necessarily work in the real world.

[Brian Masse, NDP, Windsor West, ON]

Yes. It's something like a dog's breakfast over here with the OEMs: some are really good; others are not. It becomes like a carrot-and-stick approach? If you don't have a stick, then you're just feeding a carrot, and that's what Tesla is doing right now.

You're getting the same thing over there, then. Is that correct?

[William Hanvey]

Most certainly, yes....

[Brian Masse, NDP, Windsor West, ON]

It's ironic, because they want the same standards from consumers and expectations, but they won't provide the same over here.

I'll go now to Mr. Lawford and Mr. Hatfield.

I find that over here, Canada is still treated as a colony in many respects with consumer issues, because our competition laws need to be updated. It's funny, because I hear these arguments. You could make the same arguments as some of the OEMs are making now with a screwdriver and hammer: It's about public safety; we're too concerned that people will hurt themselves, and they're going to damage things.

Isn't there also a little bit of room here for innovation and ingenuity? I guess what I'm worried about is our culture in North America is about fixing things we buy. This is a cultural shift as well as it is a structural one in the economy. If we can't go back to where we were as purchasers who were allowed to actually do things with stuff that we bought, then we've actually shifted our culture.

This is for Mr. Hatfield and Mr. Lawford.

[Matthew Hatfield]

That's exactly right.

I think you need to look at the incentives here and what kind of system they produce. Our colleague, Ms. Lovrics here, is concerned about overly broad consumer rights that could be used outside of repair purposes. Maybe there's an opportunity to tighten a little bit of the language to be very clear that we're talking about repair here.

However, we also need to not give manufacturers an overly broad opportunity to deny access to consumers and to our repair agents. We now know across a very broad range of sectors that many of them will choose to freeze people out of basic, reasonable repair rights in telecommunications, in autos and in farm equipment. The more these digital technologies enable software lockouts in more and more devices, the more broadly this will affect our culture, and the more we consumers will find ourselves surrounded by things we don't really control and with no ability to step in and take the action we need to.

[Brian Masse, NDP, Windsor West, ON]

Mr. Lawford, we can get a balance here without becoming a so-called rogue state. Is that not correct?

[John Lawford]

Yes, I think we can get it. I don't think we're being a rogue state at all to give consumers a repair right. It's being brought forward in New York State. It's already in Massachusetts and a number of other states in the United States, so this debate is happening actively there.

I'd also say that privacy has been cited against this repair right. Consumers have the right to look at their own medical data, and that's very sensitive. They have the right to have their own credit report and their own calling records from their own telecommunication service provider, and that's very sensitive information. Getting their own information on their own devices seems to me to be in the same ballpark, so don't use privacy against this.

[Brian Masse, NDP, Windsor West, ON]

Thank you.

Am I out of time, Mr. Chair? I think I am.

[The Chair, Liberal, Joël Lightbound]

You're almost out.

Thank you, Mr. Masse. We'll have the chance to get back to you a little later on.

We'll now turn to Mr. Vis for five minutes.

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

Thank you.

I'm sorry, but I'm having technical problems here.

To Madame Lovrics, you mentioned this law's ability to be in compliance with Canada's agreement with the United States and Mexico. A diagnostic maintenance or repair exception does not appear in the list of technological protection measure exemptions permitted under the Canada-United States-Mexico Agreement. CUSMA would allow Canada to adopt further exemptions, but only for non-infringing uses of specific classes of works and if an actual or likely adverse impact on those infringing uses is demonstrated by substantial evidence in a legislative context.

You mentioned that, in your opinion, Bill C-244 right now doesn't necessarily pass the test, and we might be liable to certain challenges from our trading partners if this legislation is passed. Is that correct?

[Catherine Lovrics]

That's correct. Article 20.66.4(h) of CUSMA provides that exceptions and limitations must be based on an actual or likely adverse impact on non-infringing uses, having been demonstrated by substantial evidence. As it currently stands, the bill would apply to any product without qualification. Therefore, in our view, a product-specific approach is appropriate under CUSMA.

Then, there's also article 20.66.5 of CUSMA, which provides that any new exceptions or limitations to circumvention laws shouldn't impair the adequacy of legal protections or the effectiveness of legal remedies against circumvention of effective technological measures. Our concern on that front is that the current approach—with respect to permitting devices and technologies, so the exception being focused on, basically, permitting anti-circumvention tools to be sold on to the market, as opposed to enabling a service-provider model—in our view, raises concerns under that provision.

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

In your opening remarks—

[The Chair, Liberal, Joël Lightbound]

Mr. Vis, I'm sorry to interrupt, but it appears you don't have your headset mike selected.

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

Let me run a test right now.

[The Chair, Liberal, Joël Lightbound]

I think that's better. I'm just looking for the clerk.

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

Test. Now I'm working.

[The Chair, Liberal, Joël Lightbound]

Okay. You're good to go.

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

Thank you.

In your opening remarks, you suggested that you were generally in support of the bill, subject to the amendments that you're going to bring forward to us. Is this bill salvageable, from a trade perspective, with certain amendments, or do you think we should be opposing this bill because of the trade ramifications it poses, as you just outlined?

[Catherine Lovrics]

We believe it's salvageable, provided amendments are made. We will be providing amendments that would aim for a regulatory approach. Then, should the government not proceed with a regulatory approach, we would be proposing amendments to the bill that would effectively address fairness factors generally speaking, some of which Mr. Hatfield spoke to: putting parameters around what “repair” means—diagnosis, maintenance and repair—blocking that in and setting out factors that would basically address what classes of products would benefit from the right to repair in a manner that is consistent with both CUSMA and the WIPO Internet Treaties, including whether there is substantial evidence to demonstrate that, in fact, circumvention is needed in order to facilitate the right to repair in a manner that does not result in infringement.

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

Okay. One of the things that I, as a legislator, am struggling with is that every time we discuss this bill, I'm hearing from another set of witnesses with industry-specific concerns. If we're applying a regulatory framework for a bill with such broad-reaching implications—and I'm not necessarily opposed to this bill, but I want to get this bill right—that's putting a lot of work on the public servants responsible for the Competition Act and probably a whole host of other legislation that products are subject to in Canada. Based on your legal experience, what type of time frame would the government need to actually implement a regulatory framework to protect the right to repair if, indeed, we did go down that path?

[Catherine Lovrics]

It will depend on how quickly the government moves and what classes of products are identified initially for the purpose of regulation. In our submissions, we were very much aligned with a regulatory framework as being appropriate, but should that not be the direction the government opts for, we are providing alternate amendments to the bill to at least address the high-level concerns.

And the other thing to mention with regard to the framework is that the Copyright Act is not a full solution. We agreed with Wilson Miao, when he made comments related to this, that this is just one piece of the puzzle.

I think one of the other misapprehensions we're hearing here is that this will somehow force a handshake. In fact, it won't. The current approach under the bill, which is a major concern, is that it will enable a market to basically hack and create circumvention tools that will not necessarily be provided by the manufacturers. I think that the goal here is to facilitate a service industry that will enable the right to repair and then to look to other forms of regulation to support that right to repair in a meaningful way.