Industry Committee on Feb. 8th, 2023

[Viviane LaPointe, Liberal, Sudbury, ON]

I will tell you that I spent 20 years in the hospital system in northern Ontario. I saw first-hand how our biomedical engineers couldn't repair some equipment. Because we were away from large centres, we sometimes had to wait days or weeks before the technicians of the company could come and do those repairs. I certainly understand completely the point that you're making.

I would ask you the same question, Mr. Rosborough. Do you see any reasonable exemptions to the right to repair?

[Anthony D. Rosborough]

I'll have the same pause that Professor Centivany had. I think the answer would be, “Not really.” I can substantiate that by saying that Canadians are safer when the access to technical knowledge and repairability is not kept secret and the inner workings and functioning of devices can be discerned and understood lawfully.

The fact that device manufacturers see copyright as essential to the health and safety of Canadians should also cause us some concern. If the contention is that devices and products are inherently dangerous and repair activities pose safety risks, we should ask more of manufacturers through amendments to the Canada Consumer Product Safety Act or other regulations.

Again, just as copyright law is not really an appropriate framework for cybersecurity regulation, it is also not the appropriate forum for public safety, in my opinion. If we're talking about the right to repair to the extent that it relates to Bill C-244, I think the answer is no. There aren't really limitations here, in that respect.

[Viviane LaPointe, Liberal, Sudbury, ON]

Thank you.

I know my colleague Mr. Vis asked this question, but I will ask it of you, Dr. Centivany. Would you have any recommended amendments to the bill, or are there alternatives for providing a legally enforceable right to repair while mitigating the risks that we've identified of the unintended consequences that this bill could present?

[Dr. Alissa Centivany]

I see this bill as being a very important but incremental step towards the right to repair in Canada. As I mentioned, repair is impeded by a number of factors. Law is only one, and within that, TPMs are just one small slice. We have design choices that thwart repair. We have various business strategies. We have asymmetries in terms of not being able to access materials and information. We have social factors that are involved.

I would like to see, in an ideal world, a comprehensive approach to the right to repair. This would include intellectual property laws. It would include TPMs—this bill—but it would also include important changes in other areas, including competition and things like warranties.

Earlier a question was raised around whether we can create a code of durability, which I think was a really nice way to frame the question. That might come up in a situation with regard to warranty. Warranties are the promises that manufacturers or businesses make to consumers to give them confidence in their purchases. Right now, warranties are very thin. They include only the bare minimum. There's no reason that a warranty couldn't include such information as the anticipated time before the product breaks and needs to be repaired, or what the anticipated costs of those repairs might be, or how many claims are being made on a product. These bits of information would empower consumers.

This is the kind of comprehensive repair framework that I would like to see enacted in Canada.

[Viviane LaPointe, Liberal, Sudbury, ON]

Thank you.

[The Chair, Liberal, Joël Lightbound]

Thank you, Ms. Lapointe.

Over to you, Mr. Généreux.

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

Thank you, Mr. Chair.

Thank you to the witnesses for being with us.

Mr. Bernard, you mentioned vehicle theft earlier. I have a 2009 Jetta. No one's going to steal it, I'm sure. It doesn't have any electronic components, and I'm glad.

My understanding is that, right now, areas all over Canada, especially in Quebec, are experiencing a spate of auto thefts. It's definitely not cars like mine that are being stolen. It's high-end luxury SUVs.

You said the safety of those vehicles was an important consideration. In many cases, the vehicles are put in containers and shipped halfway around the world.

What I'm trying to do is draw the connection between what you said and the bill before us.

[Charles Bernard]

Thank you for your question.

I do want to say, though, that if you saw what I drove, you'd understand why I'd consider stealing your Jetta.

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

Oh, oh!

[Charles Bernard]

As for your question, I am here as an economist. I'm not a lawyer, but I can appreciate the legal expertise that's been shared. From my standpoint, the issue is simple when it comes to auto thefts. When CASIS came into force, dealers and those in the aftermarket sector had significantly better access to repair. The numbers prove it. Certain vehicle parts had to be removed or replaced to give aftermarket mechanics greater access. I'm talking about the on-board diagnostic, or OBD, port. Way back when, that port wouldn't have been accessible in vehicles like yours, Mr. Généreux. Today, in many vehicles, it is. You can plug an electronic reader into the port and obtain diagnostic information. There is clearly a correlation between access to that information and the rise in auto thefts.

I want to repeat that CADA is in favour of greater access to repair, but understands the importance of striking a balance. The market will always have bad actors. While improved access to vehicle data over the years has done a lot for repair, it has increased the risk of vehicle theft, and we are seeing the effects of that now.

Our understanding is that the purpose of the proposed amending legislation is to improve access to vehicle data for those in the automotive aftermarket industry. However, it's hard to imagine that auto thefts will decrease as information becomes more accessible.

Again, this is all hypothetical. CADA's view is that the existing platform provides an opportunity to discuss these issues in an unhurried and more nuanced way, as opposed to initiating a discussion, possibly going too far and having to rein things in down the road.

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

As everyone knows, participation in CASIS is voluntary. At the end of the day, the agreement led to progress, as you said.

The committee has heard from a number of witnesses with a wide range of assessments and views on the bill.

I'm going to ask you a very frank question. If the entire auto industry were bound by the agreement, do you think it would improve the situation or lead to even greater progress?

[Charles Bernard]

It's hard to say. I repeat, our association is not a signatory to the agreement, so it's hard to know where exactly the negotiations stand. I wouldn't presume to speak to that.

On the access to repair front, what we've seen is that the more people who adhere to the agreement—dealers and automotive aftermarket players alike—the more a symbiotic relationship emerges. Sometimes, dealers don't have the labour or resources to meet demand, and that creates a symbiotic environment. It only makes sense that it's beneficial to have more people adhering to the agreement, especially new companies, whose focus is shifting to digital technology and the use of that technology or software in new vehicles. Another benefit is the fact that we have experience. We've been having these discussions for 10 years now. Some of the discussions have been tougher than others, but they've helped us make progress.

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

My fear was that my neighbourhood mechanic would go out of business. We talked about that with the representatives of the Automotive Industries Association of Canada. They see this as a major threat.

Ever since electric vehicle manufacturers like Tesla arrived on the scene, it's become harder and harder to repair vehicles. Now it requires special equipment. What's more, accessing the information isn't necessarily easy, because it's not always shared. That makes it hard for regular people like neighbourhood mechanics to do this kind of repair work.

I think consumers should have the option of taking their vehicle to their neighbourhood mechanic. I had my Jetta serviced at the dealer for the four years it was under warranty. Then, I stopped going to the dealer. I took it to a bunch of other mechanics to give everyone business.

[Charles Bernard]

That's what is tough to balance. It is true that not all vehicles are as technology-driven as Teslas, but vehicles do use a lot more digital technology. Just look at the sales figures over the past few years, and you'll see that local garages weren't exactly short on business—quite the contrary. Over a 10‑year period, aftermarket shop sales grew by 112%. For dealers, sales went up by 89%. There was clear, documented economic growth, and CASIS contributed to that.

I want to say this again: I'm not a lawyer, so I'm not familiar with all the legal mechanisms that would help achieve the desired outcome. However, I think we need to encourage new manufacturers or those who embrace digital technology, and look for ways to engage them in the platform. As we've seen, it has led to success. This type of approach saves consumers time and helps avoid situations like what happened in Massachusetts. As I mentioned earlier, after the state brought in pretty rigid legislation, manufacturers suddenly started playing by their own rules, removing certain parts from their vehicles, behaving in a more hostile manner and so forth.

I'm here to tell you that we did experience some success. I had the opportunity to read Mr. Rosborough's article. In it, he talks about the wins achieved through CASIS and the fact that it was ahead of its time, although it's not perfect.

In short, the concerns are certainly valid, but I think there are more ways to address the issue through CASIS than not.

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

I'm going to ask you to indulge me one last time, for my own information.

You said earlier that the average age of vehicles on the road was 13 years. Is that correct?

[Charles Bernard]

It's around 12 or 13 years.

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

Great. I'm right around the average.

[The Chair, Liberal, Joël Lightbound]

Thank you, Mr. Généreux.

We now go to Mr. Dong for five minutes.

[Han Dong, Liberal, Don Valley North, ON]

Thank you very much, Chair.

I see Paul Fogolin there. He's an old friend of mine, and I haven't seen him in years. It's good to see you here.

Paul, your presentation early on gave me a visual memory for a moment. I'm sure everybody remembers the movie The Cable Guy. Back then, when analog was the system for TV entertainment, there was a guy who went around and took money—cash—and played around with your system and gave you extra channels. We all remember those days.

Then, to eliminate these types of leaching out of the system, the companies came out with the digital system. Now we have pirate sites offshore, which are cashing in billions of dollars off the industry. They have become a true problem. It's no longer a parasite; it's a giant monster.

My point is that as technology evolves, if we rely solely on intellectual property—or, in this case, TPMs—to safeguard the profit or the revenue of the industry, I don't think it works.

You just mentioned that there are hackers and people who [Technical difficulty—Editor]. I would argue, actually, that if we give the consumer the right code, or whatever they need to perform their own repair, we're actually taking away the market from these hackers and so on.

I just want to hear your thoughts on this. Would it be a fair assumption that if the only thing that is stopping consumers from fixing—or, in this case, being creative with—their console is the TPM, wouldn't taking that away and allowing them to be creative with their console be taking business away from the hackers? Wouldn't that be better for the industry?

[Paul Fogolin]

I'll try to respond.

Can you hear me? I'll try to speak as slowly as possible.

Thanks, Han. It's always good to see you.

What we have concerns with here is, as I mentioned earlier, that the vast majority of repairs that would be necessary to fix or make a console work can be done without circumventing a TPM. To get a bit more technical, the TPMs really deal with the firmware in a console. That is the device, the software, that will recognize the disk, cartridge or digital game, affirm it and say, “Okay, this is a Nintendo game,” or, “This is an Xbox game,” etc., and allow it to be played. This firmware not only does that, but it's also the software that encrypts some of the data, data points or personal information that might be used when you set up a profile on a console. It's also part of the technology in software that allows for updates, as I said earlier, for the game experience. As players play the game, they will discover issues and bugs, and developers will try to patch them. It all runs through the firmware. The problem is not with repairing the console and making sure it works; it's just protecting those specific protection measures that allow for a secure environment for updates to happen and to catch bad actors, like cheaters.

If you ask Mr. Masse, who is a gamer, nobody likes a cheater and nobody likes the ability, if you hack a TPM, to put in what's called a dropper, which allows you to put in malware. Sometimes it's disguised as a cheating device that gives you an advantage, but sometimes these bad actors put it in a console and it ends up taking personal information through that.

These are the kinds of things we're concerned about.

[Han Dong, Liberal, Don Valley North, ON]

Paul, I'm also a gamer, but I'm more of a PC CS type of guy.

[Paul Fogolin]

That's okay, too.

[Han Dong, Liberal, Don Valley North, ON]

I never got into Switch, but I do have Nintendo Switch at home.

If this legislation passes—if—are you saying there will be more cheaters in the gaming world?

Brian, that's bad news for us, eh?

[Paul Fogolin]

It's not good news.

Our concern is on several fronts. Cheating is bad news, but again, it opens up the opportunity for bad actors to hide behind the auspices of repair for piracy and infringement. Yes, it includes cheating. It includes the copying of games—

[Han Dong, Liberal, Don Valley North, ON]

Okay. Thank you.

I want to use the rest of my time to question Professor Centivany.

We heard the medical equipment experts about how, if this bill passes, it could pose a risk in terms of those who don't want to fix these medical devices, and that they may no longer be precise anymore.

What do you say to that? Are there other provincial laws that have to be satisfied before anyone can do this, or is there a legal requirement to fix this equipment?