Mr. Chair and committee members, my name is Jamie Pegg and I have the privilege of representing 180 employees and nine area communities as general manager of Honey Bee Manufacturing. I have with me Mr. Scott Smith, our CSI manager.
Greetings are offered by Ms. Donna Boyd and the 240-plus members of the Agricultural Manufacturers of Canada, and by Mr. John Schmeiser and the 4,000 members of the newly developed North American Equipment Dealers Association.
We want to thank you for the opportunity to express our support for Bill C-294.
Three years ago, we sat before this committee with respect to the CUSMA trade agreement. We discussed the need to address the copyright changes Bill C-294 now brings to the table. In 2020, the reasons for changes were based on expected events. Since then, we have felt the impact.
TPMs have disabled technology at normally interoperable intersections between products from Canadian agricultural manufacturers and OEM equipment platforms. The result is a 53% market denial for Honey Bee in Canada alone. The proverbial USB port has been replaced by an OEM-specific connection that is not publicly documented and has no available compatibility parts.
We are a global company, from the people we work with to the 29 countries we export to. Honey Bee sells 50% of its product in North America and exports the remainder to the rest of the world. However, our industry is still placed on an uneven playing field versus our U.S. counterparts. Foreign platforms seek to prevent participation by Canadian brands.
Honey Bee's opportunity to capitalize on intellectual property is based on our ability to interoperate with OEM equipment platforms. Interoperability means that a Honey Bee harvest header can “plug and play” with OEM equipment. Historically, this has been provided in a straightforward and obvious way, like the way a keyboard plugs into a computer.
Today, Canadian industry is technically blocked by some dominant international brands, with the impact being a loss of substantial market participation opportunity. The net result is “authorized use only”. This is controlled by OEM digital locks and keys that are unavailable to manufacturers of implement. Instead of spending our research budget on innovation, we are burning it on adaptation.
It is important to state that in no way should Canadian manufacturers, dealers and—most importantly—farmer customers be at a disadvantage on choice. Historically, we had an integrated farm equipment market in North America and abroad. Honey Bee innovation caters to the specific needs of many markets and considers their unique environments, practices and crops. Meeting these challenges brings Canadian innovation to the world. The impact of technical lockout by OEMs will be the collapse of our Canadian implement manufacturing industry, which will decimate many of our smaller communities.
In Bill C-294, “innovation” is the act of offering improved components or products for use, either as an independent product or used in conjunction with other products. When innovation is applied in conjunction with another product, it is required to interoperate in a compatible way. In Bill C-244, “repair” is the act of restoring a failed device to its original state, as designed and manufactured. Neither of these needs access to internal source code or involves undesired exposure to valued IP. What is needed is the supply of external specifications for protocols, and interfaces to achieve the required functionality result.
Historically, this has been the norm. As this is no longer the case, it is now an industry requirement that companies can legally reverse-engineer a product. This may include circumventing a TPM for the purpose of accessing the required systems in order to develop the information needed for achieving interoperability or repair.
The CUSMA agreement does not place U.S. and Canadian implement manufacturers on the same footing. U.S. copyright law makes exceptions for legally modified, motorized agricultural equipment for the purpose of interoperability. Canadian copyright law does not. This makes it illegal for Honey Bee, or any other Canadian company, to reverse-engineer OEM platforms to achieve the required interoperability. This means products made in Canada cannot be legally adapted in Canada. Canadian manufacturers and farmers are at a huge disadvantage. Why is that? It's a lack of clarifying language.
Bill C-294 solves this problem.
At the start of this testimony, I offered you greetings from our employees, their families and our communities. My desire is to see the number of employees and families increase with company growth because Bill C-294 is passed. If we really want to support Canadian content and innovation, we should support the work of Canadian manufacturing. By passing Bill C-294, we are voting for Canada.
Thank you.