Public Safety Committee on Feb. 26th, 2024

[The Chair, Liberal, Heath MacDonald]

I call this meeting to order.

Welcome to meeting number 96 of the House of Commons Standing Committee on Public Safety and National Security. Today’s meeting is taking place in a hybrid format, pursuant to the Standing Orders. Members are attending in person in the room and remotely using the Zoom application.

I would like to make a few comments for the benefit of witnesses and members. Please wait until I recognize you by name before speaking. To prevent disruptive audio feedback incidents during our meeting, we kindly ask that all participants keep their earpieces away from the microphones. Audio feedback incidents can seriously injure interpreters and disrupt our proceedings. I will also remind you that all comments should be addressed through the chair.

Pursuant to the motion adopted on October 23, 2023, the committee commences its study on the growing problem of car thefts in Canada.

We have today two panels of witnesses. I would like now to welcome our witnesses for the first panel. From Équité Association, we have Terri O'Brien, president and chief executive officer. From Carfax Canada, we have Shawn Vording, vice-president, product and sales. From the Insurance Bureau of Canada, we have Celyeste Power, president and chief executive officer, and Jason Clark, national director, climate change advocacy.

Up to five minutes will be given for opening remarks, after which we will proceed with rounds of questions.

Welcome, all.

I now invite Ms. O'Brien to make an opening statement, please.

[Terri O'Brien, President and Chief Executive Officer, Équité Association]

Thank you, Mr. Chair.

Good afternoon, everyone. My name is Terri O'Brien, and I serve as the president and CEO of Équité Association. Équité is a not-for-profit organization and Canada's national authority on insurance crime and fraud prevention.

I am honoured to address you here today to continue the important dialogue on Canada's national auto theft crisis.

At Équité, our team of specialized investigators provide expert support to law enforcement agencies across Canada, collaborating on auto theft investigations, including identifying and recovering stolen vehicles and partnering with CBSA. Additionally we have developed advanced analytics capabilities, which allow us to share intelligence with our partners and track the evolving trends of insurance crime.

In Canada, a vehicle is stolen every five minutes. That means that every five minutes a Canadian is victimized, and every five minutes a neighbourhood in our country feels less safe.

With an annual cost exceeding $1.2 billion to Canadians, auto theft is not just a property crime. Vehicles in Canada are being stolen by domestic and international criminal organizations. The proceeds are then being used to finance domestic drug and gun trafficking and international terrorism. These crimes hurt our communities and put Canada in the spotlight internationally as a source nation for illegal trade.

Addressing this issue is an important step in keeping Canadians safe and stemming the flow of funds into organized crime. To put this crisis into further context, in three short years, Ontario has seen auto theft rise by 53%, and Quebec residents have been hit even harder, with a 66% increase. These crimes hurt our communities.

We know that the criminals are becoming more brazen, often resorting to physical violence, as evidenced by the significant increase we've seen in carjackings, break and enters and owner-interrupted thefts that often result in violence. Greater Toronto area residents have witnessed a 104% increase in carjackings. Carjackings are terrifying.

However, not all vehicles stolen are destined for export either. Domestically there has also been a sharp increase in stolen vehicles being “revinned” across the country. In revinning, a vehicle identification number—or VIN—is changed, in essence, to create a false identity for that vehicle. By creating a new identity for these vehicles, criminals can sell them to unsuspecting Canadians, use them to commit other crimes or export them for significant profit.

In this way Canadians are being exploited twice, once when they are victimized by auto theft and again when the proceeds from that crime are funnelled back into our communities, funding guns, drugs and other illegal activities.

From a fiscal standpoint, there are significant costs incurred by the government in terms of law enforcement and administration of the criminal justice system, which affect all taxpayers. Both individuals and the insurance industry bear extraordinary costs in premiums, deductibles, rental cars and other transportation costs, all at a time when the cost of living and inflation are already challenging for Canadians.

According to a recent Angus Reid survey, 84% of Canadians say the rise in auto theft makes them concerned about their safety and the increase in crime in their community.

Auto theft is a multi-faceted, complex issue, but when we are looking at short-term, high-impact solutions, technology has an important part to play. Canada's current motor vehicle safety regulations were fully implemented in 2007, which resulted in a steady decline in auto theft. However, today's criminals are taking advantage of these outdated standards, and they are able to gain access to a locked vehicle in as little as 60 seconds.

Transport Canada has committed to updating the safety standards, which is welcome news for Canadians.

Anti-theft vehicle technologies can utilize simple solutions that are effective at preventing the vehicle from being stolen in the first place. These could include simple solutions deployed through software patches like introducing reprogramming delays or retrofitting key fobs to put the battery to sleep after a few minutes to protect against relay attacks.

Several auto manufacturers have been offering theft event privilege discounts upwards of $10,000, depending on the vehicle. However, this funding could be better directed to immobilizers that cost about $300.

Finally, expanding data sharing between CBSA and industry partners, such as Équité Association, can lead to more targeted inspections and reduce illegal exports of stolen vehicles. This strategy aligns with how the U.S. Customs and Border Protection agency is currently operating with our sister association in the U.S., the National Insurance Crime Bureau.

Public-private partnerships create a more effective and efficient way of addressing the issue of auto theft by allowing us to pool resources and lend our expertise.

Canadians have been withstanding the worst outcomes of this public safety and financial crisis. We know that our collective strength comes from the actions we take to improve our communities and take care of one another.

I look forward to continuing the momentum that was started earlier this month at the National Summit on Combatting Auto Theft and to finding collaborative solutions to protect honest, hard-working Canadians.

Thank you.

[The Chair, Liberal, Heath MacDonald]

Thank you, Ms. O'Brien.

Mr. Vording is next.

Please go ahead.

[Shawn Vording, Vice-President, Product and Sales, CARFAX Canada]

Thank you, Mr. Chair.

Good afternoon. My name is Shawn Vording. I'm a 15-year executive at Carfax Canada and was recently announced as the new president.

I would like to thank the committee for inviting us to talk about auto theft, which we take very seriously.

We have been helping Canadians identify auto theft for over 25 years and have been actively working with various stakeholders and partners for the past six years. We are Canada's definitive source of automotive information, delivering vehicle history, appraisal and valuation. Our products help millions of Canadians make better decisions when it comes to buying, selling and owning vehicles.

We recently attended the automotive theft summit on February 8, where we learned even more about the various efforts of multiple partners and potential additional opportunities for Carfax Canada, in order to help address auto theft in Canada.

When it comes to automotive theft and fraud, the Carfax Canada vehicle history report helps our customers identify critical issues before they purchase a vehicle, such as vehicle information numbers, or VINs, specific to cloning; VIN tampering; stolen cars; and inaccuracies in vehicle data. In fact, for any VIN in North America, Carfax Canada has access to data that may help determine whether this is the case.

Carfax Canada provides products and services to several customer segments and is proud to work with many partners. These include Canadian consumers, Canadian automotive dealers, automotive manufacturers, banks, auctions, insurance carriers, Équité, the Insurance Bureau of Canada, border services agencies and Canadian law enforcement agencies.

Carfax Canada continues to acquire data and invest in products and services to help consumers and all stakeholders across the country tackle this major issue. We remain fully committed and are eager to expand our efforts and partnerships even further to benefit all Canadians.

Thank you.

[The Chair, Liberal, Heath MacDonald]

Thank you, Mr. Vording.

Ms. Power, go ahead, please.

[Celyeste Power, President and Chief Executive Officer, Insurance Bureau of Canada]

Thank you very much, Mr. Chair.

As Terri noted, our industry sees trends before they become a crisis by way of rising claims costs. When we began to see auto theft numbers increase, we were quick to look at ways we could limit the impact on our customers. It was immediately clear that we would be unable to tackle this issue alone. Thankfully, the federal government's commitment to an action plan and the ongoing collaboration of many stakeholders mean we do not have to. It's now well understood that in order to combat auto theft in Canada, we need a whole-of-society approach.

I'd like to start by painting a picture. In terms of solving the auto theft crisis, where do we want to be by 2030?

Canada should no longer be seen as a target destination for international organized crime groups to source their stolen vehicles. By 2030, it should be so difficult to steal and export a car in Canada that organized crime groups look elsewhere. It should be so difficult that other countries are looking to emulate Canada's approach. This is critical because by 2030 we can expect to see more autonomous vehicles on our roads, and then the impact of vehicle theft will become much more severe.

How do we realize that vision?

First, we have to focus on prevention and consumer awareness to make cars harder to steal in the first place. A vehicle is reported stolen every five minutes in Canada. We need to do better for your constituents and for all Canadians.

Second, we need to expand intelligence and information sharing among enforcement agencies and industry partners. There are international examples that we can replicate here to disrupt the transnational criminal organizations from benefiting from auto theft.

Third, we need to focus on intervention and law enforcement to cut off the supply of stolen vehicles to international markets. Our borders are too porous. They're designed to prevent bad things from getting into our country, but we also need to deter things from getting out. This involves the CBSA and law enforcement, as well as the co-operation of shipping and rail companies and freight forwarders. Last week's $15-million funding announcement is certainly a good start, but there's more work to do.

Finally, we need to improve the recovery of vehicles, in part through international policing coordination, to make it easier to bring your constituents' vehicles home.

What else could we do?

When it comes to elevating consumer awareness, insurers are doing their part. In addition to consumer education at the point of sale by brokers and agents and incentivizing the installation of aftermarket anti-theft devices, our industry ran an “End Auto Theft” campaign last fall to educate drivers on what they can do to protect themselves. We reached tens of millions of drivers.

We can build on this campaign while promoting other efforts. There are great examples of consumer education out there, and we need to see more of that.

As for prevention, we welcome Transport Canada's commitment to modernize outdated motor vehicle safety standards to improve theft deterrents. Updating standards and regulations can take time, so our industry is prepared to partner with manufacturers on this to make it move as quickly as possible.

Through Équité, insurers are also committed to sharing their data with law enforcement agencies and the CBSA. In the U.S., Customs and Border Protection actively shares intelligence information with the National Insurance Crime Bureau to detect and prevent the export of stolen vehicles. They indicate that this has been incredibly useful.

Enhanced information sharing will help inform earlier, more-targeted enforcement, further cutting off the supply of stolen vehicles. The provinces also have a role to play here in addressing the vulnerabilities in revinning a vehicle.

With regard to intervention and enforcement, preventing the illegal export of vehicles absolutely should be the priority.

In Canada, export documents can be amended after a ship has set sail. In the U.S., Customs and Border Protection requires the exporter of a vehicle to present all export documents and the vehicle at the port at least 72 hours prior to export. As a result, law enforcement experts estimate that only 10% of their stolen vehicles are slated for export. In Canada, that number is over 50%.

With regard to recovery, once vehicles are out of Canada, it's complicated and costly to get them back. Sharing our law enforcement information with foreign partners, including Interpol, would help arm international customs officials with the knowledge they need to intervene.

In closing, I want to state the obvious: Auto theft is not a victimless crime. It affects every Canadian—each and every one of your constituents—either directly or indirectly.

Like in any other business, increased costs will eventually be borne by the customer. Last year, auto theft added an average of $130 to insurance premiums in Ontario and $105 in Quebec. This is to say nothing of the upstream and downstream impacts that auto theft is having on Canadians' safety in their communities—our communities—every day.

We can do better—we must do better—for our friends and neighbours across the country.

Thank you very much.

[The Chair, Liberal, Heath MacDonald]

Thank you, Ms. Power.

We'll open the floor for questions.

First up is Mr. Lloyd, please, for six minutes.

[Dane Lloyd, Conservative, Sturgeon River—Parkland, AB]

Thank you, Mr. Chair.

Thank you to all the witnesses for being here today.

I'll start off with Ms. O'Brien.

Your analysts are at the port of Montreal. They analyze the containers, using statistical methods to determine if those containers might contain stolen vehicles. Is that correct?

[Terri O'Brien]

That's correct. We have investigators who are at the port of Montreal every day, working collaboratively with CBSA, Montreal police services and the RCMP. Our analytics team is across Canada, and they work remotely, running statistics and analysis to support confirming that the vehicles in the containers are in fact stolen vehicles.

[Dane Lloyd, Conservative, Sturgeon River—Parkland, AB]

Is it true that your analysts were pulled out of the port of Montreal in January of this year? Were there analysts removed from the port of Montreal?

[Terri O'Brien]

No. We have investigators who are present in the port of Montreal, and no, they work quite collaboratively with CBSA and police services. That's not true.

[Dane Lloyd, Conservative, Sturgeon River—Parkland, AB]

You didn't have analysts there before who were pulled out in January?

[Terri O'Brien]

No. That's not correct.

[Dane Lloyd, Conservative, Sturgeon River—Parkland, AB]

Okay. Thank you for that. I was curious.

[Terri O'Brien]

Okay.

[Dane Lloyd, Conservative, Sturgeon River—Parkland, AB]

My next question is for Carfax Canada.

We know that we're dealing with Bill C-27 in another committee and there are a lot of privacy issues with it, and we of course know that VINs—vehicle identification numbers—are part of that. Do you have any concerns about Bill C-27 and VINs? Is there an impact that this committee should be aware of?

[Shawn Vording]

Thank you for the question. There are definitely concerns.

The proposed bill as it stands today is very unclear as to whether or not VINs are going to be classified as personal information. I think you've heard from all three of us that the importance of VINs. The data associated with a VIN—not with an individual—is critical in combatting not only vehicle thefts but fraud in general.

We continue to take a position that a VIN is not personal information and obviously are working with other committees to get clarity on that.

[Dane Lloyd, Conservative, Sturgeon River—Parkland, AB]

Thank you for that.

We're all talking about the vehicles that are being exported primarily through our ports, but a lot of people would know that tens of thousands of these stolen vehicles have cloned VINs and are being resold in Canada to unsuspecting consumers. It just seems glaring to me that in our country you can have people with all the VINs and all the insurance paperwork you need for a vehicle, and people are unknowingly buying stolen vehicles in Canada.

What is Carfax doing and what can the government do to help ensure that Canadians aren't purchasing stolen vehicles unsuspectingly?

[Shawn Vording]

Thank you for the question.

Access to data is critical. We have an entire team that's out in the market always generating additional data points for our reports. The more comprehensive the data is, the easier it is to detect these cloned VINs. Most of it is done through a sequence of events. A vehicle is registered in Ontario and a day later registering it in British Columbia is attempted. A vehicle is in an accident in Saskatchewan, and a very short duration later registering it in another province is tried.

For us, access to data and the more data we have on the report, the easier it is to detect these cloned VINs, and then for us it's the general awareness through work with our partners and working through our brand team to make sure consumers know the importance of running a vehicle history check. We believe that we are instrumental in preventing the exchange of some of these vehicles into consumers' hands by catching them at the trade-in phase or at the dealership's lot before a consumer can purchase them.

[Dane Lloyd, Conservative, Sturgeon River—Parkland, AB]

Thank you.

My next question is for Ms. Power. I'm sure the insurance industry is frustrated by the number of claims that are being paid out—$1.2 billion last year, I think. As an insurance industry, I'm sure you're looking at all the factors.

One thing we've seen consistently in the news is that, for the people who are being apprehended for stealing these vehicles, it's not the first time. Often they're people who have been apprehended before for stealing a vehicle. They might even have been to prison or, in some cases, they might be on bail.

Does the Insurance Bureau generally support creating tougher penalties for people who are caught stealing cars multiple times?

[Celyeste Power]

Thank you very much for the question.

Generally, we think that all options should be on the table to be explored to help combat the auto theft crisis. In addition to looking at stiffer penalties for the criminals doing this work, we're also advocating that we invest resources in prosecuting resources. We've seen that done in Ontario, and it has been helpful in making sure that these are actually working through the court system. That will send a very significant message through to those criminal organizations.

[Dane Lloyd, Conservative, Sturgeon River—Parkland, AB]

Thank you for bringing up the point about funding the court system. I feel the frustration of Canadians who saw—I think it was just last week, or two weeks ago—that because of court delays in this country, people who had been waiting with charges on them were allowed to walk free under Jordan's principle, because the court wasn't able to try them within a fair amount of time. I think Canadians are very frustrated. One, we're not catching these people who are committing the crimes as much as we need to be. Two, when they actually are being caught, we're not even hearing their cases in a quick enough manner and they're just walking free.

Are you frustrated by that when you see it happen?

[Celyeste Power]

I think a key part is to invest more into the resourcing of these prosecutions. It's important that the system works the way it's supposed to, but again, I think all options on the table to reduce auto theft, from stiffer penalties to investing more resources into prosecution, need to be explored.

Unless we're looking at all these options, this issue is not going away.

[Dane Lloyd, Conservative, Sturgeon River—Parkland, AB]

Thank you.

[The Chair, Liberal, Heath MacDonald]

You have 10 more seconds.