Transport Committee on June 1st, 2010

[Mario Laframboise, Bloc, Argenteuil—Papineau—Mirabel, QC]

Mr. Beatty, you understand that in our view, the notice period after the existence of a defect was determined was too long. Obviously, I have to trust Toyota, which implemented what you call a new quality structure. The gas pedal issue required a deeper analysis, which was done in Japan, as Mr. Tanaka told us. This is how the existence of a defect was determined.

Will your new structure make you more effective in this regard?

[Stephen Beatty]

I'm certainly hopeful of that. We're undertaking these improvements and we've asked for outside experts to provide us with advice, too, about how we can make further improvements to what we do. We're trying to leave nothing about our current process unchallenged inside the company and to look at it and make determinations about how to proceed.

Again, as I've said, technical issues are complex. They take some time to resolve, but for the sake of our own customers, we want to make sure people have confidence in their vehicles. We need, as much as legislators do, to ensure that this information is coming forward, that action is being taken, and that our customers can be confident.

[Mario Laframboise, Bloc, Argenteuil—Papineau—Mirabel, QC]

Is your research centre in Canada as capable as that in Japan?

[Stephen Beatty]

We perform certain types of research activities here in Canada. We have a cold research centre in Timmins, Ontario. We have engineering teams on the ground for winter field inspection purposes. There is a technical centre for North America in Michigan, and Canadians work at that centre as well. There is a growing technical presence here in North America.

[The Chair, Conservative, Merv Tweed]

Thank you, Mr. Laframboise.

Mr. Bevington.

[Dennis Bevington, NDP, Western Arctic, NT]

Thank you, Mr. Chair.

I'm interested as well in seeing how we can make a difference moving forward. Could you clarify for us how you see Toyota Canada will act in the future on defect identification? In a very clear fashion, I'd like to hear that from you.

[Stephen Beatty]

Thank you.

There are a number of things, as I said at the last committee hearing, that Toyota Canada has been leading in and has contributed back to the global Toyota organization, including our early detection and early response activities.

All data on service operations at the dealership level are shared with Toyota Canada. We run computer algorithms to look for anything unusual in service activity that would give us a hint that there might be a technical problem, whether it's a safety-related defect or something else.

But above and beyond that, clearly we've been increasing staff. We have been taking up our role with respect to the task force committees and to ensure that we're a part of this North American regional activity, as well as maintaining our pre-existing relationship with Japan. I think the more you can have technical and engineering staff speaking to each other on a wide range of issues, the faster this information is going to come to the fore.

In addition to that, as we undertook, we have provided to Transport Canada EDR readout tools. There are now four sets of EDR readout tools in the possession of Transport Canada, which we hope will make it easier for the regulator, in this case, to understand the data that's coming out of our cars.

This is, in many respects, as Mr. McDonald has already acknowledged, an iterative approach. There are some things that the regulator will raise with us; there are some things we'll raise with the regulator. But in both cases, we will undertake to act as quickly as humanly possible to deal with any issues that arise.

[Dennis Bevington, NDP, Western Arctic, NT]

Mr. McDonald, in what you've heard from Toyota, and given your relationship with Toyota, how would you describe Toyota in comparison to other car companies in Canada when it comes to these particular issues?

[Gerard McDonald]

We have a relationship with Toyota similar to those with other manufacturers in the country. Whenever a safety-related defect is either found by us or brought to our attention, there is always a certain amount of give and take. We would always like action sooner rather than later, but it is an iterative process.

[Dennis Bevington, NDP, Western Arctic, NT]

You say there are 5,000 companies involved in this pursuit of car excellence. Within your department, how do you handle the actual analysis and ensuring that each company or even the major companies are using best practices in this regard?

Do you have a process by which you analyze what's coming back from these companies? Do you have a process that allows you to identify that a particular company is acting correctly within what you consider to be best practices?

[Gerard McDonald]

I'm assuming that you're talking about best practices with respect to the notification of safety defects. Essentially, the way we—

[Dennis Bevington, NDP, Western Arctic, NT]

And also the provision of information and the incident reports, all of those things that make up the relationship that you need to have with these manufacturers.

[Gerard McDonald]

That's fair enough.

We deal with it in a two-pronged way, essentially. As you are aware, there are certain complaints that are brought to our attention and we deal with those ourselves. We'll analyze each of those complaints to make a determination about what it may involve and whether or not there's a safety issue that we should be following up on.

We also hold meetings with the major manufacturers and their associations on a regular basis to become aware of any issues they may be dealing with. They will initiate meetings at their own behest as well, if they are aware of a particular issue that we may not be aware of. That would usually start the process of deliberation as to whether or not what we're talking about is a safety-related defect and how we're dealing with it.

[Dennis Bevington, NDP, Western Arctic, NT]

So among all these manufacturers, you don't have a best practices code that you can apply to them...? Sure, with the major manufacturers, you probably have an established relationship whereby you can identify over a course of time that they're proceeding in a fashion you're comfortable with or in which the expectation is there. But what about all the new companies that are coming on stream and bringing cars into Canada? How do you deal with them? You haven't seen an increase in your staff to work with that expansion. How is this happening?

[Gerard McDonald]

As I said, we don't have a particular code of best practices per se. The manufacturers, importers, and distributors are guided by the Motor Vehicle Safety Act, and it's their obligation, if they become aware of a safety-related defect, to advise us of such.

[The Chair, Conservative, Merv Tweed]

Thank you.

Mr. Watson.

[Jeff Watson, Conservative, Essex, ON]

Thank you, Mr. Chair.

Of course, Toyota Europe wouldn't have shared the sticky pedal report with Toyota Canada, because, like Toyota Canada, it's a sales and marketing wing of the company in Japan. There's also a manufacturing wing in each of these countries—Canada, U.S., and Europe as well—but it's Toyota Japan that is the nerve centre, if you will, that makes the decisions.

Did they ultimately share that report with Toyota Canada? If so, when?

[Stephen Beatty]

The answer is that we received a copy of the TI in response to a request from Transport Canada for the TI following the NHTSA press release.

[Jeff Watson, Conservative, Essex, ON]

When was that?

[Stephen Beatty]

I'd have to confirm the specific date.

[Jeff Watson, Conservative, Essex, ON]

Okay.

Who ultimately made the decision to serve notice of defect here in Canada with respect to the MVSA? Was that decision made in Japan or was it made by the Toyota Canada sales and marketing wing?

[Stephen Beatty]

It's a combined process.

[Jeff Watson, Conservative, Essex, ON]

Right. They reviewed your homework. They ultimately made the decision, though, correct?

[Stephen Beatty]

So once they make the determination of the safety defect, then we have a role and responsibility we need to carry out.

[Jeff Watson, Conservative, Essex, ON]

It seems to me, Mr. Chair, that if we're looking at improving the way things work here, perhaps Transport Canada's direct relationship needs to be with Toyota Japan rather than with the sales and marketing wing here in Canada. That may be one particular suggestion.

I have another question for you. Are you aware of any of your suppliers in Canada issuing direction from their own legal counsel to preserve any documents, e-mails, or other such evidence or correspondence that could point to a Toyota violation of the Motor Vehicle Safety Act or concealment of such from Transport Canada or otherwise exonerate that supplier from such violation or concealment?

I'm aware of one. I don't know if you are.