Evidence of meeting #72 for Transport, Infrastructure and Communities in the 42nd Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was audit.

A video is available from Parliament.

On the agenda

MPs speaking

Also speaking

Kim Benjamin  Director General, Road Safety and Motor Vehicle Regulation, Department of Transport
Michael Ferguson  Auditor General of Canada, Office of the Auditor General
Richard Domingue  Principal, Office of the Auditor General

4:20 p.m.

Conservative

Michael Chong Conservative Wellington—Halton Hills, ON

Thank you.

On a different part of the bill, clause 11 amends the Motor Vehicle Safety Act to add proposed section 13.1 to the act, which allows you, as minister, to suspend for a period not exceeding three years any regulation of the act. Now, is this intended to allow innovation such as autonomous vehicles to be on our roads?

4:20 p.m.

Liberal

Marc Garneau Liberal Notre-Dame-de-Grâce—Westmount, QC

Yes.

4:20 p.m.

Conservative

Michael Chong Conservative Wellington—Halton Hills, ON

That's good to hear because technology is changing rapidly, and I think we're quite behind as a country on the legislative and regulatory framework for autonomous vehicles. You know, there are cars on the road today that are fully autonomous, and many cars are fully capable of autonomous driving but have yet to flip the software switch on. I think this is something that we need to be seized with because Ontario is a significant auto manufacturer, and we don't want to fall behind other cross-border states in that competition.

Is it your intention, if this bill becomes law, to review all the regulations under the Motor Vehicle Safety Act and identify any regulations that are incompatible with self-driving autonomous vehicles or self-driving autonomous systems?

4:20 p.m.

Liberal

Marc Garneau Liberal Notre-Dame-de-Grâce—Westmount, QC

Ultimately, we will have to have a standard for all autonomous vehicles, and as different players bring in new vehicles, we will have that flexibility, and a very important part of allowing this innovation is that component of this bill.

4:20 p.m.

Conservative

Michael Chong Conservative Wellington—Halton Hills, ON

But is there a time frame on doing that? The reason I ask is that the National Highway Traffic Safety Administration in the United States last September released new guidelines and regulations on autonomous vehicles in the United States, essentially allowing driverless cars. Google's driverless car is now considered acceptable throughout the United States. In fact, they consider Google's self-driving car to be a driver for the purposes of their legislation and regulation, and that has allowed companies to set up shop there, raise financing, and pursue fully autonomous systems and fully autonomous cars.

Currently in Canada, that would not be allowed. It would not be allowed for a fully autonomous vehicle without a driver to go down our roads. I think that will put us at a disadvantage.

The industry is wondering when we are going to review all the regulations that are incompatible with these technologies in order to ensure that we have a regulatory framework that is just as innovative as what we see south of the border and in Europe.

4:25 p.m.

Liberal

Marc Garneau Liberal Notre-Dame-de-Grâce—Westmount, QC

The regulations that are there now apply to all the conventional cars that are out there, and it's important that those stay there. When new driverless vehicles start to come in—and we want to encourage them to be on our roads and to keep safety in mind—we will look at individual regulations as the case arises to make sure that....

What the United States has done is put out some guidelines. There's quite a difference between guidelines and regulations.

We want to, in Canada, encourage development. Ontario, as you point out, is particularly involved in the automotive industry, and there's a lot happening.

There's also, at the University of Alberta, a program called Active. There's a program at the University of British Columbia called Aurora. We want to get more vehicles out there, and we will be looking at that flexibility in the regulations to encourage them to do exactly what you've described.

4:25 p.m.

Liberal

The Chair Liberal Judy Sgro

Thank you very much, Mr. Garneau.

Sorry, Mr. Chong.

Mr. Aubin.

4:25 p.m.

NDP

Robert Aubin NDP Trois-Rivières, QC

Mr. Minister, if I may, I would like to come back to an answer you gave me in the first round. You said that there was a shift in management, and that risk management was now the norm.

I imagine that effective risk management requires evidence. What is happening with the six regional teams that were specifically mandated to consult with local authorities and police forces, to conduct inspections, and to provide evidence? Can we expect those six regional teams to be brought back in order to manage the risk?

4:25 p.m.

Liberal

Marc Garneau Liberal Notre-Dame-de-Grâce—Westmount, QC

We make adjustments continuously, but in reality, as I mentioned, there will be progress and it will be risk-based. In the past, for fairly logical reasons, we decided to inspect the planes or any vehicle twice a year. Nothing has changed for years, because what we were assessing had a very low level of risk.

We realized that it did not make sense to use all of our resources and that we needed to use them more intelligently, and that is what we are doing. That said, we are changing with the times. We need to monitor the situation. If we see that we need to adjust something or increase resources, that is what we'll do. I think it's a pragmatic way of using resources that are not inexhaustible.

4:25 p.m.

NDP

Robert Aubin NDP Trois-Rivières, QC

Do you think it would be possible for the Standing Committee on Transport, Infrastructure and Communities to receive the list of organizations and groups that were consulted when Bill S-2 was developed?

My question relates to another aspect of the Auditor General's audit. He seemed to suggest that, in previous consultations, the car industry had been heavily consulted, but the interest groups had not been consulted as much. Consumer and police groups, for example, or even the CAA, who are also significantly affected by this issue, had not been consulted as much. This raised the issue of possible bias.

Basically, we would like to be able to see whether, in all the consultations that took place in preparation for Bill S-2, the range of agencies consulted is wider.

4:30 p.m.

Liberal

Marc Garneau Liberal Notre-Dame-de-Grâce—Westmount, QC

Absolutely. We have the information as to who participated in the consultation, and we can forward it to you. You mentioned the CAA. I think the association even reacted to our bill, saying it was a good thing.

However, we can provide the committee with a list of the organizations we consulted in preparation for Bill S-2.

4:30 p.m.

Liberal

The Chair Liberal Judy Sgro

Thank you very much, Mr. Aubin.

Minister Garneau, thank you very much for coming this afternoon. I hope you haven't infected all of the committee and everyone else in here, because we have a piece of legislation coming up that we need to deal with.

4:30 p.m.

Voices

Oh, oh!

4:30 p.m.

Liberal

Marc Garneau Liberal Notre-Dame-de-Grâce—Westmount, QC

I hope I've infected you with my enthusiasm.

4:30 p.m.

Liberal

The Chair Liberal Judy Sgro

Only enthusiasm, no germs.

Thank you very much for coming.

I will suspend momentarily for our other witnesses to come to the table.

4:35 p.m.

Liberal

The Chair Liberal Judy Sgro

I'll call the meeting back to order. We'll continue on our study of Bill S-2.

We have with us, from the Office of the Auditor General, Michael Ferguson, Auditor General of Canada. He is with Richard Domingue and Dawn Campbell.

Mr. Ferguson especially, welcome. It's nice to see you back again.

We'll open up the floor to you. Please go ahead.

September 26th, 2017 / 4:35 p.m.

Michael Ferguson Auditor General of Canada, Office of the Auditor General

Madam Chair, thank you for this opportunity to present the results of our audit on the oversight of passenger vehicle safety by Transport Canada.

Joining me at the table are Richard Domingue and Dawn Campbell, who were responsible for the audit.

Vehicle safety technology is evolving faster than regulations and standards. Transport Canada faces challenges in exercising its important role of keeping passenger vehicles safe. An up-to-date regulatory framework and the proper oversight of passenger vehicle safety help to ensure that Canadians are driving the safest vehicles possible. We examined whether Transport Canada's regulatory framework and its oversight of vehicle safety defects and recalls were adequate to respond to emerging safety risks and issues in a timely manner. We noted a number of significant deficiencies in the regulatory framework, including a lack of timeliness, an absence of broad stakeholder consultation, and outdated regulations.

We found that Transport Canada did not develop motor vehicle safety standards to respond to emerging risks and issues in a timely manner. For example, Transport Canada's regulations did not allow vehicles to be equipped with advanced headlights that are controlled by software. At the same time, however, vehicles partially controlled by unregulated software are on Canadian roads.

We found that, in general, Transport Canada waited for the National Highway Traffic Safety Administration in the United States to develop new or amended standards before proposing regulatory actions in Canada. This reactive approach created significant delays in implementing new standards, and meant that some passenger vehicles were not equipped with the newest safety features available in other countries, such as the aforementioned advanced headlamps. There were lengthy delays—sometimes of more than 10 years—from the time that Transport Canada started to work on an issue to the implementation of new or amended standards.

Prior to making proposed regulations public in the Canada Gazette, Transport Canada consulted with manufacturers but did not engage broadly with stakeholders such as consumer associations, medical associations, and police. Manufacturers may have exercised disproportionate influence on regulatory decision-making.

We found that some important standards were not working as intended, or were outdated. For example, Transport Canada was aware that child seat anchorages could fail under certain conditions, but it had not proposed a new regulation or issued an advisory by the audit completion date. The department stated that introducing a unique-to-Canada requirement for anchorage strength in passenger vehicles would be detrimental to trade.

We also found that Transport Canada did not plan or fund its research and regulatory activities for the longer term. As a result, the department could not prioritize resources and spending decisions accordingly.

Finally, we looked at Transport Canada's oversight and analysis of public complaints and manufacturers' recalls. Overall, we found that the department adequately assessed complaints from the public to identify vehicle safety defects. However, the department did not request information about critical safety issues that manufacturers were investigating. As well, manufacturers issued 318 recalls between 2010 and 2015 for safety-related issues that were not brought to the department's attention. Furthermore, the department did not have the authority to assess whether manufacturers implemented effective processes for identifying and reporting safety defects. This limited the department's ability to investigate defects and better protect Canadians.

We found that Transport Canada adequately assessed vehicle manufacturers' efforts to complete safety recalls. However, manufacturers had difficulty identifying and contacting owners for some recalled passenger vehicles, especially for owners with older vehicles.

Transport Canada has agreed with our seven recommendations and has prepared a detailed action plan.

Madam Chair, this concludes my opening statement.

We would be pleased to answer any questions the committee may have.

4:40 p.m.

Liberal

The Chair Liberal Judy Sgro

Thank you very much.

Mr. Lobb, you have six minutes.

4:40 p.m.

Conservative

Ben Lobb Conservative Huron—Bruce, ON

The first question I have is on the six points you made in your presentation. It was the comment about the National Highway Traffic Safety Administration in the U.S. versus Transport Canada. How do you see that relationship working with Transport Canada?

4:40 p.m.

Auditor General of Canada, Office of the Auditor General

Michael Ferguson

Madam Chair, in the audit we actually refer to the department taking a reactive approach to setting regulations in a number of regulatory cases. For example, they wait to see what regulations the U.S. sets before Canada sets its regulations. What we are concerned about is that in a number of cases ,Transport Canada perhaps has research information or has done its own research into a certain issue. We certainly understand the need to understand what is going on with regulation in the U.S., but I think Transport Canada needs to be quite clear on how much of its approach is reacting to what the U.S. does in regulation and how much of its approach is about Canada's setting its own regulations.

4:40 p.m.

Conservative

Ben Lobb Conservative Huron—Bruce, ON

In your opinion, is Transport Canada privy to where the safety administration in the U.S. is leaning with regard to new regulations for motor vehicle safety, or is Transport Canada being left in the dark until after they've made their decisions?

4:40 p.m.

Richard Domingue Principal, Office of the Auditor General

Thank you, Madam Chair.

In this case, as Mr. Garneau said earlier in his testimony, there is the Regulatory Cooperation Council, the RCC, and through that committee, there is discussion of upcoming regulatory initiatives that could be undertaken by both Canada and the U.S.

What we found in the audit is that the work plan set up by the RCC is rather prescriptive in terms of what will be acceptable when it comes to new regulations that can be introduced. For example, there's the anchorage system for the child car seat restraint system, and we noticed in the report that the anchors are failing under certain conditions. Transport Canada could introduce a new regulation, but for all sorts of reasons—one of them mentioned in the report, that it would be detrimental to trade—they decided not to introduce a made-in-Canada solution to that problem.

So there is that co-operation, but to an extent it might be detrimental to the introduction of Canadian regulation when needed.

4:40 p.m.

Conservative

Ben Lobb Conservative Huron—Bruce, ON

The delay...there's been a bit of slowness within the department. You have the regulatory council. Maybe the U.S. makes a decision. They're working with the manufacturers. They go in a certain direction. On average, how long does it take Transport Canada to implement, or is it seamless?

4:40 p.m.

Auditor General of Canada, Office of the Auditor General

Michael Ferguson

I think we've identified in the audit that in a number of cases it will take Transport Canada about 10 years to actually make a change to regulations from the time they originally undertake to look at something and do the research, and do their consultations, which again were primarily with the industry, and go through all of that process. I think we've given about three examples of different changes to regulations that were taking 10 years or more to make.

Again, our concern is that vehicle technology is changing much faster than that. A regulatory system that takes 10 years to put new regulations in place doesn't keep up with the pace of change in the technology.

4:45 p.m.

Conservative

Ben Lobb Conservative Huron—Bruce, ON

I have time for one last quick question.

In point 10 of your presentation, you said there were 318 recalls between 2010 and 2015. Of those 318, were you able to identify a hypothetical scenario, if this new bill was brought forward, Bill S-2, where the minister would have or should have the ability to interject and where it would be proper to force a recall?