Evidence of meeting #73 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 recall.
A recording is available from Parliament.
President, Global Automakers of Canada
That's what the language in proposed subsection 8.1(1), I believe, states at this point, that the minister could require the company to undertake testing, yes.
Liberal
President, Global Automakers of Canada
I think the other component of my remarks, which I mentioned, is a concern that if the company is being forced to undertake the testing, pay for that testing and analysis, there could be an issue that arises when by doing such work and providing such information, at some point down the road it could be potentially incriminating itself as well. There's a concern, I guess, under the charter.
Liberal
President, Canadian Vehicle Manufacturers' Association
Yes, I have a brief comment. I think we have to remember that this is a provision that would apply when a company fails to voluntarily provide the information. I think that's the key point here. We don't have a problem with that. Obviously, if a company fails or does not choose to voluntarily provide that, the minister needs some ability, some power, to deal with that situation. That's the key thing here. What we're saying is, let it be relevant to the circumstance and the issue at hand, let it be reasonable in terms of being somewhat focused on that, and provide it in a manner that's timely and consistent with what the minister specifies.
Liberal
Ken Hardie Liberal Fleetwood—Port Kells, BC
Mr. Hatch, again I will ask for a specific example, if you have one, of a lengthy delay in warranty or recall work being done, or of parts available from a manufacturer.
Chief Economist, Canadian Automobile Dealers Association
The two highest-profile recent ones, of course, have been alluded to in this committee before by the minister and today. Certainly, there is the VW situation, but again that wouldn't fall under the purview of this bill because it was not a safety defect. Also there was the situation surrounding Takata airbags, which affected a number of different manufacturers. I'm not sure if it was five or six different manufacturers in Canada, or more than that. Those are the two highest-profile cases, and again as I mentioned in my opening remarks, these are by their very nature low-frequency events but when they do happen they tend to have a very high impact. Those would be the two highest-profile examples in recent years that come to mind.
Liberal
Ken Hardie Liberal Fleetwood—Port Kells, BC
Maybe, Mr. Nantais and Mr. Adams, you can comment on a scenario where I own the car and all of a sudden I get a notice that it has been recalled. It's serious enough that the car is not driveable but it's going to be weeks, perhaps months, before the parts are available, particularly if they're coming from a foreign country. Do you think there should be compensation available to the owners of those cars?
President, Canadian Vehicle Manufacturers' Association
I think that's something that individual companies already assess on a case-by-case basis.
Liberal
President, Canadian Vehicle Manufacturers' Association
I believe there have been, yes.
President, Canadian Vehicle Manufacturers' Association
Again, because it's an individual manufacturer-to-customer issue, I'm not that close to the scenario to give you a proper response.
Liberal
Ken Hardie Liberal Fleetwood—Port Kells, BC
All right.
In the time available, we were talking in the earlier panel about new safety technologies that are coming on board that are available in the foreign-made cars in their country of origin. We mentioned lights. Are there other developments out there waiting for approval in North America generally that could improve safety?
Mr. Adams.
President, Global Automakers of Canada
I think there probably are. The lighting issue, for our members anyway, is the most immediate concern. The advanced lighting has been in place in Europe for the last decade and hasn't come to North America simply because the U.S. has not been in a position to update its own lighting standard, and Canada tends to take its lead from what the U.S. is doing.
Liberal
President, Global Automakers of Canada
I'm sure there are, and I would be happy to canvass my members and get those results for you.
NDP
Robert Aubin NDP Trois-Rivières, QC
Thank you for joining us, gentlemen.
I will start with you, Mr. Hatch, if you don’t mind.
In your remarks just now, you talked about a harmonization of the Canadian and American systems. When we started, the minister told us that he turned down the amendment for dealers, saying that it was not a safety issue. He turned the proposal down.
You seem to be saying that there was an agreement on a compromise, and Mr. Fraser hinted at it, but there is no wording. I do not know if you have read the English version of the proposal.
NDP
Robert Aubin NDP Trois-Rivières, QC
Okay. Here is my question.
Why do you need a legislative solution to that problem? Does it mean that, without a legislative solution, you have to take a manufacturer to court every time there is a problem?
Chief Economist, Canadian Automobile Dealers Association
The reason we are seeking, and will continue to seek, a legislative solution to this problem is that there's a need for consistency. Right now many manufacturers pay some form of compensation in instances where there are difficult, long-lasting recalls. There are manufacturers out there that do the right thing, and they treat their dealers fairly and in a far-sighted manner.
When we appeared at the Senate committee last year, Mark made remarks to the effect that it's not in the manufacturer's interest to treat these relationships in a negative way. The relationship between a manufacturer and a dealer is a long-term proposition. It's not one or two years and then they go away. A lot of manufacturers do the right thing, but a lot don't, so there is a great deal of inconsistency across the board. When this happens, dealers are saddled with inventory they have to finance, and they bear significant costs.
Given the nature of the relationship between manufacturers and dealers, we have concluded that a legislative solution is required to bring consistency to the process and fairness across the board, no matter what manufacturer you might be dealing with as a dealer.
NDP
Robert Aubin NDP Trois-Rivières, QC
When you say that a good number of manufacturers do the right thing, does that include compensation to maintain inventory in the event of long delays?
Chief Economist, Canadian Automobile Dealers Association
It often does. I don't have access to the specifics of what's known as the DSSA, the dealer sales and service agreement , which is the legal document governing the business relationship between the dealer and manufacturer. Often there will be provisions in there allowing for some of those reimbursements to be paid. Often it's up to the discretion of the manufacturer or the manufacturer's the executive team.
There is no consistency across the board. We feel that the nature of the relationship is not balanced, because dealers are small and medium-sized businesses and manufacturers are much larger entities. That's not going to change, of course, but we feel there's a need for a legislative solution for this particular problem. It's going to get worse and not better, because recalls are going to become more frequent and not less frequent.
