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.
Liberal
The Chair (Hon. Judy A. Sgro (Humber River—Black Creek, Lib.)) Liberal Judy Sgro
I am calling to order our meeting of the Standing Committee on Transport, Infrastructure and Communities, pursuant to an order of reference on Wednesday, September 20, 2017 on Bill S-2, an act to amend the Motor Vehicle Safety Act and to make a consequential amendment to another act.
Our apologies for being late, but there was an issue in the House that we had to be there for. I will open the floor to whoever would like to go first.
Please introduce yourself.
Ian Jack Managing Director, Communications and Government Relations, Canadian Automobile Association
Good afternoon, everyone.
Thank you for your invitation. I am pleased to be here before you today to discuss Bill S-2.
Although I am sure many of you are familiar with CAA, let me begin by providing a bit of background on our organization's role in road safety.
We were founded in 1913 as a consumer advocacy group, not as a tow-truck company. Today, we have 6.2 million members from coast to coast and the services we offer them extend well beyond emergency roadside assistance. From our inception, our organization began advocating for critical pieces of the traffic safety framework in place today in Canada, and from those earliest days, in pushing for stop signs to seatbelts to airbags to campaigns against impaired and distracted driving, CAA has been at the forefront of traveller advocacy for more than a century. Today, we represent roughly one in four adult drivers in this country, and we are recognized as one of Canada's most trusted brands.
We have noticed that consumer protection in Canada has lagged behind other developed countries, and so we are pleased to see that Bill S-2 addresses several of the shortcomings.
In the United States, for instance, the National Highway Traffic Safety Administration, or NHTSA, has the authority to require manufacturers to recall vehicles that have safety-related defects or do not meet federal safety standards. Since enacted in 1966, more than 390 million cars, trucks, buses, RVs, mopeds, and motorcycles, and 46 million tires, and 42 million child safety seats have been recalled to correct safety defects.
Here in Canada, CAA believes that for the owners of the roughly 23 million light vehicles on the road today, Bill S-2 is a positive step that would strengthen the enforcement and compliance regime to further protect the safety of Canadians. As drafted, we are pleased to see that the minister of transport would be provided with the authority to order companies to correct a defect or non-compliance, and would be given the ability to penalize companies for offences committed under the act.
While most manufacturers live up to the high standards we have set for Canadian vehicles, the fact remains that, even as we speak, Transport Canada has 16 active defect investigations under way. Of these active investigations, 13 date from before 2017. It must be said that there are instances where government intervention may not only be useful, but could even be necessary.
For example, on November 10, 2016, Transport Canada announced it had made a preliminary determination that there was a safety defect involving brakes on 2011 and 2012 F-150 trucks with a 3.5-litre EcoBoost engine; the department had received over 100 complaints about this. In his testimony before the Senate last fall, Minister Garneau said the government contacted Ford and was disappointed that the automaker disagreed with the government's assessment. The minister further pointed out that under existing legislation, the effective result at the time was a stalemate. Ultimately, there was a delay of nearly six months of public pressure that finally resulted in the automaker issuing a notice of defect on May 5 of this year. Bill S-2 would increase the tools available to the minister to limit delays like this.
Today, the strongest measure Transport Canada can take when dealing with vehicles it believes are a hazard to Canadians is to force the issuance of a notice of defect, which requires a manufacturer to notify owners that their cars are unsafe. That's it. The government does not have the power to force a manufacturer to order a recall and/or to effect repairs. This makes the current Canadian system a veritable, if not literal, paper tiger.
Bill S-2 shifts the focus to remedies. It gives the minister the authority to order a company to issue a recall and make companies repair a recalled vehicle at no cost to the consumer. The minister may even prevent them from selling new vehicles in Canada until they are repaired. This matches similar legislation that exists in the United States, finally leveling the playing field in these important areas for Canadian consumers.
Today, Transport Canada's website hosts information about vehicle recalls and encourages consumers to address their vehicle recall as soon as possible. However, we know that is not always in the control of the consumer. Bill S-2 is a necessary tool for enforcement when handling vehicle recall cases where the minister deems intervention is necessary, and it would provide positive, added protection for consumers.
For too long, Canadian consumer protection has taken a back seat to the United States. In our view, Bill S-2 goes a long way towards rebalancing the situation. It represents a solid advance for Canadian consumers.
Thank you for your attention.
We welcome any questions you may have.
Thank you.
George Iny Executive Director, Automobile Protection Association
Good day. I'm George Iny, executive director of the Automobile Protection Association. With me is John Raymond. He's a member of the board of the association and also a former auto dealer. He works very closely with us on a number of issues, including vehicle safety.
The Automobile Protection Association, APA, is a not-for-profit organization. It was founded in 1969. It provides a public information service using telephone hotlines and a website.
We are one of the major sources of complaints to Transport Canada on presumed vehicle safety. We also work closely with university research teams across Canada to encourage proper oversight of the vehicles on our roads.
We are a small team. We even do a lot of work with people from the industry because we much prefer realistic solutions, but always while representing the interests of consumers.
I'm here today to go over perhaps some of the measures that are in the proposed Bill S-2. I'll try to give you a little colour or background information to go with it. Currently, there is a database where you can look up vehicle recalls. It's a very good database. It's an old one. But it's not in real time, so you will find out if there ever was a recall for your vehicle, but it will not tell you if your actual vehicle was fixed or not and we would like to have that ability.
In the time between when Bill S-2 came out and today most carmakers, because there's an American requirement, came on board and are pretty much doing that. This would allow the stragglers to be picked up. It would also allow the government to put in perhaps some minimum information that you would be able to get, because not all of the websites are easy to use and not all of them give you the full information on the recall.
This is an important pre-condition if you want to get used cars corrected before they're resold. It's a big problem, and one of the objections the retailers have, and also the provincial ministries, is that there isn't a standard way to look up that information that's easy. I might add that a provincial safety inspection, which people assume involves a check for recalls, actually doesn't currently. The two systems don't talk to one another. So if this is fixed, in other words, if we have at least standardized, good quality real-time information, then maybe that might be included as part of the inspection process.
Administrative monetary penalties would be a more expedited tool than using the courts. The government doesn't go to court very often and when it does, it loses, so this would be something that we're hoping would be used more. It's a little difficult, because you're giving basically a gym membership to somebody who you don't know is actually going to use it and get stronger, but that's our hope. They would be creating a tool that the government could then use, and in that case it would allow it to have a little more leverage with carmakers that aren't being very compliant.
An important provision that we feel the administrative monetary penalties should have is a set-aside for research in the area of vehicle safety or injury reduction. Most of you are aware that Volkswagen was not so recently found to have cheated on diesel engine emissions, but actually the people who discovered it were working under an award, a research grant, from a previous investigation where a different carmaker or truck maker had been found guilty of cheating. In other words, some of that money if it's collected should be set aside to further the cause of vehicle safety.
On the power to order correction of defects, they've had it in the United States since the early 1970s or late sixties. It's a flaw in our original act that the way the act was written what seemed politically or maybe practically reasonable at the time was a letter by mail. Since then, essentially, events have overtaken our act, so more than 99% of recalls or about 600 a year are happening and, I would say easily 98% roughly are happening with what's called voluntarily. So the repair is being done by the carmaker either because they think they should do it or because they're required to do it in the United States.
We're looking at three, four, five, or six recalls a year where the government really needs more muscle. It's not a huge game-changer when you look at what's happening already.
Liberal
The Chair Liberal Judy Sgro
Thank you very much.
I'm sorry to cut you off, but I'm sure you'll get your comments in as we go forward.
September 28th, 2017 / 3:55 p.m.
Conservative
Ben Lobb Conservative Huron—Bruce, ON
Thanks very much.
Mr. Iny, I'll use the case of the F-150 with the brake pump issue. From a consumer's point of view, if a Ford dealership bought a truck of that age—I think it was 2011, 2012—at a car auction and it had not been fixed, would they be notified somewhere about that recall? Would that show up in the computer?
Executive Director, Automobile Protection Association
That individual would probably buy the vehicle certified and inspected by the dealer. In some provinces it might even have had to undergo a provincial inspection, but there would be no verification of the recall.
If a Ford dealer was selling the car, if they could collect money for the work in the reconditioning process, they would do it. If it were an independent dealer, or a GM, Chrysler, or other dealer, the work would not be done.
Conservative
Ben Lobb Conservative Huron—Bruce, ON
With this legislation, they still wouldn't correct the problem.
Executive Director, Automobile Protection Association
Right, it would be a provincial matter. But at least when we go and see the industry—and we've done this many times—they wouldn't be able to tell us that there was no standard place to check and that they weren't prepared to sit on the phone calling somebody who might not have an interest in serving them.
Conservative
Ben Lobb Conservative Huron—Bruce, ON
Nowadays, there are lots of U.S. retailers that come up here to car auctions and buy trucks and cars to bring back to the U.S. I guess they could potentially buy an F-150 with a defective pump, take it to Texas, and still have the same problem, right?
Executive Director, Automobile Protection Association
In theory, before a vehicle gets imported into the U.S., or before a U.S. vehicle comes up here, it's supposed to be complete with all recalls. However, it could happen that after it comes to Canada it's removed from the list of recalled vehicles in the U.S. without being added to the list of vehicles covered by future Canadian recalls. In this case, it would disappear. I don't know if this is a problem that needs to be addressed in legislation or in the regulations, but that's an existing problem. I don't think anything here would really affect it.
When we went to freer trade in used cars, the thinking was that we didn't want to import somebody else's problems. They brought up this issue of the compliance letter, but they didn't consider what happens after the vehicle comes here. They didn't realize that at that point the vehicle is struck from the record in the States and is not necessarily added by the Canadian manufacturer.
Conservative
Ben Lobb Conservative Huron—Bruce, ON
On the vacuum pump issue, the U.S. has the power to recall. Did the U.S. issue a recall?
Executive Director, Automobile Protection Association
I haven't followed it, but the investigation was led by Canada. It wasn't an active file in the States, to my knowledge. Because they didn't have the tools, I guess they relied on the prestige of the Minister of Transport to embarrass the company into doing its job, which worked. I know Ian said six months, but that's actually quite quick in a case where a company doesn't want to do something. If Mr. Garneau were personally investigating recalls, there would be a very good result, but you obviously can't do that. This would give the Ministry of Transport, the people inside, powers that might allow them to be more effective.
Conservative
Ben Lobb Conservative Huron—Bruce, ON
On page 3 of your presentation at the bottom of the first clause, section 10.3, your last point is that emissions recalls must be included. We talked about this at our last meeting. Volkswagen is probably the worst abuser in modern history, and it's not included now. It's my understanding that Environment Canada would have to issue that recall, but I don't believe they have a recall ability either. Educate us on how we can rein in guys like Volkswagen and force them to do something in this country.
Executive Director, Automobile Protection Association
In Canada, we have about 600 safety recalls a year and about 30 emissions recalls. At one time, the two were put on the same database and were treated more or less the same. When the responsibilities for emissions were split from occupant safety, for many years they were still published on the same database. That would stay somewhere at the Ministry of the Environment and Climate Change, or I don't know where. Our concern is there should be some housekeeping done. It might not necessarily be in the legislation. We're pointing out that the two ministries should be talking to each other and should share the same database.
Liberal
Sean Fraser Liberal Central Nova, NS
Thank you very much for your testimony and for being here.
Before I get into questions, for the benefit of my colleagues around the table, I want to put on notice that I plan to move an amendment. I don't have proposed text today, but I want you to understand the spirit of it.
During the minister's testimony, he explained that there was a conversation between the department and stakeholders with respect to proposed section 10.52. This is the Senate amendment. Essentially, I will propose to delete the clause as it exists—and thanks to the Senate for causing me to think about it—and replace it with some language that would do a few things. I want the new language to reiterate with certainty that the same remedies that apply to consumers will apply to dealers when it comes to the repair, the reimbursement, or the replacement of defective vehicles in the event that a recall is ordered, but also make clear that none of this is with prejudice to remedies that may have been negotiated on commercial terms. When I have a translated version of the language, I'll circulate it to the committee.
I am curious about one of the components of the Senate amendment from a consumer protection point of view.
Mr. Jack, you might be well positioned to offer commentary. One of the potential consequences I saw with the amendment was, when there's a 1% interest payment available to dealers, that might motivate a manufacturer to repair vehicles for which there's an economic consequence to not repairing, before they repair vehicles that are on the road today being driven by consumers.
Did you have a position or perhaps thoughts on this asymmetry, which might lead to a strange situation that put Canadians in danger?
Managing Director, Communications and Government Relations, Canadian Automobile Association
I think you raise an interesting point. That may well be the case. We've stayed clear, as an association, of having an opinion one way or the other on the commercial relationships between the dealers and the factory, the OEMs. Our position has been that we wanted to get this legislation passed. As we noted, and as APA noted, we are behind the United States and have been for a long time in terms of recall powers. We feel it's time to move forward and get that done. That's the position we took at the Senate, knowing that particular amendment at that particular time was quite likely going to slow down the process. That was not to say we didn't think the dealers had a case. We just thought that it didn't necessarily have to be part of that discussion at that time.
Liberal
Sean Fraser Liberal Central Nova, NS
In your testimony, you spoke positively about the compliance mechanism. Today, do we have any data on what the completion rate is with manufacturers in terms of vehicles that have been subject to a voluntary recall or any analysis on how the new administrative monetary penalty might enhance the completion rate of repairs in affected vehicles?
Managing Director, Communications and Government Relations, Canadian Automobile Association
We can only hope that it will, of course. I'm sure George can chime in on this. He's the numbers guy a bit more than I am in terms of compliance rates.
I will say as well that one of the things that isn't covered in the bill that we would hope to see the government act on down the road potentially is mandating completion rates. That doesn't happen right now, and those rates really do vary. Sometimes they vary on how high profile something is and whether it makes the media or not. The reporting that's done on them is a little slow. There is a requirement to report on a quarterly basis, but those numbers can be a bit difficult for people to find.
There's still work to be done in that area, and we are supportive of the AMPs that are in this legislation. Some of the exact levels are to be determined down the road by Governor in Council, but we do think we need that kind of stick.
Liberal
Sean Fraser Liberal Central Nova, NS
With the limited time that we have, Mr. Iny, do you have information on this?