Transport Committee on Oct. 17th, 2017

[The Chair, Liberal, Judy Sgro]

Go ahead, Mr. Lobb.

[Ben Lobb, Conservative, Huron—Bruce, ON]

Just for the viewers at home, I have a good feeling that the Liberal amendment will pass when the vote comes. I just wanted to bring that up.

[An hon. member]

Oh, oh!

[The Chair, Liberal, Judy Sgro]

Thank you very much.

Yes, Mr. Badawey.

[Vance Badawey, Liberal, Niagara Centre, ON]

Thank you.

I would agree with Mr. Lobb, because this amendment does show some common sense.

[The Chair, Liberal, Judy Sgro]

Go ahead, Mr. Aubin.

[Robert Aubin, NDP, Trois-Rivières, QC]

Thank you, Madam Chair.

I just have a technical question.

Mr. Fraser said that Liberal amendments 1 and 2 were closely related. Do his remarks apply to both amendments, or will he be speaking to them separately? Will we be voting on each of them separately?

[Sean Fraser, Liberal, Central Nova, NS]

Technically, there is only a motion on the floor to vote on LIB-1. The explanation sort of applied to both.

[The Chair, Liberal, Judy Sgro]

Okay.

All those in favour of LIB-1? Opposed?

(Amendment agreed to [See Minutes of Proceedings])

Do you have additional comments on LIB-2, Mr. Fraser? No.

Does the department have any comments?

Are there any questions or comments?

All those in favour of LIB-2, please raise your hands—sorry. Go ahead, Mr. Aubin.

[Robert Aubin, NDP, Trois-Rivières, QC]

Thank you, Madam Chair.

[The Chair, Liberal, Judy Sgro]

Did you want to speak to LIB-2, Mr. Aubin?

[Robert Aubin, NDP, Trois-Rivières, QC]

Yes, exactly.

[The Chair, Liberal, Judy Sgro]

Okay, please speak to it.

[Robert Aubin, NDP, Trois-Rivières, QC]

I understand the desire to move closer to what the dealers were asking for, but, in my humble opinion, we are still very far away. Given that the bill seeks to bring our regime in line with the Americans' and that the dealers have specific requests, I wonder why we are hesitating to take the next step.

We don't need a bill to say that automakers can compensate dealers. The manufacturers that act in good faith and have good relationships with their dealers compensate them when the event occurs. When legislation is used to implement a measure, it isn't to regulate something that is working but, rather, to provide for something that could be a problem. What could become a problem in this case is an automaker's refusal to compensate a dealer. The Liberal amendment states that that compensation is now possible, but since it was already possible, it's pointless to make it law.

Instead, the bill should set out a minimum number of criteria requiring automakers to do it. We are a long ways off from that, though.

[The Chair, Liberal, Judy Sgro]

Go ahead, Mr. Fraser.

[Sean Fraser, Liberal, Central Nova, NS]

Thank you, Mr. Aubin.

There were a few substantive reasons I didn't enjoy the version amended by the Senate, which I perhaps didn't give justice to in my explanation.

Very quickly, there are a few reasons I disagreed with the Senate's approach, but their amendment caused me to reflect on it and I do thank them for the steps they took. I had some questions about the wisdom of the federal government trying to legislate the contracting arrangements between commercial parties. I have some questions about our constitutional ability to do it.

I also had a concern in our questioning with the CAA, though they took no position on it. One of the concerns I put on the record at that time was that if we essentially create a 1% monthly interest payment to dealers who are holding stock, manufacturers might be incentivized to repair cars that are not on the road, over cars that are on the road today.

In addition, about the harmonization point you mentioned, the Senate amendment achieves part of the U.S. harmonization, in my understanding, by compensating the dealers but doesn't look at the flip side of that coin, at the obligations those dealers would have to take on before they would be eligible for compensation. We went halfway there. To me, it seems that if we're providing remedies in this bill, we shouldn't put harmonization above what we consider to be the best policy, and if we outline what the right remedies are and say that these apply equally to consumers and to dealers, that is the correct approach.

The amendment I've proposed achieves that end, while at the same time, creating buy-in with industry players. It's not to legislate what one party or another wants, it's to implement what we think is best policy in a way that industry agrees with.

[The Chair, Liberal, Judy Sgro]

All right. There are no further comments.

(Amendment agreed to [See Minutes of Proceedings])

On amendment CPC-2, go ahead, Mrs. Block.

[Kelly Block, Conservative, Carlton Trail—Eagle Creek, SK]

Thank you very much, Madam Chair.

I won't say too much about the rationale for this again. This is an amendment that was suggested by the Canadian Vehicle Manufacturers' Association. The rationale, quite simply, is that this amendment provides clarity to the bill as it pertains to the manufacturer's legal responsibility. Ownership and control of the vehicle should determine legal liability. To make the manufacturer legally responsible for an issue outside its control would cross over into the realm of the manufacturer-dealer relationship.

Under this bill, the minister has the power to order a recall, which is the ultimate protection for the consumer.

[The Chair, Liberal, Judy Sgro]

Could I ask the department to comment on Mrs. Block's amendment, please?

[Alain Langlois, General Counsel and Deputy Executive Director, Department of Transport]

I can answer at least the last point from a liability standpoint.

The language of the legislation requires companies to ensure that a defect is corrected before the vehicle is offered for sale, so it's not an obligation that is absolute. The obligation imposed is to take reasonable means to ensure that the goal is achieved. They have to demonstrate that they have done everything within their power to achieve the goal. They obviously cannot be held responsible for something that dealers would not be willing to do of their own volition to respect a contract that might exist between themselves and the dealers. They would not be held liable for something that is completely outside their control.

[The Chair, Liberal, Judy Sgro]

Go ahead, Ms. Block.

[Kelly Block, Conservative, Carlton Trail—Eagle Creek, SK]

In response to that, if it doesn't change the reality of that, if it provided clarity to the industry, would it be supportable? Does it change anything to clarify that?

[Alain Langlois]

The only issue with the language—and Kim can probably clarify as well—is that it would force a company to ensure that the defect is corrected before they are offered for sale to the dealers, as opposed to the dealers down to the consumers. The vehicles that are already within the control of dealers would be allowed to go to consumers without the protection of that section. From a safety standpoint, I think it lessens the safety protection of the legislation.

[The Chair, Liberal, Judy Sgro]

Mr. Hardie is next.

[Ken Hardie, Liberal, Fleetwood—Port Kells, BC]

One other point that was raised in discussions is that the regulation of dealers is more a provincial matter than federal. Maybe staff can clarify that or confirm that.