House of Commons Hansard #55 of the 40th Parliament, 2nd Session. (The original version is on Parliament's site.) The word of the day was farm.
The House resumed from March 6 consideration of the motion that Bill C-273, An Act to amend the Competition Act and the Canadian Environmental Protection Act, 1999 (right to repair), be read the second time and referred to a committee.
Frank Valeriote Liberal Guelph, ON
Mr. Speaker, I am pleased to have the opportunity to stand in the House today to share my thoughts on Bill C-273, An Act to amend the Competition Act and the Canadian Environmental Protection Act, 1999 (right to repair).
I commend the member for Windsor West for bringing the bill before us today.
In short, the auto industry is being asked to make available to third party repair shops intellectual property information and diagnostic equipment, among other things, perceived by some to be exclusively available to auto dealerships.
This is a matter of utmost importance involving issues of vehicle safety and the protection of intellectual property rights of auto manufacturers on the one hand, and small business needs for information on the other.
Though a challenge in striking a balance between competing interests, it is one that can be met without the need for invasive legislation, the effect of which will lead to the complete erosion of intellectual property rights of auto manufacturers and manufacturers of other equipment whose IP rights will be threatened by this precedent setting legislation.
I would like to spend a moment to offer my specific concerns with regard to Bill C-273. We know that Canada's non-franchised, non-dealership repair facilities conduct the majority of parts and service business in Canada. Clearly the absence of this legislation will not be a threat to an already thriving industry.
Another important fact is that a significant amount of repair and diagnostic information is often already available to the independent mechanics in garages through third party information providers on line for a monthly fee.
Further, with the advent of new technology like powerful hybrid batteries requiring expensive tools, gloves and diagnostics, only the best equipped mechanics can manage the safety issues arising with specialized equipment.
Other than two or three very large national auto repair shops able to afford the training and equipment required to conduct such services, who are we really helping? Would we be passing legislation to accommodate only two or three national repair shops when they all otherwise have access to necessary information?
Manufacturers go to considerable expense to develop the technology that we see in automobiles today. They also go to considerable expense to develop the training, tools and diagnostic equipment dealers use to repair these cars.
We are all well aware of the significant challenges facing our auto industry today. I believe it would be counterintuitive to place additional demands and regulations on the struggling auto sector at this particular time.
General Motors alone is expected to close 300 dealerships across Canada as part of its restructuring. I am assured that the location of dealerships closed will be strategic so that access to dealer servicing will remain available.
This is not the time for Canada's sagging auto industry to be confronted with new challenges. At this time the industry is being hit by a tsunami of events: lack of credit, plant shutdowns and recession.
We are asking, demanding, that the auto sector restructure into a leaner, more agile industry. It is not the time to regulate the industry out of existence entirely by requiring it to give up intellectual property rights completely for the benefit of its competitors.
Frankly, this might be considered by some to be an affront to normal business ethics.
I was pleased to learn last week that the Association of International Automobile Manufacturers of Canada, the Canadian Vehicle Manufacturers' Association and the National Automotive Trade Association have committed to the creation of a voluntary framework on this very issue.
This co-operative effort will put in place a framework that would establish a voluntary system for the systematic dissemination of repair and diagnostic information; a positive first step toward the further dissemination of information.
Surely, successful voluntary efforts are preferable to yet more legislation. Imagine all the additional costs of passing the legislation, monitoring compliance, amending it and enforcing it; cost to the industry and government and in each case cost to the taxpayer.
Of particular interest to me is the national automotive service task force that exists in the United States. This voluntary task force is considered by the assembly industry, dealers, many in the auto service industry and consumers alike, to be common ground where the needs of consumers on the one hand and the safety concerns and intellectual property rights of manufacturers on the other are addressed satisfactorily.
The national automotive service task force is a voluntary, co-operative effort among the automotive service industry, the equipment and tool industry, and automotive manufacturers. The task force ensures that automotive service professionals have the information, training, and tools needed to properly diagnose and repair today's high-tech vehicles, assures the flow of relevant information, and includes a system to deal with complaints.
A Canadian version of this task force is what is ultimately proposed by the industry.
We will be told by some that the American voluntary system is legislated. In fact, only a very small part is, a part dealing with emissions. The vast majority remains, indeed, voluntary.
I have learned that the industry has already begun working groups, including manufacturers and after-market servicers, to develop the technical and non-technical provisions of a voluntary model, from tooling to training, with an estimated time of arrival no later than September 1, 2009.
Once fully implemented, the national permanent and voluntary Canadian agreement would create a framework to provide all Canadian after-market service and repair providers with the desired and agreed upon information from all Canadian manufacturers and distributors, in a similar fashion as in the U.S.
Canada's auto industry has a long and successful history of developing, implementing and enforcing voluntary memorandums of understanding. In fact, 14 voluntary memorandums of understanding have been signed to date and the industry has met or exceeded the terms of each one of them.
Legislating the forfeiture of the auto industry's IP rights is akin to demanding the forfeiture of a food retailer's secret recipe so smaller retailers can compete against the very creator of that secret recipe. This is not fair.
Indeed, in my discussions with multiple non-dealer repair shops, I have learned that in addition to already having access to necessary information online, often a simple call to the local dealer's parts and repair shop usually leads to a complete explanation of the necessary work to be done. The fact is that this legislation is described by many in the industry as a solution looking for a problem that does not now exist.
There is no doubt that should a voluntary framework fall short in Canada, we can then take the necessary steps to implement the requirements set out in the legislation before us today. However, we have the benefit of a successful voluntary framework project at work in our neighbour to the south. We can look to this model to guide us in developing a voluntary initiative in Canada.
I am not saying third-party repair shops should be denied access to required information. I ask this House, however, to look to the leadership and competence of the industry, and support a voluntary system for the dissemination of repair and diagnostic information rather than the proposal put forward by Bill C-273.
Robert Vincent Bloc Shefford, QC
Mr. Speaker, the Bloc Québécois would like to see this bill go to committee to be thoroughly studied. First of all, this bill addresses a legitimate concern, namely, allowing motor vehicle owners to benefit from increased competition when they need to have their vehicle repaired.
However, before going ahead with such a measure, it is our responsibility to carefully weigh the repercussions, particularly on carmakers and dealerships. We therefore plan to ask representatives from car dealerships, manufacturers, independent repair facilities and consumers groups to testify before the committee during our study of the bill. The committee study will allow for a more thorough analysis of what is going on with vehicle repairs in Canada. Based on that analysis, we will be in a better position to make recommendations for the government to follow.
I think it is too early to express an opinion on the conclusions the committee will reach regarding this bill. However, we will ensure that the committee's study of this bill will favour the interests of consumers, while taking into account the concerns of the auto industry. Any amendments brought forward by the committee must be along those lines.
Auto mechanics has become quite a bit more sophisticated in recent years, and more and more servicing can be done electronically. Technicians must have access to the equipment and the codes they need to service and repair a car. Bill C-273 addresses this problem by providing that motor vehicle owners and repair facilities can have access to the information and diagnostic tools and capabilities necessary to diagnose, service and repair those motor vehicles.
On the one hand, this bill could promote healthy competition in the automotive repair market, which in turn could make for a viable repair industry. The consumer would benefit in the end.
On the other hand, we are well aware of the negative impact such a measure could have on dealers as a result of the dramatic drop in new car sales. In addition, we will have to make sure that this bill will not curb innovation by threatening the provisions that apply to automakers' intellectual property.
In the interest of shedding light on these issues and getting an idea of the big picture, we have decided to support the bill at second reading, so that the committee can study it. However, as I said earlier, it is far too soon to venture to say what the committee's findings will be. One thing is sure: the Bloc Québécois will play an active role in the committee's consultations.
According to a recent study by the DesRosiers consulting firm, the number of vehicles and the concentration of automotive dealers are increasing in urban centres. Rural regions account for 21% of vehicles and only 12% of dealers. The committee study will therefore provide an opportunity to determine the extent to which controlling automotive repair technologies will affect the accessibility and competitiveness of regional vehicle repair facilities.
A number of years ago, the United States put in place a law establishing a right to repair similar to the one in the bill we are debating today. The U.S. has a voluntary system that anyone can use to access servicing and repair information, for a fee.
In Canada, service and repair technicians cannot consult this information. We want to know how adopting such a measure might affect the market and consumers in this country. But given the situation in the automotive market, we also need to hear from dealers, who derive nearly 30% of their profits from vehicle servicing and repairs, according to the DesRosiers consulting firm.
We have to consider the fact that, in Quebec, the vehicle maintenance sector is a $3.5 billion business that contributes to the health of our economy and must be allowed to continue to prosper.
This is not a straightforward bill. On the one hand, we have mechanics, and on the other, manufacturers. We have to consider both parties. We all know what is going on with the auto sector these days, but consumers should not be the ones who have to pay the price at the end of the day. We have to find a solution together.
I think that sending this bill to committee will give us our best opportunity to hear from all of the witnesses—dealers, consumer advocates, manufacturers and mechanics. They will talk to us about their concerns and about what they think we should do with the bill. Listening to what they have to say is the best way to figure out how the government should change the bill, if necessary.
We should not come to any conclusions or favour one option over another before that. Making up our minds ahead of time would put us at a disadvantage. We should not make assumptions about what should be done with respect to mechanics or manufacturers. We should not make up our minds yet. We have to give the parties a chance to tell us what they think about this bill, what should be done with it, and we have to carefully consider all of the ins and outs.
I believe that the members of the House and the members of the Standing Committee on Industry, Science and Technology will send this bill to committee so that they can report on it. The members of the committee will approach the issue with clarity and a sense of cooperation. They will not take anything for granted. They will really think about what people have to say before coming to any conclusions.
David Christopherson NDP Hamilton Centre, ON
Mr. Speaker, I am pleased to offer support to my colleague from Windsor West who has put forward this bill.
This gives me a chance to take a trip down memory lane for the next few minutes. A lot of this is about dealerships doing work versus work being done outside the dealership network but still in the repair part of the economy.
Back in the day, a lot of years ago now, I worked at such a place, for International Harvester. It was a truck centre where we sold and repaired international trucks, not the farm equipment but the trucks. I was there for about 11 years before I was elected to Hamilton city council. I can speak with some authority in terms of the way it was and relate that to where things are going now. Back then there was a level playing field.
Let us keep in mind that at its core the member for Windsor West is trying to bring in a fair, rules-based system that treats everybody the same. Back in the day when I was on the shop floor, that is the way it was. There was no advanced technology. We were in the early stages of that when I left, which would have been in the mid-1980s. There was a level playing field. Nobody held any secrets. Nobody had any special tools that they were not giving to others. Software was not even in the vocabulary. Everyone had to compete on the same basis.
Much like today, all the warranty work was done at our shop.That was probably the biggest part of our work, as well as work on the big fleets that were willing to pay for the very best mechanics, and I might say, parts people. They did not want any problems. They wanted things to go as smoothly as possible. A corporation at that level wants things to go smoothly. Working with a dealership with a major infrastructure attached to the mother corporation was a great way to go.
There were a lot of brokers and smaller trucking firms that would do their own work, or have it done by an offshoot of their company, or by someone such as a brother-in-law who ran a local garage, or Bill down on the corner who had been there for 30 years and treated everyone like family so people wanted to go there. People were able to save a few bucks, but they were not freebies or giveaways.
That was their choice, and that is the issue. To allow consumers and other after market repair businesses access to this material, the tools and the information takes us back to where we were before, which was that everybody was equal. It was business preference, productivity and efficiency that decided where people went, not whether or not they had the secret code.
They do not allow it in the United States, interestingly. It is done under the EPA, the Environmental Protection Agency. Why? Obviously the environment is so crucial now, or at least we have now woken up to how crucial it is. The last thing we want to do is take cars that are being designed to do less damage to the environment and repair them in a way that suddenly has them polluting. It does not make sense.
That seems to be what the EPA in the U.S. has said. The U.S. has that system. Why do we not? It denies consumers a choice. It is not as productive. It increases costs through lack of choice. It creates unfairness. Everyone attached to the automotive industry ought to be thanking the member for Windsor West for this bill.
I can appreciate there are some employees, as I was, who see the possibility that their work is going to go somewhere else, and they are fighting to retain it. Fair enough. That is the union's job. However, my experience was that allowing others to do the same work or at least to compete did not detract from that because we had so much extra to offer.
Other communities may argue, but I am sure the member for Windsor West would be proud to say he is from the automotive capital of Canada. We will give him that for the purposes of this bill. Let us remember that he represents a lot of the workers who are trying to protect the work they have in the current system. It would have been very easy for the member to stand in the tall grass on something like this if somebody else had brought it forward. Not only did he not do that, he was the one who brought it forward. He is doing it because he knows it is in the best interests of Canadians and he believes it is not going to do any damage to jobs that exist.
All it does is provide an unfair competitive advantage, almost a monopoly on some work by virtue of keeping secrets, which are not allowed to be kept in the country that is our biggest trading partner, the United States of America. The U.S. understands that Toyota, Honda and others ought not to be able to send their cars here and keep the secrets back home. That ought to apply whether it is a domestic or foreign automotive producer.
That is what this is about at its core. Again, it is about choice. It is about fairness. It is about making sure that Canadians have an opportunity to decide for themselves where they want to spend their money and where they want to get their vehicles repaired.
In bringing in Bill C-273, the member for Windsor West, in a large way, is doing every consumer in Canada a huge favour by removing an unfairness, an imbalance that has now been created that did not exist before. It is part of going through the transition ultimately into the new digital economy. We need to keep an eye on it from a legislative point of view to ensure that these new technologies do not create an inherent unfairness. This is one of those times.
When the member for Windsor West saw what was happening and heard from his constituents and the tens of thousands of small automotive repair shops, 95% Canadian owned, all employing local people, he investigated and, as I said, in the face of a possibility of political backlash, he had the courage to bring it forward just because it is the right thing to do.
Many issues we deal with here are of utmost importance, and consumer protection is one of the most important. That is really what this is. It is not life and death. None of our kids are going to be facing critical health issues because of this. There is no pandemic attached to the bill, or those kinds of worries. However, protecting consumers is an important part of a legislative body's duty in a mature democracy. That is what this bill does.
I want to thank my colleague from Windsor West for bringing this bill forward and making things better for the Canadian people. I can only hope that the vast majority of parliamentarians will agree and at least allow us to get the bill to committee. Let us bring in the players and have a look at it. At the very least, let us do that.
I urge members to support this bill, at least at second reading, so we can look at it further.
Dona Cadman Conservative Surrey North, BC
Mr. Speaker, I would like to take a few moments to speak to Bill C-273, An Act to amend the Competition Act and the Canadian Environmental Protection Act, 1999 (right to repair).
This government takes private members' business seriously. In the case of Bill C-273, the spirit of the bill is in the right place and, for this reason, the government wishes to support it. The government will, however, be seeking amendments should the bill progress to committee stage.
Before I get into the details of some of the reasons that the government will be seeking amendments, I would like to acknowledge the work that the member for Windsor West has done on this bill.
I also would like to highlight some areas in which, I think, all parliamentarians can agree.
First, I am sure that all members of Parliament are concerned with the recent economic challenges and the effects of these challenges on Canadians and Canadian businesses. The government has acted quickly in addressing these concerns through the Budget Implementation Act.
Second, members opposite must recognize the government's commitment to protecting Canadians and businesses from crime, abuse and economic uncertainty through its ambitious legislative agenda. In these times of economic uncertainty, it is important for the government to act in a manner that directly addresses what is most important to people's lives and economic security.
Third, all members of the House were elected to represent our constituents' interests to the best of our ability. This does not mean that parliamentarians will always agree but I would hope that members opposite will accept my remarks today in that spirit.
Finally, I am sure that all members believe in supporting a competitive economy that benefits businesses and consumers. The government has been working hard to support Canadian businesses to be stable and more efficient.
Let us be clear on one thing: healthy competition is the best way of empowering consumers and that is what the Competition Act sets out to do.
When companies compete with one another for a consumer's dollar, it opens the door to lower prices, better services and wider product selection, all of which benefit consumers.
There are many who believe a voluntary system rather than a legislated approach to aftermarket issues would satisfy the needs of the Canadian aftermarket auto repair industry. There are benefits to establishing a voluntary system, aside from the obvious benefit of keeping government out of regulating how businesses run their affairs. A voluntary system would, for example, have the flexibility to evolve over time so it addresses changes in technology as they arise, which is one of the root causes of the aftermarket concerns.
With that in mind, in April of this year, the Minister of Industry sent a strongly worded letter to all automakers calling on them to develop a voluntary accord here in Canada. I am pleased to say that there has been progress. Representatives of the vehicle manufacturers and aftermarket industries met last month to begin discussions on the development of a voluntary accord. Most parties have signed on to a process and timeframe to draft this agreement.
One of the signatories is the National Automotive Trades Association, or NATA. NATA represents a large portion of the aftermarket repair shops across the country. It had this to say in a recent letter to its members and to the public:
NATA has publicly stated that in absence of a voluntary agreement it would participate in the legislative process. Now that we have a commitment from the Canadian auto manufacturers, we do not believe legislation is necessary.
I would like to more directly address some of the government's concerns with this private member's bill. The bill seeks to amend the Competition Act and the Canadian Environmental Protection Act. I will be focusing my comments today on concerns raised by amending the Competition Act in the way that the bill proposes.
As members opposite know, the Competition Act is framework legislation, the enforcement of which has wide-ranging implications for the Canadian economy.
Even before the recent improvements contained in the Budget Implementation Act, the Competition Act was generally considered to be effective legislation.
Consultations on changes to the act have taken years to complete and have assisted the competition policy review panel in its assessment of Canada's competition and investment policies. This government has acted on the recommendations of the panel to ensure that the Competition Bureau has the tools it needs to continue to be effective in the years to come.
As all members of the House know, Bill C-273 proposes an amendment to section 75, refusal to deal, of the Competition Act by adding to the definition of product, for the purpose of that section, technical information that is required by a person in order to provide a service to a customer.
The member opposite may believe that this small change to the Competition Act will help to address the issues in the auto repair sector but this is not the case. This amendment to the Competition Act is problematic in at least two significant ways.
First, the amendment could have serious, unintended consequences. Bill C-273 has not been drafted in a way that applies only to the automotive industry to strictly address the right to repair issue. The proposed change to the definition of product could impact on all industries and all relevant bureau investigations under section 75. Such an amendment could raise questions regarding safety issues or intellectual property rights, which could cause other concerns that I do not intend to address today.
Second, amending the Competition Act to address the right to repair issue is not necessary. This issue can already be reviewed under section 75 or section 79, abuse of dominance, of the Competition Act. In the case of section 75, refusal to deal, if a party could establish that the inability to obtain the technical information was the result of another's refusal to provide a product as currently defined would satisfy the other elements of section 75. They would be able to address those concerns under the act.
Either the Competition Bureau or the affected party could make an application to the Competition Tribunal for a remedy. Another way to address this is that the bureau could make an application to the Competition Tribunal for a remedy if a party could establish that the refusal to supply the technical information was an anti-competitive practice and could establish the other elements of section 79, abuse of dominance.
Given the avenues already existing under the Competition Act to review the right to repair issue in the appropriate case and given the unintended consequences that could result from the proposed change to the definition of product, the government will be seeking to remove this Competition Act amendment during the committee stage.
We look forward to more debate on this issue and I am sure t all members will act in the best interests of their constituents.
LaVar Payne Conservative Medicine Hat, AB
Mr. Speaker, I am pleased to rise in the House today to discuss this important issue.
The automotive industry in North America is facing major challenges due to the worldwide economic downturn. The automotive sector is a key component of the Canadian economy. More than 2 million vehicles were assembled in Canada in 2008. The auto industry employed over 140,000 workers directly, with another 230,000 in the aftermarket sector. It also provided employment at more than 30,000 service and repair shops across the country.
As for the aftermarket sector, according to data shared by automotive consultant, Dennis DesRosiers, the average age of vehicles on the road in 2008 was over eight years and it is estimated that over the course of a vehicle's life it will accumulate $14,000 in aftermarket repairs and service. The demand for aftermarket services is forecast at $19.2 billion in 2010.
The government agrees with the idea that all aftermarket service providers should have access to the diagnostic information on the fleet of vehicles on Canada's roads and highways. However, the way in which the bill attempts to achieve this is flawed in a number of ways, ranging from jurisdictional questions to the issues of intellectual property and vehicle security.
I want to reassure Canadians that the federal government is committed to fostering a fair, equitable and competitive marketplace, while balancing this with our duty to protect consumer interests.
I will jump right into the crux of the matter that has brought this proposed legislation before us. Independent aftermarket service providers want the manufacturers to provide them with the same information they provide their dealerships. They say that failure to do so threatens the long term competitiveness of the independents. On the other hand, many car makers tend to believe they already share the necessary information for their customers and legislating beyond this affects their dealer networks.
Dealers also have concerns about this issue. They believe that this information sharing will cut into their revenues. In fact, the Canadian Automobile Dealers Association, which represents some 3,500 dealers in Canada, opposes legislation on this issue.
The government is working overtime with the auto industry, affected provinces and related stakeholders. A thriving, successful auto industry in Canada means a thriving, successful parts industry and a thriving, successful aftermarket industry. We cannot have one without the other.
We will always have an auto aftermarket industry, even if the assembly business is scaled back. However, a healthy aftermarket starts with a healthy economy. The federal government has a broad approach to assisting the auto sector here in Canada that is built on four key measures: continuing to sustain a fiscal and economic framework that keeps the industry competitive; supporting an integrated North American auto sector; investing in automotive research; and investing through our new automotive innovation fund.
Through Advantage Canada, our long term economic plan and recent budgets, the government is promoting long term investment, innovation and job creation across all sectors of the Canadian economy, including the auto sector. The government has provided more than $1 billion in tax relief for the automotive industry sector through lower federal corporate taxes and higher write-offs for investment in machinery and equipment.
In total, over the six-year period, including 2008-09, the government will have provided more than $12 billion in tax relief to the manufacturing sector. In the recent economic action plan, the government extended the temporary 50% accelerated capital cost allowance rate. This applies to investments in manufacturing or processing machinery and equipment that are undertaken in 2010-11, enabling manufacturers' investments in productivity-enhancing machinery and equipment.
Second, the government is supporting an integrated North American auto sector by increasing the compatibility of automotive regulations with the U.S. and continuing to improve border security and access. Improvements to the Windsor-Detroit crossing remain a priority, where 40% of Canada's commerce with the United States passes across a single, privately-owned bridge that was built in 1928. The goal is to have a new crossing by 2013.
Third, the government is investing in science and technology. Overall, Canada's economic action plan provides for more than $1.5 billion toward science and technology initiatives.
The government is allocating $200 million over two years to the National Research Council industrial research assistance program to enable it to temporarily expand its initiatives for small and medium size companies.
The government has already set aside $34 million per year for new research through the Natural Sciences and Engineering Research Council of Canada, targeting the needs of key industries, such as the auto sector.
In addition, $23.2 million in federal support has been committed for the auto 21 network of centres of excellence in support of more than 260 researchers and 500 students working on 41 auto-related R and D projects.
Science research and experimental development tax incentive policies and procedures have also been aligned with current business practices to encourage even more business investment.
As a fourth pillar, the government established the $250 million automotive innovation fund, supporting strategic, large scale R and D projects. The automotive innovation fund will help the auto industry retool for a new environmentally conscious fuel efficient age.
We have an integrated North American market and Americans have stopped buying cars. Some are deciding not to buy due to the slowdown in the U.S. economy. With credit markets frozen, those who do want to buy cars do not have access to competitive financing to purchase or lease vehicles, thus further reducing sales. This has led to a serious liquidity crisis for U.S. automakers.
Canada's economic action plan increases Canada's account limit from $13 billion to $20 billion to ensure the government has the capacity to directly provide credit and meet the financing requirements of business and strategic hard-hitting sectors of the Canadian economy.
Canada's economic action plan has also committed the government to creating a $12 billion Canadian secured credit facility to improve credit availability for consumers to purchase and lease new vehicles. This will help dealerships move cars off their lots and renew demand for the production of vehicles.
The Government of Canada has two established financing instruments that are available to the automotive sector, Export Development Canada, EDC, and the Business Development Bank of Canada, BDC. I would also like to add that both the federal and Ontario governments confirmed their overall commitment to ensuring the viability of the automotive industry by making up to $4 billion in short-term interim loans available to both GM and Chrysler while they continue to restructure their long-term business plans.
Last week the governments of Canada and Ontario provided General Motors of Canada an interim loan of $500 million. We also recently provided funding to Chrysler as part of the holistic approach we have adopted for the industry to enable it to restructure toward a viable, sustainable future. We asked for a significant commitment from all stakeholders, and we are pleased they made the tough decisions necessary to put the company on a more steady footing. A new restructuring plan, including new labour agreements with the CAW as well as completion of a deal with Fiat, gives us the assurances needed to commit taxpayer dollars to help Chrysler--
Brian Masse NDP Windsor West, ON
Mr. Speaker, on a point of order, I am just questioning the relevance of the member's comments to Bill C-273.
The Acting Speaker Conservative Barry Devolin
As the member for Windsor West knows, the Chair is in the habit of giving a great amount of leeway to members to talk about a piece of legislation. If the member will remember the piece of legislation that we are dealing with and keep his comments relevant, it would be appreciated. The hon. member for Medicine Hat.
LaVar Payne Conservative Medicine Hat, AB
Mr. Speaker, the Government of Canada also recently announced the Canadian warranty commitment program under which the federal government committed to honouring consumer warranties on new vehicles purchased from GMCL and Chrysler Canada Inc. for a limited time period while improved restructuring plans are put in place.
Budget 2009 included at least $5 billion in new financing through EDC and BDC that aims to enhance cooperation with private sector financial institutions under the new business credit availability program. EDC has a number of services specifically designed for the auto sector, including financing and insurance capacity in that sector. As can clearly be seen, the federal government understands the urgency of the challenges facing the economy and the auto sector in particular.
In recognition of the auto sector's crucial importance in generating wealth for all Canadians, we need to stay the course and focus on the big picture, and not unnecessarily add further pressures to an industry fighting for its survival.
I would like to congratulate the hon. member for bringing forward the right to repair issue before the House. However, there is concern the bill has some fundamental legal and policy issues. I look forward to further discussion on how to address these issues going forward.
Paul Szabo Liberal Mississauga South, ON
Mr. Speaker, I am pleased to add my comments to the debate on Bill C-273.
I might just say that with respect to the issue of relevance, I did a little research the last time I heard the Chair suggest that we give a lot of latitude. The relevance issue is there because the time of Parliament is very important and valuable and should be used for the purpose for which it is intended. That is why there is an order paper. It is really up to the members to keep relevant. Unfortunately, sometimes members like to push the envelope a little further. However, I think we had better ensure that the important points about a piece of legislation before the chamber are known to all members who are going to have to vote on it. It is actually a little more difficult now, given the recent developments within the auto industry, and that is what I want to talk about.
So that everybody knows what we are talking about on Bill C-273, the member for Windsor West has introduced a bill to amend the Competition Act and the Canadian Environmental Protection Act. He had a bill in the last Parliament, and the bill is back now, and it has received a lot of attention. It is one of the reasons I wanted to speak to this. Auto repair shop owners in my riding of Mississauga South have spoken to me many times over the last number of years about this problem, that as the automobile technology changes, the normal work done by automotive repair shops that are not associated with a car manufacturer gets a little more difficult. They need the manuals to know how to work on the equipment they are going to deal with. They also need the diagnostic equipment, in some cases, and they need some of the specialty tools. Without those they cannot service the automobiles. If they cannot service the automobiles, repair shops will find themselves in jeopardy with regard to staying in business. That is their argument.
The other part of the equation is the automobile industry itself. The dealers are in the business of selling cars, but they are also in the business of servicing them. If they continue to provide the full cycle of maintenance and service for automobiles, that is good and healthy for the automobile business. The technology is amazing. A 10-year-old car, as I recall, pollutes 37 times more than one of the brand new cars. It is phenomenal. All of this is because of the changes in technology. It makes this debate and this bill more relevant because it has to do with the consumer, with small businesses and with big businesses and how the interests of those parties are reconciled.
In the last Parliament, the debate might have been different because the automobile industry was not in jeopardy. Now the automobile industry is in jeopardy. There is going to be a massive rationalization of the auto industry. There is going to be a massive rationalization of dealerships, of plants, of places for people to get their automobiles serviced. The neighbourhood auto repair shop may become much more important than it has been in the past simply because there are not going to be as many dealerships to go to anyway. The debate in the last Parliament would have been different from this one. Now we have to balance the interests.
I have often thought that the best arrangement for consumers is to ensure that there is healthy competition within the service and repair sector so that they can choose. That would help to keep the costs fair and reasonable. Right now there is not that choice to the same extent there would be if the independent repair shops had access to the information, the diagnostic equipment and the tools they need to properly and professionally repair the vehicles and to maintain them. It is a dilemma.
The industry in the United States adopted a voluntary agreement to provide, and the right to repair is the generic name. In the United States there has been a facility whereby shops can have access to this. It is done on a voluntary basis; it is not legislated. We are talking about a bill that wants to legislate it. It appears with all of the dynamics that have occurred in the auto sector with the rationalization and changes yet to come, the industry has reached some agreements with regard to voluntarily providing the information, tools and diagnostic equipment, although I do not know to what extent because I have not seen all the details.
This issue is evolving. I wanted to bring to the attention of the House that this matter seems to be fairly fluid. There is a lot going on. We do not have the latest information but I think it is important that this bill survive and that it go to committee so that we can get the representations from the auto industry as well as the after market businesses that provide services.
We have to look at the impact on people and their jobs. This is a very important aspect. We have to look at the other implications of competition law and the rights of a person, organization or legal entity. We have to look at the implication of that person, organization or legal entity being forced to release that information to another so another can take business away. This is a very interesting problem. There is a model in the United States which I think is useful to look at.
With only two hours of debate in private members' business it is very difficult for all of the information to get out. My recommendation to my colleagues is that the bill go to committee. I would like all of the information to be brought to the committee so it can study it carefully to determine whether or not the voluntary deal that is evolving and may be taking place in Canada is the best thing on behalf of all stakeholders, whether it be the industry, the after market suppliers and the consumers.
We want to make sure there is a balance. I think this is our opportunity to look into this because how we approach this problem probably will be the same way that we approach similar problems in other sectors.
Having said that, I congratulate the member for bringing the bill forward. I know the auto sector is very important in his riding and that it is a very difficult time for the auto sector. There is a great deal of work to do. This is part of it. Let us send this bill to committee.
Brian Masse NDP Windsor West, ON
Mr. Speaker, first, I want to thank all members for participating in this debate at first and second readings and bringing their thoughts forward. It is an important part of what has happened.
This issue has been around for a number of years. In fact, I researched the bill for a couple of years, going across the country and having people looking at it. The former minister of industry is here today. He took an interest in it. I am sure if he would have remained as minister of industry, perhaps Bill C-273 would not have been necessary.
We are here today because there is a problem with our current system. If we continue to ignore it, it will affect the environment, consumer choice and public safety. Bill C-273 attempts to address that.
I want to touch upon a couple of things that are important and that have been part of the debate. There are voluntary agreements in the Canadian automotive industry right now, but they are still based on the Consumer Protection Act. This bill would specifically address the issue through government legislation.
We have to be clear. In the United States, under the EPA, because of its environmental laws, it created an operating agreement with the original manufacturers so there would be a clear definition. The United States legislation creates the operating agreement as a solution. It still needs to be some work on it because there are some issues with it, but at least it is available to the manufactures. Canada does not have a voluntary agreement or a legislative agreement.
I know NATA, the National Automotive Trades Association, has promised a solution, which is important to recognize. All it can do is promise it might have a voluntary agreement in 2010 at best. It is not worth the paper on which it is printed because, at the end of the day, there could be manufacturers that would opt in or opt out at different times and resolution processes would not available through any type of legislation.
It is also very important not to forget that the automobile industry right now is revolutionizing in many respects. There will also be new entrants into the market. How can we have a voluntary agreement that would be based upon a group of businesses that are all foreign companies? They would have no Canadian legislative backstop to deal with any of the problems. There will be other ones, for example, China, as it emerges into the Canadian market with the Chery. China has over 100 different automotive assembly companies. Not all of them will get into our market, but some will and they could decide not to get into some type of agreement.
This dissipates the reality of having a rules-based system that is fair, open and transparent. The Competition Bureau would then be the arbitrator. The rules could be applied and there would be fairness. There is a whole process in place that could evolve.
That is why we want to get this to committee. We want to see Canadians have the same opportunity. It is important for Canadians to understand that, as things stand right now, they would be treated differently in the United States than in Canada. It is based on nothing more than the fact that it has chosen not to bring this forward to the Canadian public at this time.
When we look at our Canadian technicians in the after-market, it is interesting to note that the men and women have the same training as those in the dealerships, unless they get additional training later on. They have to go through the same type of schooling. In fact, our standards in Canada are better.
Ironically, someone could take a trip to the United States, have something go wrong with the car and go to a facility to have it repaired by a technician with fewer qualifications than a technician in Canada. We are denied that because the proper programs cannot be downloaded or the schooling or training is not provided by the company.
This is not fair, nor is it healthy. One of the reasons we want to deal with this is it is good for the environment. We want to ensure that vehicles are clean and well maintained. It is good for public safety, that cars are fixed and in good operating condition, especially in rural communities where people have to drive hundreds of kilometres to get to an facility. It is also about the consumer's right to choose.
Therefore, we hope the bill will go to committee. I appreciate the fact that there has been a lot of input, both from those who have concerns about it and those who support it. I look forward to working with everyone to ensure we have a fair, rules-based system based on Canadian legislation to protect Canadians.
The Acting Speaker Conservative Barry Devolin
It being 12:02 p.m., the time provided for debate has expired. Therefore, the question is on the motion. Is it the pleasure of the House to adopt the motion?
The Acting Speaker Conservative Barry Devolin
When I called the vote, I could not hear a nay, but an hon. member has stated nay was said. I stand corrected. On that basis, I will call for yeas and nays on this matter.
All those in favour of the motion will please say yea.
The Acting Speaker Conservative Barry Devolin
In my opinion the yeas have it.
And five or more members having risen:
Pursuant to Standing Order 93 the division stands deferred until Wednesday, May 13, immediately before the time provided for private members' business.
John Baird Conservative Ottawa West—Nepean, ON
moved that Bill C-29, An Act to increase the availability of agricultural loans and to repeal the Farm Improvement Loans Act, be read the second time and referred to a committee.
Canadian Agricultural Loans ActGovernment Orders
Glengarry—Prescott—Russell Ontario
Conservative
Pierre Lemieux ConservativeParliamentary Secretary to the Minister of Agriculture
Mr. Speaker, I am pleased to speak in support of the proposed amendments to the Farm Improvement and Marketing Cooperatives Loans Act. I am sure that my hon. colleagues will agree that they are solid, common sense measures and that the time has come to adopt them.
Important changes are taking place in the agricultural sector. The size of agricultural farms is increasing and it is becoming more difficult for a beginning farmer to obtain the funds required to set up a viable operation. About half of all farms, representing some $123 billion in assets, are run by farmers who are 55 and older.
What will happen when these farmers want to retire? A good number of them will do so in the next 15 years.
Over the next 15 years, Canadian farmers, operating almost 84,000 farms, are expected to retire. I say “expected” because we know some will work beyond the age of 70.
In any case, we are talking about a major intergenerational challenge for Canadian agriculture that is going to play out over the coming years, a challenge to attract young farmers to the business, a challenge to transfer family farms to the next generation, a challenge to renew and rejuvenate the Canadian agriculture and agrifood sector and to put it on a sound footing for generations to come.
We need to attract young people to a future in farming. Young farmers are the foundation of Canada's agriculture and agrifood sector. They enrich and strengthen communities across Canada through their hard work and innovative spirit. They exemplify the entrepreneurial spirit that is critical to our success in the years to come. As entrepreneurs, young farmers want a government that gives their farm businesses room to grow and the tools to capture new opportunities.
I want to talk about a young farm family that is part of the next generation. Robert and Erin Brunel farm with Rob's dad, Paul, in Ste. Rose, Manitoba. R.P. Brunel Inc. is a fourth-generation family farm that specializes in grain. The Brunels farm 3,000 acres. Rob and his wife, Erin, welcomed their first child, Myley, in to the family in mid-November. Rob would like to continue to expand the business and eventually take over the farm completely from his father.
The Brunels dream of a future in agriculture, but realizing that dream is much easier said than done. It is not uncommon for farms today to have assets of well over $1 million, a considerable amount for the next generation to finance. Rob says that there are programs to help young farmers out there, but he does not qualify for many of them and they are not targeted to his specific needs. He would like a program to help him proceed with his expansion plans and eventually finance the farm transfer.
Farmers like the Brunels are the future of the sector and we need programs that will help them capture that future. That is the objective of the proposed legislation we are discussing today.
For the past 20 years, the Farm Improvement and Marketing Cooperatives Loans Act, commonly known as FIMCLA, has helped farmers and farmer-owned co-operatives improve and develop their businesses through government loan guarantees. Guaranteed loans of up to $250,000 are available to farmers for up to 80% of the purchase price. The interest rate is capped. For co-operatives, the maximum loan is $3 million.
Over the years, FIMCLA has been a valuable financial tool for farmers, helping them improve their farming operations when other sources of funding are not available or priced too high to make them viable.
Federal programs to help beginning farmers enter the agricultural sector have a number of restrictions. The advance payments program, governed by the Agricultural Marketing Products Act, only provides short-term financing to new farmers. Provincial programs for beginning farmers vary a great deal in terms of the types of programs and the amount of assistance provided.
Support for agricultural cooperatives is also limited. Debt financing provided by credit institutions to cooperatives is insufficient and provincial programs present the same problem. There is no doubt that the rules are not fair.
Consequently, in 2005 the previous government announced that it intended to cancel the program. The industry did not see this as a solution, and neither does this government. That is why we have pledged not only to maintain FIMCLA, but to consult on how to make it more responsive to the needs of farmers today. Therefore, we did that.
We heard from young farmers across Canada, farmers like the Brunels, who talked about the need for support for both beginning farmers and farm transfers. We also heard from co-operatives that told us about the challenges they had in raising the equity they needed to help farmers participate in value-added ventures.
I want to linger a moment on the topic of co-operatives. There is no question farmer owned co-operatives are a way to move farmers further up the value chain. In fact, in my riding of Glengarry—Prescott—Russell there is a very important agricultural co-operative known as St-Albert Cheese. Some farmers like the co-op approach. In fact, I have met with some in my riding of Glengarry—Prescott—Russell.
Co-ops have a record of providing benefits to farmers, improving their competitiveness, pooling risk, coordinating marketing and retaining local wealth and promoting rural sustainability through local ownership and control.
For example, Agropur, a Quebec-based dairy co-op, is one of the top dairy companies in Canada. Agropur reported revenues of $2.3 billion and a surplus of over $120 million last year, and it is owned by farmers. Across Canada, some 1,200 agriculture co-operatives generate annual revenues of $13 billion and return over $200 million back to their farmer members.
Like the farmers they serve, co-ops are evolving to take advantage of opportunities in the bio economy, to meet new consumer demands and to find new sources of capital and specialized expertise. This is more challenging than ever, given the high capital requirements of ventures like these.
We listened and we acted. The result is what we have before us today.
Before coming up with the amendments proposed in this bill, Agriculture and Agri-Food Canada consulted widely with young farmers and financial institutions. According to stakeholders, changes to the Farm Improvement and Marketing Cooperatives Loans Act (FIMCLA) will be a great step forward.
The Canadian Young Farmers Forum is backing these recommendations. It has also insisted that the paperwork be simplified.
Accordingly, the Department of Agriculture and Agri-Food will devise an electronic loans system under the amended FIMCLA in order to reduce processing times for loan applications.
Under the legislation we are proposing, FIMCLA, or the Farm Improvement and Marketing Cooperatives Loans Act, would be opened up to beginning farmers, to family farm transfers, and to a wider range of agricultural co-operatives.
For beginning farmers, the loan limit would be increased from 80% to 90% of the purchase price. We are proposing an increase in loan limits to $500,000 for real property and $350,000 for all other loan purposes. Loan guarantees would now be available on farm transfers through shares of a corporation or interest in a partnership.
For co-operatives, this proposed legislation would respond to the co-op sector's needs by expanding eligibility requirements to include all agricultural co-operatives with a majority, 50% plus 1 of farm members. These measures respond to recent trends in co-op development by allowing non-farmer investment while at the same time retaining farmer control.
The proposed bill would also build in flexibility in the regulations so that loan limits can be changed as the need arises. We are not talking about just fine-tuning FIMCLA. We are talking about key improvements to the core program.
That is why we are proposing in the new bill that the program name be changed to the Canadian agricultural loans act. This is a better reflection of the proposed legislation's stronger national focus.
Opening up the program to beginning farmers, intergenerational farm transfers, and a broader range of agricultural co-operatives would create a national loan guarantee program that would support the entire agricultural community, and it would bring parity to the agricultural sector with other sectors of the economy which are entitled to benefit from small business financing programs.
This is a government that delivers for young farmers.
We have helped support family farm transfers by increasing the lifetime capital gains exemption from $500,000 to $750,000, the first increase in 20 years. To help farmers manage cashflow, we have doubled the amount of interest free money available through cash advance programs. This would make about $600 million per year available to agricultural producers. We have delivered stable, predictable and bankable support for farm families.
We are working with provinces and industry to design programs under the growing forward framework to secure a profitable and vibrant agricultural sector for the next generation. This government supports strong, young farmer associations such as the Canadian 4-H Council, Canadian Young Farmers Forum, and Canada's outstanding young farmers.
I would like to quote briefly Doug Spencer, a dairy farmer from Campbellford, Ontario, because he touches on an important issue in the farming community right at the moment:
At the moment, the highest priority for my wife and me is to know that the business we've built up will be taken care of by the next generation, and this plan will help see to that.
The proposed amendments to FIMCLA will help farm families like the Spencers keep the farm in the family and help the older generation retire with dignity. It is good news for beginning farmers, for retiring farmers, for farmer-owned co-operatives, and for the whole sector.
The bill would provide fairness and parity with other businesses, both for beginning farmers and for farm families looking to transfer the business to the next generation.
It supports the next generation of farmers and agricultural co-operatives. It gets rid of some of the red tape and paperwork to make the program more accessible and more flexible to all farmers.
Farmers in my riding of Glengarry—Prescott—Russell represent the strong and vibrant agricultural community. They are in favour of this type of legislation and of the increased access to credit that it affords them.
I highlight that we have introduced business risk management programs. We have invested in the agricultural sector and launched new initiatives to help our farmers across the country. The minister has been very busy, opening foreign markets once again to help our agricultural sector. We are taking real action to defend and promote the best interests of our farmers.
Farmers strongly support this bill and I invite members to support the changes we are proposing to the Farm Improvement and Marketing Cooperatives Loans Act.
Wayne Easter Liberal Malpeque, PE
Mr. Speaker, I listened with interest to what the parliamentary secretary did not say, although we will be supporting this bill.
He used an example of a fourth generation farmer, where the bill will be helpful in terms of intergenerational transfers. That is true. It will help. However, the reality of today in the farming sector is that we are losing sixth generation farmers right across Canada, day after day, because of the inaction of the government. The government has a sound record of increasing farm debt. It has increased by a little over $5 billion under its watch.
Will the parliamentary secretary just answer these two simple questions? What is this bill really about? It is not about providing money to farmers. It is about providing debt. Who is guaranteed under this bill? Is it not the banking sector? There is a 95% guarantee to the banks. Is that not correct, parliamentary secretary? When is the government going to actually deal with what the problem really is, which is sustainable farm income?
Pierre Lemieux Conservative Glengarry—Prescott—Russell, ON
Mr. Speaker, I want to recap some of the highlights of these wonderful initiatives for farmers. We are talking about taking the loan rate for beginning farmers from 80% to 90%, so that they can borrow up to 90% in order to allow for the transfer of farms among generations. This is good legislation for our farmers.
If we could just have the cooperation of my colleagues in the opposition, this bill could be moved through the House and implemented before the summer. This is exactly the kind of programming that our farmers are looking for. When I am in my riding, they talk about difficulty with access to credit. They have very real bills to pay. When they want to save their family farm and move it from an older generation to a younger generation, access to credit is a very real concern.
This is the type of legislation that they have been asking for. I have not even touched on co-operatives here. We have worked very closely with co-operatives and they want greater access to credit as well. That is what we are offering here. I would invite my colleague to support this legislation and its rapid implementation.
André Bellavance Bloc Richmond—Arthabaska, QC
Mr. Speaker, I want to point out that the Bloc Québécois plans to support this bill.
However, following the parliamentary secretary's speech, a few questions came to mind, especially when he said that young farmers all across Canada were consulted. He even referred to a young farmers' organization that fully supported this bill. I would remind the House that consultations did take place here and there across Canada. Consultations were held in Longueuil, Quebec, over the holidays from July 18 to August 11, 2006. I would like some clarification, however, from the parliamentary secretary. I looked carefully through the department's documents—and I have the consultation paper here—but I do not see the Fédération de la relève agricole du Québec anywhere among those invited to the consultation in Longueuil. If it was invited, it did not attend. One thing is certain: I spoke to the president of that federation last week, and he said he was not consulted. He even issued a press release on the matter, saying that the bill looked promising, but he would have liked to have been consulted.
How is it that this government can pride itself on doing a lot of consultation? If they did the same thing as with the “Product of Canada” label, the consultation was completely inconclusive. In fact, neither the Union des producteurs agricoles du Québec, nor the Coopérative fédérée, nor the Fédération de la relève agricole du Québec were included in that consultation in Longueuil. I would like the parliamentary secretary to give us some details about that so-called consultation. It appears that some people were missing.