Speaking notes An Act to Amend the Motor Vehicle Safety Act

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Ottawa (Ontario)

Mr. Speaker, today I would like to introduce Bill S-2, the Strengthening Motor Vehicle Safety for Canadians Act. The safety of the travelling public is of paramount importance to Transport Canada and to this government.

Road safety is an issue that touches every Canadian in some manner. Many of us have either been directly involved or have loved ones that have been in some form of vehicle collision. Collisions and the associated injuries, death and cost to society are tragic. However, to a great extent, they are preventable. Helping Canadians avoid tragedy on our roads is the motivation for pursuing the continued improvement of motor vehicle safety.

We believe that the Motor Vehicle Safety Act, its associated regulations and standards, are key reasons why progressively fewer people have been killed and injured on our roads despite the fact that more people are driving. Improving the Motor Vehicle Safety regime is part of our commitment to the safety of Canadians.

The purpose of the Motor Vehicle Safety Act is to address safety issues related to vehicles on Canadian roads. The proposed amendments to the Motor Vehicle Safety Act will provide the government with new and better tools for making our roads safer.

Mr. Speaker, the Canadian motor vehicle safety regulations are applicable to all vehicles designed to operate on public roads, from motorcycles to heavy trucks. They also apply to some off-road vehicles that are occasionally driven across or along the sides of roadways or on trails. The federal government uses the Motor Vehicle Safety Act and its attendant regulations to regulate vehicle and equipment manufacturers and importers and to instill confidence in our stakeholders, including the provinces, territories, interested public organizations and the general public.

Mr. Speaker, the government has been heavily involved in improving and delivering vehicle safety for many years. The Motor Vehicle Safety Act came into effect in 1971. To keep the Act current and effective, it has been updated at various times throughout the years. As innovations and technologies continue to evolve, there remains a continuing need to improve the Act to ensure it remains current.

The Act regulates the safety requirements that apply to new and imported motor vehicles and to new motor vehicle equipment, to reduce the risk of death, injury and damage to property and the environment. The Act enables the development of regulations and safety standards for new and imported vehicles, for new tires, and for new equipment used in the restraint of children and disabled persons within motor vehicles.

In addition to creating robust regulations, the increasingly rapid advent of innovative vehicle technologies requires that the legislative framework be agile so that it does not inhibit the adoption of new safety technologies. Canada risks losing ground in this very important market unless we take the opportunity to add some flexibilities to the Act.

Continual improvement and adaptation to the environment helps keep Canadians safe. That is why we are proposing further changes to the Motor Vehicle Safety Act.

Proposed amendments to the Motor Vehicle Safety Act were tabled in the House of Commons in June 2015 (Bill C-62) to address safety gaps. The Bill attained First Reading before Parliament was dissolved. With a few additional provisions, the Bill was introduced in the other house as Bill S-2. It has completed its process there and is now being brought before this house.

While there are a number of proposed amendments that I will outline, the most significant ones have to do with motor vehicle and equipment recalls.

Generally the major vehicle manufacturers and importers have a good history of addressing safety defects in Canadian vehicles. However, if a situation arose today with a vehicle, tire or child seat, where there was clear evidence that the product contained a safety defect that could put the safety of Canadians in jeopardy, and the company did not agree and wasn’t voluntarily issuing a recall, there would be little that could be done except to take the company to court. This would result in delays in addressing safety concerns.

As such, it is proposed to amend the Act to authorize the Minister of Transport to be able to order a company to correct a defect or non-compliance in a vehicle or equipment if the Minister considers it to be in the interest of public safety.

Under such an order, there will be three options available for companies to correct the defect or non-compliance. The first option available to companies would be to repair the vehicle or equipment. The second is that the company could replace the vehicle or equipment with a reasonable equivalent. Finally the company could choose to reimburse either the cost of repairs to the vehicle or equipment that have already been undertaken or the sale price of the vehicle or equipment, less reasonable depreciation.

In addition, the Bill includes the power to order companies to pay the costs of correcting a defect or non-compliance in a vehicle or equipment. These provisions can have a significant impact on safety.

The combined order powers is mindful to avoid a potential situation where the owner of the vehicle does not have the means or does not want to pay for the correction of a defective or non-compliant vehicle. Such situations would place an unreasonable financial burden on Canadians, and potentially place other Canadians at risk, should their fellow citizens be unable to undertake the necessary repairs. Provisions have been drafted to help ensure that manufacturers would be responsible for costs pertaining to the repair of known safety defects.

To help ensure that new vehicles or equipment with safety defects or non-compliances don’t reach Canadians, the Bill also contains a provision for the Minister to order companies to ensure that defects and non-compliances are corrected before the vehicles are sold to consumers. This measure will help keep vehicles with safety issues from being driven on Canada’s roads.

These order powers, complement the existing power to order a company to issue a notice of defect or non-compliance. They address a key gap in the motor vehicle safety regime that will, once passed, help ensure that vehicle safety issues are corrected.

Beyond these order powers, other powers will be introduced into Canada’s motor vehicle safety regime. Vehicles on Canada’s roads are incredibly sophisticated machines, with complex and proprietary computers and software. Their complexity is only going to increase in the years to come. This complexity could make it challenging to obtain information related to defects or collisions, or verifying compliance with the Motor Vehicle Safety Act.

As such, the Bill includes the authority for the Minister to order companies to conduct tests, analyses or studies on a vehicle or equipment, and to require them to provide those results to Transport Canada. This new ability to order additional studies will be very valuable to help determine details around safety issues.

As part of the proposed amendments, there will be a requirement for companies to provide a contact person within the company that we can reach out to for information and to verify compliance with the Motor Vehicle Safety Act. This requirement would help in the establishment of clearer lines of communication between companies and Transport Canada.

While Transport Canada has good lines of communication with the large manufacturers and importers in Canada, which will continue, complete reliance on these informal mechanisms is risky. Formal, clear lines of communication will help in ensuring and increasing the safety of Canadians.

The proposed changes to the legislation will also increase the ability of Transport Canada to verify compliance with the Act and identify and analyze defects and collisions. The Bill clarifies where and how Transport Canada’s inspectors may access sites in the discharge of their duties. Bill S-2 also adds the ability to require the presence of persons who may be questioned on matters related to an inspection, and require that all reasonable questions be answered.

These proposed changes will help ensure that our inspectors get the information that they need to help ensure that companies are complying with the Motor Vehicle Safety Act.

While the authorities, requirements and tools already discussed will help to ensure the continued safety of Canadians, there remains a gap in terms of enforcing the Motor Vehicle Safety Act and its regulations.

Currently, the Act only has limited enforcement tools to encourage compliance from companies. If a violation is suspected, Transport Canada notifies the company, and later follows-up to monitor that any corrective action has been taken. If corrective action has not been taken, the only current option available to the department is criminal prosecution. This is time consuming and costly for industry and the government, and in some instances, may not be fully appropriate for a given violation.

As such, the proposed changes introduce an Administrative Monetary Penalty regime that will help encourage compliance from companies as an efficient, effective and less costly alternative to criminal prosecution.

Companies will also have the ability to appeal an Administrative Monetary Penalty to the Transportation Appeal Tribunal of Canada. The review process will examine if the company or person has committed a violation under the Act and if so, whether the penalty that was levied was appropriate. In specific cases, actions rather than fines may be more appropriate or have greater benefit for Canadians, such as a safety promotion campaign or changes to a company’s safety culture.

A newly proposed tool, known as Consent Agreements will create that authority. These agreements will authorize the Minister to negotiate a mutually acceptable agreement that will result in enhanced motor vehicle safety for all Canadians. These agreements will be registered in Federal Court and published. Once published, they would have the status of a court order.

Together, the addition of Administrative Monetary Penalties, as well as Consent Agreements, will dramatically increase the enforcement options available under the Motor Vehicle Safety Act.

The proposed additions to the Act are, however, not exclusive to the enforcement and compliance regime. As noted, vehicle technologies are advancing at an ever-increasing pace. This is particularly an issue as the automation and connectivity of vehicles increases and as new environmental technologies are further examined and developed.

As these new technologies emerge, there may be benefits in terms of safety, innovation or the environment. However, sometimes, our regulations may not be able to keep up with these changes. As such, it is proposed to adjust the interim order and exemption provisions in the Motor Vehicle Safety Act to help ensure it has the flexibility to support these innovations, while concurrently maintaining safety for Canadians.

An interim order allows the temporary suspension or modification of an existing regulation while a permanent regulatory change is being developed. It can signal to industry and Canadians that a regulatory change is in progress, but allows for the early implementation of such advancements.

It is proposed to amend the interim order authority to extend the period of such an order from one year to three years, to allow sufficient time to complete the formal regulations and allow the earlier adoption of new technologies that can benefit Canadians.

In addition, it is proposed to make the current exemption process more efficient. This will support the adoption of new technologies or vehicles. The proposed powers will authorize the Minister to grant an exemption from current standards in instances where it will support new safety features or new kinds of vehicles or technologies, but not compromise the safety of Canadians. Exemptions would be available to companies that apply for them and can demonstrate that the safety of Canadians would not be compromised. The exemptions would be made public, ensuring a transparent and fair process.

These measures will help to ensure that the Motor Vehicle Safety Act continues to protect the safety of the driving public, while not hindering innovation and technologies that can also benefit Canadians, and their safety.

This powerful suite of much needed changes to the Motor Vehicle Safety Act will increase the tools available to government and industry requirements while still keeping the focus on the safety of Canadians on the road.

As you are aware, the other chamber amended the Bill to add certain additional protections for dealers. We believe these changes were well-intentioned and they were useful in bringing to our attention some concerns that dealers had about the impact of recalls on their industry. I thank our colleagues in the other chamber for their efforts.

However we also believe that these provisions – as presently constituted in the amended S-2 - go beyond the authority and the purpose of the Act, which is to protect the safety of the driving public, not to manage contractual financial matters or the relationship between dealers and manufacturers.

Such an amendment – were it to remain in the legislation - may create imbalances between dealers and other purchasers – one having advantages over another; generate legal challenges when it comes to enforcement authority over dealers; as well as cause unintended consequences such as leaving no recourse for manufacturers when they do not meet their obligations. These types of issues could potentially have consequences on the commercial relations and agreements that dealers have with manufacturers. The amendment also does not take into account that there are other mechanisms to protect the commercial interests of dealers.

Again I recognize the changes introduced in the other chamber were well-intentioned and they are an example of the healthy back-and-forth that takes place between our two chambers. We believe it is possible to address the concerns of dealers while avoiding the unintended consequences I’ve mentioned. We know that dealers care about safety and will want to work with our government and with parliamentarians in modernizing the Motor Vehicle Safety Act so that Canadians win.

It is imperative now, more than ever, for rapid action on the part of elected officials to move Bill S-2 forward. Canada’s ability to more fully address its oversight role and its ability to properly assess the safety aspects of new technologies depends on the success of this Bill.

Mr. Speaker, I look forward to the Bill going before the Committee and the study of its provisions, including the implications and consequences of the proposed dealer amendment. I support and vote for the Committee to undertake a thorough analysis.

I look forward to testifying in front of the Committee with departmental officials and working with parliamentarians to strengthen the Act and make the roads safer for all Canadians.