I call this meeting to order. Good morning, everyone.
Welcome to meeting number 42 of the House of Commons Standing Committee on Industry and Technology.
Pursuant to the order of reference adopted by the House on Wednesday, October 5, Bill .
Today's meeting is taking place in a hybrid format, pursuant to the House Order of Thursday, June 23.
We will now begin the opening remarks with Wilson Miao.
Without further ado, dear colleague, you have the floor. You have five to 10 minutes to tell us about your bill.
Thank you to all the members of the INDU committee for allowing me to appear today to speak on my private member's bill, Bill .
It would be my honour to see this bill passed unanimously in the House. I would like to take a moment to thank everyone who supported this bill and allowed it to be discussed and studied here today in the standing committee.
This bill was previously tabled in the last Parliament by the member from , who is now the parliamentary secretary to the Minister of National Defence. I'd like to also take this opportunity to thank him for his work.
It's important to recognize the significance of this bill and understand the potential for it to benefit all consumers across Canada. I cannot stress enough the impact this bill will have for Canadians, consumers and our environment.
The Copyright Act as it stands today is being interpreted in areas beyond its scope. Bill addresses the concerns that are becoming more frequent in today's world. We are seeing more digital products integrated into our daily lives and relied upon for everyday services. At the same time, the actual lifespan of electronics has been reduced dramatically with planned obsolescence, leading to more cost for consumers and more burden to our environment.
Copyright exists to protect the intellectual property and the original work of its creator, not to prevent the right to repair even when nothing is being copied or distributed. The current Copyright Act contains certain clauses that make it either impossible or extremely difficult for anyone to legally repair a product, or else these clauses prevent any repairs from happening at all. As a result, Canadians are not able to seek repair alternatives and face the dilemma of throwing out their new purchase because of a small malfunction or minor damage to a product.
As technology is becoming more sophisticated, technological protection measures, or TPMs, usually in the form of a technical restriction, are built in as a barrier to prevent access to the original work. TPMs may be a digital lock, an encryption or even a custom screw. These can be found in many products, such as heavy machinery from tractors to electric scooters and everyday devices from mobile phones to health devices that save human lives. These are just a few examples of the many products that have a TPM incorporated.
There are certain exemptions, such as the Canadian Automotive Service Information Standard, which is a voluntary agreement reached in 2009 in the automotive industry that ensures that automakers and aftermarket providers provide access to service and repair information to repair facilities across Canada.
Any circumvention of a TPM is prohibited and would be considered illegal. This bill ensures that any circumvention for the sole purpose of diagnosing, maintaining and repairing a product will not violate the Copyright Act.
In order to address the limitations of the Copyright Act in Canada now, Bill would change the definition of a technological protection measure by applying it to the software and computer programs within the product, allowing consumers to circumvent a TPM for the sole purposes of diagnosis, maintenance and repair. This gives back control to our Canadian consumers.
This bill is important because it is one part of the federal responsibility that must be addressed before any right-to-repair legislation exists across Canada. Bill does not rewrite the Copyright Act, but without this change, any other legislation or regulatory changes will not have their desired effect and TPMs could not be bypassed for repair. This means that anyone who decides to circumvent a TPM now could face legal consequences.
It is time to give a measure of control back to Canadians. Canadians should have the right to repair. With this, we're able to promote a greener future by reducing waste to our landfills and extending the lifespan of a product.
I look forward to hearing your comments and to answering any questions you might have.
I'm very happy to discuss any amendments moving forward to prevent unintended consequences and to strengthen the sustainability and efficacy of the legislation.
I want to start by thanking MP Miao for bringing this bill forward. Certainly we can all agree that a circular economy, one in which we can have as many businesses competing as possible, is a great thing.
I have a few questions for you this morning, sir.
I'm going to start with warranties. You do talk about the circumvention of TPMs and wanting to make sure that companies cannot get around that in the Copyright Act. How do we work around warranties? A company has a warranty on a product, and if there's tampering or any circumvention, they can void that warranty. Have you thought about that in this bill? What can we do about that?
Thank you for your statement and comments and, of course, your questions.
With regard to warranties, this was brought up yesterday, actually, by a constituent of mine who was asking me about it and telling me about the importance of this bill. Recently he purchased a Microsoft Surface Pro, and somehow it got damaged within the warranty period. He took it back to the shop, but Microsoft decided not to honour that warranty because there were signs of tampering with the laptop.
In that regard, I feel that as long as the consumer is able to find options to repair it at a facility—not necessarily an authorized facility, but through a technician who knows what to do—it is the right of the consumer to carry that out. At the same time, it is for the manufacturer to determine whether or not there would be further amendments to the warranty they provide to the consumers so that the lifespan of the product can be also extended as well.
I believe that in the second hour of today's meeting, there will be several witnesses appearing, including Global Automakers of Canada, AIA Canada and Associated Equipment Distributors, some of which I have spoken to. They have raised some of their concerns regarding issues surrounding the industry.
However, I have to say that any industry that has consideration under the right-to-repair framework is thinking from the perspective of supporting more benefits to the consumer. No matter what industry we're talking about here, different producers across many industries have similar concerns about not allowing circumvention of a digital lock on the device or product that consumers own. In order for them to access it with the intention of repair, this change has to be carried out under the Copyright Act before other legislation can come forward.
Of course, I definitely think there is a lot more room for improvement on this bill. For example, I've spoken to Stryker, a stakeholder that develops health devices, and their main concern is if a non-technician decides to tamper with the machine and causes a death. That's very critical.
Of course, in talking about amendments, there are certain exemptions that can be considered specifically and come into play because of other consequences that we might face.
We also get to a dilemma if it's a life or death situation. During the pandemic, technicians were not able to access hospital facilities to repair or diagnose a health machine. What happens in those circumstances?
These are the situations we have to consider when discussing any amendments as we move forward with the right-to-repair framework.
Thank you, Mr. Miao. Congratulations for your leadership and for the confidence you have shown in defending certain technical aspects of your bill. It's always agreeable to see members care so much about their bill.
Section 41.21 of the Copyright Act enables the Governor-in-Council to make regulations to amend certain anti-circumvention aspects of the act, by providing for other exceptions to the anti-circumvention rules.
When you want to allow someone to circumvent a technological protection measure, or TPM, to diagnose, maintain or repair a product, how would including that in an act be a better way of accomplishing it than simply making regulations? Why legislate? Why do you think the government didn't adopt such regulations?
I think both are important. It is very important because right now there is nothing in Canada that protects consumer rights and provides consumers with an alternative to repair, which causes a very serious problem to our environment as well.
This bill would not only allow the circumvention of TPMs; it also has consequences affecting the environment, because consumers face a very strong dilemma when products nowadays are mostly made with planned obsolescence to limit the lifespan of the devices. Even I have had the experience of seeing a product that I might be able to fix easily with a part that I can find, but only authorized dealers carry it. If you get it from somewhere else and you install it, then the device will detect something that is not part of the original and it will say that you can't use this device.
In most cases, consumers will decide that instead of fixing it, they will just get a new one. The old one will end up in landfills or third world countries that don't have the privilege of taking apart these products or recycling them for other uses.
Welcome to committee. It's good to have you here on the other side.
I want to follow up on Mr. Lemire's good questions with regard to the auto industry.
In 2007, 2008 and 2009, I travelled the country to bring in the right to repair for the auto sector, and I have a subsequent bill now in the House. The CASIS agreement, the Canadian Automotive Service Information Standard, was the settlement after my bill had passed the first round in the House of Commons and was going to a second and third reading. We did the voluntary agreement at that time.
How would this bill affect the voluntary agreement, in your opinion?
First, Mr. Masse, thank you for all the work you have done in regard to the right-to-repair framework.
I understand that there have been a lot of conversations surrounding this voluntary agreement since it came into place back in 2009, and especially now. As we move forward with the target of eliminating all gasoline vehicles from the streets by 2035, there will be a lot more EVs on the street. With the current situation, some of the manufacturers are not bound by the voluntary agreement and do not have to provide the option of right-to-repair service by a third party. I believe that is not restricted just to Canadian consumers, but there is a lack of competition in our market because of it.
This bill, I believe, will stand on strong ground and address the unintended scope in the right-to-repair framework that the Copyright Act was never intended to have.
I have one last quick question.
One of the concerns I have is that if we devolve a lot of this to the province, we could have provinces with different laws and rules. I worked in the past on single-event sports betting, and Mr. Waugh had his passed. We worked together on that. It was basically my bill. I took it back off the table, and he brought it forward. They did a great, amazing job, but the problem is that each province now has its own rules, and I've had concerns over how some of that evolved.
What do you say about the concerns about provinces making different jurisdictional decisions related to this initiative?
Thank you, MP Maio, for being here today. You certainly give us a lot to think about. It's a minor amendment with major consequences.
This summer I did some consultations with tractor dealers and with the agricultural sector in general with respect to this bill. It's garnered a lot of attention in British Columbia. One of the agricultural dealerships that I was speaking with, Matsqui Ag Repair, is licensed through various tractor manufacturers to repair on their behalf, and one thing they mentioned, which I think is important, is the amount of time, energy and money they have to spend on their staff to keep them up to date with all of the various computer programs to make sure that these modern tractors run. The companies that do tractor repair work invest significantly to do so. I just wanted to put that on the table.
The second point he made is that this bill will have major environmental consequences, negative consequences, because right now fuel costs have gone up substantially for farmers across Canada. He said one thing he's already dealing with under the vehicle manufacturing standards in Canada and maybe under CEPA that still needs to be amended on this front is that farmers are finding ways to cut costs by overriding the computer programs because they can't necessarily afford, or don't want to afford, all of the input costs to harvest their crops.
He gave the example of a carburetor. It's easy in some cases for a farmer to override the software to essentially decrease the efficacy of the carburetor being used.
Have you heard of similar instances in your consultations on the possibly negative environmental consequences of this bill in respect to circumventing computer programs to avoid high input costs?
Thank you for sharing your comments.
That's a very good question, because, yes, I did hear about negative impacts related to environmental concerns, but here's my question to you as well.
Imagine this: With a tractor being so expensive, overriding the compressor to have maximum performance and tampering with what I also consider a TPM are considered illegal and would void the potential warranty with the dealership.
If that's the case, what happens with this expensive investment that ends up just sitting there on the farmland and not being used? There is a chance that the farmer might purchase another vehicle. Purchasing another vehicle means we need the raw materials, and we also need all the technologies and potentially investment in research areas to better advance the old piece of technology.
When we come to environmental concerns, yes, we do have those resources under our earth, but at the same time, environmentalists would have the consideration of why we are exploiting more resources when we can recycle the existing equipment.
Thank you very much, Chair.
I also want to congratulate MP Miao for bringing forward his first private member's bill in the House.
This is a very interesting topic. Thank you very much for raising the attention on this issue.
When I study this bill and look at the different backgrounds and analyses, I can't help but think of the importance of striking a balance between maximizing efficiency in our economy while providing an incentive for innovation and at the same time striking a balance between consumer protection or consumer rights protection versus consumer safety and security. Also, privacy concerns nowadays are a hot topic.
I started thinking about this backwards. When the Copyright Act was originally designed and the prohibition was put in place on the TPMs, there had to be a reason for it. I want to hear your thoughts on this. What's your understanding of why the TPMs shall not be circumvented under the current context of the Copyright Act?
Thank you for your questions.
There are definitely concerns to be raised, depending on the product and what is permitted to circumvent a TPM. There are potential risks, such as health risks, safety risks, cybersecurity risks and privacy violation in the Copyright Act.
Most of the time, people won't think about the right of repair in the copyright context. However, in order to repair a product, you need access. Right now, from what I see, there's computer programming that is restricting access to allow any diagnostic repair or maintenance to be done.
I just need to understand. Your thinking is that when the bill was originally designed, it did not pay enough attention to the right to repair and how quickly technology evolves. There are things that we learn on YouTube, simple things, and people are smarter nowadays about fixing things on their own.
I heard a lot of discussion about the automaker agreement. I remember the days of looking at how much it cost to buy a phone with a contract or without a contract. The major hurdle was that if you bought a phone without a contract, then you had to find somebody to unlock it if you had to travel somewhere else. Now we don't have this headache anymore.
I definitely see the benefit of what you're talking about. At the same time, I wonder if, in your view, there should be limitations as to the type of product or the type of industry, because obviously trained professionals are also a concern.
Maybe it's your vision that anyone can repair this or circumvent it. Is it only those technicians who receive some degree of training who are allowed to circumvent the TPM? What are your thoughts on that?
Thank you, member, for that question.
That part was not considered during my preparation of this private member's bill. However, with regard to the CUSMA right now, the Copyright Act provides three prohibitions on TPM circumvention activity. The first one would be the circumvention prohibition, the second is the service prohibition and the third is the device prohibition. However, there are categories that provide exceptions to these three TPM prohibitions in the agreement: law enforcement and national security, interoperability of computer programs, personal information, security, persons with perceptual disabilities, and radio apparatus.
I'll very briefly interrupt you.
My question is specifically focused on our multilateral obligations. CUSMA, of course, is a trilateral agreement between Canada, Mexico and the U.S., but we have a whole bunch of trading partners all around the world under the WTO. Many of them have signed on to the WIPO treaties. Could I ask you to come back to this committee or at least provide us with additional information on whether we're in compliance with those treaties?
My next question has to do with warranties and goes back to points that a number of individuals around this table have already addressed in the discussion.
If I were advising an OEM on how to address this legislation, it would be to use warranties to circumvent the spirit and intent of your bill. Does this bill actually specifically address the use of warranties as a circumvention tool?
Thank you very much, MP Gaheer.
Thank you very much, MP Miao, for bringing this bill forward and joining us in committee today.
This is the end of the first hour. I will have to now suspend briefly so that we can bring in witnesses for the second hour.
Again, thanks a lot, MP Miao.
I now suspend the meeting.
Good afternoon, everyone. Welcome back to the Standing Committee on Industry and Technology.
For the second hour of our meeting, we have Mr. Craig Drury, former chair of Associated Equipment Distributors.
From the Automotive Industries Association of Canada, we have Alana Baker, senior director of government relations.
The association is also represented by Sylvain Séguin, the president of Fix Network Canada
We also have David Adams, president and chief executive officer of Global Automakers of Canada.
Without further ado, it's over to Mr. Drury for five minutes.
Good afternoon. Thank you for inviting the Associated Equipment Distributors to present on Bill . It is an honour to appear before you today as AED's immediate past chair and as vice-president of operations at Vermeer Canada.
AED is an international trade association representing companies that sell, rent, service and manufacture construction, farm, mining, energy, forestry and industrial equipment and related supplies. AED's Canadian members account for more than $8.7 billion in annual sales and services and employ over 27,000 workers at 400 locations across the country.
“Right to repair” is a simple slogan. However, the policy proposals surrounding the issue are complex, with significant consequences.
At the outset, I want to make it clear that AED members support customers' right to repair their machinery and the right of distributors to make available diagnostic tools, repair information, parts and remote customer support. Idle, non-functioning equipment equals lost time and money. Whether it's on a farm during harvest or on a road-building project, there is absolutely zero incentive to not do everything we can as equipment dealers and manufacturers to keep the machine running. That can mean repairs completed by a dealership service technician, the customer or a third party provider. The equipment industry is highly competitive. If Vermeer Canada isn't providing proper and timely service, nothing is stopping the customer from moving to one of my many competitors and their products.
However, we don't support unfettered access to critical on-board software and information pertaining to environmental and safety protections or key operational functions, which is what Bill would ultimately do. While customers can complete most repairs to their machinery, environmental and safety functions, as well as technological developments that have made equipment more efficient and productive, necessitate restrictions in access to source code and software that ensure that key operational functions aren't modified or disabled.
Manufacturers of equipment rely on a network of independent small and medium-sized companies, many of which are family-owned, to sell, rent and service the equipment. These dealers make significant investments in their employees, including training service technicians to repair and maintain the latest high-technology machinery. Many AED members' facilities are located in rural and underserved areas, creating well-paying jobs and economic opportunities.
The equipment industry has invested significant time and resources to mitigate environmental harm, resulting in a substantial reduction in emissions. Of great concern is that Bill threatens important environmental gains, as it would permit unfettered access to embedded software to circumvent emissions protections.
Similarly, modern equipment has numerous safety features to protect both equipment operators and the public, the latter oftentimes driving or walking past construction sites and other areas while machinery is in use. Granting access to override safety features, as Bill would do, poses undue risk for operators and bystanders.
Additionally, equipment dealers invest countless resources to train certified technicians to work on complex machinery. By this mandating of access to embedded source code, unqualified individuals will attempt to repair the world's most advanced and sophisticated equipment at significant risk to themselves, operators and the public.
The aforementioned raises this question: Why would someone want to circumvent emissions or safety protections? The answer is simple: It's for machine performance. Limits on horsepower and other functions that the machine might be able to carry out are necessary to ensure that the equipment is environmentally friendly and safe. A simple Google search yields a plethora of vendors offering products and services to assist equipment owners to modify their machines. Requiring access to source code and embedded software will only proliferate this practice, with significant negative ramifications for the environment and safety.
Proponents of Bill tout the environmental benefits, because customers won't need to discard products as readily if they are able to fix products themselves. However, heavy equipment is among the most durable manufactured products commercially available. Equipment will oftentimes be sold to a customer, traded in when the customer purchases a new machine and subsequently either resold or rented. Improper maintenance or modifications related to granting unfettered access to source code jeopardize a machine's operation and longevity, which may cause negative environmental and safety impacts and shorten its productive life.
Simply put, for the equipment industry, the right-to-repair proposals are a solution in search of a problem. AED members provide customers and third party repair providers with parts, tools and other resources to complete the overwhelming majority of equipment repairs. It's bad business not to do so. Out-of-service equipment isn't merely an inconvenience; it can ruin a farmer's harvest or delay completion of a bridge or roadway.
Thank you again for the honour of appearing before you today. I look forward to answering any questions you may have.
Thank you, honourable members of the committee, for the opportunity to appear before you to speak to Bill .
I'm going to give my presentation in English, but we'll be happy to answer any questions in French as well.
My name is Alana Baker, and I am the senior director of government relations for the Automotive Industries Association of Canada, otherwise known as AIA Canada.
I am joined today by Sylvain Séguin, president of Fix Network Canada, a global leader in collision, glass and mechanical repair services, operating over 2,000 points of service worldwide.
AIA Canada represents, supports and leads innovation in Canada's $32.2-billion auto care sector. Our more than 4,000 members, located in every riding across Canada, help keep the country's fleet of almost 30 million vehicles on the road. Whether you have been in a collision or require maintenance, our members help vehicles last longer, pollute less and keep drivers safer by offering Canadians any product or service a vehicle may need after it rolls off the dealership's lot.
I want to begin my remarks by making clear the automotive aftermarket support for the intention and principles behind this bill. Bill is a step in the right direction when it comes to levelling the playing field for service and repair of consumer goods, something that is of importance not just to the automotive sector but to many others.
Having the flexibility to repair your goods or have them maintained by third party providers is critical in a price-conscious market, as it allows Canadians to shop around for competitive pricing. Given persistent levels of inflation, ensuring a competitive marketplace does not just help businesses but consumers as well.
This bill comes at a critical moment when manufacturers of goods, including vehicles, have become increasingly sophisticated in their ability to create a closed loop for service diagnostics and repair. The more complex an item is to repair, the more challenging it is to service. This is increasingly the case for vehicles on our roads, which are effectively computers on wheels.
However, while addressing digital locks is important, there are still loopholes that can be exploited by manufacturers to prevent third parties from repairing or servicing goods. Any legislation that proposes to address this issue should contain clear verbiage that eliminates manufacturers from the ability to circumvent the sharing of data to prevent independent shops from obtaining diagnostic repair or maintenance information for the purposes of legitimate repair.
To that end, we believe that there are some amendments that can be made to this bill that would strengthen its intention and that would truly pave the way for the right to repair in Canada. These amendments, which include parallel changes to the Competition Act, would help reinforce a manufacturer's requirement to allow access to vehicle data. I would be happy to speak about this in greater detail during the question-and-answer session.
Without access to a vehicle's diagnostic data, independent auto repair shops cannot service a vehicle. This makes it harder to make sure vehicles are operating as efficiently as possible, and we expect this problem to grow significantly over the years ahead. Without intervention, automakers will continue to control the terms through which independent auto shops access this data.
Lawmakers around the world have recognized the importance of the right to repair, including through legislation that gives consumers the right to repair their vehicle, and 83% of Canadians agree that automakers should be required by law to share data with independent auto repair shops. Canada cannot afford to be left behind. Government must act quickly to advance right-to-repair principles through forthcoming legislative efforts.
Stories are emerging every day about the inability of our members to service vehicles because manufacturers make it difficult or sometimes impossible to access essential data and information. One example was highlighted during our recent advocacy day by another member of Parliament. The auto repair shop that this member typically goes to purchased brake pads to fix his vehicle, but was unable to access the repair information from the manufacturer, Volvo, to complete the repair. The repair shop then gave the member of Parliament the brake pads they had purchased and had the car towed to the Volvo dealership. The dealership then told the customer that they would not repair the car with aftermarket brake pads, meaning the customer had to pay more money for original equipment manufacturer parts.
Stories like this are all too frequent, and they will become more common without intervention by legislation. It is critical that vehicle owners and not the automakers be the owners of their vehicle data so that they can continue to choose where they bring their vehicle. Addressing this issue will allow our small and medium-sized enterprises to remain competitive and continue to serve as the primary provider of essential vehicle services to Canadians.
I want to thank MP Wilson Miao once again for his work on this bill, and thank committee members for the opportunity to present today.
We look forward to answering your questions.
Thank you, Mr. Chair and members of the committee, for the opportunity to speak to you today on behalf of the 15 member companies of the Global Automakers of Canada.
Our manufacturing members, Honda and Toyota, represent 55% of the Canadian light-duty vehicle production through September 2022, while all members, as exclusive Canadian distributors of some of the world's largest global automakers, were responsible for 62% of Canadian sales in 2021.
My members recognize the importance of having an open, fair and competitive repair industry while maintaining safety and quality standards for the benefit of consumers. That is what the Canadian Automotive Service Information Standard provides to the automotive industry.
That said, some in the automotive aftermarket have utilized this bill to try to secure more rights, which we have yet to understand. We have serious concerns about Bill because it exposes vehicles to the prospect of theft, hacking, and compromised vehicle safety and emissions standards on which vehicle manufacturers are stringently regulated before they can put a vehicle on the road and afterward. The bill allows the circumvention of technological protection measures in a computer program if the circumvention is solely for the purpose of diagnosis, maintenance or repair of a product. In practical terms, how does an ordinary person circumvent technological protection measures? More importantly, what are the ramifications of anyone's being provided the capability of legally circumventing TPMs for any reason?
For an automobile that operates on public roads at potentially high rates of speed, we believe the risks of injury or death for the user and the general public are obviously exponentially greater than are those from other products when TPMs are removed. Critically, how would a consumer, the manufacturer or potentially the courts know who had circumvented the TPMs and for what reasons? What would be the due diligence undertaken to ensure that the individual undertaking the circumvention of any TPMs had the appropriate certification and training to undertake the diagnostic repairs? Will the circumvention of TPMs be recorded on a consumer's bill of sale so consumers understand their potential consumer protection recourse? Will the repairer also take on the responsibility and liability associated with the circumvention of TPMs? Will the repairer provide a full and complete record of repair work undertaken to the manufacturer, to establish continuity of service in the event liability issues arise with respect to safety or emissions non-compliance or cybersecurity attack?
When brought forward a previous iteration of this bill, it was made clear that the automotive industry was not the subject of the bill, because we have had a solution in place that has worked since 2010, known as the Canadian Automotive Service Information Standard, or CASIS for short. Under that voluntary agreement, manufacturers are required to provide the service information, training tools and equipment to the aftermarket so that any qualified mechanic can repair a consumer's vehicle. We're proud of the support, expert advice and help desks that our industry makes available to automotive mechanics across the country. We are open to exploring ways to improve upon this.
For the automotive industry, the right to repair clearly exists. Repair statistics bear this out when comparing repairs done by the aftermarket vis-à-vis OEM dealers. Therefore, members have been aggressively lobbied by the automotive aftermarket for so-called “rights” that already exist.
Finally, Bill , an act respecting cybersecurity, is before Parliament. It will introduce more stringent standards and monitoring to ensure that Canadians are protected from cybersecurity risks and threats, yet the bill before this committee would open up opportunities for cybersecurity risks and hacking. It is not only incongruent but also puts consumers at unnecessary risk.
Indeed, consumer protection is at the heart of this issue. Consumers need to be assured that when their vehicle is serviced and repaired, it is done so to OEM service and repair standards, and that those repairing the vehicle are accountable and liable, both to the consumer and to regulatory authorities, for such repairs.
We are on board with right-to-repair solutions. We have been for the last dozen years, since CASIS was established. This solution benefits consumers and the aftermarket without creating dangerous safety and cybersecurity vulnerabilities.
Thank you very much for your time. I look forward to your questions.
To start, we've heard a lot about privacy and cybersecurity. This has always been a priority for the aftermarket. Cybersecurity and privacy should not become reasons to justify limiting serviceability. I would say notably, as an example, the National Highway Traffic Safety Administration in the U.S. recently released updated cybersecurity practices for motor vehicles and recommended that the automotive industry provide strong vehicle cybersecurity protections that do not unduly restrict access by alternative third-party repair services authorized by the vehicle owner. The aftermarket wants repair information to be accessible through an interoperable, standardized, open system.
It's also worth mentioning that we have seen among IT experts an opinion that a multi-layered architecture of interoperable open systems might offer better protection against cybersecurity attacks in closed systems.
Also, cybersecurity and privacy risks can be managed. They can be managed throughout the vehicle's life cycle through collaboration among automakers, the aftermarket, and industry and regulatory experts. I would say that implementing industry standards can be safe. They can create secure, direct and standardized access to the vehicle data, which can then be directed to the repair facilities of the consumer's choosing. At the end of the day, it comes down to consumer choice.
I'm not directly in the mining industry, so I'll talk just generally about this. For example, there's a project in Fort McMurray right now, where a number of autonomous truck fleets are running that require very sophisticated software and control systems to operate in a safe way.
The other comment I would make is again a general comment. I am sure that in all mining operations in Canada today, there is software going back and forth. There will be trained technicians on those jobs, on behalf of the OEMs as well as the dealers and the customers themselves, to make sure that those machines are as productive as possible. The mining industry is probably the one where production is very important. Just due to the sheer numbers, if machines are down, it's a big deal. There's a lot of support going on to make that work.
From an economic perspective, just anecdotally, from the stories I've heard, it drives jobs for all three of those—the dealers, the OEMs and the sites themselves.
I'll say that we are seeing rapid advancement in vehicle technology.
As I said, vehicles on today's roads are effectively computers on wheels. Cars today are now equipped with vehicle telematic systems. These systems refer to the computer hardware that is embedded in a vehicle. It collects, stores and processes all the data on the health of the vehicle's systems, including the data that's needed for diagnostics and repair. This data is then transmitted directly from the vehicle to a back-end server, wirelessly, where it's under control and ownership of the automaker.
The problem that we're seeing now is that the telematic systems that are installed in the vehicles by the automakers are going to replace on-board diagnostics as the source of vehicle diagnostic data. Because the automakers own the telematic systems through which this data is collected, stored, processed and wirelessly transmitted, they are the de facto owners of the data and control access to it. When it comes to the consumer, they do not have a choice on where, ultimately, they bring their vehicle for service and repair. If our shops do not have access to that data, they simply can't fix the car.
Today, only 30% of the vehicles we repair in our network are equipped with advanced driver assistance systems, called ADAS.
There are going to be more and more electric vehicles, and the new technologies involved will engender huge costs to the networks, for safety, equipment and training. Furthermore, the networks are not yet ready to meet demand. There is already a significant shortage of labour and equipment. The investments, certifications and training required will, in the very near future, further limit capacity and increase costs and turnaround time.
Thank you, Mr. Chair, and thanks to our witnesses.
It's good to see you, Mr. Adams, even though I'm virtual. We've known each other for a long time.
I want to ask this question, starting with your association: Do all of the participants in your association share the same information and provide the same access in Canada as they do the United States, the European Union and Asia? Does, for example, Honda provide identically the same things in Canada as it does as in the United States, Asia and the European Union?
I'll go over to Ms. Baker.
One of the things that I'm concerned about.... I have a dealer. I go to a Ford dealership. I also go to the aftermarket as well. I can tell you that I hear enough testimony from people who can't get the information, and I've actually been the victim of that.
What does it say to young people who want to get into this profession in the future? As vehicles change, one thing I'm concerned about is that the dealers know that they can't perform all the maintenance and the types of things that are necessary, and the aftermarket is critical.
I'm concerned about young people who are investing the cost of education and their time and then getting into an unstable market. That's one of the reasons I think that the CASIS agreement needs at least either modernization or enforcement.
I agree on CASIS. Again, this is an agreement that is now outdated. It's over a decade old, and information access must keep pace with the advancements in technology. Today we see automotive professionals who are dealing with vehicle systems and components that simply did not exist back in 2009 when CASIS was created.
Contrary to what you are hearing, CASIS does not work and it does not solve the problem, for a number of reasons.
First, it's not enforceable. There's no legally binding enforcement mechanism in place.
Second, as you mentioned, automakers are not required to participate, and some, like Tesla, do not.
Third, it applies to on-board diagnostic systems, or OBD. This is a technology that's becoming outdated. Again, an example is Tesla. Some Tesla models do not come equipped with standard OBD equipment. CASIS doesn't apply to vehicle telematics systems, which I spoke to earlier. This is a technology that's found in 60% of vehicles worldwide, and it will be in an estimated 95% by 2030.
Last, I would say that the agreement provides a framework for automakers to share repair information with the auto care industry on a level equivalent to that of their authorized dealers; however, some automakers have moved to a direct sales model, so that eliminates the traditional dealers altogether, along with their obligation to independent automotive shops.
Thank you, witnesses, for being here and for your very interesting testimony. It's very important for us to hear everyone's point of view.
Ms. Baker and Mr. Séguin, what about warranties? That's something that really interests me.
When you buy a vehicle, it usually has a warranty for something like three, four or five years. You can also purchase an extended warranty on certain types of vehicles.
If someone has their car repaired somewhere other than from where it was purchased, or from the dealership, what's the status of warranties at the moment?
In the future, what will happen to this warranty if a third party repairs the vehicle using original parts? It's important to specify that, because there are also aftermarket parts. Do you think that the warranty will still be valid?
At the moment, there are certification programs for that. Many manufacturers participate. They supply the information and support training to ensure that vehicles are repaired in accordance with manufacturer's specifications. It works very well.
I'd like to raise another point, however. After a collision, the dealership doesn't necessarily have what it takes to make body repairs. In such instances, the dealership signs an agreement with an independent body shop or with one of our members for things like body or rust repairs. There are never any problems from that standpoint, and the person carrying out the repairs always has access to the manufacturer's standards for the particular vehicle to be repaired. As I mentioned, many manufacturers work with us and provide us with that information. Unfortunately, some do not, and that's where a problem arises.
As for warranties, provided that repairs are made in accordance with manufacturer specifications, the warranty is approved.
For a century, basically ever since it was invented, the automobile has evolved enormously. We are inevitably headed into a time when all cars will be using the new technologies. In fact, that's already the case for virtually all of them. As you mentioned, cars are computers on wheels.
Personally, I have my car repaired two minutes away from where I live. I go to the local mechanic, who took the shop over from his father, and is trying to keep his garage going as best he can. I've never asked him, but I would imagine he's a member of an association like yours and that he undergoes training.
As we know, new technologies are going to be used at one point or another. As Mr. Miao, the sponsor of the bill, said earlier, even his refrigerator has become a four-legged computer. I don't understand how it's going to be possible to repair all these cars that have become computers on wheels without the essential information.
I agree with you. It's important to have information, but also to have training.
I can tell you that your corner garage owner has to be trained and have the equipment required to be able to repair vehicles. However, access to this information should be available at a reasonable price. In a manner similar to what Ms. Baker was saying earlier, a somewhat more general certification program should be available rather than having each manufacturer using their own tools and equipment, thereby generating higher and higher costs.
I had a conversation with a manufacturer last week. He told me that only 30% of his vehicles, following a collision, were repaired in accordance with manufacturer specifications, because there wasn't enough capacity and the program is extremely expensive.
I can understand a manufacturer wanting to control marketing aspects, but without readier access to the training and equipment needed, the kind we are asking for now, it will become difficult to repair vehicles properly.
That's great. Thank you, Chair.
Thank you to the witnesses for making time for the committee.
My question is for Mr. Drury.
You said this bill could threaten important environmental gains by circumventing embedded restrictions or permitting unseemly engine modifications or providing more horsepower than what's recommended.
My question is this: Aren't there other regulations or laws that prevent this from happening? Certainly the Copyright Act can't be the only thing standing in the way. If someone's already violating these laws and regulations, then what's this bill going to change if they're already violating it?
We know that, for example, calibration procedures for advanced driver assistance systems can be very costly on vehicles. Some Audis, for example, require an eight-hour calibration process. If we applied a cost per hour of $125, that implies a cost of over $1,000.
I think Mr. Masse raised the point of the reason we are here today. Wouldn't you agree that the reason we're here today is costs? Compared to independent repair shops, dealerships charge consumers 36% more for repairs.
That's a question for all the witnesses.
If you look at the representation in the marketplace currently in terms of installed market parts, you see that dealers have 28% of that market. The aftermarket has 59% of that market. In terms of DIY parts, the dealers have 4.5% of that market. The aftermarket has 67.6% of that market. If you look at just the composition of the market right now and the growth in the market, you see it's not an issue of whether or not there's competition out there. There's clearly competition.
The questions were posed earlier: What are we all here for? What are we all concerned about? I think fundamentally the issue is more about the future and what's going to happen in the future. It's concerns about that. I think everybody in the automotive industry shares the concern about what's going to happen in the future, because technology is changing so rapidly, whether you're a manufacturer, a dealer of that manufacturer or part of the aftermarket.
The solution is not to put in place a bill such as the one we're talking about today, which opens up not just the consumer but society as well to far greater risks associated with cybersecurity, safety and emissions. That was already mentioned.
If you can find a way that's going to address the cybersecurity concerns....
Let me put it another way. If the automotive aftermarket is prepared to accept all of the liability associated with those rights that you are suggesting, then that's an entirely different equation.
Right now what happens in lots of cases is that vehicles will go to the aftermarket for repairs. The consumer doesn't go back to the aftermarket dealer when they have a problem with their vehicle; they go back to the manufacturer. How do we have a record of all of the servicing on that vehicle when that information is not shared between the aftermarket dealer and the manufacturer?
We're all for the ability of the consumer to get their vehicle repaired, but the rights and liabilities need to be balanced.
Sure. Thank you for the question.
Let me speak to the cost and affordability piece you mentioned. We already know that Canadians are stretched with increases to the cost of living. I mean, you gave a statistic about dealerships charging 36% more for repairs, which I've also seen. We're happy to share multiple examples from consumers that show that an inability to service the car is resulting in increased costs.
Think about having to tow your car to a dealership. If you're in an accident in Thunder Bay with your Tesla, for example, and you need to have it towed to Toronto, that's an increased cost. It's the same if you're being pushed towards higher-cost OEM parts rather than aftermarket parts. As vehicle technology advances, there is a concurrent increase in the cost to service vehicles. Having consumer choice helps Canadians to access service and repairs at a wider range of price points.
I would also add that independent shops are small business owners. They've invested their livelihoods into these shops. They're family-operated businesses. These are second and third generations, often with a fourth generation coming in. To make it such a burden to offer a service to those within their own neighbourhood who are coming in where they want to do their business, where they have been doing their business for quite some time, and where they feel comfortable.... When they're told that the shop does not have the data to fix it or they don't have access to the technology in the vehicle, it puts the small business jobs at risk and makes their business model struggle.
This is a concern for the future. We know that this is happening, and it's only going to grow.
That concludes our second hour of questioning.
I want to thank all our witnesses for joining us today.
Thank you for having taken the time to talk to us about Bill .
I would also very much like to thank the interpreters, the analysts, the clerk and all the support staff.
With that, the meeting is adjourned.