I call this meeting to order.
Welcome to meeting No. 43 of the House of Commons Standing Committee on Industry and Technology. Pursuant to the order of reference of Wednesday, October 5, 2022, we are studying Bill .
Today's meeting is taking place in a hybrid format, pursuant to the House Order of Thursday, June 23, 2022.
I apologize for chairing the meeting remotely today. I would have preferred to be with you in Ottawa, but that was unfortunately not possible.
I will introduce the witnesses appearing before the committee in the first hour of the meeting.
We have, from the Canadian Vehicle Manufacturers' Association, Brian Kingston, president and chief executive officer, and Jennifer Steeves, director, industry and consumer affairs; from LKQ Corporation, Tyler Blake Threadgill, vice-president, government affairs, and Derek Willshire, regional vice-president, Canada; and finally, from the North American Equipment Dealers Association, John Schmeiser, president, and Eric Wareham, vice-president, government affairs.
Thanks to all of you for joining us today. It is much appreciated.
Without further ado, I will cede the floor to the Canadian Vehicle Manufacturers' Association for five minutes.
Mr. Chair, honourable members, thanks for the invitation to appear here today as part of the committee's study of Bill , an act to amend the Copyright Act.
The Canadian Vehicle Manufacturers' Association, CVMA, is the industry association representing Canada's leading manufacturers of light and heavy-duty motor vehicles. Membership includes Ford, General Motors and Stellantis FCA Canada. Canada's auto industry is responsible for over $13 billion in annual economic activity, 117,000 direct jobs and an additional 371,000 jobs in aftermarket services and dealership networks in 2020. The industry is Canada's second-largest export sector, with over $36.5 billion in exports last year.
The CVMA has been a strong supporter of the Canadian Automotive Service Information Standard, CASIS, since its inception 12 years ago. CVMA members are industry leaders, providing vehicle repair information and tools to the aftermarket at a level equivalent to their respective independent authorized dealers to ensure that Canadian vehicles are repaired to OEM specification to the benefit and protection of the consumer. Over the past few months, our members have reviewed and submitted recommended updates to the CASIS website to ensure technicians have up-to-date links to our members' respective technical information portals. Regular CASIS task force meetings provide an opportunity to bring forward details about any issue that is being encountered by the aftermarket for further study and collaboration on solutions.
Safety is automakers' number one priority, and OEMs are responsible to ensure vehicle safety systems comply with the Motor Vehicle Safety Act, the MVSA. Vehicle safety technologies provide societal benefit and may save lives, including that of the driver, other passengers and those in the surrounding environment, including other motorists and pedestrians.
Vehicle emissions systems must also comply with federal regulations under the Canadian Environmental Protection Act, CEPA. Modification to a vehicle's emissions system may put a sensor out of alignment, resulting in compliance issues due to increased emissions, and it may also affect fuel consumption. Allowing unrestricted access to vehicle safety and emissions systems software that is not required to complete a repair introduces significant compliance and safety risks in the event of modification resulting in a system not operating as originally designed. CASIS ensures that repairs are done safely and in compliance with the MVSA and CEPA, among other regulatory frameworks that apply to OEMs.
Cybersecurity is another top priority for industry, and data protection and data privacy are embedded from the earliest stages of product development. OEMs invest and include security measures beginning at the design process and throughout the automotive ecosystem, and abide by rules that govern cybersecurity management.
Circumvention of a vehicle technology protection measure, or a TPM, and the modification of vehicle system firmware may undermine cybersecurity protections, making vehicles more vulnerable to hacking. Automated vehicle and connected vehicle technologies, driver-assist systems and the transition to an electric fleet with charging infrastructure require an increasingly vigilant approach to cybersecurity.
The 2020 Transport Canada report “Canada's Vehicle Cyber Security Guidance” notes that “A cyber security breach—either deliberate or accidental—could have adverse consequences, such as compromising vehicle safety, unauthorized access of confidential information, and vehicle theft, among others.”
Context is critical here. The consequences of allowing unrestricted modification of motor vehicle firmware and certain software are more serious than compared to other consumer goods, which we understand is the intended focus of this bill.
As the committee continues its study of Bill , we strongly recommend the committee hear from a cybersecurity expert to receive a briefing about cybersecurity threats as related to vehicle security safeguards including measures to protect the integrity of vehicle systems. We also recommend inviting an appropriate Transport Canada official who can provide input to the committee from a road safety and motor vehicle regulation perspective as well as an Environment and Climate Change Canada official who could speak to the importance of vehicle system integrity related to fuel consumption and emissions compliance.
In closing, the CVMA remains committed to the CASIS model, which has been working for over a decade and may serve as a model for other industries to adopt. We urge the committee to continue its detailed review, hear from the vehicle cybersecurity and safety experts, and continue to engage with CVMA as this study moves forward.
With that, I'll be pleased to take your questions, and thank you again for the invitation.
Mr. Chair, honourable members, my name is Derek Willshire, and I'm the regional vice-president for Canada at LKQ. I'm here today with my colleague, Tyler Threadgill, vice-president and head of Federal Government Affairs.
Thank you for giving LKQ the opportunity to comment on Bill , an important bill that seeks to improve the right to repair. Comprehensive regulation of the right to repair is urgently needed. Small businesses and consumers, particularly those in rural areas, will suffer significant negative impacts if action is not taken. For more information, we invite you to read the brief that we submitted on Bill C‑244.
LKQ distributes quality automotive replacement parts, whether OEM parts or aftermarket parts, for consumer vehicle repair, as well as a comprehensive diagnostic and calibration services throughout Canada and the United States.
LKQ is also the largest automotive recycler, recycling more than 900,000 end-of-life vehicles per year in North America.
LKQ employs 1,175 people at 37 locations across Canada. I work in office in Lévis, a suburb of Quebec City, alongside 92 men and women I'm very proud to consider my family. Our employees in Canada represent only a small portion of the 491,000 employees in the automotive aftermarket in Canada.
For many Canadians, a car is one of their most important purchases after buying a home. While innovation and technology have allowed for greater mobility, automobiles can be difficult to maintain. What we've seen and heard from the majority of our customers is that consumers have less and less choice in where they can have their vehicles serviced. According to the Auto Care Association, 70% of car repairs are done in the independent aftermarket. We are here today to advocate for the advancement of Bill to ensure that Canadians continue to have that choice.
The Canadian Automotive Service Information Standard, or CASIS, a voluntary agreement reached in 2009, is outdated, as vehicle repair professionals now use technology that did not exist in 2009.
Consumers deserve a vibrant aftermarket that allows them to choose how and, above all, where their vehicle is serviced. That's a real need for them. Bill does just that.
My colleague Mr. Threadgill will address some of the current obstacles.
Mr. Chair, honourable committee members, my name is Tyler Threadgill. I'm the vice-president of government affairs for LKQ Corporation, working across Canada and in the United States. Thank you for having us here today to share our thoughts on this important piece of legislation.
Bill is integral to protecting not only Canadian consumers but Canadian small business owners. Our goal is to develop a framework that allows repair and maintenance data to be shared with the automotive aftermarket and a vehicle owner's repair shop of choice. Specifically, we believe the inclusion of a right-to-repair regime for the automotive diagnostic, repair and service sector is imperative to keeping up with the ever-changing automotive industry.
As Derek alluded to, in 2009, the CASIS agreement was reached, which would allow the automotive aftermarket to access important repair and maintenance information. Similarly, a memorandum of understanding was reached by the same parties in the United States about five years later. However, there were unforeseen flaws in this agreement. They did not account for various technological advances. For instance, when these agreements were signed, in order to access vehicle data, a computer needed to be plugged into a car. Now vehicle data is sent through a telematic system that transmits data wirelessly to a server managed by the manufacturer, a process that was not around when these agreements were signed.
To remain up to speed in this technologically evolving landscape and safeguard access to vehicle data by the independent aftermarket, Bill should take into account the following concepts:
Vehicles compile extraordinary amounts of data, such as where you go and how fast you drive. It's a lot of personal information. I want to be very clear: We do not want that information. What we're looking for is the aftermarket having access to vehicle repair and maintenance data that is necessary to repair a car.
Cybersecurity is another key component to consider. This data needs to be sent in a safe, readable format for all technicians to access.
I'd like to reiterate the industry's goal: We are asking for legislation that maintains the historical status quo in the repair and maintenance market.
This is a time of tremendous technological advancement. It is critical that legislation keep pace to ensure that Canadians' choices and rights remain protected.
Thank you again for your time. We welcome any questions and look forward to working with you on this important issue.
Thank you to the INDU committee members for the invitation to appear before you today to discuss Bill .
The North American Equipment Dealers Association Canada has represented farm equipment dealers in the country since 1927. In addition to the over 850 farm equipment dealers across Canada that we represent, we also have many construction, material handling, forestry and outdoor power equipment dealers as members. We're also here today on behalf of our sister organization in Quebec, AMMAQ, which has represented dealers in that province since 1949.
Our farm equipment dealers directly employ over 20,000 people across the country. For the most part, our members are located in rural areas and, in a lot of cases, our equipment dealers are the largest employers in these rural communities.
We want to be very clear that farm equipment dealers in Canada support the customers' right to repair their own equipment, and no one has taken away a farmer's right to repair their own equipment. This is a relationship-based business, and our dealers' success is dependent on our customers' success. This is also a very highly competitive business; if the dealer doesn't take care of the customer, they will take their business elsewhere.
To show how we support a customer's repair, I'd like to share the industry commitment that OEMs and dealers have made to the customer. OEMs offer our farmer customers access to error or fault codes, plus the same repair manuals, diagnostic equipment, special tools, training and parts that are available to dealers. Should a farmer or a third party repair shop wish to purchase them, they are available from all the major manufacturers who have signed on to this industry commitment and, with this industry commitment, 98% of the repairs can be performed by farmers or third party repair shops. The remaining 2% of repairs involve access to safety or emissions criteria or may need a software reset.
Another part of our industry commitment is our “repair done right” initiative, through which we train dealership employees on what is available in the marketplace. This is to ensure that our staff and our customers know what's available to support their repair.
Dealerships invest millions in parts inventory and technician training to support customer repair. Additionally, our association has spent over $3.5 million in the last few years on capital projects for technician training at some of Canada's finest post-secondary institutions, and we have awarded over 1,200 scholarships to dealership technicians to upgrade their training. We do this because it's not only good business; it's also critical that when a machine is down, our dealership staff know what the problem is and can fix it right the first time.
An independent survey showed that 56% of the parts we sell are installed by someone other than the dealership, so we clearly do not have a monopoly on repair. That same survey shows that independent repair shops, in many cases, are the top parts customers of our dealers. What we don't support, though, is modification, and Bill would open the door to modification that has negative consequences to the environment and safety concerns.
Our dealers report many instances of customers altering the emission systems on their off-road equipment in an effort for better fuel economy and performance. However, this violates the Canadian Environmental Protection Act, and there's a lack of enforcement in this area. If Bill passes in its current form, this will open the door to widespread altering of emission systems, as there will be open access to the software.
Additionally, access to the software will create many safety hazards. As an example, a tractor's brakes are designed for the maximum speed of 40 kilometres per hour; however, with access to the software, that speed can be increased to as high as 70 kilometres per hour. That speed makes the tractor unsafe and creates a hazard to the public. Allowing access to farm equipment software also creates a cybersecurity concern.
Most modern farm equipment has remote access and diagnostic capabilities. Already we have hackers who are boasting about their attempts to remotely shut down tractors. Opening up access to the software will put Canada's food supply chain at risk.
Earlier this year, John Deere was able to remotely disable tractors that were stolen in the Ukraine by Russian troops. If proprietary code is allowed to be accessed, this could put control of the units in the hands of others with possible disastrous consequences and national security risks.
For these reasons, we oppose Bill in its current form. It doesn't take into consideration the industry commitment that supports customer repair and has unintended safety, environmental and cybersecurity consequences for the Canadian agricultural industry.
We welcome MP Miao's comments that he was willing to entertain amendments to the bill with respect to our industry, and we have submitted draft language that would exempt our construction in agricultural industries.
Our industry has stepped up to support a customer's right to repair their own equipment. I hope you agree that an industry solution is preferable to a legislated solution.
Thank you, and we look forward to your questions.
Thank you for your question.
There are two.
The first one is the installation of a DEF delete kit on, typically, off-road diesel engines. That gets around the emissions standards that have been set in the Canadian Environmental Protection Act. That is illegal. However, we have reports from some of our dealers that in their trade area, as much as 50% of the farm equipment has a DEF delete kit installed on it. The problem is there is no enforcement.
The second issue is chipping and tuning. That is the installation of a chip to increase the horsepower of a tractor or combine. It's not illegal, and a customer can do whatever they want with their farm equipment after they purchase it. However, it voids the warranty with the manufacturers. The manufacturers make it very clear that any alteration from the OEM standard is a violation of the warranty.
There is a risk that comes with both of those things. On the one hand, it's illegal or it voids your warranty, and then there's a downstream effect. Ninety-five per cent of the equipment that our dealers sell involves a trade. If a dealer takes in a piece of equipment that has been altered or chipped and then sells it to another customer, who's liable if a transmission or an engine blows up because it's been chipped?
Those are the two primary issues. They're the installation of DEF delete kits and chipping and tuning.
I agree with Mr. Kingston's comments.
I would add, though, that this process.... When we're looking at the classes of work represented here by auto manufacturers and farm equipment, we're going to hear—and you'll hear about many other products—that this is an all-encompassing piece of legislation. It doesn't distinguish between an airplane, farm equipment or a cellphone, and those have very different characteristics.
I will say that in other markets, generally speaking, there's a deliberative process that makes a distinction among classes of work so that individuals can petition for exemptions from copyright protections for the purpose of repair and maintenance. It's not as blunt an instrument as this legislation would be. It's more a scalpel to dissect among classes of work in a more deliberative way, with safeguards in place for some of the concerns that have been raised here.
Thanks to all the witnesses for your time and for sharing your experience today.
It's clear that we have two perspectives from the panellists today. Our job is to understand those two perspectives and try to navigate down the middle there and try to make sure that everybody's position is covered.
I want to start by saying that the author of the legislation and the previous author of the previous legislation are both really clear that this is legislation that is founded on the right to repair, not the right to modify and not the right to harvest data. It's really about repair. It's about really respecting, in a technological context, the evolution of your industries, the parties to CASIS, in a way that I think they've been left behind by CASIS right now.
On the concern about modification, obviously we don't want want to.... You painted some dire pictures there, Mr. Schmeiser, but where is that coming from? I have to say that it seems a little overstated, given what's actually in the bill. This is really about the right to repair. What is causing your concern that there might be these modifications from these honourable parties to CASIS?
Thank you for your question.
First of all, it's a voluntary agreement. It needs to be enforced.
Again, I think we stated clearly that a lot of the technology has evolved. We're good with that. That's great. However, anything that's transmitted right now on servers is not accessible through the OBD-II port. Sixty per cent of cars have this new technology. We believe that before 2030, 95% of those cars are not going to be....
It would need to be mandatory. It would need to be rewritten and tightened up a little, in my humble opinion.
I'd like to thank all the witnesses for being here.
I'm going to turn to Mr. Willshire and Mr. Threadgill from LKQ Corporation.
In the United States, the Federal Trade Commission produced a report for which it sought LKQ's advice. One of the concerns raised is VIN burning, a manufacturer's practice where a part can only work for one car because the vehicle's on‑board software would prevent the part from being used for another vehicle. This practice is reportedly used by General Motors, among others, as well as a number of European luxury brands.
Is there a similar repair problem here in Canada?
It's a very good question. VIN burning is taking place here as well, with what we're seeing.
LKQ, in addition to distributing new parts, aftermarket parts, OEM parts, is also the largest recycler of cars in the world. We recycle over 900,000 cars in North America alone.
Often what we will see is.... Take a side-view mirror, for instance. It may be perfectly good, in great standing, and it's a very good option to replace a side-view mirror, but it has a VIN number that might be burned when you put it on a new car. The mirror no longer is just a mirror, right? It has a motor. It may have a heater. It has sensors. It needs to be able to be properly put on and calibrated. Unfortunately, even though it is a part from the original manufacturer, in many cases it's not allowed to work properly.
Over the last two years, no one has escaped the supply chain disruption caused by the COVID‑19 pandemic.
For our part, we've invested several millions of dollars to ensure that we have a good inventory of parts at competitive prices, always with safety as a priority.
As you said, you're from a rural area. Most Canadians don't live in cities like Toronto or Montreal either, and they don't always have access to repair services for certain vehicles. It's critical to think not only about the 491,000 employees of small- and medium-sized rural auto repair businesses, but also about all the Canadian consumers who will have to travel to the city for routine maintenance. You spoke earlier about VIN burning. In Canada, when tires are rotated, sometimes the tire pressure monitoring system needs to be recalibrated, for example after the left front tire is installed on the right rear wheel. This is starting to be more common than you might think. It's inconvenient for the consumer.
What I'm hearing is that we have customer choice in giving options.
When we're looking at amendments on this on warranties, there are new cars, old cars, new equipment and old equipment. The right to repair seems to be good when something's out of warranty. When a vehicle or piece of equipment is a little older, then we need to get that repaired. However, a new vehicle seems to be where the warranty could be voided and where there are environmental implications.
Tell me a little bit more about what you see from this bill, particularly with regard to new equipment, older equipment and the ability for people to get something repaired whether it's new or old.
Thank you to my colleague.
I thank the witnesses for being here.
My question is for you, Mr. Willshire.
The auto repair industry is present across Canada and is largely made up of small businesses. Take, for example, all the neighbourhood garages. Would Bill spell the end to that reality? There's also talk of the labour shortage just about everywhere and the need for local and regional repairers. This applies to the agricultural sector as well as to the automotive sector, for example, and it is beneficial both in terms of the environment and price, among other things.
Will we see the end of that?
My next question is for Mr. Schmeiser.
I also represent an agricultural area. Many farmers have testified that they've had to wait hours, even days, for a technician to arrive from a dealership to diagnose a problem. These delays can be even longer if a farmer needs to transport equipment elsewhere or lives far from a certified dealership. These delays can cost our farmers thousands of dollars, especially at harvest time.
If farmers try to repair their equipment, they could face various consequences. So they need to wait. Even if they do all the right things and wait for an official dealership to do the diagnosis and repairs, they lose part of their livelihood. What recourse is there for these farmers?
Thank you, Mr. Chair. That's very generous of you.
Mr. Schmeiser, you said earlier that parts represent about 70% of your association's business. Obviously, you're not necessarily the one installing them. In the village where I live, there are two large farmers who have garages as long as an arena. They have their own mechanics and buy parts to repair their equipment themselves.
How important is access to support services, both for you and for farmers? They want to be as self-sufficient as possible, so they can make repairs as quickly as possible. For your part, repairs are also among the services you offer. Aren't you at odds, in a way? How do you see that situation?
Good afternoon, everyone.
I will ask members in the room to take their seats. We're about to start the second hour of the meeting of the INDU committee.
With us for the second panel from the Canadian Automobile Association are Jason Kerr, senior director, government relations, and Ian Jack, vice-president of public affairs.
We also have two representatives from Medtech Canada, who are appearing by videoconference, Raj Malik, vice-president of Federal Affairs and National Strategic Partnerships, and Mia Spiegelman, vice-president of Regulatory Affairs.
Thank you all for joining us.
Without further ado, I'll give the floor to Mr. Kerr from the Canadian Automobile Association to get the discussion started.
Actually, Mr. Chair, it will be me, Ian Jack, who will be speaking first.
Mr. Chair, honourable members, thank you for the invitation to appear before you today to speak about this topic.
As noted, my name is Ian Jack, and I am VP of public affairs. With me is Jason Kerr, our managing director of government relations.
Most of you, of course, will be familiar with our brand, founded in 1913. The Canadian Automobile Association is a federation of eight clubs, providing more than 6.8 million Canadians coast to coast with emergency roadside assistance as well as automotive insurance, rewards and travel services.
Importantly, CAA is also a not-for-profit that has always advocated on issues of concern to its members. Today those issues include road safety, the environment, mobility, infrastructure and consumer protection, which is why we're here today.
Why do we care about digital locks at CAA? The answer is simple: We want Canadians to have access to reasonably priced vehicle repairs. To do that, we need competition in the marketplace. That competition will come from local garages that have been a staple of all of our communities since time immemorial. We need to ensure their future health.
Why do we think vehicles are worth taking note of in a discussion about a law of general applicability? It's because vehicles and vehicle repairs are the most expensive thing most consumers will buy to which digital locks might apply. It's not their iPhone, not their toaster oven; it's their vehicle.
We view this legislation as ensuring technological neutrality, making sure the underlying principles of the existing legislation are respected as technology advances. Time was, mechanics with the proper tools could fix your vehicle. You had options as to where to buy those tools. Now, however, software, including diagnostic software, is king across most industries, including automotive. This has given various industries the opportunity to slap an electronic padlock on their products, to the detriment of consumer choice and price competition on repair.
We don't think this is right, at least not for consumers of vehicle repair. If restrictions are in place that prevent access to a vehicle's software that supports maintaining and servicing that vehicle, Canadians are left with limited options if their vehicle breaks down or is in a collision. They have little choice but to go through their dealership.
That's fine if that's what you as a consumer want, but Canadians should have the right to bring their vehicles to a garage of their choosing. As we've recently been reminded, prices do tend to go up over time. More competition will help with affordability. We'd also point out that not everyone lives a short drive from a dealership. Access to convenient and reasonably priced service should not be limited to those in big cities. In our view, it is important to ensure that those in the aftermarket who are attempting to diagnose, maintain and repair vehicles do not face obstacles such as technological protection measures that could restrict competition.
Indeed, in recent national opinion polling, CAA has found that a significant majority of Canadians agree that independent garages should have guaranteed access to manufacturers' software to diagnose and repair vehicles.
Bill is attempting to address a potential barrier to repairability, one that will help promote price discipline for consumers. For this reason, we support this bill.
We're further hopeful that passage of the bill would encourage automakers and the aftermarket to come together to outline the gaps in availability of repair data and its accessibility and to address them for today and for the vehicles of the future. That would be good for Canadian vehicle owners by ensuring future convenience, choice and price competition.
Thank you again for inviting us to appear before you today.
We look forward to your questions.
Thank you, Mr. Chair.
Thank you, Mr. Chair and members of the INDU committee.
On behalf of Medtech Canada, we're grateful to have the opportunity to participate in the committee’s review of Bill . My name is Raj Malik. I am the vice-president of federal affairs for Medtech Canada. Joining me today is Mia Spiegelman, Medtech Canada’s vice-president of regulatory affairs.
Medtech Canada is the national association representing Canada's innovative medical technology industry. We represent approximately 120 member companies that range from small emerging med-tech companies to large multinationals serving the Canadian market, collectively employing over 35,000 Canadians. Medical devices range from the smallest technologies, such as pacemakers, to the largest of diagnostic imaging technologies, such as MRIs, and everything in between.
With our time at the committee today, I would like to share some insights on the current regulations under which the med-tech industry operates and how this relates to our recommendations for Bill to ensure protections for patients and health care providers are upheld.
Our primary concern with the proposed amendments to the Copyright Act in Bill is that this would allow for the access to highly sensitive medical technology software by unregulated and untrained service providers. In addition, the amendments would allow for the creation of uncontrolled and unregulated service parts for medical devices, leading to potential patient or health care provider harm.
To be clear, our industry continues to support the availability of federally regulated third party entities to service and repair medical devices. We know this is critical to the functioning of the Canadian health care system.
Medical devices in Canada are heavily regulated by our federal government. Most medical devices undergo a rigorous licensing process that ensures the medical devices sold in Canada are safe for use, and this includes any related software and accessories. In addition, most facilities or organizations that handle medical devices throughout the supply chain are also regulated, such as hospitals, manufacturers, importers, distributors and regulated third party service providers that fall under their umbrella. Through this network, we ensure that throughout the life cycle of a medical device, which can range anywhere from seven to 15 years, the device remains as effective and safe as the day it was approved for sale into Canada.
At this time, third party service providers who provide only a service of repair are not covered under any government quality assurance regulations, which leaves very little protection for our patient and health care provider populations.
As an example of federal safeguards, the was passed in 2014. This legislation was brought forward by the Oakville MP at the time, Terence Young, following the death of his 15-year-old daughter Vanessa in 2000 when she used a prescribed therapeutic product as intended but suffered an adverse reaction.
Vanessa’s Law was enacted to further tighten the post-market surveillance and oversight of therapeutic products. As of 2019, manufacturers, importers and other companies across the supply chain are now required to further analyze and/or gather reports on risks and issues identified after the medical device is sold into the Canadian market. Unregulated third party service providers, on the other hand, are not currently captured under these requirements.
Additionally, unregulated service providers today are not required by Health Canada to adhere to any standard procedures such as proper training of personnel, evaluating parts suppliers, calibrating tools, maintaining records of device service and preventive maintenance or maintaining device design.
The current Copyright Act prevents unregulated third party servicers both from circumventing technical protection measures—TPMs—in our medical devices and from replacement of untested or unapproved repair parts. These protection measures ensure that only highly trained and authorized service providers can access this highly sensitive technology to perform the necessary repairs. These protections are in place to lower the risk of impacting device effectiveness and the risk of causing serious medical harm to patients.
When it comes to medical devices, TPMs are vital to the safety of patients and health care providers, as they are an integral part of what Health Canada reviews during the licensing process. TPMs ensure the device functions properly and alarms appropriately and that malicious actors cannot access patient data. If TPMs are bypassed and software modified improperly, serviced medical equipment can malfunction, causing risk to patients and technicians.
In conclusion, as medical devices are heavily regulated products requiring licences and adherence to robust safety standards, including aftermarket surveillance and reporting requirements, allowing access to unregulated third party servicers undermines existing safety measures that protect patients and our health care providers today. On behalf of Canada’s medical technology industry, we strongly recommend that medical devices and technologies regulated for sale by Health Canada be provided a specific exemption in any proposed amendments to the Copyright Act.
Thank you. We will be pleased to take any questions.
When Vanessa's Law was enacted, it had different sections. One of them talks about the safety of the medical device throughout its life cycle. As Mr. Malik mentioned, it could be seven to 15 years.
In the medical device industry, they implemented it such that now manufacturers, importers, distributors and regulated third party service providers are required to provide annual summary reports around adverse events. If the adverse events cause unintended increased risk, they have to report it to Health Canada. Other such reports are now required in medical device regulations.
In regard to the act and how it's linked, third party service providers that are not regulated do not have this requirement. Therefore, there is a gap in this area, and this has been brought up to Health Canada as well.
I'd now like to turn to the representatives from CAA.
You have automobile clubs across Canada, including in Quebec. You have a total of nearly seven million members, so your association is very well known. Today, you are representing those seven million motorists, and you support this bill.
Has your association presented, or does it intend to present, any amendments to the bill or does it find it acceptable as it stands?
In other words, would you like to see the bill improved or enhanced?
Have we presented any amendments? No.
Are we happy with the law as written? Yes.
Do we acknowledge that there could be some legitimate exemptions—like maybe from our colleagues here—that should be considered? Sure. I'm not an expert in medical technology, so I wouldn't try to speak for them.
I would say two things about any exemption process that the committee might consider through amendment. The first is that every industry will line up and claim that it is worthy of an exemption. Some will actually be worthy; some may be less worthy.
I think this committee probably hears from the brand name and generic pharmaceutical industries from time to time. You will know that they just spend all their time in court arguing over how long various periods should be. I would hope the committee would want to avoid that in any amendments it might consider on this bill. Think carefully about how to narrow the possibility of getting an exemption.
If I may, sir, there was a prior testimony that perhaps those who want to circumvent a digital lock should have to make their case. I would suggest the onus should be the other way around. If you are about to pass a law of general applicability that allows for the circumvention of digital locks for legitimate purposes, it should be the industry that says that we can't touch its software that should have to make its case.
I understand what you're saying.
My fear, based on what witnesses have told us, is that it's the beginning of the end for our neighbourhood garages in our villages and municipalities, both in the agricultural world and the automotive world. This really scares me. It's going as far as having auto parts engraved so they can be used only once, so they cannot be replaced by any other part, not even a part from the very company that makes these parts. This means that manufacturers are really pushing the envelope to maintain control of the whole thing, if I can put it that way.
I fear that one day, if we don't change anything, we won't have access to all the local garages in each municipality. Is my fear justified?
We share that concern, absolutely. That's why we support this legislation. We think it would be, in terms of our industry, a small step forward in making sure that we don't end up in that huis clos
of having to go to a dealer that is maybe 200 or 400 kilometres away, depending on the vehicle you've purchased.
As well, I would say that CASIS—and we hear about CASIS—to me is a perfect example of another piège that I would encourage the committee to think about in any amendments that it considers.
What a wonderful story that the automotive industry and the aftermarket voluntarily got together and made an agreement to share information 15 years ago. Well, since then—and it's unfortunate that Mr. Masse is not here today, because he's been on this committee forever and could tell you—year after year, the same story is heard, which is that one side says CASIS is wonderful and working perfectly and the other side says it's irreparably broken.
What is the truth of the matter? We're a third party in this; we don't have line of sight either. However, that voluntary agreement has no review mechanism, no audit mechanism, and there's no third party that looks at it that anybody can go to review it. That's why we've ended up in that situation today.
We have heard talk of—and we could accept—voluntary agreements to potentially share information among industries in order to not be subject to Bill . We think that's where some would like to go with this. We would urge some caution there. If that's where we end up, we think we need to make sure, whether it's ISED or some other body, that there is a regular review.
If a party to a voluntary agreement has an issue with it, what are they supposed to do about it? Again, that's why we don't like what we would consider reverse onus from a previous witness. There's an imbalance here of economic power between an OEM and most in the aftermarket.
Our friends at LKQ may have a bit of money, but they don't have as much money as the multinational auto companies, and anybody else in that industry is going to be even smaller. To us, asking somebody like that to have hundreds of thousands of dollars' worth of lawyers and spend years in court to argue about whether they should have access would be a mistake.
Absolutely. It was not just members, I might add. We have 6.8 million members, but when we do polling, we poll all Canadians. We ask them whether they are members so we know what the difference is, if there is one, but there isn't on this issue. Over two-thirds of Canadians support the right of the independent repair industry, through garages, to have access to that software.
Again, you'll hear differing stories about how easy that access is and how complete that access is today. In our view, the bill before you is ensuring that we don't have another impediment, and it's about ensuring that in the future, digital locks don't become an impediment.
To the point made by Monsieur Généreux, the industry is getting tighter and tighter and tougher and tougher and more technologically driven. The importance to the OEMs of the repair model, and therefore that software, is only going to grow with time.
We already see that when new manufacturers come along, like Tesla, they don't use dealerships. They're company owned. That's been a long-term trend in the industry. I think it would be fair to say that if the OEMs were creating the industry from scratch today, they wouldn't set up independent dealer networks that they end up getting, you know.....
One of the things they love about wireless transmission of data is that it allows them, for the first time ever, to establish a direct binary relationship with the owner of a vehicle. If you think about it, I would suggest that if it's a new vehicle, most of us have a relationship with a dealership, and if not, then with a garage, but not with the OEM itself.
That's partly what this is about, this brave new world for the manufacturers. We think their pressure to hold that data will only increase. We want to make sure that it's more widely available, as we said, to the benefit of consumers, in particular on price when it comes to repair.
In Australia, there has been an agreement. The agreement is not really working very well and has been delayed for many, many years. There are no manufacturers that make vehicles that are based in Australia, and that has been quite an impediment, because they don't pay quite a lot of attention to the rules. Things have been quite delayed there.
The EU is still working on their law. They're still working through things on right to repair. They do not have a right-to-repair bill per se at this moment. I can't say that there's anything that they've done on digital locks that I can think of, but I can check on that and get back to you, Ms. Lapointe.
Also, in the United States, as my colleague Mr. Jack mentioned, there is a bill that's been passed in Massachusetts to allow for right to repair. There is a movement to try to pass a federal or a national right-to-repair piece of legislation so that there's not a patchwork of legislation across the states. However, it is being held up at great length by the manufacturers, and in fact the manufacturers spent close to $25 million on an advertising campaign to push back on right to repair in advance of the referendum that happened a couple of years ago now.
I think what we can say is that the right-to-repair bill that occurred here 15 years ago in Canada was voluntary, but it was the first of its kind in the world, and it was great to see that happen. It was great to see that everyone came together, but there wasn't an oversight mechanism. There wasn't anything. No one was in control. There wasn't someone you could come back to if it wasn't working to ask who was going to do something about it.
Today one side of the sector says it's not working, and then the automobile manufacturers say everything's working perfectly. It's not necessarily our place to sit here and tell you it is or isn't working, but clearly there is a gap and clearly there's a mechanism that should have been put in place but wasn't.
I'll turn to Jason in a moment, but I'd start by saying that these repairs are legal today. There are very limited circumstances under which the warranty would be void.
The piece of legislation before us today is, in our view, to ensure that digital locks are not used as a new way to start blocking the access that is legal and, as we heard our friends here in the industry say, that has been available for 15 years.
I'm not sure.... No, I don't think we do share that concern.
Jason, is there anything to add on that?
Computer programs embedded in products are typically licensed to consumers. To retain the right to use the program, they usually must comply with the licence, which may require that they do not circumvent TPMs for any reason. Thus, a person could breach the licence, losing the right to use the program, even if, in this case, the Copyright Act otherwise allows the person to circumvent the technological protection measure.
Given that provinces have legislative powers over contract law, should the federal government engage with them on the matter of restrictive licences—in the context of Bill , obviously?
That's a very good question. We care a lot about both of those issues. It's a very good question; thank you for it.
I would say a few things. First of all, we've also heard testimony that this is happening anyway, regardless of this legislation. Right now you have people going on the dark web and to various corners of the internet to download pirated pieces of software to do some of this themselves. We think that this legislation would surface that and bring it, hopefully, into the legal market. That's one thing we would say about it.
We think there are, as we've also heard, environmental laws. They should absolutely be enforced. However, these are amendments to the Copyright Act, not to environmental..., and I don't think we want environment.... As Mr. Vis commented, it's already broad enough. I don't think we need to be putting environmental concerns into this bill at the same time. That should be dealt with under environmental legislation.
We are not particularly concerned about road safety aspects of this bill because, again, we're talking about legitimate software that is already being used by legitimate players in the industry to repair vehicles, and just making sure through these amendments, this Bill , that we don't put a new block in place—a new padlock, if you will, on access to that software.
We'll leave that to your legislative counsel. I don't have legal advice on where the best place for that is, as long as it's there. Legislation, of course, would be better in that respect, but then there would have to be regulation made to follow that.
I'll make one other broader point, if I may. My colleagues inside the department won't like this very much, but I started writing about right to repair as a journalist in 1999. I've been around this issue for a long time, and one of the things that happened many years ago is that Industry Canada was slammed together out of a bunch of different departments. It is responsible for attracting and keeping automotive investment in this country. It's also responsible for the Copyright Act, as you would know. It's also responsible for consumer affairs.
My experience over the years has been that one of those things is considered more important than the others to the department. I understand that. Again, Mr. Masse isn't here to pipe up for the auto workers of Windsor, but I'm sure he would if he were here. I get that, but it is a fact that when there are competing interests inside the department, it is not always the consumer interest that triumphs at the end of the day. That may be understandable, but I think if there's a legislative mandate, it makes it harder for the department to not do anything. Indeed, my understanding is that there is a mechanism for an exemption under the Copyright Act regulations, but an exemption hasn't been granted once in 10 years.