Proceedings of the Standing Senate Committee on
Transport and Communications
Issue 3 - Evidence, June 1, 2010
OTTAWA, Tuesday, June 1, 2010
The Standing Senate Committee on Transport and Communications met this day at 9:32 a.m. to study Bill S-5, an Act to amend the Motor Vehicle Safety Act and the Canadian Environmental Protection Act, 1999.
Senator Dennis Dawson (Chair) in the chair.
[Translation]
The Chair: Honourable Senators, I would now like to call to order this meeting of the Standing Senate Committee on Transport and Communications. Thank you for being here today. This morning, we will begin our study of Bill S-5, An Act to amend the Motor Vehicle Safety Act and the Canadian Environmental Protection Act, 1999, that is before our committee.
[English]
This constitutes the beginning of our examination of this bill and will set the stage for our work over the next few meetings.
This morning, we are pleased to welcome before the committee The Honourable John Baird, Minister of Transport, Infrastructure and Communities. Accompanying the minister are his officials, Mr. Kash Ram, Director General, Road Safety and Motor Vehicle Regulation; and Kim Benjamin, Director, Road Safety Programs.
Colleagues, as we only have a half an hour with the minister, I would appreciate your cooperation in keeping your questions succinct.
Mr. Baird, I invite you to make some opening remarks, after which there will be questions from senators.
[Translation]
Hon. John Baird, P.C., M.P., Minister of Transport, Infrastructure and Communities: Thank you very much, Mr. Chair. I am very happy to be here with you today.
[English]
I can either make some opening remarks or we can move into questions.
The Chair: Please proceed with opening remarks.
Mr. Baird: I am pleased to be here today to talk about Bill S-5. This is a bill to allow Canada to meet its requirements under the North American Free Trade Agreement concerning the trade of vehicles. Both the Motor Vehicle Safety Act and the Canadian Environmental Protection Act need to be amended. In 1992, NAFTA was signed. The goal was to eliminate trade investment barriers between our three countries. This agreement came into effect on January 1, 1994, laying the foundations for strong economic growth and prosperity for all three countries.
Since that time, NAFTA has demonstrated how free trade increases wealth and competitiveness, delivering real benefits to families, workers, manufacturers and consumers. The automotive provision of NAFTA came into force January 1, 2009. This provision requires each country to accept the importation of used vehicles from the other two.
The Motor Vehicle Safety Act regulates the safety of vehicles allowed into the Canadian fleet. It specifically regulates the manufacturing and importation of motor vehicles and motor vehicle equipment, namely tires and car seats, to reduce the risk of death and injury to property damage and to the environment. Currently, imported vehicles older than 15 years may be imported from any country and are not required to meet safety or emission standards. However, for vehicles less than 15 years old, the Motor Vehicle Safety Act currently only allows for the importation of used vehicles from the United States.
The proposed changes will require that used vehicles less than 15 years old be permitted to be imported to Canada from Mexico. To meet this goal, there are three proposed changes with respect to our act. Bill S-5 is proposing an amendment to the definition of "vehicle" to harmonize the definitions between the Motor Vehicle Safety Act and the Canadian Environmental Protection Act. Subsection 7(2) of the Motor Vehicle Safety Act will be amended to include the importation of used vehicles from Mexico, in addition to the current provision which allows the importation of U.S. used vehicles. There is also a condition stipulated in the proposed revision to the Motor Vehicle Safety Act to clarify and establish a time period by which the vehicle must be modified, inspected and certified before it is licensed to be used in Canada.
It is important to note that neither the NAFTA requirements nor the proposed amendments in our bill affect the importation of new vehicles or vehicles that are 15 or more years of age. Furthermore, a regulator of imported vehicles must inspect all vehicles. Only vehicles that meet Canadian vehicle standards will be accepted into our fleet.
Since the coming into force date of NAFTA, the January 1, 2009, date has passed, so there is an urgent need to amend both the Motor Vehicle Safety Act and the CEPA so that we become fully compliant with NAFTA. The benefits of the proposed amendment to the two acts are: Canada will be able to meet its NAFTA obligations and be compliant with NAFTA, and it will permit us to be subject to trade challenges or penalties; by opening the borders with respect to trade with Mexico, the Canada public will have a wider selection of vehicles to choose from.
I do not believe there is a line waiting list of Canadians lining up to buy these vehicles. However, we want to be in compliance with NAFTA. I and my colleagues from the department are at your disposal to answer questions.
Senator Housakos: Could you outline the differences, in terms of environmental requirements, between Mexico, Canada and the United States now on used cars, so that when cars are being traded among the three countries, we know of them? Are there major differences right now in the various environmental acts?
Mr. Baird: There are two areas. One is vehicle safety standards and the other is environmental. I will ask my colleague to respond.
Kash Ram, Director General, Road Safety and Motor Vehicle Regulation, Transport Canada: Canada that requires that vehicles sold in Canada or imported into Canada meet vehicle safety standards. For example, passenger cars have to meet 40 standards and this applies to vehicles sold in Canada or imported into Canada.
There are separate environmental requirements, which I would refer to my colleagues from Environment Canada. That is important from the perspective of safeguarding Canadians, both in terms of physical safety as well as the health and environmental impacts.
Mr. Baird: We obviously want environmental and safety standards to be compliant, which may require modification, for example, something like day running lights. In Ontario, whenever you have to get a new registration, you have to have the vehicle safety checked and there is an existing regime there. Both on the environmental side and safety side, they would have to be compliant.
Some of the standards are lower in the other countries. We have a high set of standards. Increasingly, though, they are coming into sync. On the environment side, we are harmonizing our standards with the United States so that vehicles are particular to those manufactured here. I have a personal car and a work car. My personal car was made in Lansing, Michigan, and work car was made in Oshawa. The cars go back and forth, sometimes a dozen times, so there are benefits to harmonization.
Senator Cochrane: Where will these standards be "fixed"; will it be in Mexico, when they come into Canada or before they come into Canada?
Mr. Baird: It is their choice. I suspect most modifications would be done in Canada, though.
Mr. Ram: It would be their choice. Once they are modified, they have to be inspected in Canada.
Senator Cochrane: Will they be modified in Mexico or Canada?
Mr. Baird: It is their choice. I suspect most will be done in Canada because most people would be more familiar with Canadian standards.
Senator Cochrane: Therefore, you can buy a car and bring it over and modify it here. As long as it meets the standards, it will be okay.
Mr. Baird: If it required modifications. Some may not.
Mr. Ram: It is important that it be capable of being modified before it is let through the border.
Mr. Baird: Let me use an example. A Canadian businesswoman has her own car and works in Mexico. She comes back to Canada and wants to bring it with her. That is the sort of anecdotal story I hear from Canadians around the world. It is not so much that they choose to go to Mexico and buy a vehicle; they just want the flexibility to bring the car back, particularly if it is a specialty car or a sports car or something that is particularly important model to them.
For example, I talked to a Canadian who was working in the United Arab Emirates and he has a Mercedes. The market for a Mercedes in the UAE has collapsed, so he could not sell it if he wanted to, so he wants to bring it back here. In that case, he has major problems.
Senator Cochrane: Would that apply here?
Mr. Baird: In that case, it would not need to be modified; it would meet our standards for Mercedes.
Senator Plett: The arrangement would be very similar to what we have with the United States, would it not? I bought a vehicle this last weekend in Oklahoma that was built Canada. Some modifications had to be done, and I was given the choice of having it done there or here. Mexico would not be any different, would it?
Mr. Baird: No.
Senator Mercer: If Senator Plett is buying cars in Oklahoma, the Manitoba Motor Dealers Association will be very disappointed.
Thank you for your presentation, minister. As you know, I do not have a major objection to the bill. However, I am a little confused by the fact that you talked about an urgent need to pass this bill. Did the President of Mexico raise this matter with the Prime Minister in his meetings last week?
Mr. Baird: It was not at the top of the agenda.
Senator Mercer: The urgency of it is not as urgent as other trade irritants might be between Mexico and Canada.
Mr. Baird: We would like it to pass expeditiously. At the same time, we want the Senate to do its proper due diligence.
Senator Mercer: We will do that. In my review of the documents provided by officials, I have a difficult time understanding why we are rushing to pass this bill at this time.
Mr. Baird: We are showing a degree of good faith by not throwing it into an omnibus bill, which allows you the ability to give it due consideration. When I heard that you were the Liberal senator working on it, I said: Let us do that for Senator Mercer.
Senator Mercer: I found only one person who is anxious to import a vehicle from Mexico.
Mr. Baird: Is it Senator Dawson?
Senator Mercer: There will not be a great deal of import volume but Transport Canada has received inquiries specifically from the Imported Vehicle Owners Association of Canada requesting that we move quickly on the bill. Do you have any idea why they want us to move quickly? Is volume backed up?
Mr. Baird: I do not think any of us expect a significant volume. You might find that Canadians who reside in Mexico for part of the year want to bring a car back to Canada. I suspect the movement will be mostly one way because of the road salt used in Canada and the resulting problems it causes to car bodies.
Senator Mercer: We are most concerned with the environmental issues. As I recall, environmental protection standards in Mexico seem to be pretty loosey goosey.
Mr. Baird: I would say that they are not as robust.
Senator Mercer: That is why you are the minister. Based on information received from Mexico, there are only two vehicular safety standards: one for crane recovery vehicles — tow trucks — and one for mini buses with a capacity of 16 to 30 passengers. Mexican officials indicated that they rely on conformation to the safety standards in the country of origin. I suspect that the majority of vehicles in Mexico would be built outside Mexico, although it has an auto sector.
Mr. Baird: It would also speak to a financial interest if the vehicle required major modifications. It would be incredibly costly and, therefore, not in one's financial interest to import a vehicle. I suspect that we will see this measure used mostly with luxury vehicles, sports cars or antique cars that people want to import for personal use.
Senator Mercer: There is an industry of used vehicles, in particular older and antique vehicles, from inland southern United States where there is no salt used on the roads. Are the regulations identical or similar? If I were to go Charlotte, North Carolina tomorrow to buy a '57 Chevy for import to Canada, would the regulations imposed on me be the same as those imposed if I were to buy the vehicle in Baja, Mexico?
Mr. Baird: This bill deals with cars under the age of 15 years. Cars older than 15 years are already covered.
Senator Mercer: Let us make the car 10 years old in my scenario.
Mr. Baird: When you import a car into Canada from anywhere it must meet Canadian environmental and safety standards.
Senator Johnson: Does this bill represent a choice in terms of meeting our free trade obligations?
Mr. Baird: This was negotiated as part of NAFTA and is one of the last things to come into force. I would say it is a modest part of NAFTA.
Senator Johnson: Can you tell me how many used vehicles are imported into Canada each year from the United States, Mexico and other countries?
Mr. Baird: No cars under 15 years old are imported from Mexico because that is not allowed. Mr. Ram, do you have the numbers?
Mr. Ram: The vast majority of imported cars come from the U.S. and they are under 15 years old.
Mr. Baird: Senator Mercer's scenario is apt for someone wanting to buy a Cadillac or a sports car. The parents of a good friend of mine lived in Mexico, where they had two cars. The father passed away and the mother is returning to Canada. She might want to bring the cars back to Canada. There are Canadian retirement communities in Mexico.
Senator Johnson: That makes sense.
Senator Merchant: Canadian provinces licence vehicles. Is there any difference in standards between the provinces and territories or are they uniform?
Mr. Baird: They are not uniform at all. All provinces have different standards and regulations. In Ontario, a vehicle has to submit to an emissions test every three years under the Drive Clean Program. I took my car for emission testing the other day. It is different from province to province. The federal government sets the standards for new vehicles and for the importation of vehicles while the provinces set the standards for vehicles after they leave the lot. Is that safe to say, Mr. Ram?
Mr. Ram: It is indeed. The provinces set the standards for vehicles that are sold, when there is any change in ownership. The road worthiness of the vehicle falls under provincial and territorial jurisdiction. They have widely varying standards for determining things such as whether the brakes are in good condition, the tires have enough tread left on them and so on.
Regarding vehicles imported into Canada, there are two stages: First, is the federal requirement to ensure the vehicle meets its new-car standards and the second is the provincial and territorial standards of road worthiness and mechanical fitness.
Mr. Baird: For example, in Ontario you could not transfer ownership of a vehicle that has a cracked windshield.
Senator Merchant: Would it be difficult to get the provinces on board?
Mr. Baird: It would not be a matter of getting them on board. The importer of a car less than 15 years old is required to follow the rules. It costs $25 to transfer the ownership and requires a certified safety check.
Senator Mercer: Minister, the subject has come up about the safety standards imposed by the provinces. There are varying standards from province to province. I own a car in Nova Scotia and my wife has a car registered in Ontario, so I am familiar with the various regulations. Nova Scotia has had vehicle safety regulations in place for more than 40 years whereby vehicles need to be inspected yearly for safety purposes. Ontario has its emission control tests that need to be done every three years. While we have you here today, have you or your department given any consideration to trying to harmonize provincial and territorial regulations across the country, given the mobility of our population?
Mr. Baird: There has been considerable discussion at meetings of Canadian Council of Ministers of Transport but the provinces are often loath to give up jurisdiction. There are times when it would be in the national interest for simplicity. At the same time, there are different realities in different parts of the country. In New Brunswick, highways seem to be sacrosanct and are a huge priority for successive governments in New Brunswick. In the GTA of Ontario, public transit is a huge priority. We have tried to do some work on this, but it is challenging.
Senator Mercer: I would not want you to impose anything. Rather, I would suggest working together toward common standards to allow greater ease of movement for Canadians from one province to another.
Mr. Baird: I am particularly concerned about emissions standards, which is an environmental issue that falls under my department, but Minister Prentice has taken the political lead on it. It would be crazy to have 13 different emission standards in Canada. For auto manufacturers, it is hard enough to meet the Canadian standards versus those in the U.S. For example, a car going to P.E.I. would have to meet a standard different from one going to Saskatchewan. That is why we are keen to have a strong national emission standard that could be matched or harmonized with the United States. When I say "harmonized," I hope it would be harmonized up rather than down.
Senator Mercer: That is up for debate regarding harmonization similar to regulations in the United States. California has more stringent emission controls than any one of the other 49 States. Everyone tries to meet the California standard.
Mr. Baird: We want to go to the dominant North American standard. Let us raise the bar for the environment. The more progressive a state is with their emission standards, there is a direct correlation in the number of jobs in the auto sector.
Senator Mercer: That is true. There are not many auto assembly jobs in California. You would have difficulty getting some of their emission standards in place in Michigan.
Mr. Baird: Some of the most progressive democratic senators from Michigan have different views from those of their counterparts in California.
The Chair: Is reciprocal legislation being passed in Mexico at the same time?
Mr. Ram: They were compliant as of the January 1, 2009 date.
The Chair: They were; we were not?
Mr. Baird: That is correct.
The Chair: Minister, thank you very much. Before asking the next three witnesses to come to the table, Senator Zimmer has a question. I did not notice him before.
Senator Zimmer: Sorry for being late, Mr. Chair. It is ironic that we are dealing with cars from Mexico. Mine comes from Germany and it would not start this morning.
Minister, it is nice to see you. Clause 3 would allow the importation of used vehicles from Mexico that are not already compliant with Canadian standards granted that the person importing makes a statement of declaration stating that the prescribed time the vehicle be made to comply with the requirements.
Can you tell me how long this prescribed time will be? Will there be one prescribed time, regardless of the number of standards that need to be met by the imported vehicle?
Mr. Baird: It will be the same as what we do for the United States.
Was there a timeline on it, Mr. Ram?
Mr. Ram: I believe it is 24 days but I cannot be certain. It would be consistent with what we have for vehicles from the U.S.
The Chair: If everyone agrees, I will free the minister and ask the witnesses from Environment Canada and Transport Canada to come to the table. If senators have further questions, we will address them to the officials.
Minister, we will be getting back to you soon. The Senate has given us a study on aviation and airports, and I expect we will want you as a witness in that process.
Mr. Baird: I would be pleased to return at any time to discuss any issues that honourable senators deem important.
The Chair: Thank you.
I would ask Mr. Ram to stay at the table and ask Kim Benjamin, Director, Road Safety Programs for Transport Canada, and from Environment Canada; John Moffet, Director General, Legislative and Regulatory Affairs; and Josée Lavergne, Manager, Air Pollutant Regulatory Development Section, Transportation Division, to take their places at the table.
Are there any questions for the representatives of Transport Canada and Environment Canada?
Senator Zimmer: I have one question.
Regarding subsection 155(2) of CEPA, 1999, amended by clause 3, are all Canadian standards waived in the decision to allow used vehicles from Mexico into Canada, or are there certain basic standards that must be met prior to the importation and then further standards that can be met post importation?
John Moffet, Director General, Legislative and Regulatory Affairs, Environment Canada: I am not sure that I got the gist of the question. You are asking whether some standards are applicable before you can bring a car across the border?
Senator Zimmer: Yes, and some after.
Mr. Moffet: The answer to that is the same answer that Minister Baird provided regarding the safety issue; namely, the obligation is on the importer to provide a declaration that the car will be brought up to standard. Within a prescribed period of time, the car is brought up to standard and then is inspected. If the importers choose to do that before or after crossing the border, that is up to them. However, they will not be able to have the car certified until they meet all the standards.
Senator Mercer: That certification and then inspection are not done by Environment Canada or by Transport Canada but by the provincial licensing authority, is that correct?
Mr. Moffet: We actually have not worked out all the details of precisely how, who will be doing the inspections, and who will be issuing the certification.
There is a regime in place now for safety, but we do not have such a regime in place. We will be establishing that system, but we have not worked out all the details of precisely how it will work.
Senator Mercer: The provisions of this act come into force on a day or days to be fixed by order of the Governor-in- Council. We will rush through this and pass it and then it will sit on a shelf somewhere until regulations are developed to provide for this procedure. Is that correct?
Mr. Moffet: That is correct. It will not be in effect until we have the regulatory regime, the inspection regime, and the certification regime in place. We cannot put that regime in place until the Senate and the House of Commons pass the law. Once you do, we will need a certain period of time to have the administrative position in place.
Senator Mercer: I am the official spokesperson for the opposition on this bill. I have said that I will vote for it. Has the process of this planning started? Is it well under way so that this will come into effect? Will the regulations be there to back it up?
Mr. Moffet: The short answer is yes. My colleague is busy working on this as we speak.
The Chair: If there are no other questions, on behalf of honourable senators, I wish to thank the witnesses for making themselves available for the committee.
Tomorrow, we will hear from more witnesses and continue discussions on the bill.
We will now go in camera and talk about the existing report on telecommunications and broadband.
(The committee continued in camera.)