Proceedings of the Standing Senate Committee on
Transport and Communications
Issue No. 15 - Evidence - May 2, 2017
OTTAWA, Tuesday, May 2, 2017
The Standing Senate Committee on Transport and Communications met this day at 9:31 a.m., to continue its study on the regulatory and technical issues related to the deployment of connected and automated vehicles.
Senator Dennis Dawson (Chair) in the chair.
[Translation]
The Chair: Honourable senators, this morning, the committee is continuing its study on the regulatory and technical issues related to the deployment of smart vehicles.
[English]
We have two panels of witnesses today. For our first panel, I would like to welcome Mr. Todd Litman, Executive Director of the Victoria Transport Policy Institute.
[Translation]
Thank you for being with us. Go ahead and make your presentation. Afterward, the senators will ask you questions.
[English]
Todd Litman, Executive Director, Victoria Transport Policy Institute: I came all the way from a little city called Victoria — you might have heard of it — and I arrived at three o'clock this morning after a few delays, so I'll do my best to be coherent.
I will talk about a very interesting question: How soon will cars drive themselves and when is it time that you can fire your chauffeur? For the last several years, I have done research investigating the implications of autonomous vehicles on policy questions such as what capacity road and parking facilities we need to build, how much public transit we need to fund, and the roles that roads, parking and public transit will play in the future. My research critically examines the impacts, the benefits and costs, and the travel impacts and how soon they are likely to become commercially available, affordable and common in the vehicle fleet.
Now you might have heard a lot of newspeople saying that autonomous vehicles are just around the corner, and a lot of manufacturers have talked about how their autonomous vehicles have driven thousands of kilometres or hundreds of thousands of kilometres and that major manufacturers will soon be selling such vehicles. It's good to be cautious and a little skeptical of claims that we will soon have a fleet of autonomous vehicles.
There's considerable uncertainty concerning autonomous vehicle impacts. Advocates claim that they will provide large benefits, but they will be costly. They will require additional equipment, service and maintenance costs that will add hundreds or thousands of dollars per vehicle year, and many of their benefits are unproven.
Significant technical and economic obstacles must be overcome before many households can rely on autonomous vehicles for daily travel. Operating a vehicle on public roads is very complex due to the frequency and proximity of interactions with often unpredictable objects, such as other vehicles, pedestrians, animals and potholes. If they follow previous vehicle technology deployment patterns, autonomous vehicles will additionally be costly and imperfect.
During the 2020s and probably into the 2030s, autonomous vehicles are likely to be expensive and limited in the conditions under which they can operate, such as snow and ice. Currently no one has a technology that will allow autonomous vehicles to operate under snow conditions. There are just too many technical obstacles. What country are we in? Canada. Do we get snow and ice? Yes.
It will probably be the 2040s or 2050s before middle-income families can afford to own self-driving vehicles that safely operate in all conditions, and longer before used autonomous vehicles become affordable to lower-income households.
Some motorists may prefer to drive themselves, just as some motorists prefer manual transmissions, creating new roadway management problems. One of the key challenges will be when the roadway fleet is mixed, so you have a mix of autonomous vehicles and self-driving vehicles, and that condition is likely to last for decades. It will take a long time before any jurisdiction will be able to forbid human-driven cars and shift totally to autonomous vehicles. Until that occurs, there will be significant complications.
Vehicle innovations tend to be implemented more slowly than other technological changes due to their high cost, slow fleet turnover and strict safety requirements. Automobiles typically cost 50 times more and last 10 times longer than electronic equipment such as mobile phones and computers. Consumers seldom purchase a new vehicle just to obtain a new technology. Large increases in vehicle purchase and scrappage rates would be required for most vehicles to be autonomous before 2050. So think of it this way: In order to have the fleet shift to autonomous vehicles, we would have to decide in the next few decades that a lot of perfectly functional vehicles will have to be scrapped just so that they can be replaced with autonomous vehicles.
Autonomous operation will probably reduce taxi costs by something like 20 to 40 per cent, allowing households to reduce their vehicle ownership. However, many motorists prefer owning personal vehicles for prestige and convenience sake. As a result, shared autonomous vehicles are likely to reduce vehicle ownership mostly in compact urban areas and will have little effect in exurban and rural areas.
Advocates may exaggerate net benefits by ignoring new costs and risks. For example, there is good evidence and safety researchers know that it's very common if drivers or road users feel safer, they drive faster, they take slightly more risks, and many safety strategies that are predicted to have a certain crash reduction don't achieve those targets because of what we call offsetting behaviour or rebound effects. If people knew that the other cars around them were all going to watch out and be very safe, then pedestrians, cyclists and drivers may take more risks, and so the net safety benefits, that is the reduction in some risks, may be offset by increases in others.
Another very important point is that even though autonomous operation will certainly reduce certain types of risks, that is, human errors, it will probably introduce a whole set of new risks such as technical failures and hacking. When is the last time your mobile phone or computer failed to operate as you expected? Well, autonomous vehicles will introduce those same uncertainties.
And there is a systematic risk, and that is if government agencies, policymakers and planners reduce some of our conventional services and, for example, reduce investments in public transit, then the people who can't afford a self driving car could be significantly worse off.
Transportation professionals — that is planners, engineers and policy analysts — have important roles to play in autonomous vehicle development and deployment. We can help support their development and testing and establish performance standards that they must meet to legally operate on public roads.
If such vehicles perform successfully and become common, they may affect planning decisions such as the supply, design and operation of roadways, parking facilities and public transit. To be prudent, such infrastructure changes should only occur after autonomous vehicle benefits, affordability and public acceptance are fully demonstrated. This may vary. Autonomous vehicles may affect some roadways and communities more than others.
In particular, there's a lot of discussion about autonomous vehicles reducing traffic congestion, but almost all of the models indicate that that will only occur on highways where you can have a special lane dedicated to self-driving cars. Self-driving cars are very unlikely to reduce traffic congestion on city streets, at least for the foreseeable future. It will be important to differentiate which roadways we're talking about when we talk about some of these benefits.
A critical question is the impact of autonomous vehicles on total vehicle travel, that is, how much driving people do in total and the associated external costs. By increasing travel convenience and comfort, allowing vehicle travel by non- drivers and circulating on roads to avoid paying for parking, they may significantly increase total vehicle travel. But they may also facilitate car sharing, which allows households to reduce their vehicle ownership and, therefore, their total driving.
My review suggests they will probably increase total travel and associated external costs such as traffic congestion, accidents and air pollution, unless autonomous vehicles are implemented with appropriate policies such as efficient road and parking pricing.
Another critical issue is the degree of potential benefits that can be achieved when only a portion of vehicle travel is autonomous, that is, when the fleets are mixed. Some benefits, such as improved mobility for affluent non-drivers, may occur when autonomous vehicles are uncommon and costly, but many potential benefits require that most or all vehicles on the road operate autonomously. For example, it seems unlikely that traffic densities and, therefore, traffic congestion, lane width or the parking supply significantly will be reduced or traffic signals eliminated until nearly all vehicles on affected roads self-drive.
Another critical public policy issue is the degree that this technology may harm people who don't use such vehicles, for example, if increased traffic volumes and speeds degrade walking or cycling conditions, conventional public transit service declines or human-driven vehicles are restricted. These issues will probably generate considerable debate about their merit and fairness.
Autonomous vehicle implementation is just one of many trends likely to affect future travel demands and costs and, therefore, transportation planning decisions, and it's not necessarily the most important. Its ultimate impacts depend on how it interacts with other trends, such as shifts from personal to shared vehicles. It's probably not a game changer during most of our professional lives, and it is certainly not a paradigm shift since it doesn't fundamentally change how we define and measure transportation problems. Rather, it could reinforce existing automobile-oriented transportation planning.
Thank you very much.
The Chair: Thank you, Mr. Litman.
[Translation]
Senator Boisvenu: Mr. Litman, to start, I would like to thank you for your report, which I found very realistic. I think that the people we have heard from so far have positions that vary from very optimistic to very pessimistic. Yours is very realistic.
I would like to ask a few questions, first about the transformation of the kind of vehicle, from the current vehicle, which has very little autonomy, to the automated vehicle. What would be the biggest challenge in this transition? Is it automotive technology or the transfer of infrastructure? I am thinking of roads, recharging, level crossings, and the like.
[English]
Mr. Litman: That is a very good question. My thinking is based on the assumption that the technologists will succeed in creating self-driving cars. Sometime, someday, and it may be early or late in the 2020s or even in the 2030s, you will be able to go to a dealer and buy one of these cars.
If you followed the way that the technologists think about it, they have identified five levels. Level one is the kind of technologies you can buy now, like speed control and things like that. Level two is becoming available, where the car will follow the lane and you'll be able to close your eyes. Level three is where it does some things automatically.
It is level four is where, even if you can't drive because you're blind or you're a child or whatever, your car could come up to you, you get in the car and the car will drive itself. That's level four, and that assumes that operation would occur under favourable conditions, when it's sunny out, during the daytime and on well-mapped roads.
Level five assumes that the cars can operate themselves under all conditions: that you no longer need to have a regular car and that your car will take your children to hockey practice and you don't even have to be in the car.
It's pretty clear that levels one, two and three are going to be available soon. Some of the level three technology does require that certain highways have a sophisticated level of mapping or maybe some markers or sensors in them and that there be communication between the vehicles. That is very likely to occur, and I think, from my understanding, the main role for government or policy makers is to help guide those transitions and test to make sure that they really are as safe as the industry promises.
But it's the level four where optimists are predicting that we're going be able to reduce traffic congestion, the number of parking spaces we need and public transit service. Those are policy decisions, so that's where the infrastructure planning will have to respond to the level of technology.
I think there's a small role to support and guide the technology and test its performance, but from a policy and planning perspective, the issues that I'm most interested in are questions such as: How soon can we start reducing roadway building or the parking supply and making lanes narrower? My research suggests two things: One is that there are other economic and social trends that are equally important or even more important.
For example, Uber, or what we call ride-hailing services, are now already allowing many households to reduce their vehicle ownership and rely on what we call shared vehicles. That is occurring is whether or not those vehicles are autonomous. Similarly, a lot of families, young families in particular, want to live in a walkable urban neighbourhood and reduce car ownership. There is evidence that especially young people want to live more what you could call a "multi-modal lifestyle.'' They don't want to own as many cars and want to rely more on walking, cycling and public transit.
Those trends are occurring regardless of what happens with autonomous vehicles, so my recommendation is to treat autonomous vehicles as one of many trends that are changing travel demands and future infrastructure needs.
Does that answer your question?
[Translation]
Senator Boisvenu: Yes. You have addressed a major problem, which is scrapping conventional vehicles in favour of self-driving vehicles. In this regard, we risk having a period when scrap will create a real waste management problem for our society. We already consume a lot of residual materials. Are we going to have the same situation as our mobile phones or televisions, which we have to replace every two or three years because new technology comes on the market, which creates a waste management problem? How will we manage this mass of waste that will result from the transition from conventional vehicles to automated vehicles? Do you have any solutions?
[English]
Mr. Litman: Right. That's another good question. I'm skeptical that there will be accelerated fleet turnover. I think the transition to autonomous vehicles will actually be very slow.
In my research, I look at previous vehicle technologies. A good example is your automatic transmission. Automatic transmissions became commercially available — you could start buying one — in the 1940s, but it wasn't until the 1970s that they were pretty reliable. For the first couple of decades, they were expensive and troublesome. It was only in the 1980s that they started being standard equipment; you didn't have to pay extra for an automatic transmission. Even now, some people want to drive a manual transmission. Because the average vehicle operates for 15 or 16 years, we still have lots of vehicles that are manual transmission in the vehicle fleet.
This is the kind of analysis I do. I'm skeptical that there will be a lot of people who will throw away a good car just to buy an autonomous vehicle. In fact, during the first decade or two, I think they will be fairly expensive, just like the first generation of automatic transmission vehicles were. Wealthy people who are buying a Mercedes-Benz or Cadillac will buy the Mercedes-Benz or Cadillac that have autonomous driving capability. It will add another $5,000 or $10,000. But the types of families that buy an inexpensive, basic sedan — or who buy used vehicles — probably won't start buying affordable automated vehicles at least until the 2040s — 20, 30 or 40 years from now. I'm skeptical that a lot of people will say, "I'm willing to pay several thousand dollars more for a vehicle that has these features and throw away my old car.''
My own guess is that the biggest economic and environmental problems are not the waste of scrappage — that's what we talk about, scrappage. Rather, the big risk is that this is going to increase the total amount of driving.
If you're an affluent person who is shopping for a house and you're trying to decide where you're going to shop for the house, with autonomous driving, you can now go 60 or 80 kilometres. The car companies will start advertising that the seats will become beds. So you'll wake up in the morning, your car will drive you to work and you'll get a little bit of rest. In fact, the smart car companies will have two beds that fold down, and they will start advertising commuter sex. They will talk about what fun you're going to have in your new car, and I just hope that we require that the windows be tinted for those cars.
There are very legitimate concerns not so much about the scrappage but about the increased vehicle travel and therefore the increased traffic congestion, air pollution and accidents that could occur if autonomous vehicles make driving very convenient and cheap.
The Chair: Colleagues, we have a very long list. One question each, and Mr. Litman, please limit your answers so we can get everyone in, because we have a second panel.
Mr. Litman: I understand.
[Translation]
Senator Dagenais: Thank you for your presentation, Mr. Litman. I would like to raise a few things related to responsibility when accidents occur. I was a police officer for many years, and I handled several accidents where human error was the cause. People would blame the road and say that it was the curve of death, but speed was the real culprit. We can assume that 90 per cent of accidents are caused by human error. In most cases, two people are involved, and one of them is responsible, presumably. With automated vehicles, we can assume that there will be one fewer human being, but there will always be the other human being on the road who will make driving errors.
To what extent will the human factor ensure that the increased safety associated with automated vehicles actually reduce the number of accidents? Have you consulted insurance companies on the issue of responsibility, and are they enthusiastic about this project?
[English]
Mr. Litman: I am certainly very aware of the huge cost that traffic accidents impose on society. Probably all of us have friends or family members who have been killed, disabled or who have borne the cost of an accident. It's a major cost to society. It is a huge cost burden, so anything that can provide traffic safety is good.
It's true that something like 80 or 90 per cent of accidents result from human error. But it is important to keep in mind that autonomous technology introduces lots of new risk factors, so we really don't know what the net safety gains will be. I've heard a lot of advocates of self-driving cars say 80 per cent of accidents are human error, therefore self- driving cars will reduce accidents by 80 per cent. I think it will be somewhat less. We don't know. It's an empirical question. We will only know after the systems are fully operational.
Driving on a road is far more complicated than flying an airplane. An airplane has up and down in addition to right and left, but an airplane does not have hundreds of objects that could cause a crash manoeuvring around it every minute. Driving in traffic is extremely complicated. Although our reactions are slower, humans have something called common sense that technology does not have. A machine cannot anticipate all the ways that the machine can go wrong; it takes humans. I suspect we will discover and be surprised at the ways that self-driving technologies can cause accidents. It will be up to us.
There is a lot of discussion, not only with the insurance companies but also among legislators and policymakers, as to who should bear responsibility. It is clear just from a logic perspective that if a software company is programming in such a way that it affects the risks, then the company buying the software has to be held responsible. There needs to be a lot of thinking about how to make the liability, the crash responsibility, of self-driving cars logical so that the car manufacturers have every incentive to maximize safety. I think that's what you will need to think about as policymakers. You will need to think about how to structure the liability responsibility.
Let me give you an example. If you were buying a self-driving car and there was a knob on there that said on one side is speed and the other side is safety, where would you dial that knob? You, as the buyer, will be tempted to go more for speed. You will say, "I want this vehicle to take a few more risks to get me there faster.'' But if you're society — that is, the other road users — you want those drivers to dial that knob towards safety because you're concerned about not just the injuries to the occupant of the vehicle but the injuries to others.
When companies produce cars, they're making decisions that involve these tradeoffs between safety and speed. From a policy perspective, you want them to get it right.
I hope that's helpful.
Senator Bovey: I find all this very interesting. I'm particularly interested in the transition phase between self-driving and user-driving or mixed-driving. I'm interested you think that society or individuals are going to want to own these vehicles. How much of the research has been done based on them not being privately owned but being managed by a company?
You said you felt we should be cautious in making infrastructure changes in order to accommodate autonomous vehicles until we know their benefits. My question is: What would you constitute the benefits? We've read and heard about a lot, and I appreciate they may be in the sphere of imagination.
The other question that ties into that is the role of public transit. You're assuming it's going down. I wonder how many of the studies we're looking at assume that public transit, with greater automation, will in fact increase and therefore lower the number of cars on the road.
Tying that together, who leads the policy? We've heard it from industry and from every level of government, and I'm concerned. Who is really taking charge?
Mr. Litman: Well, that is a very good question. Of course, that's what policymakers have to do. Policymakers have to develop the framework in which the manufacturers, the taxi companies and the individual motorists operate. These are very important questions.
I'm the first to admit that it's a bit hazy. We can't predict the future, which is one of the reasons that I get very skeptical when people predict that we'll all have self-driving cars within a certain time frame. We really don't know. There's a lot of uncertainty.
Right now, we are in a transition towards shared mobility. Several trends are increasing the attractiveness to a lot of households. They don't want to own as many cars. They want to save some money, and they would like to live in a walkable, transit-friendly neighbourhood with good car sharing so they can rent a car by the hour and have services such as Uber and Lyft so that a household can go from owning one or two cars to one or zero cars.
To put this in perspective, I'm a demographically average family: mom, dad, two kids. We've been car-free for the last nine years. We were able to do that because we live in a walkable neighbourhood. We financed our children's university education on what we didn't spend on cars. I can tell you that there are benefits. So the shared economy, the shared mobility, has tremendous potential benefits.
Taxis are an important component of that. To the degree that self-driving technology will allow taxis to be somewhat cheaper, that's good. That's helping with this shift.
In suburban areas where public transit is inefficient because it has low load factors, it makes sense to encourage shared automated vehicle technologies.
I think that pretty much anyone who drives more than about 10,000 kilometres a year — let's say anyone who commutes to work — will want to have a personal car. Even when the self-driving technology is there, they will have a self-driving personal car. If you drive more than about 10,000 kilometres a year, it's cheaper to own your own car.
In rural and suburban areas, I think a lot of people will continue to own personal cars. They might be self-driving or human-driven. It's in the cities where there's potential for transformation away from owning personal cars to shared vehicle fleets. That's where we would see significant reductions in traffic congestion, accidents, air pollution and consumer costs. That's where you get significant potential savings.
My advice to policymakers is to emphasize the transition toward more efficient and shared vehicles in all of its ways — everything from conventional public transit to more efficient taxi service, Uber and things like that.
Senator Eggleton: Thank you very much for your presentation, particularly for your research on all of this. It's very helpful to us.
Many people have described the benefits from autonomous vehicles ultimately when we have full automation, the reduction in accidents and concepts like shared driving and all of these sort of things. That is all very nice, but I would agree with you that there is perhaps decades of transition. For some of the rural or exurban types, it may be even longer than that.
Before long, I think we'll get to a point where there's some level of autonomous vehicle around. Perhaps it is the level three, which is a conditional automation. Maybe it would just be highway driving. Maybe when you get in the city amidst traffic, you might have to take control of it because you might have many if not more autonomous vehicles as time goes on, but in the early stages you might have more of the traditional type of human-driven vehicles.
This creates a lot of complexities, particularly in the early stages. I think as legislators, as governments, our first priority has to be safety. We have to see how we get through this transition in the early stages. That's what we're looking at now. The ultimate may be way down the road. However, the earlier stages like levels two and three are coming very soon, I would suggest, particularly for people who might have enough money to buy and put one of these on the road before too many years. We need to figure out what kind of a legislative framework we need, particularly on the issue of safety.
Where do you think the priority is? What would you suggest is the priority for legislators?
Mr. Litman: I will absolutely agree with you that this is a very important policy question, although I would add a couple. I would say we don't have to be equal, but of similar magnitude is consumer affordability and social equity.
I don't want in any way to suggest that I'm dismissing the very significant potential benefits of autonomous vehicle technology, and I do think it's very likely that in the next decade or two that affluent people will benefit significantly. First of all, when you're taking a long trip on a highway, you will buy the Cadillac or the Mercedes-Benz that can drive. When you're travelling from here to Toronto or whatever, to your cabin in the woods, your car will drive you on the highway and you can take a nap or get some work done or whatever, and that's a benefit. That's an internal benefit, a user benefit.
The concern we do want to have is if it increased accident risk or traffic congestion for others, this great convenience to the affluent, new car buyer, because it will be decades before lower-income people can afford this technology. We do want to be very cautious about it.
One of the most significant benefits that proponents emphasize, such as congestion reduction, only work if you have a dedicated lane. The congestion reduction does not work if you have mixed traffic, at least with any of the models that I'm familiar with. At what point will let's say the city council of Toronto or Ottawa decide that they will dedicate this very valuable asset called a highway lane to the use of people who own this new expensive technology? You're essentially saying that if you can afford a $40,000 or $50,000 car, then you can get this congestion-reducing traffic lane.
I'm an economist, so I would like to see smart congestion reduction strategies, which is more efficient road pricing, tolls on roads and more efficient parking pricing. These other strategies are actually quicker and more effective at achieving things like reducing traffic congestion and accidents and air pollution that are not autonomous vehicles.
Part of my concern about the whole discussion about autonomous vehicles is that it's distracting a lot of people. It's allowing people to say, "We don't have to think about road pricing, and we don't have to think about parking policy reforms, and we don't have to think about ways to improve public transit because this magic bullet called self-driving cars will solve all of those problems pretty quick.''
Senator Eggleton: I appreciate that, but I asked you specifically about safety. One thing you said is you think there needs to be dedicated lanes. Are you saying that autonomous vehicles should not be allowed with traditional vehicles in mixed conditions in our cities?
Mr. Litman: The congestion reduction benefit requires dedicated lanes, at least with any of the approaches that I'm familiar with.
Senator Eggleton: Is it unsafe to mix the two?
Mr. Litman: The whole idea is that the vehicles travel within centimetres of each other. They platoon. That's the term engineers use. The vehicles all drive close together.
Let's imagine you have a lane of autonomous vehicles that are driving within centimetres of each other at 120 kilometres an hour, and you are a human driver struck in traffic in the general purpose lane. You see one of these platoons go by and you're a foolish young guy. Are you going to be tempted to pull into that lane and draft behind that platoon of self-driving cars? You betcha. How will we prevent these foolish young guys from taking that opportunity to go faster? Maybe nine times out of ten they will not cause a crash and will do this and will succeed sometimes and make it a sport.
There are risks that we probably can't anticipate with the mixed traffic. That's all I can say. It does raise very significant social equity questions if this very valuable asset called a traffic lane is being dedicated to a certain type of user, and especially if it's a more expensive vehicle.
Senator Eggleton: Fair enough. Thank you.
Senator Runciman: There have been many great and interesting points. The car you were just talking about, that's, I gather, the level four that you're referencing? That's not the kind of product that Tesla is now producing and saying by the end of this year will be travelling between New York and Los Angeles?
Mr. Litman: You're talking about the congestion reduction. If they have a dedicated lane, the vehicles can drive closer to each other. That's actually level three.
Senator Runciman: Level three.
Mr. Litman: Level three is it can self-drive under certain conditions.
Senator Runciman: That's not the kind of vehicle being produced today?
Mr. Litman: I believe the technology is fully operational. Part of it is the connected vehicle. As I'm sure you know, connected vehicles is where vehicles can communicate and negotiate that centimetre distance between them, and that's all good.
Tesla is giving you a really nice vehicle that happens to be electric, and that's great, and you can rest while it's driving, so it gives you a benefit. However, whether it gives an external benefit, a benefit to society, so that you could justify saying we're going to dedicate this lane, that will be a much more complicated analysis.
Senator Runciman: The question I really wanted to get to, you have a healthy skepticism about this, and I appreciate you bringing all the points to the committee's attention, but what we're talking about here will I think result in wholesale change in the design of infrastructure and land use planning as well. I guess the message you're saying is you don't want to get ahead of the public on this, but what it comes down to is the chicken or egg question, if the benefits won't be fully realized without the changes in infrastructure.
There are competitive jurisdictions, especially in the United States, and I think it's fair to speculate that they will move ahead fairly quickly on this.
I'm looking for a specific recommendation from you, because this committee will report to government at some point on how they should proceed with respect to this.
Mr. Litman: Some of you should have a copy of my report, and it does have a timeline. Basically it takes each decade. My analysis suggests that during this decade and the 2020s, the main role for government will be to set the standards for testing the safety and reliability and then determining at what point they're allowed. The main concern of that is the safety.
In the 2030s, it will be much more about rethinking the infrastructure as they penetrate the vehicle fleet. What portion of the vehicle fleet would need to be autonomous-capable before you as a policymaker would willingly say, "Yes, we will dedicate some traffic lanes, some highway lanes, just to autonomous vehicles''? Would it be 10 per cent or 20 per cent or 30 per cent of the fleet?
Senator Runciman: You can look at different policymakerpolicy-makers and different political motivation. We can look at Ontario, for example, where they're subsidizing the purchase of electric cars. Government is driving consumers in that direction, so it would vary.
Mr. Litman: The technology is proceeding. There are certainly technological advancements going on, regardless of what any particular jurisdiction does. The idea that you, as an affluent person, would have a car that drives you and gives you that convenience is probably going to occur regardless of what Canadian policymakers do. It may be that Canada's a leader, it might be a follower, but that technology will be fully developed at some point in the next 10 to 20 years.
But with regard to the question of infrastructure, that's where I think it's much more important to be thinking about social benefits and also social equity. That's where the discussion about to what degree these affect crashes, congestion, accidents, air pollution and basic mobility for non-drivers is going to be very important. It's not obvious to me that these are all benefits. There is a small example of this going on with the question about whether to retain phone booths. Are public phones a necessity in the modern world? It does turn out that there are some situations where people do need them, but that's a little off track, so I'll finish there.
[Translation]
Senator Cormier: You spoke about the impact of this technological change on urban environments. I'm interested in the impact of this technological change on the rural environments, because Canada, being a large country, has an enormous number of rural communities.
In the past, we have heard about the challenges of infrastructure and access to technology. Some regions do not have access to the Internet, so there will be problems in terms of access to training for garage owners, who will have to repair these notorious cars, and other language implications. Has your research led you to think about how the federal government could help rural communities to prepare for this technological shift so that they are not out of step with the urban environment?
[English]
Mr. Litman: That is another very good question. In fact, on a related issue, I've been doing a lot of research on rural public transit. What is the need for public transit in rural communities? There is some reason to think that rural communities need more public transportation, and to the degree that self-driving vehicles can provide somewhat cheaper public transit, I think there are very significant potential benefits.
On the other hand, rural residents tend to have lower incomes overall, and self-driving vehicles are almost certainly going to be more costly, especially during the first two or three decades, because they will require additional equipment in the vehicle.
Has anyone wondered why Google is so anxious to support self-driving cars? That's because under most technologies, to operate the car, you will have to subscribe to Google's extra-special mapping service. Their motivation for supporting self-driving car development is you will have to subscribe, at hundreds of dollars a year, to their mapping service.
In rural areas, there will probably be a tension. Wealthier rural households will benefit from having this car that will drive itself, and rural residents and suburban residents spend a lot of time chauffeuring the non-drivers in their families, and to some degree, instead of you having to drive your mother-in-law to do her shopping and medical appointments, she will have a car that will do that itself.
For some households, there will be a benefit and it could conceivably actually improve public transit services. More rural communities will have a couple of buses a day, or something like that, but it will still be costly.
My guess is that self-driving taxis will never get below about 40 cents per kilometre; it's probably going to be 40 cents to 50 cents a kilometre. If you live in a rural area where you are 50 kilometres from the nearest store, it's never going to be cheap. There is no technology that will make it truly cheap for you to commute or go shopping every day.
In rural communities, I think there are potential benefits, but I think the biggest benefit, actually, is going to be for the wealthier families that want to move further out, if you're a lawyer or a business executive who lives in Toronto. The question is: Is that a good thing? Do people living in rural areas want more long-distance commuters? Is that a good thing or bad thing? There is a potential for a lot more long-distance commuters. That's one of the things that could affect rural areas.
I think there are significant potential benefits with somewhat cheaper public transit service.
[Translation]
Senator Cormier: As for the role that the federal government must play in this matter, do you have any suggestions for us about the type of policies and projects that the federal government could put in place to help communities prepare for this shift?
[English]
Mr. Litman: That is a great question that ties in with my current research on rural community public transit.
If our vision is to help people who are poor and physically impaired in rural areas, then it has to be the model. The basic model has to be public transportation. And then that brings us back to this question: How well does Canada do in providing public transit in rural areas?
Now, it's not generally a federal policy. Traditionally, the Canadian federal government only gives big baskets of money for major public transit projects, and there isn't a lot of money flowing to smaller, rural communities for public transit, and there are reasons for that.
My experience in my province of British Columbia is that, 20 years ago, British Columbia changed the name of the agency from the Ministry of Highways to the Ministry of Transportation, with the implication that it was going to be multi-modal. But in practice, at the provincial level, the provinces are doing a very poor job of supporting rural public transit. There is no comprehensive program to ensure it and, in fact, there is not even a good metric. You can't say that a particular community has level of service B or level of service C. There are standard ways that traffic engineers and planners think about this, but there is no standard way that the governments use.
I have great concerns about the lack of leadership at the federal and provincial levels. In other words, currently the federal and provincial levels recognize urban public transit and recognize highways and airports but do almost nothing to support walking, bicycling and public transit even though those are the emerging modes that are increasingly important.
I think the discussion about autonomous vehicles is actually an opportunity to be thinking about what it should look like to use these new technologies and new services. Even supporting Uber or other shared vehicle services is another example of something where I think there could be much more federal and provincial strategic thinking about this.
[Translation]
Senator Saint-Germain: You have a very interesting perspective, which is rather unique and very enlightening. Could you tell us more about a statement you made? Among the recommendations you would make to the government, you proposed emphasizing the transition to more mixed vehicles.
I understand from your last response that you are advising the government to look at the coexistence of modes of transportation, be it pedestrians, bicycles, regular motor vehicles or self-driving vehicles. In speeding up this transition, beyond the environmental impacts you mentioned, do you see other significant impacts, including economic impacts on employment? We have heard very little about the potential impact on employment. I regret that you don't have much time, but I would like to hear your thoughts on that.
[English]
I hope it was a tough one but a good one.
Mr. Litman: It was an excellent question. That's music to my ears because that is what I do professionally. I struggle with these issues. If we had all day, I would give you a lecture on multi-objective planning and things like that.Let me make just a couple of points, and I would be glad to do more work with you if any of these points are interesting.
We make a big mistake thinking of walking, bicycling, public transit and now shared vehicles and taxis as primarily environmental initiatives — ways to achieve environmental goals. They are, but what is much more important for most Canadians is the affordability objective.
In the U.S., they do a major travel survey every few years. In the last one, they asked an interesting question: "What do you think is the most important issue to the transportation system users? What's the most important problem?'' It wasn't traffic congestion or accidents. It was the cost — affordability.
Transportation professionals have almost no way to talk about affordability. Affordability is not something that comes up in most discussions. The only thing that most transportation professionals talk about is the price of gasoline or public transit fares. But 60 to 80 per cent of the costs of vehicle travel are the fixed costs: the costs of owning a car, insuring it, registering the vehicle and having a place to park your car at home.
True affordability requires that households be able to reduce their car ownership — to go from owning three cars to two cars, two cars to one car or one car to zero cars. That's where you can save thousands of dollars a year.
If you think of a struggling household, say a family that's just getting by, and their car breaks down. They are in big trouble. I can tell you stories of how devastating it is to live in an automobile-dependent community and you, for whatever reason, can't drive.
True affordability means creating communities with households — I'll give you an indicator — where your children can get to school without you having to drive them or where, when your car breaks down, you can still get to work; you can still commute, even if you don't have a car. There are many ways to think about this, but it's that combination of walking, cycling and public transit that allows households to do that, and now shared vehicles will play an increasing role. There's an important way to think about these issues.
Another aspect of this is that, currently, a lot of our planning policies encourage automobile ownership and sprawl — the zoning codes, in particular. Anytime somebody builds a building, they're expected to provide parking. We don't have a law that guarantees housing for people, but we do have laws that guarantee parking for cars. There are two to six parking spaces per car due to these zoning codes.
I'll off on a tangent. I apologize. Much of my work involves rethinking planning priorities so that we do a better job of responding to consumer demands. You can also bring in public health. If you talk with public health professionals, they are concerned with people not getting enough exercise. Living in a walkable neighbourhood is the key for most people to get exercise — those people and their dogs. You want your dog to get enough exercise, don't you? Developers want to reduce their parking requirements, and of course, everyone wants to reduce traffic congestion. The research I've done shows that the cities with the lowest traffic fatality rates are the ones with the best walking, biking and public transit.
If you use a comprehensive analysis framework, you have more justification for supporting transportation demand management, which is strategies that reduce the amount of driving people do and that result in more walking, bicycling, public transit and shared vehicles.
The Chair: We would have questions for another hour, Mr. Litman, but we have a second panel waiting to start. Thank you again for being here.
[Translation]
I would like to introduce Vincent Gogolek, executive director, and Philippa Lawson, barrister and solicitor, who are representing the BC Freedom of Information and Privacy Association. Go ahead, Mr. Gogolek.
Vincent Gogolek, Executive Director, BC Freedom of Information and Privacy Association: Thank you very much for the invitation. It's an honour for us to appear before you today on what is basically a fairly charged issue.
[English]
The BC Freedom of Information Privacy Association is a non-partisan, non-profit society established a quarter century ago to promote and defend freedom of information and privacy rights in Canada. While we maintain a focus on information and privacy rights in B.C., we have played an active role at the federal level.
In 2015, we released a study entitled The Connected Car: Who is in the Driver's Seat — I believe it has been circulated to the committee — which was generously funded by the federal Privacy Commissioner's contributions program. Ms. Lawson was the head researcher for this very extensive study and is she is here today to also provide information to you.
What we found in the connected car report was that telematics and wireless connectivity have transformed what used to be a purely mechanical vehicle into electronically-controlled transportation and mobile communication devices. These capabilities raise significant privacy concerns. The same technologies that allow for safer, more convenient and entertaining vehicles are also capable of amassing vast databases of information. This information can be used not only to improve vehicle systems and features but also to track and profile customers for targeted marketing and for other purposes.
Customer data generated by the connected car is now seen as a major new source of revenue for auto makers and their many partners. In fact, there is so much competition for access to this data that some auto makers have been publicly pushing back on these pressures. The massive quantities of data generated by connected cars flow through a complex network of industry players that can include auto makers, insurers, their service providers, aftermarket telematics providers, third party suppliers and providers of specific products and services. Who can access the data generated by connected cars depends on how the technology and systems are designed.
Access to this data is governed by privacy law as well as by the terms of use and privacy policies for each service or application. Auto makers and other entities that collect, store, use or disclose personal data for commercial purposes are subject to the Personal Information Protection and Electronic Documents Act, or PIPEDA. As a result, they are only permitted to collect, use or disclose personal information with the consent of the individual except in certain specific situations. They must not force consumers to agree to unnecessary collection, use or disclosure of their data. The law prohibits the collection, use or disclosure of personal data for purposes that a reasonable person would consider inappropriate in the circumstances.
Sadly, our review of connected car terms of service and privacy policies showed that auto makers are failing to meet their legal obligations under almost every principle of data protection law. A privacy pledge signed by a large group of major auto makers in the fall of 2014 falls far short of Canadian legal standards. Deficiencies include inadequate openness, accountability, individual access, purpose specifications, notice, consent and limits on the unnecessary collection, retention, use and disclosure of personal data. Lack of consumer choice with respect to unnecessary data collection, use or disclosure is a major violation of Canadian privacy law.
We made a number of recommendations in the report, and I'll try to keep those short. The most effective way to protect data is not to collect it or retain it in the first place. Hard limits on the collection of personal data should be the starting point for data protection standards in the industry. Our report recommended establishing data protection regulations for the connected car industry; developing national data protection standards for usage-based insurance; involving privacy experts in the design stage of intelligent transportation systems, including connected vehicle research projects; adopting privacy-by-design principles and related tools, including establishing a privacy management program; identifying and avoiding unintended uses; being open and transparent; respect for user privacy; working with device manufacturers and others to integrate controls and data minimalization techniques.
What has happened since we came out with our report? Unfortunately, we have not seen the kind of progress we had hoped for when we released the report, but we are encouraged that Commissioner Therrien indicated that his office will soon be funding an arm's-length project that aims to develop a code of practice for connected cars when he appeared before you at the end of March.
A number of members of this committee I believe were at the conference a couple of weeks ago where Minister Garneau, in his keynote address, pointed out that the federal government must be responsible for privacy, cybersecurity and safety. It's very clear that the minister regards privacy as something squarely within the federal mandate and therefore your terms to reference.
[Translation]
I thank this honourable committee for the opportunity to appear before you. We look forward to your questions.
Senator Saint-Germain: Thank you very much for your presentation, and for your very interesting study. You have answered the first part of my question, namely, that your recommendations haven't yet been implemented.
The second part of my question has to do with the transition in terms of privacy and access to information. Are the provisions in the current provincial and federal legislation sufficient? Is the problem one of severity and vigilance in the application? Is the problem at this level, first and foremost?
[English]
Philippa Lawson, Barrister and Solicitor, BC Freedom of Information and Privacy Association: In my view, no. The Canadian legislation provides broad principles without the specificity that particular industries such as the automotive industry need right now. That's why we have proposed and recommended that work begin immediately and that we need government leadership to get the key stakeholders together to start developing a code of practice that can work, that's technology-neutral and that's not going to impede desirable innovation but effectively protects individual privacy in this sphere.
You need to have a code of practice that the industry players can agree upon, such as the one that PIPEDA, our federal data protection, is built on. It started with an industry-based code of practice. We believe, based on past practice and clear indication that market forces will not deliver privacy on their own, that there will be a need for regulation. But you start with getting the substantive protections identified and defined in a code of practice.
The legislation is very good and much better than what exists in the United States in terms of setting out the broad principles, but another problem with our legislation right now is it's based on the principle of consent. It assumes that individuals can give informed consent to the collection, use and third-party disclosure of their information. That's simply unworkable in this context, and that's what I found when I researched this. There are just far too many players, third-party players collecting the information, far too many undefined uses. It's just impossible for an individual person to be able to give consent.
When I did my research, which is two years dated now, OnStar's terms of service specifically said that OnStar takes no responsibility for what the telecommunications provider does with the information. Of course, all of the information is being transmitted over wireless telecommunications networks — AT&T, Sprint, Bell or whoever it is. Each Canadian telecom provider is partnering with an American telecom provider for this purpose.
Even if you are just driving in Canada, right away when you consent to your connected car service, whether it is GM, Ford, whatever, you are likely to have to, in the terms of service, then read and consent to the terms of service of the telecom service provider separately, and possibly other service providers as well. Any third-party applications that you subscribe to will be a separate terms of service.
Let's say you drive into the United States. My bet is that if you're following the principles of Canadian privacy law, as soon as you cross the border maybe a window would pop up and say, "Do you consent to AT&T U.S. terms of service?'' Is that real choice? You have a trip to the United States. It is not real choice.
To the extent that consumers are providing consent, in my view it is a fictional consent, so that is a fundamental weakness of the legislation and why we need to identify baseline hard limits on collection, on siloing of information in different parts of the vehicle and on prohibitions on certain collection, for example.
Senator Runciman: I am intrigued by a couple of things you said there. You talked about a major violation when you were referencing automakers, violations of PIPEDA. You didn't get into specific automakers, but obviously you know who they are. Have there been any consequences for what you termed major violations?
Mr. Gogolek: Not yet. We did not bring a complaint in terms of what we found. This is a very complex question; there are a number of players. As Ms. Lawson indicated, what we really need are regulations that reflect what the automakers are doing and what they are developing but that also meet the standards of Canadian privacy that are tailored specifically to the connected car environment.
Senator Runciman: The bottom line is nothing has happened. You talked about developing a code of practice, which you said is essentially what you did with the development of PIPEDA. What degree of confidence do you have? What about the agencies responsible for enforcement? If you brought this to the attention of not just them but the public at large, why has nothing been done and why has the industry itself apparently not responded in a favourable way? People readily agree when they download apps to their smartphone that they're giving up their privacy. I wonder if there is a sense that the public doesn't really care.
Mr. Gogolek: As Ms. Lawson indicated, it's because a lot of this is opaque where there are a number of different layers. You have to actually go and seek out the policies, so you basically say, "I agree.'' The terminology is very loose and open to very wide interpretation. "We'll collect, use or disclose your information for legitimate business purposes.'' How is that determined? "We're a business and we think it's legitimate, so I guess we're compliant then, so condition satisfied.'' We need something a lot better than that.
Senator Runciman: You talk about data protection standards. Earlier witnesses referenced cybersecurity and talked about having ID verification and security technologies, which apparently are available now, that would be required by governments to be installed in an automobile before it could go on sale. The standards would apply to the cars. Either it's on the market or not on the market unless it meets those standards. That's the sort of thing you're talking about.
Mr. Gogolek: Exactly. Standards have changed over time in terms of do you need a lap belt, do you need a lap and shoulder belt, air bags. This is part of accepted regulation. In terms of safety, government regulations will be done. They will also be changed. They're done in consultation with the industry. Can you do this? We know you're working on this technology. Is it something you can put in all the cars? We have to be conscious that cars are very expensive to design and build, and we need the industry to take part in this and buy in.
Senator Runciman: The same thing should apply to cybersecurity measures.
Ms. Lawson: I would say privacy is part of the safety question, and it's important to recognize how much further it goes than just security. We're not just talking about securing the vehicles from cyberattacks. We're talking about allowing individuals to control the use of their own personal information.
In further answer to your question, Senator Runciman, there are different contexts in which standards need to apply and different types of standards that we're talking about. I do hold great hope for the potential of codes of conduct, standards, whatever you want to call them, to assist the industry in developing systems that respect consumer privacy and that are safe for the public. We have to start there.
When you're looking at the public systems for connected vehicles, intelligent transportation systems, which governments are involved in designing right now, we need to ensure that what's called the basic safety message — the information that gets automatically transmitted between the vehicles and vehicles and the infrastructure — is as secure as possible. There is no such thing as 100 per cent security, but you want it to be fully secure.
There is evidence in submissions to the National Highway Traffic Safety Administration in the United States that the proposals for that right now are not sufficiently secure but they can be if the government, for example, requires encryption or requires the use of technology to protect that message.
In the context that we were looking at with our study, which is in the private sector, the connected car systems, the infotainment systems as well as the telematic systems that are in new vehicles now, particularly higher-end new vehicles, the kinds of standards that we're thinking about here — and we didn't get into those details — would be things like requiring that the data collected by the infotainment system is kept completely separate from the vehicle operations, from the telematics system; that the ECUs, the electronic control units, all those mini computers throughout, are isolated in silos so that you're protecting the information in an effective way so if you got a hacker coming in, they only get into the one unit and can't automatically get into the other units. So when someone is collecting your information through the smartphone that's connected to the car, they are not also automatically getting all the information on your driving behaviour.
Another big area that these standards should address is what happens when you return the rental car or you sell your car. There should be very simple ways of wiping all your personal information off the vehicle when you're getting rid of it, or even if you want to do it on a daily basis, whatever. As far as we are aware — and I haven't looked at the systems recently — that has not been the case.
I also want to say that this research is two years old. We don't know what the car manufacturers and other players in the industry have been doing behind the scenes to address this. I certainly hope and expect that privacy is on their radar screen — that's obvious — and that they are trying to design their systems with privacy in mind. What we're not seeing that we were hoping for was government leadership in bringing key stakeholders together to develop these standards and codes of practice.
Senator Eggleton: Informed consent. Frequently when using a computer, you come across services, products, apps, whatever, that then bring up something that you have to agree to, which is largely several pages of legalese. What can we do to improve upon information for laypeople, for people who aren't lawyers? You could do summaries, I suppose more informal, more plain language kinds of things, except probably the lawyers would say, "Oh, yes, but that wouldn't protect you legally and wouldn't protect the supplier legally if it got into a court case.''What do we do about that to make some meaningful changes in terms of providing informed consent?
Mr. Gogolek: Part of it is making the various partners more visible to people who buy or lease the car. Who are you sharing it with? Because normally, when we think about going out and buying Brand X car, then I guess you're collecting my information, but who else is getting it? Does the maker of my minivan have marketing agreements with Starbucks, Tim Hortons or Burger King, and the screen in the back, on which the kids are watching Finding Dory, the telematics will say, "Gee, the movie is almost over; aren't you hungry for a Happy Meal now? I can take Dad there now.'' It can lay in a course for McDonald's.
We need to have more of this available because what is being shown to consumers is not the whole story.
Senator Eggleton: Is it going to volunteer all of that information? Somebody is going to buy a car, and not everybody thinks about those kinds of questions. Maybe they should in the future, but they're more concerned about the colour, how it drives, the size of it and a whole raft of other things, and they wouldn't think about asking all of that. How do we make sure they get that information so there is informed consent on the electronic systems within the car?
Ms. Lawson: That is a very good and vexing question, and the Privacy Commissioner is looking at it in the broader scope, not just the transportation sector.
As I said before, my research indicated that it's actually impossible. You do need to work on the transparency side of things. I would suggest we can improve very much on the informed part of the consent by doing something along the lines of the Ontario Securities Commission with mutual fund disclosures and standardizing the disclosure, sitting down and figuring out what individual consumers need and making it simple for them, with same language and same format to see and compare among different options.
There are areas around the edges, I think, where consent can be meaningful if it's done properly, through a truly transparent and simple way for consumers, but there are also areas where you're just never going to get consent and where it may actually be inappropriate, where we may be able to decide as a society that certain information simply need not be collected and should not be collected and that the privacy and safety and security risks are too great and outweigh any benefit that might be provided. For example, by connecting the telematics to the infotainment system, you can have cars where the volume on the infotainment system automatically adjusts depending on the engine noise. Is it worth the potential hacking or security risk that that kind of connection or sharing of information requires?
I do think there are areas where we can put hard limits on the data collection, regardless of consent. Our law actually does include a provision that says regardless of consent, where it's unreasonable, then it shouldn't be collected, used or disclosed.
Senator Eggleton: Thank you.
Senator Bovey: I'm just going to pick up with that for a second. If one doesn't agree to consent, does that mean that some of these shared vehicles won't let us use them? That's one part of the question.
I'm really concerned — and this isn't the first time this group has heard me say this. Who is going to lead all of this? Is it a federal government leadership? Is it a provincial government leadership? Is it an industry leadership? Who is going to bring all these partners together and come up with the policies and standards and the appropriate fairness of consent and privacy so that people's rights aren't being turned off if they don't happen to agree with collecting a certain kind of information? There are multiple sides to this coin.
Mr. Gogolek: One of the provisions in law is you can't withhold service in terms of requiring people to agree to a wide open collection or provision of personal information.
In terms of who should be taking the lead on this, it seems the minister's view is that privacy, cybersecurity and safety are the three areas that he feels are clearly in federal jurisdiction. Of course, importation and registration of new vehicles is entirely federal, so it would seem that that would be a logical point to ensure that anything being put on the road in Canada is compliant, not just with safety but also in terms of security of information and privacy of our personal information being collected by these cars.
Ms. Lawson: Just to follow up, on the first question, this was one of the many violations we found. As Mr. Gogolek has stated, our law actually says you're not supposed to require consumers to consent to something that is not necessary for the service they've requested or purchased. That's precisely what we found they were doing. All we looked at were the policies, by the way, not the practices, just what they actually said on paper. So that's a real problem.
What we were seeing with the systems is that it was an all-or-nothing proposition, that if you don't agree to the whole whack — which was often wide open — then you can't use the service at all; you can't use the automatic navigation system. Those are again areas for standards, to take that general principle of law that exists and then apply it to this context and word it in such a way that it's clear to the automakers and people designing all the systems.
On the question of who leads, my view is it is very much a federal responsibility. This not something that should be left to the provinces. What is needed is a joint commission or work among the departments of transportation; innovation, science and economic development; and the Privacy Commissioner. If you get those three parties together to pull in the key stakeholders, we have two major automaker associations in Canada, we have the aftermarket represented by an association, we have very helpful associations out there that can represent the stakeholders, get to the table and start working on this, but it absolutely requires federal leadership.
Senator Bovey: I'm pleased to hear you say that because it seems to have been a very grey area in many aspects of this, and your definite response gives me some confidence.
Ms. Lawson: If I can follow up, the United States is doing this. The FTC, the Federal Trade Commission, which ends up being the privacy regulator in the United States, is partnering with the National Highway Transportation Safety Administration on this. They're holding a public session in Washington, D.C. at the end of June on this. I hope some of you can monitor if not attend it.
A bill called the Car Spy Act, which a senator has sponsored in the United States, is back on the table. It requires the joint work between the FTC and NHTSA.
Senator Bovey: Your example of going across the border and not consenting to AT&T is sort of the dramatic case. We all turn around and come home then, do we?
Ms. Lawson: Exactly.
[Translation]
Senator Saint-Germain: I'm probably going to simplify the matter, so please feel free to correct me if necessary, but it seems to me that, as you say, legislation should be strengthened, especially to shift the responsibility for privacy requirements to the manufacturers, sellers and operators of motor vehicles. It seems to me that, if this approach were adopted and coupled with one aimed at informing the public, it would make the situation much simpler.
From this perspective, do we not, beyond the law, have a problem of adequate oversight of the implementation of the legislation? I know it has to be strengthened, as you have explained, but beyond that, is this legislation seen as a paper tiger? Because in the automotive sector, in particular, those who have to implement it know very well that there is little oversight and, above all, very few penalties.
Mr. Gogolek: I agree with you, and I think that Commissioner Therrien does, too. He made recommendations so that his office could play a role that was more —
Senator Saint-Germain: Coercive?
Mr. Gogolek: Yes, and so that he could benefit from the power of ordering entities to comply with the legislation —
[English]
— to put themselves into compliance with the law. That is changes for PIPEDA. Those are changes that have had the private sector and the public sector actively looking for order-making powers.
[Translation]
In general, it's a problem: the legislation is written, but the consequences aren't obvious. Some entities seem to be inclined to turn a blind eye to the problem until their reputations start to suffer. Then there is no clear line not to cross.
[English]
Ms. Lawson: I was around and involved in the introduction of the privacy legislation in Canada back in the 1990s and early 2000s. There was effectively a compromise made with the industry that the government would regulate but regulate lightly, as an ombudsman, without any heavy penalties. That was the deal, and that's the model we have in Canada, which is considered much better and stronger than the United States. But the United States actually has, in some ways, a better enforcement model because the FTC has much stronger powers. We've seen instances where the FTC has come down and issued big fines.
I have been before several parliamentary committees on issues of privacy, and from day one, since the first study I did back in the early 2000s on the retail industry and to what extent they were complying with PIPEDA, I found widespread non-compliance. I and my colleagues have been calling for stronger enforcement of this legislation in Canada, stronger enforcement powers for the Privacy Commissioner and possibly private rights of action, some mechanisms to make effective this very good set of principles we have.
So exactly to your point, this is a big problem for the connected car, the broader economy and privacy protection. We have great principles and rules. but they are widely disrespected and not enforced.
[Translation]
Senator Cormier: You talked about the leadership role that the federal government must play in terms of regulations, but I guess the provinces certainly have a role to play, as well.
How do you imagine the relationship between the federal government and the provinces in terms of the accountability or dialogue needed to make the regulations consistent?
Mr. Gogolek: It is basically a matter of coordinating approaches. Some provinces, such as Quebec, have legislation similar to PIPEDA, with principles and a general approach to the issues that are similar. There is a question of scope — and it may be a question that is always open — that has not really been clarified by the Supreme Court of Canada.
In my view, the overriding point for the federal government is that it has the ability to regulate all these cars and technologies at the point of entry into the marketplace. I think the federal government has a key role to play, but there are also provincial laws, of course, that deal with traffic lanes, certain aspects of transportation, and privacy.
[English]
Ms. Lawson: Generally speaking, I would see interested provincial governments being part of this working group or whatever you want to call it — task force, working group — that is led by the federal government.
One area in which provinces are acting and do have primary responsibility is insurance. Our report looked at usage- based insurance, because that is one of the applications of telematics right now. We found there is very good work being done by the three provinces that were allowing it at the time. The privacy concerns were being very well addressed at that level, because it is a regulated industry; it is a heavily, carefully and directly regulated industry.
It's interesting. What's happening with usage-based insurance is that one particular application of this connected- car technology is very different from the rest of it. The rest is a wild west, and the industry is being left to guide itself, to make decisions on its own in a highly competitive environment, without clear direction and principles from government.
The industry would benefit from this. They needed a level playing field and clear direction. Get them involved and we would end up with a much better situation for the industry itself.
[Translation]
The Chair: Mr. Gogolek, Ms. Lawson, and Mr. Litman, you have made our morning extremely enlightening. However, I can't say that you've made our work any easier, because you have broadened the challenge we are facing. Still, we greatly appreciated your testimonies.
[English]
Honourable senators, before we leave, I would like to inform you that our fact-finding missions to Waterloo and Kanata are confirmed. On May 29, those who want to participate will be in Waterloo for meetings with the Waterloo and Kitchener university people, and on June 5, we will be visiting Kanata installations for BlackBerry. Again, it will be very interesting. The clerk will get in contact with you on the details.
Tomorrow, we are having two more witnesses. The Canadian Automated Vehicles Centre of Excellence and PMG Technologies will be in front of us at tomorrow night's meeting.
Unless there are other questions or comments, see you tomorrow. Thank you.
(The committee adjourned.)