Proceedings of the Standing Senate Committee on
Transport and Communications
Issue No. 17 - Evidence - May 17, 2017
OTTAWA, Wednesday, May 17, 2017
The Standing Senate Committee on Transport and Communications met this day at 6:48 p.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, the Standing Senate Committee on Transport and Communications is continuing its study on the regulatory and technical issues related to the deployment of connected and automated vehicles.
[English]
I am pleased to introduce our panel of witnesses. From the Automotive Parts Manufacturers' Association, we have Mr. Warren Ali, Director, Emerging Technologies Initiatives.
[Translation]
And joining us from the Automotive Industries Association of Canada are Jean-François Champagne, President, and France Daviault, Senior Director, Stakeholder Relations. Thank you for being with us this evening. I invite Mr. Ali to give his presentation, followed by the Automotive Industries Association of Canada.
[English]
Warren Ali, Director, Emerging Technologies Initiatives, Automotive Parts Manufacturers' Association: Thank you honourable members of the Standing Senate Committee on Transport and Communications for providing the APMA with this opportunity to present before you regarding your study on regulatory and technical issues related to the deployment of connected and autonomous vehicles.
The APMA is Canada's national association representing OEM producers of parts, equipment, tools, supplies and services for the worldwide automotive industry.
The association was founded in 1952. Its members account for 90 per cent of independent parts production in Canada. In 2016, automotive parts shipments were over $32 billion, and the industry employed over 95,000 people.
APMA's fundamental objective is to promote the original and equipment automotive supply manufacturing industry, both domestically and internationally. The association provides important representation to both federal and provincial governments, supports regional government initiatives, and creates and executes global marketing initiatives to develop trade and business opportunities for the membership.
The key drivers in today's auto industry can be summed up by ACES — autonomous, connected, electric and shared — with safety always being paramount to all. From the perspective of ACES, vehicle manufacturers and their suppliers are actively adopting technology cycles in accordance with the standards set in the mobile ICT industry. The innovation and connected technologies pushes the envelope for faster data delivery, interactivity and safety in the entire end-vehicle user experience. The connected car movement necessitates that the automotive ecosystem converges with the ICT ecosystem like never before envisioned.
The APMA recognize this as an opportunity to leverage technology advancements that exist within the Canadian technology community and to showcase the potential of this market convergence in a real-world environment.
To this end, the APMA created the Connected Vehicle Working Group, bringing together technology leaders from the public, private and academic sectors. The connected vehicle working group's first public initiative was to collaborate on a unique program. The amalgamation and integration of automotive centric connected technology into a fully functional demonstration vehicle, a Lexus RX 350 manufactured in Ontario by Toyota Canada.
This initiative is known as the connected vehicle project. The aim of the APMA's connected vehicle project was not simply to add several disparate systems, sensors, interactions and graphics is into a vehicle, but more to demonstrate the art of the possible with the seamless integration of Canadian technology and a vehicular innovation platform. The connected vehicle project has always been envisioned as a necessary starting point to incorporate, expand and rapidly accelerate the development of the connected car movement into the existing automotive supply chain process.
The second phase of the APMA's connected vehicle project includes the testing of connected vehicle applications in both real-world and virtual driving scenarios to determine their effectiveness, while maintaining driver and road safety and to ensure that the connected technologies and services are safe and do not unnecessarily distract motorists or cause unintended consequences.
The work is being done in the City of Stratford, a long-time partner of the APMA in all of our CAV initiatives, as well as the home to our soon-to-be-launched connected and autonomous vehicle demonstration hub, that will be funded in part by the Government of Ontario.
What has become very clear through all our work is that new and emerging technologies and ways of doing business is disrupting the entire automotive ecosystem, from how we make the car, to the car itself, how we drive the car and to the very roads on which we drive, with all of the supporting infrastructure. All aspects are being impacted in significant ways.
The automotive industry, as well as all related stakeholders, public, private and academic, are actively working on and towards addressing several important and challenging issues, including improved safety and security, mobility, sustainability and accessibility; reducing congestion and waste through improved traffic flows and people movement; supporting and encouraging innovation and economic development around this emerging and expanding sector; understanding the impact on agency planning, transportation modelling, design, construction, operations, maintenance and monitoring; and adapting to coming shifts in demographics, consumer choices, vehicle ownership, land use and travel patterns, and coping with yet undetermined social consequences to communities and the environment.
Many jurisdictions in North America have begun addressing these challenges in real-time, and Canada needs to maintain pace. Here's a list of some of the key considerations and how they impact Canada.
Infrastructure is important for government, especially as it pertains to who pays the cost for capital, operations and maintenance. For instance, with highways overlapping in municipal, provincial and federal jurisdictions, urban roadways, suburban and rural roadways, what type of infrastructure will we be using? Will it be wi-fi? Will it be dedicated short-range communication, or DSRC, LTE or 5G? There's the issue of security and trust, the roles and responsibilities for industry, for government and the general public. Security is especially an important aspect from Canada's perspective, as we are seen as, and we are, a global leader in this field.
Information, security and cryptography have been a particular strength of Canadian technology. As everybody knows, BlackBerry continues to be the most secure smartphone on the market. This is because we designed security into it from the beginning, using Canadian technology.
Additionally, security and privacy were designed in from the beginning for the U.S. vehicle-to-vehicle and vehicle- to-anything initiatives, and this technology, which again, is Canadian technology, will be a critical component for the connected and autonomous vehicle. It is important to make sure that security and privacy are highlighted and critical requirements for any CAV deployments and that they should be designed in from the beginning.
There's also the industry of data: for instance, the collection, the ownership, the privacy, the warehousing and the access. There's interoperability between infrastructure systems, whether they be pan-Canadian or North American models. They need to incorporate governance structures, safety and security regimes.
Obviously, there will always be the human factors, including human-machine interface, addressing things like driver distraction and drivers with disabilities, and driver engagement and disengagement with autonomous vehicles.
There's the availability of highly qualified personnel. There are technologies continuously emerging and evolving, the overwhelming and sometimes confusing marketing and media hype that follows along with it, as well as consumer acceptance.
In order to address these, we need to be able to adopt new approaches and new thinking. We need to rethink the way things are done. Just because something has worked in the past does not mean it will always work in the future. For example, reconsidering NAFTA: Electronics, software and sensors are more valuable now than ever, and they were not major considerations when NAFTA was first negotiated. Many jobs in facilities that were located here left to go to lower wage and lower cost jurisdictions. We now need to rethink how we rebuild that capacity and regain expertise due to the high value-added nature of this component.
We have to adapt to the pace of change that is rapidly accelerating. As mentioned before, the advances that took decades or years in the past can now happen in months, even days, and perhaps, in the future, even hours.
The entire industry is also dealing with changing consumer tastes and demographics, the views on ownership, convenience, flexibility and affordability I referred to back when we said "sharing.'' Car purchasers now are waiting longer before buying and the key items that factor into their decision-making is not how their phone will sync with the car, but how will their vehicle sync with their phone in their everyday lives.
Obviously, there are the insurance issues that we have to be able to address as well, for instance, liability for the vehicle. Does it fall to the driver, the vehicle maker, the supplier or the software provider?
And then we have to talk about the use of data itself. In an owned, shared or open model, who owns or who has rights to the data? The original equipment manufacturer, the driver, the data provider or the government? What can the data be used for once obtained? Who is responsible for maintaining the accuracy and security of that data? Liability for the data is going to be a big issue.
Then there's the data quality assurance and confidence. We need to have regimes in place to assess, assign and rate data quality because in order for the vehicles to be connected and operating on their own, there needs to be a firm and secure infrastructure to be able to make sure that that takes place.
We need to have best before and stale dates in terms of what infrastructure is to be able to know whether we are there or if there are places we have to go to and rebuild.
There need to be new approaches to R&D, innovation and demonstrations. For instance, we can use smart cities, like the City of Stratford, as living laboratories. We also have to adopt new approaches to partnering. We recently had a meeting on Monday, called the Ontario Innovation Summit, that was hosted by the equivalent of the APMA in the aerospace sector in Ontario, and one of the interesting things that came from that was they were saying in the aerospace industry, they need to partner with the automotive industry because the automotive industry has more rapid turnaround cycles than aerospace. I had to laugh, because I said that if they think that the automotive industry has rapid turnaround cycles, we are absolutely glacial when it compares to the ICT industry, which turns over things in weeks and months. The way we are working with ICT in Ontario provides somewhat of a base model for how we can also partner with people in the aerospace industry.
Finally, when we are talking about new approaches to partnering, there are various initiatives we are talking about that other jurisdictions are as well, such as super clusters, cross-industry collaboration and new models for sharing risks, costs and benefits. Thank you once again for providing us with this opportunity and I look forward to your questions.
France Daviault, Senior Director, Stakeholder Relations, Automotive Industries Association of Canada: Good evening, I would like to thank the committee, especially Senator Griffin, for extending an invitation to the Automotive Industries Association, or AIA, of Canada to be here with you tonight.
AIA represents the Canadian automotive aftermarket. The automotive aftermarket, in general terms, is what comes after a car leaves the dealer's lot, so the aftermarket cares for Canada's fleet of 23 million vehicles through the provision of parts, products, service and repairs. Our members, representative of the aftermarket supply chain, include manufacturers, exporters, importers, wholesalers and distributors of replacement parts and supplies — retailers, like Canadian Tire and independent repair and maintenance shops, that are found in almost every Canadian community, big or small.
To put the importance of the aftermarket into perspective, consider the following: The aftermarket is a $21 billion a year industry. The aftermarket employs almost 400,000 Canadian workers. This represents almost half of Canada's entire automotive industry. The aftermarket employs more people than Canada's agricultural industry, Canada's forestry, fishing, mining, quarrying, oil and gas industry.
The aftermarket has to be a part of the conversation on the technical and regulatory issues related to the deployment of connected and autonomous vehicles. There cannot be sweeping changes in the very types of vehicles that Canadians drive without there being accompanying changes in the aftermarket. To put it another way, vehicle manufacturing cannot enter the 22nd century while the aftermarket remains in the 21st century.
AIA, as the voice and resource of Canada's aftermarket, is committed to creating a sustainable future for our industry. To achieve this, AIA has begun investing heavily in research to collect data that will support evidence-based policymaking. Relevant to the connected and autonomous vehicle discussion is our soon-to-be-completed Emerging Technologies and Industry Disruptors project that will identify disruptors to our industry and solutions to manage those disruptors. Our soon-to-be-released Aftermarket Labour Market Intelligence project, funded by Employment and Social Development Canada, is an online tool that will aim to provide unprecedented access to functional labour market information for employers, students, government and educators, and will fill in the critical information gaps related to industry skills, labour shortages and compensation.
Over the next few minutes, we will briefly discuss one technical and one regulatory issue related to the deployment of connected and autonomous vehicles. Both of these issues raise concerns over consumer choice. While both of these issues were addressed in previous committee meetings, tonight we will address them from the perspective of Canada's automotive aftermarket.
Jean-François Champagne, President, Automotive Industries Association of Canada: We'll first talk about telematics and Right to Repair. The Canadian Automotive Service Information Standard, or CASIS, agreement, also known as Right to Repair, was signed in 2009. The agreement provided a framework for the voluntary sharing by original equipment manufacturers, or the OEMs, of their service and repair information with the automotive aftermarket, a necessary action at the time to deal with changing vehicle technology.
Fast-forward to present day and the issue of vehicle information has become much more complex as a result of the rise of telematics, the technology that sends data to vehicles in real time and captures vehicle data in real time.
Telematics threatens the future sustainability of the aftermarket. It provides OEMs and their dealerships with unprecedented access to communicate with a car and its owner. This creates a customer monopoly through a closed- loop communication circuit. This closed-loop communication circuit will increasingly facilitate the capabilities of OEMs to, among other things, instruct an owner of a vehicle to bring their vehicle into a specific dealership for a routine checkup and to conduct remote diagnostics, repairs and software updates.
The above-mentioned applications of telematic services have the potential to give OEMs a huge competitive advantage in the battle for repair dollars by driving business away from independent repair and maintenance shops. This raises concerns about consumer choice. It also raises concerns about the future of independent repair and maintenance shops in small communities across Canada. Will these shops be able to survive under the pressure of this technology? If not, what are the likely consequences for residents?
The question that we have to ask is: Does the CASIS agreement of 2009 meet the needs of today and of the future, or will additional regulatory and legislative actions need to be taken?
[Translation]
Ms. Daviault: I will now address the future workforce needs of the aftermarket that can be summed up perfectly by the statement "you can't fix a computer with a wrench.'' Autonomous vehicles will be structurally different from the vehicles that currently dominate Canada's roadways. They will consist of sensors, radars, lidar, a central computer, GPS systems and video cameras.
A quick review of automotive service technician apprenticeship programs across Canada demonstrates that the curriculum is not keeping pace with these future realities. The traditional mechanical skills that automotive service technicians are trained in today will not suffice to repair and maintain Canada's future fleet of vehicles as automotive service technicians will increasingly require computing, coding, engineering, analytical and programming skills. Recycling a statement from my opening remarks, vehicles cannot move into the 22nd century while workforce skills remain in the 21st.
Mr. Champagne: My objective tonight was to raise awareness about the role that the aftermarket plays in the deployment of connected and autonomous vehicles and the need for regulatory and technical issues to be considered from the perspective of the aftermarket. Both telematics and workforce needs of the future raise concerns about consumer choice. If telematics creates a closed-loop communication circuit between the OEMs, dealerships and customers, effectively shutting out the aftermarket, consumer choice is threatened. If the future workforce needs of the aftermarket are not accounted for in the curriculum, consumer choice is threatened, as the options for where consumers can have their vehicles serviced are limited.
In closing, the aftermarket cannot be an afterthought. Changes in vehicle manufacturing must be accompanied by changes in the aftermarket.
The Chair: Thank you, everyone.
[English]
You are opening a whole new issue that will not make our work easier but will make it better in the sense that we have to address it. We have to address these issues, because beyond the theoretical world of the new cars, we have to exist with the existing cars. So anyway, I thank you for your presentation.
Senator Runciman: That was a very interesting presentation and a new slant on the kinds of testimony we have been hearing.
With respect to the aftermarket, you talked about independent operations, but I'm thinking not just of the Canadian Tires of the world but some of these smaller call them mom-and-pop operations. I live in Brockville, for example, and I know a couple of them that are run by mechanics who were probably trained 30 or 40 years ago. I'm not sure if they have other people working on staff who are being constantly upgraded in terms of the new technology, but do you cover those kinds of operations as well or simply the larger repair shops, if you will, the Walmarts, the Canadian Tires, that sort of thing?
Mr. Champagne: We do represent a broad base of the automotive aftermarket that would include potentially small operators that could be operating under a banner, such as AUTOPRO, essentially as part of a bigger network managed through NAPA, a corporate member with AIA. Large and small, we are representing the large corporations, as well as those small independent operators, directly or indirectly through the associations, through other organizations.
Senator Runciman: Even these smaller operations, in terms of the sharing of data, that 2009 agreement, that data would be shared with even these smaller repair shops.
Mr. Champagne: Right.
Senator Runciman: We have seen cars becoming more sophisticated in recent years. What has the impact been on the aftermarket industry in terms of costs and any other implications that you have seen given the advancing technology in the past 10 years, we'll say?
Mr. Champagne: I would like to use one analogy that often we refer to in the aftermarket. As the car evolved through the last generations, going through ABS braking systems and automatic transmission, each of those iterations in the evolutions of technology has raised a question as to whether or not the aftermarket was going to be able to continue to service and repair vehicles. And the answer to that is yes they have. They have been able to adapt, and they have done it through education, access to information, the right tools and so on.
To your point, what we're hearing now, as recent advancements in technology starts to shape, is that in some cases there are some systems that will require the intervention of the original manufacturers for maintenance and repairs. However, the reality is that if you are bringing your vehicle today to a local repairer or to the original manufacturers they in fact have access to the same level of knowledge, data, tools and training, making them both competent to service the vehicle that you have today.
Senator Runciman: The implication, or the one I inferred anyway with respect to telematics, is when does this 2009 agreement expire. Is there an expiry date?
Mr. Champagne: It does not have an expiry date.
Senator Runciman: But you're concerned about being driven to dealerships. I'm confused with respect to your concern there if the agreement is still in place because they're obligated to share the data with you. For my edification anyway, you better explain your concerns.
Mr. Champagne: The concern is that the CASIS agreement is a voluntary agreement and so it is on the goodwill of the various groups that have signed. In fact, two associations representing the OEMs have signed the agreement, as well as two organizations representing the aftermarket. But it's a voluntary agreement and so was not supported by any piece of legislation.
Senator Runciman: Are there any general statistics in terms of dealerships with respect to the percentage of profits that come from car sales versus repairs?
Mr. Champagne: You mean the actual revenue generated by the service of a vehicle?
Senator Runciman: With respect to telematics, which seems to be a major concern, you're suggesting this is something the committee should be looking at in terms of a recommendation to the government for some kind of "protection'' perhaps is the right word?
Mr. Champagne: An awareness definitely that the aftermarket is a very important player in maintaining all these vehicles on the road safely and reliably and the aftermarket is a very big player is also ensuring that in small communities — Brockville and smaller communities — there is always a place you can go to get a vehicle repaired, whether autonomous, connected or not, the reality is Canadians living in these small communities could rely on a network of small independents and these independents are able to do this work because they have access to information, tools and training. We need to make sure this continues because without the aftermarket we're going to limit consumers' choice and access to repair in the small communities in which they live.
[Translation]
Senator Boisvenu: Thank you for joining us. Mr. Champagne, it is a pleasure to see you and Ms. Daviault again.
Most of the witnesses we have heard since the beginning of this study have presented us with their futuristic vision of autonomous vehicles. They did not present their dreams, but their vision in 30 or 40 years. They said that cars today are used 10 or 15 per cent of the time and that, for the rest of the time, they sleep in a garage. In the future, they are looking at cars that will be used 24 hours a day, giving greater potential for use, and hence a possible reduction in the number of vehicles.
A bit like humans, these vehicles will become defective with age. Will we see a complete overhaul of repair shops, whose hours of operation generally resemble those of a government office, from 9 a.m. to 5 p.m.? Will we see shops staffed by robots that are open 24 hours a day? Come to think of it, these vehicles will sort of be robots on four wheels. Does your group have a vision for the future that will define this issue more clearly?
Mr. Champagne: Yes, we are looking at a future where vehicles will be used more effectively. According to our research, vehicles are clearly under-used; they are parked most of the time. The ability to have autonomous vehicles will lead to better use and potentially a smaller fleet. From an aftermarket perspective, we are looking at fleet size closely. It is a very good indicator of our economic activity. It continues to grow, because, for the time being, there are more and more vehicles on the roads. Over the past two years, car manufacturers have been making record sales in Canada, so the fleet continues to grow.
The other significant aspect is that the average age of a vehicle on the road today is almost 10 years. The average Canadian vehicle is 9.6 years old. This aspect has evolved. Canadians are using their vehicles longer and longer, thanks to our automobile manufacturers who are making better vehicles, which last a long time and do not rust. This has brought more work to the aftermarket sector.
This also relates directly to the number of kilometres on a vehicle. In a world with fewer vehicles on the roads, there would be an increase in the number of kilometres, which would lead to an increase in maintenance needs for autonomous vehicles. We are seeing that.
At the same time, we also know that new technologies require less maintenance and last longer. What we are observing with our members is that there are longer intervals between maintenance and service appointments, but the vehicles are being used more intensely. There will be changes in vehicle maintenance. In addition, to answer your question about our ability to manage repairs for these vehicles, it will be a much more nimble method. Autonomous vehicles will be able to drive themselves to the repair centre without the need for human intervention to get there.
Senator Boisvenu: The principle of vehicle autonomy is being developed by the major manufacturers. You are an industry that depends on all the research that is being done. When Chrysler or Toyota develops a new widget in the cars it puts on the market, you have to catch up to be up to date. Is there a symbiotic relationship in this area, or even stronger ties today? As you said earlier, the changes will take place within a year, perhaps a month, not over 10 years. As a result, you might become an obsolete industry if it takes too long between when you learn the new technologies and when the vehicles are being put on the market. Are you tightening your communication links with large corporations to ensure that you are always at the forefront of technology?
Ms. Daviault: That is certainly what we want. In terms of saying that we have done it, I would say that we still have a way to go to forge ties. We have always been sort of an afterthought. It is only recently, with the technological changes, that we have started taking up more space and asking to be at the table and to partner with manufacturers. It will take time, but that's certainly what we want.
Senator Boisvenu: Is the resistance that you are observing connected to past or cultural behaviour, or is it rather related to a tendency to keep discoveries or technologies secret and closed? There is no denying that it's a very competitive market.
Ms. Daviault: I don't think the manufacturers want to hide what is coming. What happens with dealers is that vehicle sales and profit margins are shrinking. The profit margin is up now because of service and repair. We sort of work in the same space, which makes us competitors, in a way.
[English]
Senator Bovey: Thank you for your presentations. Really interesting.
I have to say, I was intrigued with your talk of the 22nd century and the 21st. I drive an end-of-the-20th-century car. I think I'm still trying to struggle into the 21st century, so I find all this really fascinating.
That aside, you talked about the number of workers. Coming from the educational sector, training is big for me. I understand it may be our engineering faculties and IT faculties that are training the people to develop the technology. I wonder if I'm right in assuming perhaps that it's our technical colleges, apprenticeships and internships that will be the core training sites for the aftermarket workers.
Given that it's a big national issue with this changing technology, given that education is a provincial responsibility and given that safety on our roads are both — and you've talked about infrastructure being municipal, provincial, federal and I'm going to say international — what's the role of the federal government going to be in ensuring that there are the training programs that meet standards across the country, when it is not really the federal government's responsibility? Can you make a case that it is, in this case, the federal government's responsibility?
Mr. Champagne: I promised myself I wouldn't try to reinvent Canada with the relationship between the provinces and the federal government, but you're making a very good point, senator, about the fact that training for the aftermarket is driven by the trade schools and the apprenticeship program. If you think from the national perspective, the Red Seal program has worked well in our area of expertise.
There may be a place for some guidelines on retraining. Under the auspices of innovation, there may be a place to make a point that when it comes down to bringing the education level from our workers to the new generation, there may be a place for the federal government. I understand it is a provincial responsibility, and we work with the provincial levels and down to school boards to try to make this collaboration between industries and education institutions to shape the curriculum.
Some guidelines, some indications through — and I know EI does some great programs for retraining. Maybe there are areas of development there. We need to educate our workforce and the people who are going to find a new career, and all the people in secondary school looking more a career. Being a mechanic is really turning into being a technician, and if you want to look at the garage of 20 years ago, full of oil, it's turning into a lab, and it will require different skills. You can't repair a computer with a wrench. Maybe there is a place to give directives.
Senator Bovey: In school curriculum, how far down the system are you looking? My grandchildren are learning the timetables at the same rate I did. I'm not sure that's going to prepare them for the roles ahead. You talked about post- secondary. Don't we have a responsibility to understand what their needs will be before they get to the grade 7, 8, 9 level?
Mr. Champagne: Yes, we do.
Senator Bovey: "How'' is my question.
Ms. Daviault: To add to that, provincially, we have been working with the education ministry to brainstorm about how to get to the elementary school. We have been told that there needs to be some sort of national campaign or program that speaks to the parents of these young children to really bring to light the need in the STEM sector, which is getting a lot of attention these days.
But in terms of our trade, there is a lot of work to be done publicly to change the misnomer of what it is to be in this field.
The Chair: Mr. Ali, we have the traditional car manufacturers. We have the Googles, the Ubers and those that don't live in the same environment. In the middle, you a mixture where people like Volvo are working between.
Does your membership basically have to start picking and choosing, or are you working with the technology-driven manufacturers as much as the traditional car manufacturers, or are your members more traditional?
Mr. Ali: I can put it this way: This year is our sixty-fifth anniversary. If we go back 65 years and assess the membership of the APMA, it was a bunch of people who stood around a car and said, "Anybody who makes something that goes into that needs to be our member.'' You fast-forward 65 years and you look at a vehicle, outwardly it still has the same parts with doors, tires, steering wheel and everything else, but the internal makeup of that car is essentially night and day from where it was before. You have millions of lines code, sensors and computers that are assessing way more data than ever before.
To answer your question, yes we are. We have members who span the complete gamut of both what car manufacturers do as well as how they manufacture the cars. BlackBerry QNX is one of our members. We have members in the telematics industries, like weather telematics. We have members that are in the IOT space, dealing with the factories of the future.
Our membership spans everything, and we are working with them in concert.
If you look at the $32 billion and 95,000 members and we represent 90 per cent of that, yes, it focuses primarily on the traditional member and auto sector, but we are focusing more and more time and effort and resources in the connected and autonomous vehicle space. That is what has led to our upcoming connected and autonomous vehicle demonstration in the city of Stratford. The Province of Ontario announced on April 27 that it's going to be providing about $80 million towards this. It will come in four specific pillars, and one will be our demonstration project in the city. It will expand on the work that we've already done on the vehicles themselves.
Senator MacDonald: The more automated these vehicles become, I would assume the greater the risks when it comes to systems and technologies being hacked.
What kind countermeasures are in place now for potential hacking of systems that exist now? What would have to be done in future to prevent this stuff? Is there something on the drawing board now that's concurrent with the evolution of this technology?
Mr. Champagne: Auto makers would be in a better position to answer that question, but to participate in North American forums where there are discussions about cybersecurity for vehicles, I'll probably say that there are specific initiatives, primarily in the United States, in ensuring that the connected vehicle is connecting in a way that remains cyber secure. It has been a big concern with — that is responsible for highway safety in the United States specifically.
With a highly integrated industry throughout North America, we're part of the conversation. Again, I'm no expert nor can I speak on behalf of the OEMs, but I think they are doing a lot of good efforts around that. They specifically, through the U.S. agencies, have been asked to focus their energy on that area.
I will add that, from the aftermarket perspective and from a North American perspective, we are advocating to OEMs to embrace specific types of technologies that are cyber secure and also allow for telematics data to be communicated, not just vehicle to vehicle, vehicle to infrastructures or V to X, but also provide that cyber secure connections to the aftermarket for repair and maintenance purposes.
Mr. Ali: To add a couple of points to that, I brought up a few points in my remarks about that vehicle manufacturer and supplier safety is paramount to everything they're doing. As part of this safety when it comes to connected and autonomous vehicles, this does speak to cybersecurity. We had an event in September where we had one of the two gentlemen that hacked into the Jeep Cherokee — who took it over and were able to make the brakes faulty or take over the steering. This is definitely something we're focused on.
There is a lot of talent here in Canada that the United States government is taking advantage of and has contracted them to help with demonstration initiatives that they're doing in the state of Michigan. This is definitely something that everyone is looking at, both from vehicle to vehicle, vehicle to infrastructure and then vehicle to everything else.
Cybersecurity of the data flow, cybersecurity of the car, all of these things are being affected. They are taking into account that certain things have to be addressed at the user level, too. A lot of the reasons why vehicles get hacked is not the vehicle itself, but when somebody enters with their cellphone and then their cellphone syncs, whatever was synced in that cellphone gets synced into the vehicle. It deals not with just the vehicle itself but whatever gets brought into it.
Senator MacDonald: You mentioned the CASIS agreement.
As vehicles become more automated, more connected, what changes if any do you see to the CASIS agreement? Will it have to evolve as well?
Mr. Champagne: The CASIS agreement when it was drafted in 2009 was silent on the terminology around telematics. Maybe it's important to know that the whole negotiation around Right to Repair took a slightly different path in the U.S. In fact, we're a first in Canada. In the U.S., the voluntary agreement around Right to Repair was the result of one piece of legislation that was adopted in the state of Massachusetts, which created the precedent that sort of motivated all parties to come to a voluntary agreement, but it is underpinned by a piece of legislation that exists in Massachusetts.
The voluntary agreement in the United States is specific to say that that agreement does not include or does not extend to telematics, and so there's a higher sense of urgency in the United States to get a negotiation with the OEMs, to really look at telematics specifically because, again, their agreement specifically spells out telematics.
Again, in CASIS, it remains silent, so there is a bit of an area of interpretation as to whether or not, in fact, telematics is included or not in the scope of the existing CASIS agreement.
[Translation]
Senator Cormier: Thank you for your presentations. Like my colleague, I am very interested in the issue of workforce training. We have heard in previous testimony that, of course, this technology will be introduced gradually. As you may recall, the Internet came about gradually; training needs were identified, small specialized companies emerged, programs were developed.
My question is about training, perhaps not in a school setting, but in this transitional phase for your members, for garage owners in small communities. How do you see the training needs? A time will probably come when it may not be a laboratory yet, but it will no longer be a garage; there will be an intermediate phase. How do you see the training needs for the people on the ground, not in schools? Do you have discussions with the ministries of education or the provincial governments on that?
Ms. Daviault: I can tell you about the immediate needs. What we know from our research and our conversations with repair shops is that there is already a lack of training in the labour market. We are already falling behind a little. The goal now is to train the workforce for the vehicles coming to the shops. For instance, there are backup cameras and sensors. We are already a little behind with the training in that area.
The project I mentioned at the beginning will allow us to map out the training needs and determine what technicians need to be able to repair a vehicle. It will help us determine how to train technicians, where the training sessions will take place, and how to target the places with available jobs, while connecting them to curricula and colleges in those areas. The project would be carried out across Canada. That is our plan, but we have a lot of work to do.
Senator Cormier: Is there a generational issue as well? Clearly, there are older workers.
Ms. Daviault: Absolutely. We have recently done some research showing that over 38 per cent of our workforce, including technicians and mechanics, was between the ages of 50 and 65. We need a succession plan. On top of that, we have difficulty attracting young people to becoming mechanics, so we see that there is a shortage.
I'm not sure whether I answered your question. We are doing a bit of work for the present, knowing that industry must absolutely connect with colleges and education systems to immediately identify the future needs and to be able to find out where technicians are across Canada, where the jobs are, and what kind of training they need.
Mr. Champagne: Staying in much the same vein as Senator Bovey earlier, there is good collaboration between the industry and educational institutions. I feel that is the key, making sure of that participation in order to create the curriculum and the educational programs. I think it will be very important. In our representations to various levels of government, we try to make sure that there is that collaboration. I can perhaps quickly mention Georgian College in Barrie, which established the Automotive Business School of Canada a very long time ago. This is quite a unique post- college program, an example of fine collaboration. Car dealers, vehicle manufacturers and ourselves all participate actively to support the school. We participate financially and we have a direct impact on curriculum development. It's a great model that already exists, but, once again, in a provincial structure, it is very difficult to export. That gives you a little idea of some great collaboration with the industry that could be exported and that could perhaps have some influence.
[English]
Senator Griffin: I'm intrigued as to what you would consider the two most important things the Government of Canada could do in regard to your issues of concern. The government has a number of instruments at its hand, but they fall into two categories: a regulatory instrument and an economic instrument.
What two things could we do to address the concerns that each of you has expressed this evening?
Mr. Champagne: From our perspective, the first one is to ensure that there is a structure that will enable the automotive aftermarket to continue to have access to the data, the tools and the training, the same fashion as car dealerships receive today so that the aftermarket is able to repair safely and reliably all the vehicles on the road, the same way that you would find in an OEM or a car dealership. That would be the first one.
Senator Griffin: Okay.
Mr. Champagne: The other one connected to that is to reinforce consumers' choice, and consumers' choice takes two aspects. The first one is obviously your capacity in a small community serviced by a small local operator to be able to take your vehicle there and know that you have the choice to have it serviced there. We haven't talked too much about the whole aspect of data privacy, but again, as a car owner, it is my car, my data and my choice as to where I want that data to be directed to, and again the case of specific to repair maintenance of your vehicle, obviously to a local repair at the aftermarket.
Mr. Ali: From the perspective of the part suppliers, there are a couple of things that you can look at. In terms of skills development, you can look, from the immigration level, when it comes to being able to get work visas and things of that nature. I can tell you for sure that there are companies in Ottawa and Kanata that had American big companies like Apple set up shop right across the street from them for the express purpose of trying to get those people. We have heard stories where the trade commissioner's office and their ICE officers basically sit inside of Google and when they see somebody they want, they offer a green card and say, "When do you want to start?'' If we can look at ways to address keeping the talent and bring in talent from abroad, that's a great thing.
Second, from some of the things that my colleagues are speaking about, some of the things that are happening are happening on an entrepreneurial level.
There are companies popping up dealing with this express idea of when does your car need repairs and how does your car connect to certain repair shops, et cetera. By utilizing Minister Bains and the innovation initiative to support the entrepreneurial sector that will be looking at addressing these things that are popping up and trying to find value propositions that are outside of the traditional dealer markets or traditional things that are happening, that's another great thing that you can look at.
I think that speaks to everything that came in the latest budget, and that speaks to everything that the various levels of government, when they work together, are putting their heads and their minds together already.
Senator Griffin: Great, thank you.
Senator Runciman: Mr. Ali, I'm curious about the parts industry. How much of the design work is done in-house and how much is done by the manufacturers themselves who sign a contract with X, Y, Z or whatever to produce a certain part which has been designed by the manufacturers' design units?
Mr. Ali: Speaking to specific numbers, I won't do that.
Senator Runciman: No.
Mr. Ali: More and more of the design and innovation and the cost savings are being driven from the OEM down to the tier ones, which then falls down to tier twos and tier threes. So the various suppliers from mould makers to toolmakers to even the way they automate their systems, a lot of that stuff is being pushed further down the supply chain as the costs move that way. From that perspective, it's moving more out of the OEM side.
Where OEMs are still maintaining ownership is with respect to those four models that we talked about, the new drive systems, whether that be from the electric perspective or hydrogen perspective, whether it talks about how they are going to incorporate automated and connected technologies in the vehicle and how that vehicle works itself. Those are staying pretty much in-house, which is why you're seeing investments from Ford and Magna and GM in companies either through acquisition or as recently as GM with their work in Markham, as well as in Oshawa with the 700 to 1,000 engineers they're going to be bringing in, from this perspective. They are keeping that more in-house.
Senator Runciman: From the outside of design, for example, the privacy issues are a priority. That's what Senator MacDonald was talking about. I know that Mr. Champagne talked about it being better to ask this question to manufacturers, and we do have testimony before us where research was done, 75 per cent of the manufacturers didn't have any answers with respect to how to deal with hacking.
Looking at the design of parts, you would think, given the concerns, that that would be a priority in terms of from the outside of the design.
Mr. Ali: Without a doubt.
Senator Runciman: So that is happening. Mr. Champagne, you talked about these new models of automated vehicles increasing automation, requiring less maintenance, the newer vehicles. I agree with you. I have had a car longer than I have since I was a young guy when I couldn't afford a car, but I've kept this car for seven years now, and it's operating well.
However, I do know of someone who had a pretty advanced vehicle, automated braking and all the bells and whistles, and he was going over an international bridge and it seized up on him, one of the wheels wouldn't turn, and it locked up. It took a month for him to get that car back, and all they said was it was a computer coding problem.
It may require less maintenance, but as Senator Boisvenu said, these cars do get decrepit as they get older. I'm wondering what the implications might be for owners when the radar systems and all the sophisticated modules start to fail. Consumers could be looking at much more challenging repair times than is currently the case. That could be an implication here as well.
Mr. Champagne: The automated aftermarket is known to be a very integrated supply chain that you drive a vehicle into a bay, it's a late 2004 model year of X and it requires X, Y, Z replacement parts, and usually within a very short amount of time the repairer is able to identify the problem, calls the supplier and very rapidly we get this part that's made for this car that's now 13 years old and repair the car. It's a very effective supply chain.
But you are correct in the assumption that the type of repair we will perform will change. In fact, it's already changed a bit. We change less oil, and some components do not fail like before. Specifically, we are getting more and more into the reprogramming and the software updates, very similar to cellphones, more than the mechanical update.
My personal opinion would be that from the perspective of the aftermarket, it's an industry that has evolved, adapted, been very resilient, and that will continue to serve the public in a similar fashion, rapidly, and being able to provide a good service to consumers who say, "Hey, I need a car,'' and we have been pretty good at doing that.
Senator Runciman: So this fellow's experience was not an experience that we can expect going forward?
Mr. Champagne: Hopefully, it's an anecdote; it doesn't become the norm.
[Translation]
Senator Boisvenu: Once again, thanks to our guests; you are really interesting. Probably because you represent small companies in service areas that are really close to the public, your presentation shows that you are in step with reality.
I would like to come back to the CASIS agreement. The last time I had my vehicle repaired, I remember going to the dealer. He hooked it up to a computer and the diagnosis was made somewhere on the planet, but not by the mechanic. I realize how heavily dependent we are, even to diagnose an engine problem. The dealer does not do it; the manufacturer does, and where on earth they were when they found the problem, I don't know.
CASIS is a voluntary agreement that allows access to the major companies' software. Is that right? Should the agreement become mandatory? Should the government not be playing the role of "regulator''? A lot of jobs depend on it and, eventually, the major companies may be tempted to create a monopoly on repairing their own vehicles, especially, as I was telling you earlier, it will all be about robots. As a robot, why would I send it to be repaired somewhere else? I will repair it myself. It is becoming an integrated sales and repair industry that is going to have a major impact on your area of business. Is there no merit in the voluntary agreement becoming mandatory so that those small shops have the right to access the computers of the major companies?
Mr. Champagne: I can only agree. The intent of our association, in the aftermarket, is to keep working in partnership with vehicle manufacturers. I think you have heard our position that there is a risk and that we are concerned. However, I don't think we have thrown in the towel yet, and we are still working. Our message is about education, and we want to make sure that you fully understand the issues. We will continue to work with the auto industry. However, it is not beyond the realm of possibility that, some day, we'll be back here with a request, telling you that, our efforts aside, it might be time for the government to get involved in the matter and establish a regulatory structure, but we are not there yet. Once again, our hope is that an agreement will be negotiated.
[English]
Senator Bovey: You were talking about the curriculum at the college in Barrie. It brought to mind another way of making sure that there's cross-provincial curriculum cases is through the college associations, and they were meeting here a couple weeks ago. I would encourage both a federal approach but also an inter-institutional approach. If the curriculum is working well in developing training, I would be interested to see how it's being played out to BCIT or Red River Community College or Algonquin College here. We have to be as innovative in multi-ways of connecting as industry is in developing it.
It's not really a question.
The Chair: Do you have any comments on the non-question?
Mr. Champagne: We have been in contact with Polytechnics Canada, as an example. We have met with NAIT and SAIT. We have some of our elected officials on our board that are very much into that segment. Those are different areas we observe. Thank you very much for the comment.
Mr. Ali: Just from the auto parts manufacturers side of it, we have some very successful programs where either it's within the company itself training its own people, or they do, in fact, work directly with colleges to provide specific training to prepare their workers for the future.
The way the new generation and the connected and autonomous vehicles spaces are working, they are coming out of accelerator labs like a Ryerson DMZ or a community tech program in Waterloo, or even here in Ottawa at some of the facilities here. You will see that there will be an education component that comes from those as well. There is some work that's already being done, so I think there are ways that can be broadened even further.
[Translation]
The Chair: My thanks to Ms. Daviault, Mr. Ali and Mr. Champagne for their contributions today.
[English]
Honourable senators, when we come back from the break week, we will hear from the representatives from the Centre for Automotive Research of the University of Waterloo. That will be on May 30.
The following week, just so that people prepare their agenda, we will be going to Kanata to the QNX BlackBerry facilities, and the following morning, they will be coming here as witnesses, so we will get the demonstration on Monday and we will have the opportunity to ask questions of them the following day.
(The committee adjourned.)