Proceedings of the Standing Senate Committee on
Transport and Communications

Issue No. 14 - Evidence - April 11, 2017


OTTAWA, Tuesday, April 11, 2017

The Standing Senate Committee on Transport and Communications met this day at 9:30 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 connected and automated vehicles.

[English]

We have today two panels of witnesses. On this first panel I would like to welcome Mr. Kevin LaRoche, Lawyer and Partner at the law firm Borden Ladner Gervais LLP, and Mr. Robert Love, Lawyer and Partner at the same firm.

Borden Ladner Gervais is one of the largest firms in Canada, and it published last year a report on autonomous vehicles.

[Translation]

Thank you for being here. You may begin your presentation.

[English]

Kevin LaRoche, Lawyer and Partner, Borden Ladner Gervais LLP: Thank you for the opportunity to discuss with you today our thoughts and observations regarding issues associated with the deployment of connected and autonomous vehicles. I know this is a matter that the committee is focused on. I've had the opportunity to read some of the presentations made earlier. I hope that we're in a position to add to that and, if not, at least to respond to particular questions that you may have.

My colleague Mr. Love and I, as has been said, are counsel for Borden Ladner Gervais. As it relates to your study, my background is in the area of intellectual property and cybersecurity. Mr. Love is more focused on the area of product liability.

We began this paper in the late fall of 2015. We prepared it as a white paper. Our objective was to attempt to outline to our firm's very diverse client base what the impact of autonomous vehicles was likely to be. To be frank, the response to that paper was overwhelming in terms of the number of Internet hits, the number of solicitations by clients, the number of invitations that we received to make presentations to various groups, from trucking associations to urban planning associations, as well as the number of calls from the municipalities expressing interest or looking for some form of perspective or advice.

The objective of this paper is not to exhaustively explore any one subject. We're more concerned with the breadth of the impact, trying to foresee as best we can what the technologies will do across society and across economies rather than in the context of a particular economic sector or concern.

That is at least my interest. I'm much more a generalist. I'm concerned with the broad social and economic impacts of autonomous vehicles. However, Mr. Love, who I introduce to you now, brings a more particular perspective, which I'll leave for him to explain to you.

Robert Love, Lawyer and Partner, Borden Ladner Gervais LLP: Thank you very much. I echo the appreciation for the invitation to address this committee.

In my view, the number one driving force for autonomous vehicles is and ought to be the increased safety for Canadians using our roadways, and that includes, of course, the motorist, the occupants, pedestrians, cyclists, motorcyclists.

The other benefits of connected vehicles and autonomous vehicles are not to be ignored, but those are the spinoffs to the key focus, and that is reducing injury and death.

It is a paradigm shift in moving from minimizing the injury when a crash occurs to trying to avoid the crash itself. Given that 94 per cent of crashes are tied to human choice or error, and there are about five motor vehicle fatalities for every 100,000 Canadians, every effort should be made to support the development and deployment of this technology, provided of course that this can be done safely.

To achieve this, an unprecedented amount of coordination and collaboration is required across various industry sectors but perhaps most importantly across various levels of governmental agencies both within Canada and across our southern border and internationally. This requires proactive leadership.

Leadership from government ought to take the form of clear policy statements and regulatory action where required. Using the United States as an example, the National Highway Traffic Safety Administration issued its Federal Automated Vehicles Policy in September 2016, and it is now followed with proposed changes to the Federal Motor Vehicle Safety Standards which require OEMs — original equipment manufacturers — to include vehicle-to- vehicle technologies in all new light-duty vehicles in order to collect and transmit data on vehicle speed, heading and brake status to other V2V vehicles within 300 metres. The phase-in period could start in 2021 and be mandatory by 2023. Extensive consultation is already taking place with government and industry.

The real challenge over the next decade or so is not the autonomous vehicle and its technology, but its interaction with non-autonomous vehicles and infrastructure which has not been updated to interact with autonomous vehicles. This is why the V2V rule proposal in the U.S. is so important, as it will achieve the greatest positive impact in the shortest time at the least cost.

I do have a growing concern with respect to level 3 automated vehicles, where the vehicle is fully automated in most situations. The driver is required to take over in some situations, but constant attention is not required. The driver is expected to respond appropriately to a request by the vehicle to intervene, but I question whether this is a realistic expectation, setting the driver up for failure.

Interestingly, collision rates seem to be rising, including pedestrian collisions. While the issue is still being researched, one has to wonder whether this is explained because of distracted drivers and distracted pedestrians. Level 3 vehicles may only exacerbate this issue. More research needs to be done before allowing level 3 vehicles to operate on our roads.

The opportunity of autonomous vehicles has prompted many new players to enter the field. Because these new players are not necessarily familiar with the design, manufacture, assembly and distribution of motor vehicles, caution must be exercised in ensuring that there's a clear statement of what is expected and the standards to meet. As Transport Canada has jurisdiction over the safety of motor vehicles, this task falls to it.

Many other areas of law will be impacted by the advent of autonomous vehicles, but because of our constitutional structure and division of powers, it will be difficult to create a homogeneous legal environment. While national legislation on issues does not seem possible, encouraging collaboration will greatly assist in ensuring a more consistent approach between levels of government.

I know that the committee is also looking at the impact of autonomous vehicles on various sectors and industries, so I'll comment on one that I have some familiarity with, and that's the insurance industry. It will likely be impacted by autonomous vehicles in a significant way.

When you look at the level of direct written premiums for auto insurance, using the 2013 number of $21 billion — and that's exclusive of the government-owned insurers — in that same year, Canadian private insurers of automobiles paid out about $15.1 billion in net claims. A reduction in collisions will result in a reduction of claims which will result in a reduction of premiums. Absent new markets, the insurance industry is facing a potential significant constriction in the next 10 to 15 years and beyond.

We would now be pleased to respond to your questions.

The Chair: Thank you very much, Mr. Love. It opens up a vast level of questions, and we will start with Senator Saint-Germain.

Senator Saint-Germain: I will speak French.

[Translation]

I must say, very sincerely, that I am very impressed by the quality of your work and by the fact that you go beyond the strict interpretation of the law and the short-term legal view. In that sense, your contribution to our committee's work will be most valuable. Thank you very much.

You wrote recently in the magazine Policy Options that, with regard to automated vehicles, it is not a question of replacement, but of jobs becoming obsolete. You pointed out that, according to the 2011 census data, the business model developed for autonomous vehicles could compromise the jobs of more than 1.1 million Canadians owing to replacement and jobs becoming obsolete. In your opinion, which sectors can be expected to be hit the hardest by replacement and jobs becoming obsolete, and what measures could be taken to prevent the loss of those jobs or to provide for potential retraining, and what could we start doing right away?

[English]

Mr. LaRoche: I think it's very likely that as the level of autonomy of vehicles increases, we will very quickly work into a situation where local transport becomes autonomous. I believe within five to seven years, if not sooner, we will all walk out of this room and walk into a taxicab in which there is no driver. That is on a local basis. That's not going to happen in every city, certainly not in my hometown of Fernie, B.C., but in local, limited areas, the level of autonomy will come very quickly.

Local transport and long-haul transport are at immediate risk. That risk will mature within 5 to 10 years, at the outside 12 years. In the paper we give statistics relating to the number of jobs that might be at risk in the United States. I can't recall those numbers off the top of my head, but we're talking about hundreds of thousands of jobs potentially being at risk. Those are relatively stable, good jobs. Those are at risk.

There's an upside. The upside is that as technology grows, other kinds of skills are needed. As you correctly point out, the question becomes, how do we take the working-base knowledge that we presently have and turn it into the knowledge base that's required in the economy that we see?

We have some lead time, although not much. Some people say 4 or 5 years, other people might say 10 or 15 years, but there is some lead time. It becomes a question of emphasizing to younger people the directions they need to go, ensuring that they have the opportunities to obtain the necessary training, and making sure that Canadian graduates in that training are leaders in their field so that they can work in the microchip industry, so that they can develop all of the aspects of autonomous vehicles.

I think the impact will be very significant. I think it will happen sooner than many people think, and it will be very substantial. I wouldn't want to be a taxicab driver five years from now.

I was speaking to the trucking industry not long ago. For some reason, I seemed to be on fire that day; they seemed to like what I was saying. A gentleman came up at the end asking what they should do. I said, "If I were you, I wouldn't be sitting around this meeting. I would be back to my banker figuring out how I was going to refinance to create the capital necessary to buy the trucks which are going to be self-driving on major highways in infrastructure situations 10 years from now. That's what I'd be doing.''

Forewarned is forearmed.

Senator Bovey: Thank you. I found your presentations very interesting and helpful.

You're well aware that we've been hearing from a number of witnesses on a number of aspects of this issue. I have become increasingly concerned about who leads. Is it industry? Is it governments? I was pleased to hear you say that national legislation on all issues does not seem possible and that ensuring collaboration will greatly assist.

Who drives that collaboration? I know you've said that policy and regulatory aspects should be done by the federal government, but who is leading it, or do we have a multi-pronged fork that is going to go off in different directions?

I'm also interested to hear where you estimate we are at achieving the level of cooperation on these issues internationally, particularly with the United States.

Mr. Love: I'm happy to address that.

In terms of who should be taking the lead, I think we need a vision or policy statement from Transport Canada specifically as to where they see the industry should go so that they can work towards that goal.

For example, the Federal Automated Vehicle Policy in the United States is a great example of that. It sets out a vision for autonomous vehicles. It gives guidelines in terms of what the OEMs should be incorporating into their designs so they can all work together to achieve the same goal, because you don't want to invest significantly in a particular technology only to find out that the regulating agency at the end of the day is not going to accept that.

The big aspect of autonomous vehicles is that they work together. So you don't want a VHS and Beta situation. You want everyone working together with the same technology to achieve the best results for autonomous vehicles.

In terms of who is taking the lead, I think it is Transport Canada, but as the committee is aware, they can't enter into the jurisdiction of the provinces in terms of the deployment of the vehicles on the roadways. That's where collaboration is necessary with the federal and provincial governments, and when we get into vehicle-to-infrastructure arrangements, down into the municipal level as well.

It's not just Transport Canada because you're talking about autonomous vehicles and also connected vehicles. My understanding is that no single agency within the government has control over all aspects of autonomous vehicles. So that requires the integration and the collaboration amongst different agencies as well, not just different levels of government.

Senator Bovey: Are all the provinces at the same point of coming to their decisions, or are we dealing with lots of potholes along the way, so to speak?

Mr. Love: They're not the same. Ontario is the only province that has come out with legislation to actually allow for the testing of autonomous vehicles on their roadways, with a few players who have permission to do so and are testing in Ontario, but no other province has that. Where the other provinces are, I'm not sure.

Mr. LaRoche: I approach it from a much broader perspective. The question is, what can government do?

From my mind, there needs to be a general policy with respect to autonomous vehicles. It's a policy that needs to be sensitive to all of the areas we're discussing. It needs to be a policy that recognizes there are short-term concerns, which need to be addressed. It needs to be a policy that recognizes that there are mid-term concerns that need to be addressed. It needs to be a policy to recognize that there are federal-provincial issues that need to be addressed and one that recognizes that there are innovation issues that need to be addressed.

The articulation of such a policy as a set of goals would recognize implicitly that there are some areas requiring significant regulation, for example, cybersecurity. Such a policy would recognize that there are some areas in which there should be very little regulation. Such a policy would recognize that there are areas in which the government should attempt to encourage certain things, for example, as my friend says, the development of common standards. Such a policy can also play to innovation. One of the big things down the road is vehicle-to-infrastructure arrangements. That is where the vehicle communicates with the infrastructure.

Right now, we're a V2V world, vehicle-to-vehicle. Vehicles are very heavily equipped in terms of the technology; they're going to be very expensive. There's a lot of hardware and a lot of software in there. In the longer run, that cost will fall as the technology is no longer incorporated in the road but in the infrastructure beside the road. It's at that point that that which is private cost becomes a public utility. The infrastructure cost becomes a public utility, lowering private costs, but it's a state-sponsored cost. There's a lot of innovation to be had there. Maybe this is a case where Canada wants to lead in that area.

One can certainly see in a country such as ours, which is as large as it is and has such an economic history centred around transportation, from fur traders to early Air Canada, that we're all about transportation. Maybe that's something we're good at. Maybe that's something that we want to take a look at.

We're also world leaders in communications and have been for many years. We have historical strength to draw on there. So the creation of long-distance infrastructure experiments and innovation to support autonomous vehicles might very well be an area in which we could grow. That could be a selection made within a policy.

I'm sorry I've gone on too long. I don't mean to interrupt other's questions.

The Chair: It sounds like a very good framework for our report. You've written our introduction. We'll quote you at the bottom of the introduction.

Senator Eggleton: Vehicle manufacturing in Canada is integrated with vehicle manufacturing in the United States. I'd like your comments about where we are vis-à-vis the United States at the moment.

I do know that they have, through the Department of Transport, developed safe testing and deployment of AV policy of 15-point safety assessments for vehicle manufacturers. Should we be following suit?

Also into the equation is something new, the budget. A couple of weeks ago it brought some money to Transport Canada to modernize our transportation system. There are also other funding envelopes for things not necessarily dedicated to AVs and CVs, but innovation and various other things relevant to super clusters are getting funding as well. That may have some impact.

I'd like to get your comments generally on how far out we are in relation to the United States. Should we be following suit in some of the things that they're doing and is this new money helping to get us there?

Mr. Love: To the first part of the question, I think that Canada has to harmonize with the U.S. in terms of the direction on autonomous vehicles. So the NHTSA has already come out with their federal automated policy and also a cybersecurity one as well. They followed that, as I said, with the proposed rule-making on vehicle-to-vehicle.

The motor vehicle industry is so closely connected between Canada and the U.S. that all of the regulations — we talk about the Federal Motor Vehicle Safety Standards in the U.S. and the Canadian Motor Vehicle Safety Regulations here — should be harmonized so that a vehicle produced in Canada can be shipped across the border to the U.S. without any modification or changes other than, of course, from metric to imperial and vice versa. We need the free flow of trade back and forth between them.

Whereas NHTSA has come out with a federal automated policy, I don't see any reason why Transport Canada can't follow suit and come out with a statement aligned with that, unless there is some good reason to depart from that.

The autonomous policy has the flexibility to show OEMs that this is the direction, this is the vision we want for the automated vehicles, but you, the private players, come up with the technology. You can work in your own way to achieve that vision the way that you best see fit. There is more collaboration now between NHTSA and Transport Canada along many lines. I think they are working collaboratively together on that front.

In terms of the investment question, yes, I was aware of the money set aside in the budget for investment. I think we should play to our strengths. Our strengths in Canada are in the technology. It's in the material development to make vehicles lighter.

That money needs to be put forward so that Canada becomes the testing ground. The OEMs are now making decisions on where they are going to test and deploy autonomous vehicles, and you want to be front and centre in terms of where they're testing because they're going to deploy where they're testing. If you missed the start of the race, it's going to be very hard to catch up.

The policy allows the flexibility, and then you need the provinces to come forward with legislation to allow the testing on the roadways so that the companies will invest and will come to the jurisdiction of Canada, wherever they want to test, and that's where they're going to deploy. That's where there will be opportunities for jobs and innovation.

Senator Eggleton: It could start with this framework policy from the federal government, and it could then lead to further collaboration with both industry and the provinces. That's probably the step-by-step procedure you're suggesting.

Mr. Love: I agree.

Also, the federal statement, even though it can't wade into the provincial jurisdiction, it can set out the expectation through collaboration, but set out this is where we think there is collaboration and here is where we think the jurisdiction falls to the provinces. And it can set it out so everyone is working from the same play book.

Senator Eggleton: That sounds like a good start.

Your last comment was about the insurance industry constriction. This again looks at the question of employment and this particular industry. I take it you're suggesting that with fewer accidents, ultimately there will be a shrinkage in that particular industry, although perhaps in the early stages when you've got automated and non-automated vehicles interacting, even co-hire —

Mr. LaRoche: Horses and buggies.

Senator Eggleton: This would virtually become a not very profitable business somewhere down the line, and you would see a considerable shrinkage of it. Is that what you're saying?

Mr. LaRoche: I'll leave Mr. Love to give the serious answer to that. The jocular answer is that Warren Buffett is reputed to have said, "No accidents, no insurance.'' But on the other hand he owns GEICO, so maybe he is betting counter cyclically, I don't know.

Mr. Love: I do foresee a constriction in the insurance industry. I think it's going to take some time. In the near term you're going to see the development of autonomous vehicles, as long as the way can be paved to have them operating on the roads. That's within two or three years. But those are going to be ones that are owned and operated by the OEMs and the like, where they can spend the money on a $100,000 car with all the technology and have it work in a geo-fenced area, for example, in the city of Ottawa or in the city of Toronto.

You can have a level 4 vehicle within a year, and maybe a level 5 — so it's completely driverless — within two years, operating in a geo-fenced area. Those vehicles should be relatively accident free.

Because they are $100,000 vehicles, the insurance cost still may be high on those, but in the long term, which is more 20 years out, where your consumer is driving an autonomous vehicle, there is a lot of lead time for the insurance industry to develop new products.

There is no doubt that in the long term there is going to be a reduction in collisions, which is great because it is going to reduce deaths and injuries on our roads, but with reduced collisions, there will be reduced premiums.

The Chair: As you know, in Quebec we have no-fault insurance, so we don't know if we're going to be blaming the computer. Somebody is going to address the issue.

Senator Runciman: We have representatives of a very prestigious law firm here. We saw news today and yesterday with respect to court delays and a significant offence being stayed. I'm wondering if you could speak to that issue and how this could affect criminal law, court delays. A lot of courts are bogged down with impaired driving charges, for example. I'm wondering what you see in the future with respect to the impact on criminal law and, I would say, policing resources as well.

Mr. LaRoche: That's interesting. A great deal of crime is vehicular, whether it's impaired driving, careless driving, negligence. In a fully automated world, that disappears, and the need for policing of those subjects no longer exists, which frees policing resources for other pursuits.

I'm not sure about the number of vehicle-related cases in the average provincial criminal court, but I imagine it's a not insignificant amount. So that, too, should disappear in the long run.

We're talking about a society in which the fully autonomous vehicle predominates. Frankly, as much as I'd like to see these things roll out tomorrow morning, I think the fully autonomous world is probably 15 or 20 years out. But we can edge towards there.

What is very perceptive about your comment — and it's a thing that has interested me about this — is the knock-on implications in areas that you don't normally expect. What are the knock-on implications for court delays? When you stop and think about it, there are implications for court delays, perhaps not immediate, perhaps long run.

As we point out in the paper, there are implications for emergency rooms. A very large percentage of the work in your average hospital emergency room relates to motor vehicle accidents. We say, "Okay, fewer accidents, less need for emergency rooms.'' But there is a downside to that. It's a bit macabre, but it's a downside. Most organ transplants are made as a result of deaths occurring as a result of motor vehicle accidents. It is not a pleasant subject, as I say, a bit macabre, but there will be a knock-on impact there.

It's the breadth of the impact that I find most interesting. I had not thought much about your question, but I think the answer I've given is correct. I think it will be a mid-term to long-term impact.

Senator Runciman: Of course, we can't predict. There could be new criminal charges that arise out of moving in this direction as well, hacking, for example, and that sort of thing.

Mr. LaRoche: Certainly, cybersecurity is a whole issue to this and one that people are profoundly concerned about. I'm very concerned when I look at our American brothers and discover that the House and the Senate voted that digital data compiled as a result of searching can now be made available and sold. I wouldn't want my digital data sold in any way, shape or form. There will be massively more amounts of it in an autonomous vehicle world. It's a world of data. People will know — machines will know — where you were, what time you were there, with whom and on what date. That's a massive amount of data that has to be regulated.

Senator Runciman: I posed this question to other witnesses with respect to the whole issue of cybersecurity, where governments should require, before a vehicle is available for sale, that they have protections built into that vehicle, as best they can, with respect to protecting the privacy interests of the owner.

Mr. LaRoche: This is security by design, designed into the vehicle, and I think it's something that should be very closely regarded.

As quickly as we move toward common standards with the United States in the physical attributes of autonomous vehicles to ensure that they are all operating on the same standards, on the same wavelengths, et cetera, at the same time we have to make sure that safeguards for private information are designed into the system.

[Translation]

Senator Boisvenu: Welcome to our witnesses. In my opinion, I think we need someone to take charge of the issue in Canada. According to federal government officials, a lot of work is being done in silos, but there is little coordination. This worries me, as you said, because if we miss the initial steps, catching up will be very expensive. I think the report should identify the person who will play an immediate leading role on this issue, because we are noticing that developments are proceeding more quickly in certain locations than they are here.

My first question is the following: how can we decide who will take charge of this issue in Canada?

[English]

Mr. Love: I think what you might need is a cross-governmental agency or committee of some sort, because I don't think there is anyone who can take the lead and do so in an authoritative capacity. It necessarily requires cooperation and collaboration. So rather than having individuals do it in an ad hoc manner, a governmental committee or agency could be created, which has membership from a municipal, provincial, and federal level, but also different agencies. They can sit together around a table like this and make sure that everybody is on the same page, working toward the same goal. Everyone has different interests and those interests have to be brought to the table.

You make a critical point. We can't be slow off the mark. We are already a little bit behind. Canada was seen as a leader, and I'll mention particularly Ontario in terms of its investment and development in the auto industry. I think we're starting to lag a little bit behind there. Michigan is already coming out with the SAVE legislation, which has enabled the testing and developing of autonomous vehicles on the roadway. Several other states have done the same.

We need to pave — no pun intended — the road for the technology to be tested and developed here, and that's going to spin off the jobs.

[Translation]

Senator Boisvenu: Mr. LaRoche, you said that actions should be identified for the short and medium term. In your opinion, do we have enough information today to clearly establish those objectives? Right now, it feels like we are managing a crystal ball that is clouding the issues. Do you have enough information to establish short and long-term objectives for Canada?

[English]

Mr. LaRoche: I was thinking about that this morning. It's a massive task.

I'm a trial lawyer and I do complex technological trials. I look at them and think, "I will never get this thing under control. There are too many issues and too many witnesses. I think I just want to retire and go back to being a chicken farmer in Fernie. I don't want anything to do with this anymore.''

But it's like everything else in life; you look at the task and divide it into workable portions. Identify what needs to be done in the short term, identify what needs to be done in the intermediate, and identify what needs to be done in the long run. Know the unknowables to the extent that you can.

I don't think that we're in a position today to answer even the short-run issues because I'm not sure that we have fully identified the short-run issues, but they are identifiable. Once they are identified, then responsibility for them can be allocated and policies can be prepared.

While it looks intimidating, like all intellectual tasks it's manageable if enough people sit down, table it out and put it into its respective categories: What needs to happen first? What needs to happen next? What has the worst consequence and what has the best consequence? Where are the dollars coming from? That's the difficulty of making policy. It's perfectly doable, but it needs to be done and it needs to be done early on.

To add to Bob's comment, it would be a mistake to make a policy, go through the exercise that I'm describing now, and not enunciate a leader to carry it forward. The enunciation of a policy is nothing, frankly, unless the means of carrying it forward are articulated. Simply creating another interdepartmental committee or a working group is not it. The entity on so important a project needs to be identified, constituted, mandated and budgeted, I think, in my personal view.

[Translation]

Senator Boisvenu: The committee has also given itself the objective of meeting with representatives from universities and companies that are doing research and already producing these vehicles. With respect to our upcoming visits, what advice could you give us as to our approach to these projects and research? Do you have any advice for us to help us gather documentation and prepare with a view to defining short-and medium-term goals?

[English]

Mr. LaRoche: I would be asking them to think outside of their box and to help you identify the social and economic policy issues that will arise as a result of that which they do. It's a perfectly fair question.

Another question would be this: What can we do to help you that does not involve giving you money? In other words, what infrastructure and what do you see that needs to be done in the future to make your product or service acceptable?

Again, the emphasis really would be on, "We're not talking about giving you money; we might do that, but that's separate.'' The question is this: What can the public purse do to ensure that the product is a workable one in the long run and what will the consequences for us be? I think that's a fair question.

Senator MacDonald: I would like to get back to some of the issues you raised in regards to usage-based insurance. I find the intrusive nature of this type of thing troubling.

For each trip taken in a vehicle, you mentioned the duration of a trip and speed of the vehicle. We note that some insurance companies have already used this technology to offer discounts to drivers based on their driving habits. This seems extremely intrusive to me. I'm curious about how much of this is going on. Does this have to be approved by the person who is purchasing insurance? How do they determine who is driving the vehicle?

There are so many questions around this. Could you elaborate?

Mr. Love: Sure, I'm happy to.

There's one insurer in particular I've read about recently — I believe it's Aviva — that has offered a 15 per cent premium discount if your vehicle has level 2 automation: advanced breaking, lane keep, that sort of thing. Already the data is showing that these vehicles are in fewer collisions than vehicles without that technology. So on that sort of thing, there is no intrusion or sharing of information. It's just I bought this new vehicle and they ask what type it is. You tell them what type it is and they say that that qualifies you for a discount because of the automated features in the vehicle.

If you're going to the next level of sharing your vehicle data with them, they may offer you a discounted premium. I believe right now that there are opportunities out there for people to provide information to the insurance company in exchange for a reduced premium. I believe there is a debate as to whether or not in the long run it's not going to be mandatory — because it's always voluntary — and that by refusing and paying a high premium, you are subsidizing the other driver, so they are forcing you into agreeing to accept their terms and share all the information with them.

Whether that needs to be regulated or not, I think the focus has to be on what they can do with the information as opposed to the collection of information. They are in the business of assessing risk, so if it's a lower risk some people might want to enjoy the lower premium because they are a lower risk. The focus is more on what they can do with the information they obtain.

Senator MacDonald: Conversely, they can use the information to determine that you are a higher risk and impose higher premiums on you.

Mr. Love: Yes, they do that right now through your accident history.

Senator MacDonald: You may not have an accident history, but they could still determine that you are a higher risk, right?

Mr. Love: Yes.

Senator MacDonald: Thank you.

Senator Griffin: My question relates to the aftermarket. I'm thinking of the automobile repair shops, the mom and pop operations, especially out in smaller centres or rural areas. The whole aftermarket business is a $21 billion industry, so it's not insignificant.

One concern these folks would have is who owns the information that comes in related to these cars if they're trying to service them. What regulations or legislation might the federal government have to enact, or even the provincial government, to enable these local automotive businesses to be able to continue to operate?

Mr. LaRoche: In terms of information, if I understand the question and I may not, the scenario would be that I take my car in for repair and it's full of information, and the repairer then has access to that information.

Generally the information we're discussing here is not maintained in the vehicle; it is constantly communicated back to the company, if you will. So the car is a telematic device. It is constantly in communication. It is sending data back to someone. It's not storing the data itself.

I don't think in the world that I understand that a repairer would be able to download the data in your car and determine where you've been in the last 10 days. I don't think that information is in the vehicle any longer. Other people might get it, but probably not the repairer.

As for the repairers themselves, I think they have a challenging future. I think that future is a result of the fact that there are going to be fewer accidents and there may well be fewer cars. To me, it's not a growth field.

Mr. Love: I would add two comments. One is that the experience and education required to fix these vehicles is going to increase exponentially. So this is not changing the oil when a vehicle comes in with all sorts of radar and cameras and LIDAR. That's going to be quite a different future for your auto mechanic.

In terms of information, one important point to make is that the vehicle-to-vehicle proposal is to have a system which operates independently from the other stored information in the vehicle so that it is not available to be communicated anywhere outside the vehicle. It's a separate system designed only to communicate with vehicles within 300 metres. So there can be no transmission of that information. It will be completely unidentifiable to the vehicle or any occupants of the vehicle.

When you move forward into vehicle-to-infrastructure, I would expect the same thing. The infrastructure won't know whose vehicle is being driven. They will just know it's a vehicle going through the intersection.

Senator Mercer: Gentlemen, I have a comment before my question. You mentioned organ donation declining because of automated vehicles. At the time of seat belts becoming mandatory across the country, I happened to be Executive Director of the Nova Scotia Kidney Foundation, and kidney patients were one of the major recipients that came via automobile accidents. There was dramatic decline at that time. Certainly we are in favour of seat belts, but it did have an effect. This will have another unintended consequence. Again a positive effect, but it has an effect on organ donation for people.

I do want to put on the record that we are not being too sympathetic to the insurance industry at this table. We are not having a tag day for these people. They will find a way to milk the people who are not driving automated cars and survive.

The aftermarket question Senator Griffin asked was important because those of us who live in rural parts of the country don't rush off to dealers with highly trained technicians all the time. One of the responses that the federal and provincial governments need to look at is the training and retraining of the technicians that are servicing vehicles now. It is a $21 billion industry that Senator Griffin continues to quote, and I agree with her. Should the government be proactive at this stage of the game and start looking at how we retool our training process both federally and provincially in providing actual training?

Mr. Love: Let me quickly make a comment with respect to the timing of this.

There are about 30 million-plus vehicles on Canadian roads right now. Every year about 8 per cent are replaced with new vehicles. It is a large proportion. It takes about 20 years to turn over the Canadian vehicle fleet. I forget the exact percentage, but about half the vehicles on the road are over 10 years old. So there is a fair bit of lead time in terms of what is going to happen.

As we all know, other than checking your oil and windshield fluid levels, it's hard to do anything else on your vehicle. These days you need to go to a trained mechanic. It will be more sophisticated to keep all of the auto mechanics up to date on the technology and the changes.

Senator Runciman: I think it was Mr. Love who mentioned the geo-fenced area. I was curious as to what that would look like. Is this a 10 or 20 block defined area, or is there specific technology that goes into what you describe as a geo- fence?

Mr. Love: Yes. You could have a car manufacturer who will have a vehicle that's level 4 right now, so it will have a driver in it but the driver won't be driving. It will be very prescriptive in terms of where it can operate, so perhaps just within the city limits of a particular city. By geo-fenced, I mean it communicates with GPS, so it's not allowed outside that area.

Within a few years, two years even, you could call a lift service. They will come to your house and there will not be a driver. As long as you are within this geo-fenced area, it will take you to the destination.

Senator Runciman: There is no other specified infrastructure required to move in this direction?

Mr. Love: That's correct because this vehicle is worth perhaps $100,000 and has all the technology to operate independently. But before you can go into the mass market, you will need the infrastructure also communicating with the vehicles to lower the cost of the technology in the vehicle you are driving.

Senator Runciman: How significant will that be in terms of investments? It would vary from municipality to municipality. The fiscal capacity, how do you see that evolving?

Mr. Love: Slowly. It's going to be expensive.

The Chair: I would like to join my colleagues in congratulating you on your presentation and on the excellent questions and answers. It's going to help our committee. We hope you are an inspiration for the witnesses to come. Mr. Love and Mr. LaRoche, thank you.

We will now invite Mr. David Ticoll to come to the head table.

[Translation]

Honourable senators, let us continue our study with our next witness, Mr. David Ticoll, Distinguished Senior Fellow, Innovation Policy Lab, Munk School of Global Affairs, University of Toronto.

[English]

Mr. Ticoll published a discussion paper on automated vehicles in Toronto, commissioned by the City of Toronto Transportation Services Division. He also gave a presentation on the effect of those vehicles on the job market at the conference on automated vehicles in Toronto last year.

[Translation]

Please go ahead, Mr. Ticoll.

[English]

David Ticoll, Distinguished Senior Fellow, Innovation Policy Lab, Munk School of Global Affairs, University of Toronto, as an individual: I'd like to thank the committee for this opportunity to testify in support of your study on the issues related to the deployment of connected and automated vehicles.

Before I start, I'd like to mention that in the interests of precision, I've made a few small changes to my opening remarks relative to the circulated version you received. I believe the clerk will ensure you have copies of the slightly revised presentation I'm about to make.

I'm proposing today that we focus on the big picture, which is how connected and autonomous vehicles will change some important things about Canada. My question is very simple: How will we use vehicle automation to help build the Canada that we desire for our children and grandchildren?

The arrival of CAVs provides Canada with a once-in-a-century nation-building opportunity, I believe. We have used major transportation initiatives for nation building before, with the Canadian Pacific Railway in the 19th century and the Trans-Canada Highway in the 20th. These had transformative impacts across every aspect of life in this country.

In our sesquicentennial year, what could be more timely than to do it again, to address the economic, social and environmental priorities of the 21st century?

[Translation]

The mobility revolution is more than self-driving cars, buses and trucks. It includes freight transportation, specialized robotics, industrial equipment, unmanned aerial vehicles, such as drones, that deliver people and goods, connected infrastructure and so forth. Instead of vehicle hardware, information technologies will be the most valuable assets of the CAV era.

[English]

Consider this scenario, say, 20 years from now, when my new grandson will be 21 years old: Most consumers have given up on car ownership and instead use electric, automated taxis for personal transportation. Most automated taxis are sized to fit one or two people, with custom vehicles for all sorts of special needs, from shopping at IKEA to wheelchair access.

Because road accidents have declined by 95 per cent, automated taxis have shed tons of safety armour, gaining battery range and energy efficiency as a result.

Mobility services cut consumer transportation costs in half, and at the same time, successful mobility service providers reap much higher profits than today's car companies do.

In terms of vehicle parking, the need for parking on streets has declined dramatically, so city streets have lots of room for pedestrians, cyclists and greenery.

In this scenario, Canada has made huge progress on policy goals, such as achieving our Paris greenhouse gas commitments; eliminating traffic-related deaths and injuries; fostering innovation, productivity and growth in a variety of economic sectors; and improving mobility for elderly, young, disabled and low-income Canadians. For example, an analysis I did based on census data projects 1 million elderly citizens will have difficulty using public transit in 2030.

This scenario sounds utopian but much of it is achievable. The question is what will governments do to maximize these outcomes?

The mobility revolution also means lots of challenges. For example, Canada's car and auto parts manufacturers must adapt to disruptive technologies, competitors from the technology sector and entirely new business models. By my calculation, CAVs could lead to job losses in sectors or occupations that employ over 1.1 million Canadians. CAVs will also create new jobs, but it's hard to see how the net outcome will be positive.

Some infrastructure investments that we're considering today that are based on pre-CAV assumptions could seem overpriced or obsolete by the time they are built. Cheap, convenient and accessible automated mobility could increase road travel, the volume of road travel, the amount of congestion we have on our streets and more people living outside cities — more urban sprawl.

If Canadians switch from car ownership to on-demand mobility, a handful of global companies could end up running most of the cars on our streets and controlling all the data we've been talking about today, which would flow right through them.

Considering all these changes, governments would be well served to review their fiscal and budgetary assumptions.

So to maximize the benefits and minimize or mitigate the risks of this emerging future, we do need clear-eyed leadership, new mandates and skills in government, and we need practical, politically sellable solutions.

Here is a possible vision. By 2025 or sooner, Canada emerges as a global leader in the adoption of CAV technologies to protect the environment; improve health, safety and accessibility, and our quality of life; revitalize our cities and communities; enhance individual and collective information rights; and build a vibrant, equitable and innovative 21st century economy.

Our goals for, say, 2035 should include tangible outcomes that address the policy objectives and challenges that I've described. Achieving such outcomes would require active consensus building, a big national effort to engage in an array of stakeholders across Canada.

The timing is good. The government's focus on infrastructure and mobility investment and innovation in the 2017 budget provides powerful levers to act now on CAV policy priorities. For example, government could use these investments to encourage consideration of CAV technologies and their implications in infrastructure and transit investments; foster CAV innovation that address the full spectrum of policy goals in the announced Smart City Challenge as well as in other pilot projects; encourage the use of Canadian-developed and Canadian-produced CAV technologies in these initiatives; and invest in mobility information policy frameworks, capabilities and infrastructure. I think information policy is quite a new area for government as a major policy domain.

I look forward to our discussion this morning and respectfully refer you to my written submission, "Harnessing the Mobility Revolution to Build a Canada that We Want,'' for more thoughts on a possible action plan.

The Chair: Thank you very much. You've certainly created a lot of interest.

[Translation]

Senator Saint-Germain: First I would like to apologize for inadvertently attributing your article in Policy Options to someone else, in my question to our previous witnesses. You are the author of this article, which is very interesting, as I said earlier.

My question is about the need to prepare for the conversion of jobs, or the loss of certain types of jobs, and for the transition to other kinds of jobs when automated vehicles become more common and more widely accessible.

In your remarks, you outlined a vision and potential action plan. It involves a number of sectors, including the environment and health. I would like you to elaborate on the education sector based on future labour market needs, that is, the training needed to hire qualified workers in order to minimize the potential negative human, social and economic impacts of unemployment or the loss of certain types of jobs.

Mr. Ticoll: That is a very good question.

[English]

I want to say that this challenge we face as a result of vehicle automation is only one part of it. We're facing automation in many sectors of the economy. Highly skilled, medium- and low-skilled jobs are being automated. Regarding the 1.1 million number I gave, I'm not predicting that all those jobs will be lost, but there will be jobs lost in all of those sectors, subsectors and occupations, I believe, as a result of vehicle automation. But this is also happening all across the economy. So, yes, it's a huge issue facing all advanced industrial economies right now.

I think Canada is actually in relatively good shape compared with many other countries. We have a much smaller labour force of, maybe, 18 million people, compared with other places, say, the U.S. or even the U.K., Europe or China. We already have quite a high proportion of educated people in our population. We also have the demographic challenge of an aging population, which means that we need to keep people working to support those of us who are going to be doing other things as we age.

I have a theory that it's easier to keep 18 million people busy than 200 million people. If this was the United States and we were to say, for example, that we wanted to ensure that we had half or even a quarter of our workforce capable of doing highly technical occupations that required intensive computer training or what have you, we are looking at maybe 50 million people. In Canada, it would be, maybe, 4 or 5 million people, and then we export some of these skills globally, or the work that those people do.

I believe that the current government's real emphasis on that side of things is actually more sensible in Canada than it might be in many other countries for that reason.

We have the demographic factor and the fact that we have a relatively small population, so we probably can do relatively well in teaching people technical skills.

The other side of it is I believe there will be continued demand for people in trades, such as construction workers and people like that. So it's not just the super highly technical occupations.

I think the core thing we need to do — and I know the government is working on this as well — is to get much more specific and granular about where the demand is likely going to be and not just rely on purported laws of economics. We really need to figure that out, very specifically, for Canada and its very specific situation, domestically and globally, and then provide that advice to post-secondary institutions so that they can offer the right programs, and also offer it to young people and parents, and so on, who are making the choices.

[Translation]

Senator Boisvenu: We have a lot of questions. We have a body of information that enables us to ask question and have a certain vision. I am thinking of the general population that has to make informed choices. It is very far removed from this committee and from the people who are managing this technological shift.

I have a question and a secondary question for you. First, how can the public be informed of the choices that will be available and that will be made? It will be a monumental change. Secondly, who will be responsible for ensuring that the public makes informed choices about modes of transportation? I am including the municipalities and the provinces, which have a responsibility for public transit.

[English]

Mr. Ticoll: There has to be a layered answer to that question, because it's going to come about in a variety of different ways. We are increasingly seeing today's car manufacturers providing what they call advanced driver assistance systems, which the previous witnesses described as level 2 capabilities, which are things like automatic braking, lane keeping and so on. It's kind of seeping into the world already.

Quite honestly, I don't have a car that does that but I have friends who do. They have said, "The car does this and it's amazing. I didn't even plan for it.'' It's just being discovered, in some respects, by people. There's a lot of hype about self-driving cars out there and there's a lot of skepticism among ordinary people who can't imagine giving up their right to control the steering wheel. This is a natural cultural evolution, and as it becomes more credible and begins to become real, people will start to come to grips with it.

I think there will probably be a moment in time — and this is something that many manufacturers want to do and plan to do — when a fleet of cars will land in a major Canadian city, owned by a major mobility services provider, and it could be one of today's taxi companies, like Uber, or Ford, which has promised to do this by 2021, who will say they want to do this. They are going to start simply providing these services within this geo-fenced area. There will be a natural demographic of people who will immediately jump on that, like young people who are already technologically savvy, youth below driving age, elderly people, people with disabilities and low-income people having trouble getting from, say, their home in Etobicoke to their job in Scarborough at five o'clock in the morning and can't afford to pay a regular taxi.

Just as when smartphones hit the streets, nobody predicted they would need a smartphone. We didn't even know what they were. Suddenly, everyone started using them and it became a necessity of life and now it's causing traffic accidents.

I think that through the natural way that new technologies become introduced into society, this will take its course. I think educating people about the desirability or usability of this stuff is one of the least of government's problems. If it's anybody's job, it's the job of the industry that wants to sell this stuff.

On the issue of mobility services, the President of Ford has said that he's making about 7 or 8 per cent gross margins from the sale of physical cars, and he figures that they can make 20 per cent gross margins from mobility services. They're highly incentivized to make this transition.

Senator Bovey: Thank you very much. This has been a very informative morning. I agree with you that we're in a once-in-a-century opportunity for Canada and Canadians.

You mentioned the need for a cross-government mandate and multi-departments, which I certainly concur with, including the private sector, not-for-profits, social enterprises and others. That's all perfectly sensible.

My concern, when we talk about these geotechnical areas, is this: How do we ensure that all Canadians are going to benefit from these new technologies? Can we really have a national strategy that's going to benefit rural Canadians as well as urban Canadians?

Mr. Ticoll: Those are very two different questions: benefiting all Canadians, and, specifically, the issue of rural access.

Senator Bovey: But they are part of the "all.''

Mr. Ticoll: Yes.

I don't think any change ever benefits everyone, no matter what it is. Unfortunately, we're in a world where there are always winners and losers. As I said in my talk, I think the goal is to maximize the benefits and minimize or mitigate the downsides. For example, some people will lose jobs as a result of this.

There are so many different dimensions. We need to look specifically at the range of dimensions, where benefits and risks come along. Then we need to do a demographic and financial analysis of where those benefits need to be maximized, where the risks are, and how to address them specifically.

For example, accessibility: As I mentioned, people below the driving age, people with disabilities, elderly people, and people who chose not to drive because they are not comfortable driving will be huge beneficiaries of this. But there is a downside to that, because in fact it will lead to more traffic. There will be more demand for roads, and that could lead to more congestion. So there are complexities even to achieving the benefits.

Specifically on the rural topic, I think about that a lot because I have a cottage. I think, "How am I going to use this at my cottage, and how is it going to be made available?'' It's a very different kind of environment.

First of all, let's talk about remote communities, Aboriginal communities or communities that aren't even served by roads or not served well by roads. I think that's where drone technologies could play a big role, particularly for delivering products and services. Some developers now, including large aircraft manufacturers, are working on pilotless aircraft that would carry people. Conceivably that will be feasible within the next 15 years or so.

Then we need to figure out business models for how to achieve this on-demand mobility in rural areas. I believe there are ways to do that.

People in the country, particularly, really love their trucks. I think they will be among the last to go to shared models, but they could still be driverless.

Senator Bovey: I am concerned about the remote areas. We've just seen the city of Churchill without milk and bread for several weeks because of a blizzard, and there's no road access, et cetera. I am very concerned about how all that plays out.

Mr. Ticoll: I think that's a big opportunity for a made-in-Canada solution and one that could be exported.

Senator Mercer: Thank you very much for being here. This has been very informative, and we appreciate your expertise.

One of the questions I raise is that of municipal planning with respect to this new technology and the fact that I think we're creating, as Senator Bovey and Senator Griffin made reference to, a broader divide between urban and rural municipalities in this country.

I happen to live in a rural area now, but the difference is that these vehicles will be of greater benefit to municipal planning in an urban centre, as you've described it in your 2025 and 2035 scenarios, either one. But in a rural area, the benefit is not as significant. The fact is that for those of us who live in rural areas, access to companies that are going to service us with small automated vehicles is probably not as likely as it is in urban centres.

How do you square that circle? It seems to me that government policy needs to be designed to serve all Canadians. It becomes difficult to do that when you have a quite obvious differential between urban and rural Canadians.

Mr. Ticoll: First of all, in defence of the urban scenario, it's really complicated to get this right in the urban environment, in particular because of all the knock-on effects. That's a huge and complicated topic that I would recommend you think about very deeply.

As far as the rural scenario is concerned, as I mentioned to Senator Bovey, I believe, on the one hand, that rural residents will simply be able to use self-driving technologies in their personally owned vehicles. Even in cottage country, where I mentioned I have my cottage, there's a real class structure there. There are the wealthy cottagers and there are the locals, many of whom have a tough time. I believe there will be a business model to support those people through on-demand vehicles. It won't have as many vehicles, obviously; we don't need as many, but we could have them available.

This is all based on mathematics. If you can do the mathematics of figuring out where to put them, store them, keep them and make them accessible to people on an as-needed basis, I believe there is a workable model even in rural areas for on-demand services — both for the people who are out at the ends of roads and even more so for the people who live in the towns.

[Translation]

Senator Cormier: Your presentation lets us dream. It gives us an idea of what our regions could become. My colleagues have talked a lot about rural regions. I am also from a rural area. You partially answered a question I had about the impact of the deployment of automated vehicles on our regions as regards infrastructure planning and public policy, and also about access to these vehicles for seniors and people with reduced mobility. In your opinion, what steps could the federal government take to prepare these rural regions for the advent of these modes of transportation? This is related to public policy at the federal and provincial levels, and to municipal planning.

As you stated, it is very complex, but what could we do now to prepare rural regions for the advent of automated vehicles?

Mr. Ticoll: Thank you for your question. In my opinion, trials should be conducted as soon as possible. We have budgets for 2017, and perhaps also for future years. There is the Smart City Challenge trial that will be conducted over several years. Perhaps we could do trials in rural regions and areas that are farther away from cities. In my opinion, these trials are much more important that the development of infrastructure or technology because, if we do trials —

[English]

Are people here familiar with the Smart City Challenge? I'll give you a brief on this.

The U.S. government launched the Smart City Challenge in the United States a couple of years ago under the Department of Transport — it was a contest. The prize was $40 million, I believe, of funds that would be given to the city that came up with the most creative, innovative and desirable set of initiatives. It wasn't specifically focused on automated vehicles, but it had a strong transportation focus and a strong focus on connected infrastructure, because that's more present today.

Contestants were encouraged to think about how they might prepare for automated vehicles, as well as other kinds of smart things that a city can do. They were encouraged to make bids that addressed a wide variety of policy issues: accessibility, social inequality, the kinds of things we're talking about here.

The other thing is that they encouraged partnerships with the private sector. They didn't know how many submissions they would get. They got 120 submissions, which is probably 10 times more than they expected. They ended up with seven finalists and they finally gave the award to Columbus, Ohio. Columbus, Ohio, has both connected and automated as part of it, as well as a number of other things. Every single one of the finalists says that as a result of being part of this, they're going to go ahead and do a lot of the initiatives they put into their bids, even if they didn't win, and they've got industry coming behind to help them to do this.

By exciting the imagination and putting a bit of money behind it, I believe that has probably had a bigger impact on addressing the kinds of concerns that you and others have identified than actually putting in a piece of technology. The fact that the government is planning on doing the Smart City Challenge provides huge opportunity.

Senator Griffin: The question I have relates to literacy. Our problem in Canada in some areas is that we have a fairly high rate of functional illiteracy, unfortunately, in spite of all the money we spend on our educational system.

The previous speakers talked about the need for mechanics to have a high level of literacy or skill. Car owners will have to have the same thing, although I do like that you have a scenario where most consumers will have given up car ownership, so that's how they will deal with it.

In terms of the mechanics, right now in order for adults who have a low level of literacy to enter into funded training programs, they usually have to be already unemployed, and only certain areas are targeted.

In terms of the possible recommendations we could make to the federal government in terms of the future for training, what would you suggest?

Mr. Ticoll: Information technology skills. That's the most important at a variety of levels. Certainly at the maintenance level, those are the emerging technician roles.

In a taxonomy of the information technology labour market that I have developed over the years, the technician role is one that we often don't think of very much. We are always thinking about the software developers, technology innovators and so on. In fact, about a quarter of the ICT labour market is people in technician roles.

We need to start creating people who are familiar with the new technologies that are going to be in self-driving cars. Some of it is software, some is hardware and some is networking. That would be the main space that addresses your concern.

I also want to mention that I don't believe the people who will operate self-driving cars — in other words, ordinary consumers who get into these vehicles — will need special forms of literacy. There is a big field in the technology sector called usability design. The idea is to make sure the technology can be used by anyone, just like in today's cars. I'm not too concerned about that end of things.

Senator Eggleton: Could you give a brief overview of what you advised the City of Toronto in your submission to them, not just because I live there, but because I think it is also instructive from the urban standpoint? We talked a bit about the rural environment. We also need to look at the urban standpoint in preparation for this coming era.

Mr. Ticoll: Thank you for probably the hardest question and one that I didn't anticipate.

The reason it is the hardest question is because when I wrote that paper, which is 75 or 80 pages — I believe it is quoted in the library report provided to you — is I tried to set out the full framework for a policy agenda. There are all these different areas, whether it's jobs, urban planning or infrastructure requirements or urban sprawl. The information management issue is an entirely new domain for policy. One of the objectives of my paper was simply to lay out the menu of things we need to think about. This was one the first papers written on this topic in Canada, so it was important to get that out and get it right in terms of backup data and so on.

I would say my number one recommendation was to embrace the complexity of this and the fact that we need to come to grips with all of those things if we are going to get it right. I came up with a three-level potential approach that the city could take.

One level was to simply become informed and prepared and to think about how to respond as events unfold.

Level two was to be more proactive and try to attract vehicle manufacturers to try out their vehicles in Toronto and to make Toronto more of a hub for connected vehicle and automated vehicle innovation.

The third was even more grandiose: to make Toronto a global centre. At the time, they were talking about doing a world's fair in Toronto, so maybe put that together with a world's fair bid. Go big and demonstrate Toronto as a genuine global leader in the implementation of this technology and use the world's fair as an excuse for funding initiatives that would change the way people live in the city.

That was the core.

Senator Eggleton: I won't put you through more on that. I'll have a look at the paper.

In your presentation today, you wanted us to consider the scenario where in 20 most consumers have given up on car ownership and instead used electric, automated taxis for personal transportation. What about the effect on mass transit in urban areas? How do you see this affecting mass transit?

Mr. Ticoll: If this happens, there will be fewer vehicles in within a city at any given time. Instead of maybe 2 million cars in Toronto, about half of which come from outside the city on a daily basis, if we went to a maximum model, it might be only 800,000 cars or less. But there will be more cars on the road at any given time because they will be in constant use. You will also have all the demographics of people who previously didn't have access to personal transportation, and it will be more convenient. Also, as cars drop people off, they will then drive to pick up the next people. So there may actually be more vehicles on the road, and that's a policy issue we need to address even before we get to your point.

In the model, there are two kinds of vehicles. One is for a couple of people, and then there is an automated minibus that might hold seven or eight people. Those minibuses may well replace many buses. Between those two innovations, buses in particular will be at risk because these will be much more convenient and very cost-effective.

Mass transit, on the other hand, rail based or automated busways — which I think we should be doing more of because they are cheaper to implement — there is still a huge opportunity for that.

The ultimate model is multimodal. There is a concept called Mobility as a Service. The idea is you have an app on your mobile device. You're setting out for some place across town. On the spur of the moment you decide that you will walk a certain distance. You then want to hop on a bike for a while, and then you take the subway for five or six kilometres. Then you get off at other end and do something else. You book it all on this app, and it is economically attractive to do that. Somewhere in there you will take an automated car, of course, in the model. It's a very different vision of how transportation works in a city.

This is happening. Many Scandinavian countries are starting to implement this in a pre-automated vehicle state. The U.K. is experimenting with it. People are talking about this in Canada. I'm hoping, as part of the Smart City Challenge, that some enterprising city will try to run a pilot of Mobility as a Service.

I believe that buses are probably the mode of transport that is most vulnerable.

Senator Eggleton: Those are interesting concepts.

Let me ask you about one statement you also made today. I have seen it in a previous submission of yours. You said:

By my calculation, CAVs could lead to job losses in sectors or occupations that employ over 1.1 million Canadians. CAVs will also create jobs, but it's hard to see how the net outcome will be positive.

Could you explain the last part of that?

Mr. Ticoll: Let's look at the numbers. About half of those 1.1 million people are professional drivers of one sort or another. They drive trucks, taxis or limousines. They're delivery and courier drivers. They're mail, postal and courier workers. The other half does other things; they are not professional drivers. Many of their jobs will become unnecessary. We won't even need to automate them. For example, we were talking about insurance agents and brokers. If we go to a model of on-demand mobility, the big companies that provide these services won't even buy personal car insurance. Never mind that accidents will go away. They will self-insure or go to some big global corporation and get insured. Sixty-six thousand people are employed as insurance agents and brokers in this country. Auto service and body shops employ 166,000 people.

It's not only lack of accidents that will affect them, but if these are electric vehicles, they will no longer need oil changes or spark plugs. A lot of the routine maintenance will go away. That's a lot of people to reemploy.

It's not just in these arenas but in others as well where we will see technological unemployment.

When we have had massive waves of job generation in the past, whether it was the industrialization that happened at the beginning of the 20th century or the post-war job boom, we had a pretty good idea of the huge demand for employment that was hitting us like a massive wave. I just don't see where that massive wave is coming from right now.

Senator Eggleton: You talked earlier about Senator Griffin's question with respect to people being retrained — that is, trained in information technology — but not everybody has the ability to be in the high technology field.

Mr. Ticoll: Or the desire.

Senator Eggleton: Yes — most of the people who I take it are part of what you don't think will be very positive in terms of outcome?

Mr. Ticoll: Yes. There is the impact on jobs, the information management issue and the issue of urban sprawl. There are many challenges we need to come to grips with.

The Chair: Mr. Ticoll, thank you for your presentation. As you can see, there was a strong interest.

Colleagues, we will go in camera for a short meeting.

(The committee continued in camera).