Proceedings of the Standing Senate Committee on
Transport and Communications
Issue No. 18 - Evidence - May 31, 2017
OTTAWA, Wednesday, May 31, 2017
The Standing Senate Committee on Transport and Communications met this day at 6:45 p.m., in public and in camera, 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, welcome to the Standing Senate Committee on Transport and Communications. This evening we are continuing our 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 Global Automakers of Canada we have David Adams, President; and from Toyota Canada we have Stephen Beatty and Dave Nichols.
[Translation]
Gentlemen, I invite you to make your presentation. Afterwards, senators will ask you some questions.
[English]
David Adams, President, Global Automakers of Canada: Thank you very much, Mr. Chair and honourable senators. I appreciate the opportunity to be in front of the committee again. You have my material. I will not go into the background of the association for the sake of dealing with the material as opposed to who we are. That should be evident through reading the material.
We appreciate the opportunity to appear before you on this important subject. The members have been monitoring the proceedings of this committee, and we understand the members of the committee have concerns that are likely shared by the majority of Canadians with respect to connected and automated vehicle technology.
These concerns include but are not limited to the ability of drivers to understand and use the connected and automated technologies being built into vehicles; the privacy of the driver's personal information once the vehicle becomes connected to the larger Internet of things; the apportionment of liability when accidents occur with automated vehicles; the concerns around connected vehicle security and the ability of connected vehicles to be hacked; the challenges around both the human-machine interface inside an automated vehicle and the challenges around the existence of automated and nonautomated vehicles on the same roadways and vehicles transition; the costs of vehicle automation with respect to employment dislocation arising from automation and infrastructure costs arising from increasing levels of connectivity between vehicles and the road infrastructure; and, finally, the regulatory regime necessary to both facilitate and oversee the introduction of automated and connected vehicles.
The association believes that first principles dictate appropriate definitions of both automated and connected vehicles.
Automated vehicles, from the perspective of the automotive industry, are such that we do not subscribe to the term "autonomous'' or "self-driving'' car but, rather, vehicles with different levels of automation as prescribed under the Society of Automotive Engineers standard J3016 that sets out the definitions for six different levels of automated vehicle.
I believe other presenters have highlighted what those levels of automation include.
With respect to connected vehicles, there are two general baskets of vehicle connectivity. The first relates to consumer conveniences and infotainment that arise from having a vehicle that is connected to the Internet — a vehicle to everything in the broader sense of the Internet of things or V2X.
The second basket of connectivity relates to the vehicle to vehicle and vehicle to infrastructure that is not necessarily dependent on the Internet but rather communication through Dedicated Short-range Communications, DSRC, over a specific spectrum bandwidth, which is the 5.9 gigahertz spectrum, which enables vehicles to communicate with one another and the infrastructure to reduce or eliminate accidents, speed limit traffic, maximize roadway capacity, and streamline traffic flows, as well as warning of accidents and roadway incidents outside the field of vision and improving the overall fuel efficiency of the vehicles on the road.
The association maintains that the issues related to the ongoing advancement of automated and connected vehicles are not fundamentally technical, although technical challenges still exist, but rather challenges related to regulation, ethics, data and interjurisdictional operability.
Regulatory consistency both within Canada and internationally is essential in order to ensure that automated and connected vehicles can move unencumbered across both provincial and national borders. Additionally, the testing protocols and compliance requirements should be consistent across jurisdictions.
Importantly, care must be taken to ensure that low-speed vehicles, otherwise known as LSVs, retain their own stream of regulatory requirements given that in virtually all cases these vehicles do not meet any of the prescribed Canadian motor vehicle safety standards for occupant protection that on-road light duty vehicles are required to meet.
With respect to V2V and V2I communication, it is important for government to preserve the 5.9 gigahertz spectrum band that has been set aside in North America specifically to facilitate the clean communication between vehicles and the infrastructure using the aforementioned DSRC technology.
To date, this is the technology of choice given its low latency, which is essentially the ability to recognize and transmit data in milliseconds, its reliability and its ability to authenticate messages. The 5.9 gigahertz spectrum is currently under seige in the United States from the telecommunications companies also looking to utilize the bandwidth as there is only a limited amount of bandwidth available.
Automated vehicle technology is rapidly evolving, and as such, moving too quickly to develop standards or regulatory regimes based on unknown or untested assumptions. That runs the risk of unintentionally stifling innovation. Continued engagement with jurisdictions involved in R&D in the automated and connected vehicle space will be important for Canada, as will ongoing support for R&D in Canada if the country wishes to capitalize on the existing strengths and capacities in this area and continue to cultivate the expertise in these technologies of the present and near future.
With that, I will end my remarks, and I am happy to answer questions later on. Thank you very much.
Stephen Beatty, Vice President, Corporate, Toyota Canada Inc.: Mr. Chair and honourable senators, on behalf of Toyota, thank you for giving us the opportunity to make this submission. I would also commend you on the important work you are doing. These are significant and complex issues and require the type of work you are doing here.
Before getting into my formal remarks, I wish to situate Toyota. As a company, we own more patents in the field of automated vehicle technology than any other company, whether in the auto industry or outside. From a Canadian standpoint, Toyota is now the largest manufacturer of vehicles in Canada, so we believe it is important for us to participate in studies like this and to help in the development of sound public policy.
We are certainly in favour of advancing the technologies. We see this as achieving a number of major societal benefits. It has the potential to eliminate collisions, to speed the flow of traffic and to provide meaningful environmental benefits. However, we also believe that it is functionally a long way off since there are so many scenarios that are simply beyond current machine competence. It will take many years of research and development and many more miles of testing and learning to achieve the performance and reliability expected of fully autonomous vehicles.
To help us get there, we have a number of initial requests which I will set out in these opening comments, but first let me explain where we are in the pursuit of our development of connected and automated vehicles.
Toyota is currently pursuing two paths to enhance vehicles with autonomous technologies. We call them Guardian and Chauffeur. Guardian technologies are those that are always on when you drive a Toyota or Lexus vehicle. They monitor the vehicles and the environment around it, and they engage only when required.
Toyota's automatic emergency braking feature is a good example of that. This system is part of our Toyota Safety Sense bundle of features, which is standard equipment on almost every Toyota model we will be able to sell in Canada this year. Our Lexus luxury brand is similarly well-equipped with these features.
Chauffeur technologies, on the other hand, take over the driving task from the human operator. Among other benefits, this will help to deliver significant freedom of mobility to people who cannot drive currently.
Since much of the hardware and the software being developed for the Guardian and Chauffeur is the same, we believe that our two-path approach allows Toyota to introduce many driver-enhancing safety systems into current models to help save lives today, but at the same time, it provides a seamless evolutionary path for Toyota to introduce fully autonomous vehicles in the future.
Whether they enhance driver abilities or take over from the driver entirely, these technologies can save lives. That is why Toyota aggressively tests and proves these systems, and in several cases already offers them to Canadian drivers.
Based on our extensive experience with introducing new technologies — from safety systems to hybrid vehicles — we have four requests to make of the committee. First, we would urge all stakeholders to use a common vocabulary for policies related to automated vehicle systems.
As our research has identified, Canadians have very different ideas about what autonomous vehicle technology can and cannot do. Before we can discuss the benefits and issues associated with those technologies, it is important that we share a common understanding of what we are discussing. Like my colleague from the Global Automakers, we would adopt the SAE standard.
Second, Toyota has a number of requests related to regulation. A strong pre-emptive set of national guidelines is required. In fact, within the context of a North American framework, a set of guidelines developed as part of the upcoming NAFTA renegotiations would help automakers develop and test autonomous vehicle technologies that work across the continent. This is preferable to a patchwork of provincial or state policies.
Existing technical requirements may need to be revised or even eliminated if they are incompatible with a highly automated vehicle that does not conform to a conventional design, for example, a vehicle without a steering wheel.
We encourage policy-makers to regulate only when necessary. Automated vehicle technology is rapidly evolving. Moving prematurely to develop regulations based on unknown or untested assumptions could act as a hindrance to the development of the new technologies.
Third, we request that companies with a proven track record for developing and testing automotive safety technologies be allowed to conduct tests in real-world conditions, including on public roads.
The challenge for policy-makers is to establish a framework that does not constrain responsible and proven creators of automotive safety technology while also putting in place appropriate safeguards with respect to companies that are less experienced. Evaluating best practices and experiences of other jurisdictions will help you strike the right balance.
For decades now, automakers have been allowed to test technologies on public roads, and all users of the roads have benefited. We request that this practice continue with respect to autonomous vehicle technologies.
Our fourth request addresses data sharing and privacy. Before any data sharing policy is implemented, we request that all stakeholders work together to ensure that it does not unintentionally delay innovation or compromise safety.
Sharing data will help develop more robust technologies, and it is worthwhile. However, data that is incorrectly interpreted may discourage development. For example, engineers will intentionally push a system to the breaking point to learn from the failures and make the system more robust. But using this data to gauge the effectiveness of a system may actually encourage developers to draw back or soften the tests in order to ensure public confidence.
Therefore, we need to identify what data should be shared, ensure that the source of the data is anonymous and determine who can access the data and for what purposes.
In summary, Toyota is optimistic about the benefits that autonomous vehicle technologies can bring to Canadians. We are also cognizant of the many complex issues that must be addressed to the satisfaction of all stakeholders to ensure these benefits are fully realized.
This is why Toyota is pleased that this committee is conducting these hearings. Thank you and I look forward to your questions and comments.
The Chair: I want to remind honourable senators that on Wednesday Toyota is doing a demonstration of hydrogen- fuelled vehicles on the Hill and I invite the members to participate if possible.
That being said, I also want to remark on the fact that Guardian and Chauffeur, when you say we have to develop a vocabulary, that is the first time we have heard those two words here, but I think they are appropriate.
Senator Eggleton: Mr. Adams, in your opening remarks — and Mr. Beatty you said much the same thing but in different words — you said automated vehicle technology is rapidly evolving, and as such, moving too quickly to develop standards or regulatory regimes based on unknown or untested assumptions and this runs the risk of unintentionally stifling innovation.
I don't think we want to stifle innovation. We appreciate this problem, but we are also told by people that it is about time government got ahead of the curve instead of always responding after the fact by bringing in legislation. We are here to advise the Minister of Transport. He has asked us to look at this and advise him on what to do.
What specific things can you suggest? You talked about a balance, Mr. Beatty. That is fair enough, but here we are, betwixt and between. Do we get the proper regulations in effect, before all of this is on top of us, or will we end up reacting to it after it is on top of us?
Mr. Beatty: Perhaps I could respond to the first part of that.
To date, when we bring new technologies to the marketplace, we work closely with Transport Canada following a set of administrative protocols as much as regulatory requirements. As an OEM manufacturer of vehicles, we are permitted to test vehicles on Canadian roads. We do it under a strict set of protocols of our own to ensure public safety as we are doing that.
There is a long culture and set of practices between the industry and Transport Canada that allows for that testing to take place in ways that are monitored and effective. I recognize, though, that there are many companies that are not part of that structure, if you will, coming to it fresh for the first time. There are many tech companies, for example, for whom understanding those protocols will become an issue. We need to find a new way of broadening the tent, if you will.
Mr. Adams: I think that is a valuable question and I appreciate it. No one is advocating for the wild west by any means, but what we are looking for is, as we both indicated in our remarks, efforts not to stifle innovation.
If you look at what is taking place in the United States, it is something that, to my point and I think also to Mr. Beatty's point, there are opportunities to Canadianize work that has already been undertaken.
For instance, last fall the government in the United States issued a guideline for automated vehicles; again, laying out 15 specific principles with respect to automation. The request was to ask automakers to look at them when they were introducing automated systems into their vehicles. I think that type of approach makes a lot of sense. That is something we should be working on in conjunction with the Americans.
Actually, there is work under way as other witnesses have advised, through the Regulatory Cooperation Council between Canada and the United States on connected and automated vehicles and that work should continue.
I will leave it at that for the moment.
Senator Eggleton: Let me ask you something else. You referred to the American experience and we are aware of some of the things going on down there. Is there any particular endeavour down there that you think is worth watching more than others or anything that we should be very careful not to follow?
Mr. Adams: To the point that we've made, it is important to look at any regulation from a national perspective as opposed to a piecemeal perspective through the provinces. Right now, there are about 39 states looking at specific state regulation and I think 13 that have actually enacted it. I think that is a bit of a recipe for disaster in terms of looking at trying to get some homogeneity across the United States.
Senator Eggleton: To look at the national perspective?
Mr. Adams: For sure. That is something Transport Canada should have the lead on.
Senator Eggleton: Quite frequently in our committee hearings, people talk about electric vehicle technology as if it is going hand-in-hand along with automated and connected vehicle endeavours.
Is that part of your plan at Toyota? Do you see these as being connected?
Mr. Beatty: Clearly, there is evolution on both sides, on power train technology and on vehicle automation, but the two are not connected in that sense.
We are building connectivity and vehicle automation into every vehicle we put on the road which is why, as I was saying in my submission, today most of the vehicles we will sell will come with automated safety features in our Safety Sense suite. That is a set of features that is constantly evolving and is taking us to the next level.
What is important is that we build those sensors into the vehicles today so that as the levels of automation build, all of the necessary component sensors are in place on the vehicle, and already at a cost that makes these systems approachable for the consumer.
Senator Galvez: Thank you very much for your very interesting presentation. We have been studying this subject for some months and now the picture is getting clearer. What concerns me is the difference in the speed of development of the different elements that we need for this project to come into reality.
We have these vehicles that are experiencing exponential growth and development. It is happening so fast it is unbelievable. However, we have been hearing about the infrastructure that is needed, that is, where these cars will circulate, and some people say they will use the same roads. Others say no, we will need different lighting and accessories to control the traffic.
As a practical example, just from Quebec to Montreal there are only a few places to connect and charge these vehicles. If infrastructure is going at a different pace than the development of the vehicles, and the people are left far behind, then who is going to drive and use these cars? Which type of clients are these cars built for? Will they be able to afford these cars?
Can you enlighten me with some ideas about the future?
Mr. Adams: I will start and then let Stephen chime in.
You have raised an important point. Looking at automated vehicles, it goes back to the point that Mr. Beatty made of defining exactly what we are talking about.
Looking at automated vehicles, you are talking about two bifurcated pathways. By that I mean you have the incumbents in the automotive industry, as Mr. Beatty has outlined. For every generation of vehicle that they bring forward they are putting more and more automation into that vehicle. The intention, obviously, is for those vehicles to travel on the roadways and highways that people are travelling on now.
At the other end of the spectrum, you have companies like Google and others that are developing what appear to be more like pods without steering wheels and everything else. Those are two different pathways to automation. You may see the little pods being used, but they will be used in specific geo-fenced environments, as opposed to being on the same roadways with vehicles that are built by auto manufacturers with different levels of autonomy.
That is how I think it will evolve. At some point you may well get to a system where all of these vehicles are on the same roadways together, but I think it is a far way out before that happens.
Mr. Beatty: I second that. If you think about the longevity of a vehicle that is built today and is on the road, you can reasonably assume that vehicle will be on the road for the next dozen years or more. A vehicle today that comes to the marketplace with level 1 autonomy will still be part of the on-road fleet for many years.
You will have this mix of vehicles in different driving applications mixing with each other. That is why the industry would tell you that full autonomy is some considerable distance down the road, except in those geo-fenced territories or in dedicated lanes on highways and so forth, because vehicles driven by individual human beings don't mix well with vehicles driven by computers. We will have to work our way through that process of how the transportation system evolves.
Senator Galvez: Regarding fully-automated vehicles, you are using the term "geo-fenced territories.'' That is new jargon. Will the municipalities pay for this infrastructure? Is that what the automotive industry thinks? And for the longer highways, will it be more the federal government? Who will pay for this?
Mr. Adams: That is a good question. I want to go back to one of your original opening comments about the infrastructure and what is required.
It depends, again, what we are talking about. If you are talking about connected vehicles, that is different from an automated or highly automated vehicle. A highly automated vehicle can essentially operate without any regard for what is going on, or with any expenditure on infrastructure, if you want to call it that. Right now, automated vehicles require well-painted lines on the roads and that type of thing. Again, that is a challenge going forward that needs to be addressed when we have things like winter and that kind of thing.
With the connected vehicles, though, that is a different story. If you are looking at ensuring that street lights, for instance, are in sync with them when a vehicle approaches, yes, there is a cost to putting that infrastructure in place. Where does the revenue come for making those changes?
You talk about a long life cycle for a vehicle; infrastructure is built for 30 or 40 years so it has to be something that can presumably be retrofitted to accommodate the connected vehicle.
Stratford is good example of a community that has WiFi connectivity throughout and is a test hub in southwestern Ontario for connected vehicles.
Senator Mercer: Thank you, gentlemen, for your presentations.
Senator Galvez talked about the picture becoming clearer. I'm not so sure I agree. I think it's a little foggy. But I do appreciate a couple of statements. Mr. Beatty, you are the first person that I recall saying words like "there are so many scenarios that are simply beyond current machine competence,'' which is a word of caution that has been introduced that we have not heard. Everybody has been gung-ho here.
I'm old enough to remember the introduction of home VCRs when we had two styles, two types of tape, and it took a good deal of fighting between the two technologies until one won over the other. And many Canadians, many people around the world spent a lot of money on Beta machines that were no good.
I hope at some point, when we get to the point where we are mass producing these vehicles, there is some agreement as to some basic technology so that I don't have a vehicle that two years into my ownership is like a Beta machine. I never owned a Beta machine; I waited until the technology settled down and I will probably do the same here.
Mr. Beatty, you were describing your Chauffeur technologies to take over the driving tasks from a human operator. Among other benefits, this will help deliver significant freedom of mobility to people who cannot currently drive. Who is in charge? You are out there on the highway, we have thousands and thousands of vehicles out there and maybe we have a whole whack of them in the Chauffeur category — Toyota has given the title and it's a good title — and somebody hacks the system. You now have thousands of cars sitting out there and with this scenario. You have not only thousands of people out there but a bunch of people who do not know how to drive because certain people cannot currently drive. Who is in charge?
Mr. Beatty: Senator, let me try to parse that at several different levels.And thank you for the opportunity to comment on it.
As you can imagine, particularly in a society like Japan where we have a rapidly aging population, the ability for seniors and people with other mobility restrictions to be able to move around is significant. And so a lot of work is going on in Japan and here in North America by Toyota and other companies to investigate the possibilities of using artificial intelligence to be able to run vehicles safely in what we refer to as that Chauffeur mode.
On the other hand, it takes an enormous number of millions of miles driven to be able to shake out the system in the absence of having full data sharing across the transportation system, and in the absence of using artificial intelligence in order to test the scenarios and individual sensors. We have been investing billions of dollars into the task of understanding how to develop machine intelligence in order to be able to take over that role and that's why we are saying that that fully autonomous vehicle is further out than the most optimistic people would argue for.
Perhaps it's because we are a car maker and we're trained to err on the side of caution and public safety that we believe that frontier is further out.
But let me pose it to you in another way. Last year in the U.S. I think there were 35,000 traffic deaths. And that happens in a risk scenario where human beings are driving cars. We accept as a matter of social engineering that those deaths will happen. It's not acceptable to us as an outcome, but we understand that's the risk of having vehicles driven by human beings.
The question I would pose is this: What level of injury or death would be acceptable from cars driven by artificial intelligence? And I would posit that the answer would be zero. So the threshold for security when it comes to rolling out automated systems is much higher than it is for putting a new vehicle on the road today without that level of automation, which is why I believe the evolution of bringing new safety systems and automation to the vehicle over time will be the successful course in bringing us to that level of full automation down the road.
And that's why I think there are very serious social and ethical issues that we need to address as we move down the road toward vehicle automation.
Senator Mercer: I don't disagree, but you are talking about 35,000 car deaths in the United States and what is acceptable. There are thousands of people killed by guns every day in the United States and nobody is anxious to impose gun control on a country that desperately needs it.
I do appreciate the two things. Both of you made recommendations which are very helpful and different points. I did want to go to the one I think is very useful but also politically has some benefits for Canadians. A strong preemptive set of national guidelines is required. In fact, in the context of the North American framework, a set of guidelines is developed as part of upcoming NAFTA negotiations. That ought to ensure that the NAFTA negotiations go on for a long time.
I'm getting to my question, or my statement actually. I can hear one of negotiators talking about fake technologies as we go through this.
But back to being serious about it, these recommendations are important. And one of the things I want to do is to invite both of you, when you leave here, if you come up with other suggestions, don't hesitate in getting back to us via the clerk because it's important that we hear your expert opinion.
Mr. Adams, in your presentation you talked about the cost of vehicle automation with respect to employment dislocation arising from automation and infrastructure costs. This is a major concern of legislators. The automobile sector is a very important sector, and you talked about being the largest producer of cars in Canada, et cetera. I'm puzzled by this because I'm old enough to know that somewhere in Gillette or Schick's safe is the formula for a razor blade that never needs sharpening and never needs replacing. They bought it and they have locked it up and paid somebody millions of dollars for it. Why are we developing a technology that may not be, because of the safety aspect and the limits that can be put on it, and the planned obsolescence is gone from this? This is how you make your money — by selling me repeat cars.
Mr. Adams: I will comment and maybe let Mr. Beatty chime in as well. I think what you are probably looking at, in at least one scenario going forward, is your vehicle becoming much like your smartphone. So when there is updated technology that needs to be brought on to the vehicle — because a lot of it is software — programming will be done over the air. It will automatically keep your vehicle up to date with the latest system out there.
The challenge arises when, just like with your smartphone, if you don't do the update, you are using an outdated system. That's another thing that adds to the complexity Mr. Beatty highlighted. What do you do with individuals who don't update their vehicle? Maybe they get a warning signal that says you either update your vehicle with the latest software or you are not allowed to drive that vehicle until you do. These are challenges that exist and the dislocation of employment is a real issue. If you look at the number one occupation for males around the world, it is drivers, whether it's a taxi, a lorry, what have you. With every change in technology, there are old jobs that are dislocated and new jobs created, when we think about moving from the horse and buggy to the automobile.
[Translation]
Senator Saint-Germain: Thank you for having formulated what you called requests, which are also recommendations, for the committee. I am particularly interested in issues related to government regulation. I can tell you right from the outset that I do not like overregulation. That said, in the area of transport, safety and the public interest are often the subject of regulation.
Mr. Beatty, you said that you encourage political decision makers to regulate only when it is indispensable. We understand that we are talking about federal, provincial and municipal echelons. Could you give us an example of issues or subjects of regulation which in your opinion would not be indispensable?
[English]
Mr. Beatty: Let me go back into the history of where we've been over the last number of years. I joined the auto industry in the late 1990s, and at that time, when we were talking about autonomous vehicles, it was very heavily reliant on built infrastructure. We would have pucks in the roadways so that vehicles would follow or there would be signals from posts along the side of the roadway. And the cost of creating an autonomous vehicle network in that environment was dramatic and it was reliant on our having very heavy involvement by government in establishing the standards, building the infrastructure and setting the conditions to allow for vehicles to hit the roadways.
What has happened in the meantime is that governments around the world have not had the resources to engage in those mega-projects to make those changes, and even public transit has lagged in that period. But the technology in cars has not stood still, in part because of competition with the tech sector and in part because of things we are looking for for our own customers. You are now seeing vehicles that can geo-position themselves relative to any other vehicle on the road relative to their position on earth that have sensors built into them that can detect obstacles on the roadway and correct for differing road conditions and traction, and those systems have developed in the absence of prescriptive regulation.
What we have in place is an absolute obligation on automakers to ensure our vehicles are safe. So we test heavily and work closely with government regulators and with industry bodies to establish testing protocols, approaches to bringing product to the marketplace, and it is not in the interests of any automaker to put unsafe vehicles on the road. Ultimately, that will be the end of our companies if we do that.
We want to work within the existing framework of safety regulation in order to bring this forward. We are saying that 10 years down the road many of those issues will have solidified themselves and regulation can lock in place to make practices or standards functional.
[Translation]
Senator Saint-Germain: I understand that the technological infrastructure will make the vehicles quite good from the performance point of view. You are designing them so as to minimize adaptation to public infrastructures. Will the adaptation to public infrastructures be minimal?
[English]
Mr. Beatty: The cost of adapting public infrastructure drops every year, and the intelligence built directly into the car, as opposed to infrastructure, has been increasing all the time.
[Translation]
Senator Saint-Germain: Mr. Adams, regarding regulations, you say that it is primordial to see to it that low-speed vehicles continue to be regulated separately, because in almost all cases, they do not comply with any Canadian regulatory standards. So, two types of regulations will be needed?
[English]
Mr. Adams: Two types of regulations are already required in Canada with respect to a low-speed vehicle, and we need to be mindful that there are different safety requirements for low-speed vehicles vis-à-vis vehicles on the road.
The challenge becomes when you are looking at the evolution of the automobile and what constitutes a road-worthy device, you start to get a blurring of low speed and what people consider a car. You can think of vehicles on the road now that look like a car, but they don't meet the same safety requirements as a car, and it can lull consumers into a false sense of security. It looks like a car, it has four wheels, so it must be built to the same standards as a light-duty vehicle. We need to be careful to keep those streams separate.
[Translation]
Senator Boisvenu: I would still like more information. I thought you were going to announce big news tonight by telling us that this would be happening tomorrow. But listening to you, I get the impression that it will be fifty years before we see this. So, I will not see this new technology, which saddens me a lot. Self-driving cars are not new. In the 18th century, a man could get into his horse-drawn cart and go into town. One touch of the whip and his horse brought him back home.
First, in your brief you referred to the need to put national guidelines in place. Is the state currently playing an active role in the development of this technology? I don't mean only as regards regulation, but also in development, in supporting businesses financially or with research.
Secondly, although our governments hold the budget purse strings very tightly, these new technologies will necessitate enormous investments in infrastructure. Since you will eventually benefit from the sale of these cars, do you think it might be reasonable that you and the governments share the infrastructure costs?
[English]
Mr. Beatty: If I may, that goes back to my storytelling in terms of where the technology shift has happened, from infrastructure to the car. In the absence of that investment in infrastructure, automakers have started to build the automated technologies directly into the cars. We will continue to make great strides in that space. That's why I'm not as pessimistic as you are about the progress being achieved. There are automated vehicles on the road all around you today when you drive. What there are not are fully autonomous vehicles on the road around you. This is a rapid evolutionary process that takes us through stages of new technologies, and more of that is intelligence built into the car.
One of the big spaces for government, if we really want to talk about legislative and regulatory requirements, is this: Safety and security of transmission of data in out and out of cars is going to become a critical issue.
When we do talk about infrastructure, everywhere the cars go, there will have to be a transmission from the vehicle to other vehicles and to infrastructure, and those communications have to be reliable and secure.
As recently as last week, for example, Toyota made an announcement of a major investment in block-chain technology to be able to defend the integrity of the data flowing through the car. I believe there is a role for government to support the development of research in the space and then to build the regulatory framework that allows for secure transmission of data.
Mr. Adams: To add to that, you were asking about Canadian companies and technology. To Stephen's point as well, there is a Canadian company called TrustPoint Innovation Technologies that is a technology that is being utilized by the Department of Transportation in the United States to provide those secure communications between vehicles and the infrastructure. They are a spinoff operation of QNX, which is a spinoff of BlackBerry. QNX is an integral corporation involved in the connectivity and automation of vehicles as well.
So there are companies in Canada and academic institutions that are engaged in this space. Are we as connected as we could be to everything else going on around the world? Maybe not, but I think that only speaks to the pace with which all of this activity is evolving.
Senator MacDonald: Mr. Beatty, you spoke about block-chain technology. Could you expand on that, as well as distributed ledger technology, and explain exactly what it means and how it would be applied?
Mr. Beatty: This goes back to the issue of the basic safety message that has to move from the car. Any vehicle approaching another vehicle or any piece of infrastructure that has to interact with a vehicle has to be assured that the messages it is receiving are trustworthy. The issue becomes: How do you provide that level of security of data while also ensuring that you are able to maintain the anonymity of the individual driver in that environment?
We want to ensure a system that provides for the rapid flow of data and safety but not at the cost of individual liberty or privacy. Block-chain technology gives you the opportunity to ensure the integrity of the data while maintaining the anonymity of the source of the data.
Canadians have been significant players in that space. It comes out of the technology that was developed for bitcoin, the global electronic currency. It is one of many technologies we can be looking at in this space, but it is an important lever for us to pull as we are looking to ensure the integrity of the system.
Senator MacDonald: What about distributed ledger technology? How does that differ from block-chain?
Mr. Beatty: To be honest, senator, to get into the details of that, I would prefer to bring our tech people up to pull through that, but we can provide information to you.
Senator MacDonald: Besides Toyota, are there other manufacturers that are considering applying block-chain technology?
Mr. Beatty: Absolutely. I don't think there are vast secrets from each other about the need to address these basic issues. Across the industry, you have multiple parties and multiple supplier groups looking at this.
Ultimately, the guarantee for you as legislators is that we are going to settle on standards. We work with a global network of suppliers that work with all of us as OEMs to build these technologies. We may be the patent-holders in many instances, but it quickly solidifies into a set of standards in the industry.
In that sense, there aren't a lot of secrets. We know what each other is working on in broad measure. Frankly, we are trying to encourage broad sharing of technology to be able to roll out faster.
Senator Bovey: Thank you. This is all very interesting. You have addressed my questions with respect to data, so I want to move on to what has been called "disruptive technology,'' especially in the world of employment.
With technology advancing so rapidly, how do we develop the curriculum so you have young people coming into the field when it's changing on a dime? Can you talk a bit about your work with colleges, universities, engineering departments, et cetera, so we have some comfort that there is new and ongoing training?
Mr. Adams: I will take a spin on your question, if I might, to talk about automated technology on vehicles today and a consequence of that technology. It addresses the very issue that you raise in terms of training and education.
That comes around the whole concept of collision repair with vehicles. People who have been around for 30 years, they think a vehicle is a vehicle is a vehicle. It is made with the same metals, substances or what-have-you. It has an engine and so on. However, the challenge for the repair industry today is when you have sensors all around that vehicle built into the bumper, the windshield and the mirrors on the car, what happens if that vehicle is in an accident and it is not repaired properly to manufacturer-OEM specifications? That's a real challenge we have in the repair industry at the moment. That is why a number of auto manufacturers are developing their own certified repair programs to ensure that when that vehicle goes back on the road, it operates as it should operate.
You can imagine if a consumer is going down the road, driving a vehicle after it has been repaired, and is counting on his vehicle to advise him if the vehicle is going outside of the lane or if the consumer needs to put on its brakes, and that technology isn't working properly because it wasn't repaired properly, it's a significant issue. That is one side of the coin.
The other side of the coin is getting universities and colleges embracing new technology so they are equipped to move forward with the automation that Stephen and other companies are integrating into vehicles.
Mr. Beatty: There is another aspect of education that we need to consider. The technology in the vehicle is changing faster than the ability of drivers to understand the change in that technology.
If you think about the way that we licence drivers in Canada today, you learn how to drive once in your life. You obtain your driver's licence at the beginning of that driving career, and then maybe late in life, you are required to renew your licence through a set of tests. However, we don't update drivers' understanding of the technologies in the vehicle.
I can give you the simple example of ABS technology. When automatic braking came in, drivers who had been taught early in their career to pump the brakes were doing exactly the wrong thing. These new technologies will change the way that we handle vehicles. A big part of what we are doing as a company is reinvesting in public education around what these sensors do, what the new safety systems do and how to actually operate an automated vehicle safely and effectively.
Senator Runciman: Off the top, I want to say I know Toyota is a wonderful corporate citizen, but — I'm following along the lines of Senator Saint-Germain with respect to the role of the national government regarding how extensive the regulatory framework should be.
Mr. Beatty, you said you see that as clearly a role that the government has to play. But I have questions about how well that role is played in today's environment. This is not to malign the industry in any way, but in the past, we have seen Chrysler-Fiat, GM, Volkswagen and Hyundai with all serious problems — some of them allegations at this point, and most have been brought to public attention by whistle-blowers. That raises questions, especially when we get into this level of technology about how much of a role should trust in the industry play versus significant involvement by government.
I have a report here from U.S. Senator Ed Markey called Tracking and Hacking. One of his conclusions reads:
The alarmingly inconsistent and incomplete state of industry security and privacy practices . . . raises a need for the National Highway Traffic Safety Administration . . . to promulgate new standards that will protect the data, security and privacy of drivers in the modern age of increasingly connected vehicles.
He then goes into a list of what he feels is required.
I am looking for an opinion from you. We had a witness the other day who said he felt there should be extensive involvement in the initial phases, but perhaps at some point down the road governments could back off a bit. How do you see that role going forward?
Mr. Beatty: Thank you for the opportunity to comment. As I said earlier, I think that data security and privacy are very big issues and should be addressed by government.
Our view is that access to the data that we require to be able to ensure the effective operation and testing of vehicles is very important to us while maintaining individual consumer privacy. That is part of the reason we are advocating that you look at this on a North American-wide basis to ensure we have common systems and protocols in place.
If you would like me to "spitball'' a proposal to you, one of the things that has always irritated me beyond belief is the fact that under Canadian law, vehicle owners are able to take their vehicles out of certification under current safety laws. They can raise or lower a vehicle. They can re-chip a vehicle. They can do any number of things that will take the vehicle outside of its factory certification. That increasingly includes the possibility of plugging third-party devices that provide vehicle connectivity into OBD ports and so forth. This is one of the very troubling potential back doors in terms of security of vehicles and public safety.
If you were to make recommendations to the government for an overhaul of our current standards, one of those should be to ensure that any third-party device that is attached to a vehicle needs to be tested to the same rigorous standards that an OEM product is because it does open the potential for a Trojan Horse to be introduced into the vehicle.
Senator Runciman: Does Toyota keep records on hacking?
Mr. Beatty: We conduct very extensive work of our own to ensure the electronic integrity of the vehicles. There are a number of third-party organizations in the U.S. and elsewhere that are constantly testing vehicles for potential flaws, some of which are brought to the attention of the public; some of which are brought to the attention of individual corporations.
Like any other electronic device, obviously we work hard to ensure that if there is an issue that is found, it is addressed. We work very carefully to ensure that our systems aren't so open in the first place that you leave the opportunity for third-party access to the vehicle. As a company, we have been much more cautious about connectivity.
Senator Runciman: I guess that is a no, really. You are working with organizations. You certainly couldn't respond to a hacking incident in real time.
Mr. Beatty: We haven't seen hacking incidents in real time. What we have seen are hypothetical scenarios where people have set up under controlled conditions.
Senator Runciman: Is any work being done on override capabilities that could be shared with law enforcement?
Mr. Beatty: I'm not sure what sort of override technologies you are thinking about in this case.
Senator Runciman: Someone who is using a stolen car, that sort of thing.
Mr. Beatty: So the vehicles on the road today that would allow you to put the vehicle into turtle mode, if you would, or limp-home mode that would allow the vehicle to be safely removed off the road but not operate at full effectiveness.
Senator Griffin: You have obviously done a lot of consultation in a lot of places. Have you had any consultation with the provincial governments? They are the ones who license vehicles and build many of the highways in our country.
Mr. Adams: The association is an associate member of the Canadian Council of Motor Transport Administrators. As you know, I think they appeared before this committee. They are a collection of all the provinces and territories, along with the federal government. We have been part of their automated vehicle working group. Last year I made a presentation to the CCMTA and also to the Transportation Association of Canada.
We try to stay in touch with those organizations, because we have the federal government that essentially deals with the vehicle, as you say, and then the provinces are dealing with the vehicle on the roadway. Their challenges are around what kind of infrastructure is needed and should they be creating an environment to test vehicles, and so on and so forth.
Senator Griffin: I am looking at your recommendation number four, which is data sharing and privacy, but I am thinking of it in a different way. I am thinking of the aftermarket industry; that is, the people who repair cars, the local service stations or Canadian Tire. Do you see them as being able to access the data in order to continue to do their jobs or are they going out of business?
Mr. Beatty: In the context of what we are recommending here, this is in respect of the development of the new technologies and then their development in the marketplace. I suspect that as technologies mature, the aftermarket service industry will continue to exist, and it will be installing modules on vehicles in response to collisions and any other needed repairs to a vehicle. We already share detailed repair information for vehicles with the aftermarket industry. That is part of an industry-wide protocol.
Senator Griffin: I am glad to hear that. That is a big industry.
One thing I am really concerned about in our country — and it is an embarrassment — is we have quite a high functional illiteracy rate. With what we are talking about here, I think there will have to be some high-quality training and education of people who manufacture cars, who do the software, who do the repairs, who do everything related in this industry. I have some concern whether we are really ready for that. I don't know whether you have that concern.
Mr. Beatty: When we introduced the Prius into our lineup for the first time, we went from an industry where everything was mechanical to an industry where suddenly everything was electrified. The types of skills that were required to work on those vehicles were radically different from anything that had come before.
We required any of our dealers who would be selling those vehicles to ensure they had top trained technicians, and we provided the training that was necessary to bring those skills up. Beyond that, we have now gone out to recruit differently to bring in new technical skills into the industry to ensure we have this ongoing supply.
I think the one challenge for the industry is that often the auto industry has been seen as some sort of sunset industry that was part of old industry. In fact, we are very much part of the leading edge of new technology. There is an industry-wide effort that is required in order to attract the youngest, brightest and best new employees into the sector.
[Translation]
The Chair: Very briefly, for a second round of questions. Senators Galvez and Saint-Germain, you may ask your questions one after the other, and the witnesses will answer afterwards.
[English]
Senator Galvez: I asked the representatives from CAA about the evolution of car insurance. Now that a car will be more like a computer or a smartphone rather than a mechanical thing and the driver is less and less needed to control the car, who will carry the responsibility in the case of an accident?
Mr. Adams: I'm sure I have seen the same reports that you folks have probably seen already. A couple of companies have come out and said that they would assume full liability if something happened with one of their automated vehicles, Volvo being one of those companies; there are a few more as well.
You raise a good point in terms of how you apportion the liability. I don't think it's as much of an issue when you have a fully automated vehicle because, then, it is clearer that the technology is driving the vehicle, not the driver. Where it becomes a grey zone for a lot of people is when you have the driving task being shared between the driver and the vehicle. I think that gets back to the data question as well. When there is an accident that occurs and we're not sure who is driving, if you want to put it that way, then it makes sense that that data on the vehicle would be shared with those who need to see it to be able to answer that question from an insurance perspective.
[Translation]
Senator Saint-Germain: My question is about the fact that you would like the government to keep the high frequency 5.9 gigahertz bandwidth. You say that the automobile industry needs it and that the telecommunications industry is interested in it. What percentage of the Canadian territory does it serve? Moreover, do you think that the two industries and the government will share costs, given the use you will make of it and the expected profits?
[English]
Mr. Adams: I can start by saying that it is important that that spectrum be preserved. There is only so much of the spectrum. There is thought that you can maybe move to other technologies beyond dedicated short-range communication that need that spectrum. Right now, I think — I don't claim to be an expert in the area — that seems to be the biggest game going. I think the real fear comes when you get competing industries saying, "Don't worry about it. Us sharing the spectrum won't impinge on the ability to send accurate signals on a timely basis between vehicles and the infrastructure.'' Personally, I wouldn't want to take that risk. I would want to make sure that you have the spectrum preserved so that you can ensure that the dedicated short-range communication operates as it should.
Senator Saint-Germain: I understand that you need it, but what are the conditions? Would you share the costs?
Mr. Beatty: Part of the way that the cost is shared is by ensuring that the data that's flowing through the system is paid for. Already, as we are rolling out connected services, that is baked into the value of the vehicle, on a starting basis, and then it is built into the subscription beyond that.
That is necessary for a variety of reasons. It is necessary to provide services to the consumer, be it entertainment, be it any number of other things that they have on board. It's important to us as a company because it will provide telemetry back to us about the health of the vehicle and any needed services that are required. I think it's important to government because it's going to ensure that you have a safety check on how the transportation system itself is actually operating.
I do think that there is a sharing of the costs associated with this. However, as always, it comes down to the fact that, because these are largely personal-use devices operated by consumers, it's a consumer cost. Our job as a car company is to make sure that we can make the service as competitive as we possibly can, while also ensuring the reliability of it, to meet those three different sets of needs.
[Translation]
Senator Saint-Germain: So the user-pays principle is operative. Fine, thank you.
[English]
The Chair: I'd like to thank Mr. Adams, Mr. Beatty and Mr. Nichols for their participation today. I think your contribution will help this committee very much.
Honourable senators, before we proceed with a short in camera meeting, if you agree, during that time, personnel of the senators can stay, but everybody else should leave. Everybody agrees?
Hon. Senators: Agreed.
(The committee continued in camera.)