This site will look much better in a browser that supports web standards, but it is accessible to any browser or Internet device.

Skip to Content

Bill S-5, Motor Vehicle Safety Act & Canadian Environmental Protection Act, 1999

 

Hon. Michael L. MacDonald moved second reading of Bill S-5, An Act to amend the Motor Vehicle Safety Act and the Canadian Environmental Protection Act, 1999.

He said: Honourable senators, I am pleased to rise in this chamber this afternoon to present an amendment to change both the Motor Vehicle Safety Act and the Canadian Environmental Protection Act, 1999, in order to implement the North American Free Trade Agreement provisions on the importation of used vehicles. I am making this presentation on behalf of the Department of Transport, Infrastructure and Communities Canada and Environment Canada.

Some of you may think this is a relatively dry and uninspiring topic. You would be right, so I invite you all to fill up your glasses and try to bear this out with me.

The Motor Vehicle Safety Act regulates the manufacture and importation of motor vehicles and safety equipment like tires and child seats. The Canadian Environmental Protection Act, 1999 helps to prevent pollution and protects the environment and human health. The changes proposed by this bill allow administrative amendments to the trade components of these two laws and ensure we will comply with our trade obligations under the North American Free Trade Agreement. Right now, imported vehicles more than 15 years old are not required to meet safety or emissions standards, but under the current rules, the Motor Vehicle Safety Act only allows for the importation of used vehicles from the United States. The Canadian Environmental Protection Act, 1999 allows for the importation of used vehicles as long as they meet Canadian standards at the time of manufacture.

In 1994, the North American Free Trade Agreement came into effect, creating one of the world's largest free trade zones and laying the foundation for strong economic growth and rising prosperity in Canada, the United States and Mexico. NAFTA has shown us how free trade increases wealth and competitiveness and delivers real benefits to families, workers, manufacturers and consumers. It is important to honour these commitments defined in the agreement.

The predecessor to the North American Free Trade Agreement was the Canada-U.S. Free Trade Agreement signed in 1988 by Prime Minister Brian Mulroney and President Ronald Regan. The objectives of this agreement were to eliminate barriers to the trade of goods and services between the territories of the parties, give us fair competition within the free trade area, liberalize conditions for investment within the free trade area, establish effective procedures for the joint administration of this agreement and the resolution of disputes and lay the foundation for further bilateral and multilateral cooperation to expand and enhance the benefits of the agreement.

The Motor Vehicle Safety Act was amended in 1993. The amendment established the Registrar of Imported Vehicles to regulate and monitor the importation of vehicles. It assures that vehicles purchased by Canadians at the retail level in the United States are fully compliant with the Canadian federal vehicle safety requirements before these vehicles are licensed by the provinces and territories.

The Registrar of Imported Vehicles also provides information to potential importers, responding to an average of 750 calls a day through its call centre. What is unique about the program is that it is fully funded by those that are importing the vehicles from the United States through a processing fee paid for each imported vehicle.

Following the Canada-U.S. Free Trade Agreement, the North American Free Trade Agreement was signed in 1992 by U.S. President George H.W. Bush, Canadian Prime Minister Brian Mulroney and Mexican President Carlos Salinas. NAFTA is a regional agreement between the Government of Canada, the Government of the United Mexican States and the Government of the United States of America to implement a free trade area.

The objectives of NAFTA are to eliminate barriers to trade in and facilitate the cross-border movement of goods and services between the territories of the parties; promote fair competition in the free trade area; increase investment opportunities in the territories of the parties; promote and enforce intellectual property rights in each party's territory; create effective procedures for the implementation and application of this agreement for its joint administration and for the resolution of disputes; and establish a framework for further trilateral, regional and multilateral cooperation to expand and enhance the benefits of the agreement.

While NAFTA was signed in 1992, its automotive provisions did not come into effect until January 1, 2009. These provisions require that Mexico, the United States and Canada allow the importation of used vehicles from each other. Like under the Canada-U.S. Free Trade Agreement, imports will begin with older vehicles and gradually expand over the next 10 years to include all used vehicles.

Prior to the automotive provision of the North American Free Trade Agreement coming into force, the American government already had a program where it considered requests for importation of vehicles from other countries. Our American friends consider each vehicle on a case-by-case basis to see whether they meet their safety standards. Hence, their rules do not need to change in order to meet the North American Free Trade Agreement requirements.

The Mexican government has already implemented a reciprocal provision. The President of Mexico issued a decree on December 22, 2008, to allow duty-free entry into Mexico as of January 1, 2009, of used light and heavy vehicles from Canada and the United States that are 10 years old or older.

Canada cannot implement the NAFTA automotive provisions under the current Motor Vehicle Safety Act nor under the current Canadian Environmental Protection Act, 1999. The coming-into-force date of the North American Free Trade Agreement automotive provisions have already passed so there was urgent need for changes to these two acts so Canada complies with its trade obligations and is not subject to challenges under NAFTA.

As some background, honourable senators, the Motor Vehicle Safety Act first came into effect in 1971. It established comprehensive minimum safety standards for the design and performance of vehicles manufactured or imported for use in Canada. It is the cornerstone of Canada's federal road safety program. Since its inception, it has been amended twice with, as I mentioned before, the last changes being made in 1993. This act has played an important role in the decline of Canadian deaths and injuries from vehicle collisions.

The Canadian driving environment is very different from that of our NAFTA partners. Our safety standards were developed to meet certain unique requirements while still harmonizing, to a large extent, with the United States. For example, the decreased daylight levels in Canadian winters necessitates daytime running lights on vehicles in Canada. In addition to driving conditions, we have other unique requirements to ensure safety, such as requiring speedometers to display kilometres per hour instead of miles per hour. Many of these standards are not visible to the naked eye but affect the safety of individuals. For example, the mechanism for attaching child restraints is stronger in Canada than in most other countries.

It is important to maintain the level of vehicle safety. The cost of collisions in Canada has recently been estimated at $62.7 billion each year. This estimate of the social costs of motor vehicle collisions includes both direct and indirect costs. Direct costs are things like property damage, emergency response, hospital and other medical care and insurance administration, out-of-pocket expenses by victims of motor vehicle collisions and traffic delays like lost time, extra fuel use and environmental pollution. Indirect costs are the human costs of collisions, like partial and total disability of victims, productivity and workplace loss, as well as the awful cost of the pain and suffering of victims and their families.

Our government is working to make our roads safer for Canadians and their families. These changes will not affect that work. I should note, honourable senators, that Transport Canada is reviewing the Motor Vehicle Safety Act as a whole to determine whether other changes are needed to the act to ensure the safety of Canadians on our roads. Newly imported vehicles will still need to meet the same safety requirements as domestically assembled vehicles.

Used vehicles imported from the United States are already addressed under the Motor Vehicle Safety Act. These vehicles must be manufactured to meet American safety standards and, if and when they are imported to Canada, must be certified to meet the additional Canadian safety standards before being registered by the provinces or the territories. Through this arrangement, we ensure these used vehicles meet Canadian safety requirements. Vehicles from Mexico will need to meet the same safety standards.

The Canadian Environmental Protection Act, 1999 came into force on March 31, 2000, following an extensive parliamentary review of the original 1988 act. It is the government's principal legislative tool to prevent pollution and to protect the environment and human health. It provides for an integrated engine and fuel approach to reducing harmful emissions from vehicles and equipment. While it is a modern piece of legislation, amendments are required from time to time to keep pace with various international commitments, such as NAFTA.

Currently, the Canadian Environmental Protection Act, 1999 regulations allow us to import used vehicles, provided that they meet Canadian or U.S. standards at the time of their manufacture. Environment Canada's vehicle emission regulations are harmonized with the United States.

Amendments to the Canadian Environmental Protection Act are required to provide the authority to develop regulations to address the importation of used vehicles from Mexico that are not compliant with Canadian standards. These regulations will be developed with respect to the North American Free Trade Agreement obligations only, and any vehicles imported into Canada from Mexico will be required to be modified in compliance with the Canadian emission standards and any applicable provincial and territorial requirements.

The amendments to the Canadian Environmental Protection Act would implement the relevant North American Free Trade Agreement provisions by providing the authority to allow the importation of used vehicles from Mexico that are not compliant with Canadian emission standards conditional on a declaration being made at the time of their importation that Canadian emission requirements will be met and that the vehicle will be certified in accordance with regulations. Therefore, the implementation of this bill will allow Canada to match the existing used vehicle importation measures of both Mexico and the U.S., our NAFTA trading partners.

Provincial and territorial governments have been consulted because any imported vehicle will be licensed and operated within Canada. They have expressed no concerns regarding this proposal. Commercial importers are supportive of the proposed changes. As the proposed amendments affect only owner-used vehicles, we do not believe that the changes will have a significant effect on manufacturers as the target markets for these vehicles are different. While we believe that the number of used vehicles will be minimal, the amendments will give consumers and commercial importers more choice by enabling the importation of vehicles from Mexico.

In 2009, Canada imported 124,000 used vehicles from the United States compared to approximately 1.5 million vehicles bought new in Canada. Due to the harmonization of many Canadian and American safety standards, the imported vehicles coming from the United States were already manufactured in a manner that made it relatively easy to modify them to meet Canadian standards. We imported about 11,000 vehicles from the entire world combined that were over 15 years old, the threshold for extension from all Canadian environmental and safety standards. As the Mexican market is different from Canada's, the harmonization of safety standards does not yet exist, and we anticipate that there will be a small number of vehicles that can meet our standards at this time.

The changes to the acts themselves are few and the proposed bill is fairly short. For the Motor Vehicle Safety Act we need to amend the definition of "vehicle." For both the Motor Vehicle Safety Act and the Canadian Environmental Protection Act, 1999, we need to modify clauses to specifically note that imports from Mexico will be accepted as long as they satisfy the requirements of the regulations.

For the Canadian Environmental Protection Act, this will mean that the importer must make a declaration to this effect. These regulations will specify the vehicle's safety and emissions standards that will have to be met in order to provide for an equivalent level of safety and environmental protection as currently exists for all vehicles currently imported and sold within Canada.

The government estimates that one year to a maximum of two years after proclamation will be needed to draft and implement the safety regulations under the Motor Vehicle Safety Act and under the Canadian Environmental Protection Act, 1999.

The government remains committed to addressing road safety by exercising its powers and authorities under the act and by supporting Road Safety Vision 2010, a joint initiative between the federal, provincial and territorial governments and other partners. The federal government can achieve and demonstrate leadership among its road safety partners by maintaining the integrity of the Motor Vehicle Safety Act.

As I have already mentioned, Transport Canada is reviewing the Motor Vehicle Safety Act to determine whether other changes are needed to the act to ensure the safety of Canadians on our roads and the efficiency of the Canadian vehicle safety regime developed and operated under the authority of the Motor Vehicle Safety Act.

The government is also committed to protecting the environment by exercising its powers and authorities under the act and harmonizing with the emission regulations of other countries that have the most progressive emission standards. This approach provides for combined environmental and economic benefits.

In addition to our responsibilities for the environment and road safety, we cannot forget the importance of better positioning Canada to compete for investment and market opportunities. The automotive trade provisions of the North American Free Trade Agreement open the doors to Canadians to export used vehicles to both the United States and Mexico. However, this opportunity could be lost if we do not demonstrate our commitment to upholding our end of the agreement.

In conclusion, I remind honourable senators that with these amendment, we will enable the implementation of the NAFTA automotive provisions, maintain road safety by limiting importation to vehicles that provide a level of safety comparable to that of similar Canadian specification vehicles and continue to protect the environment by ensuring that imported used vehicles meet Canadian environmental standards once certified for use.

We believe these proposed amendments are the right approach to take. They strike the right balance to allow us to meet our current trade obligations, while at the same time protecting the safety of the travelling public and the environment. I urge honourable senators to give this legislation their unanimous support.