Fiscal Year 2017-18
Table of Contents
- Executive summary
- Operating context
- Risks and planning assumptions
- Planned improvements
- Oversight Delivery in 2017-2018
- Organizational Contact Information
This document is a plain language version, in a standardized format, of the more technical information contained in the National Operations Plan for 2017-18. This is part of the Oversight Transparency approach implemented by Transport Canada in early 2019.
The Motor Vehicle Regulatory Enforcement Program oversees new or imported vehicles, child car seats and tires. This is done by:
- testing to verify they meet minimum safety standards
- assessing how people and companies comply with related safety requirements
- investigating public complaints of alleged safety defects, and overseeing recalls
The program aims to reduce risks to Canadians. It ensures new vehicles and equipment meet Canada's safety standards. It also ensures companies act quickly and effectively to address safety risks when they arise.
Total oversight spending (salary and operating costs) for fiscal year 2017 to 2018 was $4,874,587. This includes all the oversight activities and vehicle and equipment purchases.
Key areas of focus include planning to develop and implement new programs expected from recent amendments to the Motor Vehicle Safety Act, such as:
- an Administrative Monetary Penalty Program
- new safety defect information requirements
- an exemption authority to encourage new innovative or safety technology development
Approximately $160,000 in new funding is expected to support the development and implementation of these programs.
External factors affecting program delivery
Major developments may affect program delivery. As an example, the rapid market introduction of new vehicle safety technology is likely to increase the need for governments to obtain knowledge and technical expertise.
Large and complex recalls or defect investigations can place high public expectations and demands on limited oversight resources. An increase in public reports of alleged defects and manufacturers' recall notices is expected to continue (see page 7).
Only 75% of vehicle owners heed recall notices issued by manufacturers. This places additional pressure on the department, in cooperation with jurisdictional partners and manufacturers, to maintain awareness about the importance of getting recalls fixed.
Internal factors affecting program delivery
Public complaints received about alleged safety defects, the number of ensuing investigations, and the number of recalls issued annually continues to increase. This places more work on fixed resource levels (see page 7).
Hiring and training qualified people is challenging and time consuming for managers and human resources personnel.
Significant program design changes
We expect a significant program change to result from anticipated changes to the Motor Vehicle Safety Act. Specifically, if the government approves amendments proposed in Bill S-2, there will be immediate pressure to use, or develop regulations to use, new oversight tools such as:
- consent agreements
- conditional exemptions
- information-gathering from manufacturers
- administrative monetary penalties (e.g., fines) for non-compliance
The following information is available online:
- Associated legislation, regulations, and standards
- 2017-18 Departmental Results Report and Program Budgetary Financial Resources
The Motor Vehicle Regulatory Enforcement Program assesses whether people and companies comply with the legislation, regulations and standards that apply to vehicles, tires or child car seats they manufacture, distribute or import.
These activities can be reactive or proactive. They consist mainly of the following:
Regulatory authorizations: reactive
In Canada, to sell vehicles, tires and child seats, manufacturers must apply for and obtain a National Safety Mark (NSM) from the Minister of Transport, which they affix to their product. Importers also have to obtain similar authorization. A company is not issued an NSM or authorized to import until it can show that its product meets Canadian safety standards.
Temporary importation applications: reactive
The program reviews, assess and processes requests to temporarily import non-compliant vehicles into Canada on a case-by-case basis. The vehicle can only be imported for certain purposes set out in regulations, and for a limited time period.
Compliance audits: proactive
The program periodically audits manufacturers and importers to check whether companies and the vehicle, tires and/or child car seats they produce meet applicable Canadian Safety Standards and requirements.
Compliance testing: proactive
The program tests vehicles, tires and child seats to assess whether they meet applicable safety standards, or identify the need for possible changes to requirements.
Defect investigations and recalls: reactive
The program analyzes large amounts of reports which allege potential safety defects. These reports are made through various sources (the public, media, law enforcement and emergency responders). When trends or common problems occur, we may identify a defect, prompting a company to conduct a recall. We also assess recalls to ensure they are carried out as per requirements.
Enforcement action: reactive
If the program finds a non-compliance, we take enforcement action. The severity of the action takes into account the degree of risk posed by the non-compliance.
The Motor Vehicle Safety Act is based on the principle of manufacturer self-certification. Through this process, the manufacturer tests and provides proof to the government that all applicable safety standards are met. This approach is similar to the one the United States (U.S.) uses. It minimizes government's pre-market influence and burden on the regulated community.
The Motor Vehicle Safety Act applies to 3 types of companies:
- companies that manufacture regulated vehicles or vehicle equipment in Canada
- companies that distribute vehicles or equipment obtained from those manufacturers to other people, for resale
- companies that import regulated vehicles or equipment into Canada, for sale
In addition, the act applies to people who import vehicles sold in the U.S., and those who want to temporarily import vehicles and equipment for specific purposes.
The Motor Vehicle Regulation Enforcement Branch oversees approximately 2,200 manufacturers (Canadian and foreign).
Vehicles, tires and child car seats must be certified by the manufacturer before they can be sold on the Canadian market. For this reason, manufacturers certify their products during the design and development phase. They must keep records related to the design, testing and field performance of their vehicles or equipment. This allows inspectors to verify compliance with applicable standards, and to find safety defects.
Transport Canada's Motor Vehicle Safety Oversight Program evaluates whether or not companies are meeting their certification and record-keeping responsibilities, and if their products meet minimum safety requirements.
Public complaints of alleged defects, and recalls issued by manufacturers, continue to increase annually. Transport Canada analysis and investigation of these complaints often prompts manufacturers to issue recall notices.
The following statistics illustrate this trend:
Number of recalls by Calendar Year 2000 to 2017
|Calendar Year||Total Number of Recalls|
Number of complaints by Calendar Year 2000 to 2017
|Calendar Year||Number of Complaints|
Risks and planning assumptions
Canada has over 2,200 manufacturers of vehicles, tires and child car seats. They produce many models, trim levels and versions of each product, to which one or more standards may apply. As such, it would be inefficient and extremely expensive to test and audit every product or application.
This is why the oversight branch, consistent with the department's practice, uses a risk-based approach to conduct oversight. In some cases, we also randomly select potential lower risk instances of non-compliance.
For example, we consider the following factors:
- When selecting vehicle and equipment for compliance tests:
- number of models produced/sold
- number of complaints or accidents reported to the department on a particular model or year
- if the model is new or the design has changed significantly
- if the product is unique or controversial
- compliance history for the product
- When selecting which standards to be used for compliance tests:
- when was the standard was last tested
- standards that are unique to a particular class of vehicle
- standards that have been recently improved or updated
- When selecting companies for and the frequency of compliance audits:
- type of vehicle (e.g., bus, car, snowmobile, trailer)
- compliance history
- company size, knowledge and experience
The program bases reactive activities on demand or circumstances, rather than risk criteria. For example, the department must process applications for NSMs or temporary importation to reflect conditions contained in legislation or regulations.
Other reactive activities must happen in the interest of public safety. These may include:
- recording, analyzing, and when necessary, investigating reports of alleged safety defects
- assessing, posting and monitoring manufacturers' recall notices
The following factors may affect whether or not the program conducts motor vehicle safety oversight activities as planned:
- vehicle and equipment availability (i.e., high demand, or limited or end-of-year production)
- weather, some tests depend on the presence or absence of certain weather conditions, which can be unpredictable
- time needed to acquire certain vehicles
- the cost of vehicles
- amount of reactive activities
- changes in staffing levels
- year-to-year budget changes
As mentioned, amendments to the Motor Vehicle Safety Act will, if approved, provide new enforcement tools to strengthen oversight. If approved, these tools would encourage industry to develop innovative and safe technology, and increase safety while promoting compliance. For example, these tools could include:
- a new monetary administrative penalty (AMPS) program, an oversight tool already available for other modes of transportation
- a new authority to require companies to gather and provide information to TC
- This could help identify defects earlier
- The need for this new authority was reinforced through a recent Office of the Auditor General audit
- The U.S. already has this authority
- a new authority given to the Minister to issue exemptions, with conditions, to safely introduce new technologies and features to Canada, without compromising overall safety
- Manufacturers could use this privilege to introduce anything from new headlight or mirror technology, to autonomous or connected vehicles
In addition, the program is planning other initiatives, such as:
- equipping inspectors and investigators with the knowledge and skills they need to oversee emerging automotive technologies
- locating permanent funding to keep pace with increased reactive oversight activities (complaint reporting and defect investigations)
- using approved human resource tools and strategies to hire and keep staff
Oversight Delivery in 2017-2018
As per Transport Canada's Oversight Transparency Integration Plan, Motor Vehicle Safety will report results of all oversight activities, including planned and actual results and variance explanations where needed, through the Canadian Center on Transportation Data (CCTD).
Organizational Contact Information
Transport Canada welcomes your comments on this report.
Annex A: Definitions
How Transport Canada promotes, monitors or enforces compliance with our safety and security requirements.
Given when a regulated party (for example, a railway company or vehicle manufacturer) applies for permission to do a regulated activity, or be exempt from it. We may give permission in various forms, including a permit, licence or certification. Transport Canada does not control the number of regulatory authorizations per planning cycle.