Process for Seeking Exemptions from Canada Motor Vehicle Safety Standards

Policy Objective

This document is to serve as guidance material for stakeholders on the process for requesting an exemption from the Canada Motor Vehicle Safety Standards (hereafter referred to as prescribed standards), including the information needed, how it will be evaluated by the department and against what criteria, in order for the Minister to make an informed decision regarding whether or not to grant the requested exemption. The process set out in this document is intended to serve as a guide to complement the requirements set out in the Motor Vehicle Safety Regulations (MVSR).

Policy Statement

Transport Canada aims to create an environment that encourages the development and use of transformative technologies. The exemption process outlined in section 9 of the Motor Vehicle Safety Act (MVSA) authorizes the Minister to grant relief from prescribed standards, to promote the introduction of innovative technologies or safety features in support of the department’s overall objective to welcome emerging vehicle technologies and ensure the safety of Canadian road users.

Applicability

This document is intended for use by all parties involved in the exemption process.

Definitions

1. Exemption

An exemption relieves a company from the obligation to ensure that a vehicle meets prescribed standards, provided that certain conditions are satisfied.

Section 9 of MVSA authorizes the Minister of Transport to grant exemptions from prescribed standards to promote the development of new safety features or new kinds of vehicles, technologies, vehicle systems, or components. This authority does not extend to exemption from regulations. The Director General, Multi-Modal and Road Safety Programs has been authorized to make the decision to grant or deny an exemption on behalf of the Minister.

The exemption provision within the MVSA reads as follows:

9 (1) On application by a company as provided for in the regulations, the Minister may, by order, grant an exemption for a specified period, in accordance with any conditions specified in the order, for any model of vehicle manufactured or imported by the company from conformity with any prescribed standard if the exemption from that standard would, in the opinion of the Minister, promote the development of:

(a) new safety features that are equivalent to or superior to those that conform to prescribed standards; or

(b) new kinds of vehicles, technologies, vehicle systems or components.

(2) An exemption must only be granted for a model if the exemption would not substantially diminish the overall safety performance of the model.

(3) Each exemption order must, as soon as feasible, be published through the Internet or by any other means that the Minister considers appropriate.

(4) Repealed.

(5) On expiration of the period of an exemption, a new exemption may be granted in accordance with this section.

2. Risk Assessment

Under the MVSA, an exemption must only be granted on the condition that it would not substantially diminish the overall safety performance of the vehicle model. In order for the department to assess this requirement, applicants are encouraged to enclose a risk assessment with the exemption application. The result of this broader approach to risk assessment is a comprehensive picture of the actual and anticipated harms together with a plan for mitigating those harms to the extent possible, along with the identification of residual risk, if applicable.

A risk assessment is the systematic identification and evaluation of potential harms related to a particular activity, taking into account the likelihood of harm occurring and the consequences of harm. The concept of risk assessment also includes the identification and evaluation of risk mitigation features/strategies, or the means by which risk can be reduced. Risk assessments are used widely in transportation safety and security, and other sectors, to bring rigour to the analysis of a course or courses of action.

The risk assessment is not be confused with the Safety Assessment for Automated Driving Systems, which is a separate report voluntarily submitted by industry to Transport Canada before SAE Level 3 to 5 automated vehicles are deployed in Canada. The Safety Assessment process is a mechanism for industry to outline how they are managing vehicle safety issues that are not addressed in regulations. The Safety Assessment may be submitted as a complementary or supporting document to exemption applications when applicable, but is not a substitute for a risk assessment.

Background

Innovative vehicle technologies are advancing at a rapidly increasing pace. While these advancements offer promising opportunities for economic, safety, and environmental benefits, they also present a number of regulatory challenges. In its original form, the MVSA and its accompanying regulations were developed for conventional vehicles and equipment with human drivers in mind. As automakers rethink what cars look like and develop enhanced safety features, exemptions from prescribed standards may be necessary.

In anticipation of these advances, the MVSA was amended in March 2018 to streamline the existing exemption process. The Minister of Transport, rather than the GIC, may grant a company an exemption from prescribed standards to support new safety features or new kinds of vehicles and technologies. As the rate of innovation begins to outpace the traditional regulatory process, exemptions allow companies sufficient time to develop and use the proposed technology while Transport Canada officials consider if updates to the appropriate standards are necessary. An exemption will only apply to the model of vehicle specified in the exemption order; however, the exemption would be made public. In addition, if a company is granted an exemption, it is important to note that they will be responsible for all requirements laid out in the MVSA and its accompanying regulations throughout the lifecycle of the vehicle, including notices of defect/non-compliance requirements.

Assumptions

This process has been developed based on the following assumptions:

While compliance with this document is intended to facilitate the application process, the Director General, Multi-Modal and Road Safety Programs has the authority to grant or deny an exemption on behalf of the Minister; and
A company seeking an exemption will provide all information and documentation prescribed in sections 13 and 14 of the MVSR to substantiate their application and facilitate the assessment. It is also recommended that a risk assessment accompany the application.

Approach

The test for assessing the merits of an exemption request is two-fold:

Would granting the exemption promote the development of new safety features or new kinds of vehicles, technologies, vehicle systems or components?
Would granting the exemption not substantially diminish the overall safety performance of the model?

Release of Exemptions to the Public

Once the company seeking an exemption is notified that it has been granted, Transport Canada will publish the exemption on its website as soon as possible. Details of the exemption will be released to the fullest extent possible as outlined in Appendix E: Exemption Document Template, including the relevant prescribed standards being exempted along with the purpose, application, conditions, and validity of the exemption.

Contact Office

Questions regarding the content of this process should be sent to:

Multi-Modal and Road Safety Programs
Telephone number: 1-613-998-8616 (Ottawa region and from other countries) or
1-800-333-0371 (long distance, Canada)
Email: mvs-sa@tc.gc.ca

Appendix A: Exemption Process

General

Responsibility for the evaluation of applications, along with the recommendation to grant or deny exemptions under section 9 of the MVSA, rests with the Motor Vehicle Regulation Enforcement Division of Transport Canada’s Multi-modal and Road Safety Programs.

Step 1: Client Exemption Request

Before filing an exemption application, the applicant may contact the Multi-modal and Road Safety Programs Directorate if additional information about the process is required. The department cannot advise on the likelihood of an exemption being granted in advance of an application. Throughout the application process, it is the responsibility of the applicant to demonstrate that the overall safety performance of the vehicle would not be substantially reduced if an exemption under section 9 of the MVSA was granted. In addition to the recommended risk assessment, the information required for an application under each exemption category is discussed below based on sections 13(1), 13(3), and 13(4) of the MVSR. The following outlines applicant responsibilities when submitting an application for exemption under section 9 of the MVSA.

Complete and submit an application (suggested template in Appendix B: Suggested Exemption Request Form) to Transport Canada’s Compliance Engineering, Vehicle and Equipment Testing, Multi-Modal and Road Safety Programs either by email (ComplianceEngineeringandVehicleTesting@tc.gc.ca) or in person/by mail to 330 Sparks Street, Tower C, Ottawa, Ontario K1A 0N5 (ASFAA).
Include company name and address and the province or country where the company is established.
Provide the number, title and text or substance of the prescribed standards from which exemption is sought; and, the proposed duration of the exemption.
Provide the reason(s) for requesting an exemption, as well as the reason(s) why an exemption would be in the public interest and consistent with the objectives of the MVSA, including if it would promote the development of:
1. a) new safety features that are equivalent to or superior to those that conform to the prescribed standards; or
2. b) new kinds of vehicles, technologies, vehicle systems or components.
If applicable, identify which information and data found in the application should be withheld from public disclosure, and why.
Provide the supporting information required, depending on the exemption category:
1. Exemption category 1: Development of new safety features
  1. a description of the new features;
  2. a copy of the research, development, and testing documentation establishing the innovative nature of the new features;
  3. an analysis of how the level of performance of the new features is equivalent to or superior to the level of performance established by the prescribed standards, including:
    - a detailed description of how a vehicle equipped with the new features would, if exempted, differ from one that conforms to the prescribed standards; and
    - results of tests conducted on the new features that demonstrate a level of performance that is equivalent or superior to that required by the prescribed standards;
  4. evidence that an exemption would facilitate the development or the field evaluation of the vehicle; and,
  5. a statement whether, at the end of the exemption period, the manufacturer intends to comply with the prescribed standards, apply for a further exemption, or request an amendment to the prescribed standards.
2. Exemption category 2: Development of new kinds of vehicles, technologies, vehicle systems or components
  1. a copy of the research, development, and testing documentation establishing that an exemption would not substantially diminish the safe performance of the vehicle, including:
    - a detailed description of how the vehicle equipped with the new kinds of vehicle systems, technologies, or components would differ from one that conforms to the prescribed standards;
    - the reasons why not conforming to the prescribed standards does not substantially diminish the safe performance of the vehicle; and
    - a discussion of other means of conformity that were considered and the reasons for rejecting each of them; and
  2. the reasons why an exemption would facilitate the development or field evaluation of the vehicle; and
  3. a statement whether, at the end of an exemption period, the manufacturer intends to conform to the prescribed standards.
Provide any additional sources of information that would facilitate the review of the exemption request, such as a risk assessment with accompanying mitigation strategies.
Consider proposing terms and conditions for the exemption that could mitigate any potential risks and ensure motor vehicle safety would not be negatively affected.
If the application is for the renewal of an exemption, provide the information required, depending on the exemption category. Include a statement of the total number of vehicles sold in Canada under the expiring exemption. The applicant may also wish to place particular focus on an examination of how the exemption was successful (e.g., how did the exemption contribute to the development of new safety features or new kind of vehicles, technologies, vehicle systems or components and how did the exemption avoid substantially diminishing the overall safety performance of the vehicle).
Ensure that the application for exemption is fully completed. If the company applying for an exemption does not submit all of the information prescribed by section 13 and 14 (where applicable) of the MVSR, the Minister will not be in a position to grant an exemption until the missing or incomplete information is received.

Step 2: Exemption Request Assessment

Transport Canada will endeavour to review and determine exemption requests as quickly as possible on a priority basis. The following provides an outline of Transport Canada’s responsibilities when evaluating an exemption application under section 9 of the MVSA.

Send email to applicant to acknowledge that their request has been received and is under review.
Review exemption request material to ensure that all necessary documentation has been provided. If not, inform the applicant of the missing or incomplete documentation before proceeding with the assessment.
Once the exemption request material has been received in full, inform the Provinces and Territories that a request to be exempted from the Canada Motor Vehicle Safety Standards has been received by Multi-Modal and Road Safety Programs Directorate.
Coordinate input from others in the process, such as other Branches within Multi-Modal and Road Safety Programs and Transport Canada, or other departments, or provinces and territories, or international counterparts, as applicable.
Evaluate the information provided by the applicant to determine if the exemption would:
1. promote the development of new safety features or new kinds of vehicles, technologies, vehicle systems or components; and
2. not substantially diminish the overall safety performance of the model.
Review and evaluate the risk assessment and regulated information provided in the application. If Transport Canada officials recommend risk mitigating conditions in addition to those identified by the applicant, the department will consult the applicant to determine impacts, if any, on implementation. (see Appendix C: Assessment Considerations and Methodology).
Document the decision-making process and assessment findings by completing the Exemption Request Evaluation Paper (see Appendix D: Exemption Request Evaluation Paper) and record the justification to grant or deny the exemption.

Step 3: Formulation of Recommendation to Grant or Deny

Transport Canada officials will formulate their recommendation to grant or deny the exemption on the basis of Transport Canada’s assessment in accordance with section 9 of the MVSA. Prior to submission to the Director General, Multi-Modal and Road Safety Programs, a recommendation, as well as all supporting documentation, will be vetted by officials within Multi-Modal and Road Safety Programs.

If Transport Canada officials recommend denying an exemption request, the assessment package will be submitted to the Director General, Multi-Modal and Road Safety Programs for approval.
If Transport Canada officials recommend granting the exemption request, the assessment package, and the draft exemption in both official languages will be submitted to the Director General, Multi-Modal and Road Safety Programs for approval (see Appendix E: Exemption Document Template).

Step 4: Exemption Disposition

Transport Canada officials will submit the Exemption Request Form and its supporting documents, the Assessment Paper, and the Exemption Document to the Director General, Multi-Modal and Road Safety Programs for review and approval.
If the exemption request is denied, the Director General, Multi-Modal and Road Safety Programs will inform the applicant in writing and provide a rationale. The applicant may submit another request with new/additional information and/or arguments.
If the exemption request is granted, the Director General, Multi-Modal and Road Safety Programs will inform the applicant in writing.
The Director General, Multi-Modal and Road Safety Programs will notify the Minister of Transport of all issued exemptions in a timely manner.
The Multi-Modal and Road Safety Programs Directorate will provide a copy of all issued exemptions to the provinces and territories.

Step 5: Distribution of Exemption Document

One bilingual copy:

To applicant; and,
Posted on the Transport Canada website.

Step 6: Labels related to exemptions

Vehicle models that have been granted exemptions must have labels securely applied to their windshield or side window that list the prescribed standards and vehicle features for which an exemption has been granted (by number and title), as well as the short title of the exemption order, as indicated in subsection 13(5) of the MVSR.

The compliance label or information label, as the case may be, for these vehicle models shall also list the pertinent information related to the granted exemptions, as indicated in subsection 6(11) of the MVSR.

Exemption Request Process Map

Appendix B: Suggested Exemption Request Form

Request made by

Name/Company
Province or country where company is established
Address
Email

Date request made:

Provisions(s) for which exemption is sought:

Name of Act/Standard
Section Reference
Text or substance of standard

Proposed duration of exemption:

Background information:

Rationale for exemption:

Reason(s) for requesting an exemption, including:

to promote the development of new safety features that are equivalent to or superior to those that conform to prescribed standards; or
to promote the development of new kinds of vehicles, technologies, vehicle systems or components.

Reason(s) why an exemption would be in the public interest and would not substantially diminish the overall safety performance of the model.

Supporting information:

If the basis of an exemption is to promote the development of new safety features, applications must include:

a description of the new features;
a copy of the research, development, and testing documentation establishing the innovative nature of the new features;
an analysis of how the level of performance of the new features is equivalent to or superior to the level of performance established by the prescribed standards, including:
- a detailed description of how a vehicle equipped with the new features would, if exempted, differ from one that conforms to the prescribed standards;
- Results of tests conducted on the new features that demonstrate a level of performance that is equivalent or superior to that required by the prescribed standards; and
evidence that an exemption would facilitate the development or the field evaluation of the vehicle.

If the basis of an exemption is to promote the development of new kinds of vehicles, technologies, vehicle systems or components, applications must include:

a copy of the research, development, and testing documentation establishing that an exemption would not substantially diminish the safe performance of the vehicle, including:
- a detailed description of how the vehicle equipped with the new kinds of vehicle systems, technologies, or components would differ from one that conforms to the prescribed standards;
- the reasons why not conforming to the prescribed standards does not substantially diminish the safe performance of the vehicle;
- a discussion of other means of conformity that were considered and the reasons for rejecting each of them; and
the reasons why an exemption would facilitate the development or field evaluation of the vehicle.

If the application is for the renewal of an exemption, applications must include:

all supporting information, depending on the exemption category; and
a statement of the total number of vehicles sold in Canada under the expiring exemption.

Risk assessment:

Companies are encouraged to submit a risk assessment to support the evaluation of an exemption request and to demonstrate that an exemption would not substantially diminish the overall safety performance of the model. Transport Canada will not specify the format or method of performing risk assessments for exemption applications; however, applicants may wish to consider internationally recognized risk assessment formats/standards.

Additional sources:

Companies are encouraged to submit additional sources of information if they believe it would facilitate the review of their exemption request. This includes, but is not limited to, guidance documents such as the Safety Assessment for Automated Driving Systems in Canada.

Proposed terms and conditions by applicant:

Identify criteria and formulate any other terms and conditions of the exemption.

Statement of intent:

At the end of the exemption period, is the intention to:

comply with the standard;
apply for a further exemption; or
request an amendment to existing standards?

Public disclosure restrictions:

Identification of information and data to be withheld from public disclosure, as well as justification for restriction.

Appendix C: Assessment Considerations and Methodology

Pursuant to section 9 of the MVSA, the test for assessing the merits of an exemption request is two-fold:

Is the granting of the exemption likely to promote the development of new safety features or new kinds of vehicles, technologies, vehicle systems or components?
Is the granting of the exemption not likely to substantially diminish the overall safety performance of the model?

The Minister has been delegated the authority by Parliament to use his discretion to make an informed opinion based on the information contained in an application. The Minister’s discretion is exercised by having regard to all the relevant facts and law, by not being swayed by irrelevant considerations, by having regard to the letter and purpose of the MVSA, and by considering each case on its merits.

Safety risks can be mitigated by the conditions specified in the exemption order. A risk assessment carried out by the applicant is a constructive means to enable Transport Canada to determine conditions to be specified in the exemption order. For example, safety risks may be mitigated by the period of the exemption, which must be specified in the exemption order.

The following questions are intended to guide Transport Canada in assessing whether applications contain sufficient information, along with related risk considerations. The department may, in consultation with the applicant, impose additional conditions to mitigate risks.

General considerations:

Has the applicant identified and assessed the safety implications and risks associated with an exemption, along with the adequacy of proposed risk mitigation strategies?
Would the exemption affect the safety of the road transportation system and, if so, how?
Are any follow-up actions required by Transport Canada or the applicant?

Application considerations:

Has the applicant submitted all of the necessary information to begin a complete assessment?
Does the application explain why an exemption would facilitate the development or the field evaluation of a vehicle?
Does the application include a statement as to whether the company intends, at the end of the exemption period, to conform to the prescribed standards?
Does the application refer to the correct and up-to-date standard? Are there any other prescribed standards that would be affected?

For applications concerning new kinds of vehicles, technologies, vehicle systems or components:

Does the application include a copy of the research, development and testing documentation establishing that an exemption would not substantially diminish the safe performance of the vehicle?
Does the documentation include a detailed description of how the vehicle equipped with the new kinds of vehicle systems or components would, if exempted, differ from one that conforms to the prescribed standards?
Does the documentation include reasons why not conforming to the prescribed standards does not substantially diminish the safe performance of the vehicle?
Does the documentation include discussion of other means of conformity that were considered and the reasons for rejecting each of them?

For applications concerning safety features:

Has a description of the new features been provided?
Has a copy of the research, development and testing documentation establishing the innovative nature of the new features been provided?
Has an analysis of how the level of performance of the new features is equivalent to or superior to the level of performance established by the prescribed standards been provided, including a detailed description of how a vehicle equipped with the new features would, if exempted, differ from one that conforms to the prescribed standards?
Have the results of tests conducted on the new features that demonstrate a level of performance that is equivalent to or superior to that required by the prescribed standards been provided? Can the tests be verified by Transport Canada? Can Transport Canada perform testing independent of the manufacturer or importer?

Additional considerations:

Transport Canada would be interested in other information that the applicant feels may be of interest or value to their exemption request, such as:

Would the exemption be compatible with existing provincial/territorial and international standards?
Is there any link between the exemption and Canada’s Road Safety Strategy 2025?

Agreements

The exemption should include documenting, where appropriate, consistency with a Memorandum of Understanding on Vehicle Compatibility and any other agreement between the department and the manufacturer or importer.

Multi-modal and Road Safety Programs Directorate's methodology for evaluating exemption requests:

In determining risk, qualitative or quantitative indicators or measures may be used to reflect relationships between likelihood of a harm occurring and the consequences of that harm. A risk matrix is a useful tool for this purpose, as presented in the sample generic risk matrix below. The x axis aims to reflect the likelihood (frequency) of a harm occurring and the y axis reflects the consequences (severity) of the harm. The colours represent risk levels that the Minister/department: may tolerate (green), may tolerate with sufficient mitigation (yellow) and will not tolerate (red). Each harm will be considered with respect to its impact and likelihood. The indicators in the sample risk matrix and cell colours are presented for indicative purposes only.

Sample generic risk matrix

Text description

First row: E catastrophic consequences, 1E yellow, 2E red, 3E red, 4E red, 5E red

Second row: D critical consequences, 1D green, 2D yellow, 3D red, 4D red, 5D red

Third row: C moderate consequences, 1C green, 2C green, 3C yellow, 4C red, 5C red

Fourth row: B minor consequences, 1B green, 2B green, 3B green, 4B yellow, 5B red

Fifth row: A negligible consequences, 1A green, 2A green, 3A green, 4A green, 5A yellow

Sixth row: 1 – rare likelihood, 2 – unlikely, 3 – occasional, 4 – likely, 5 almost certain

It is important to note that risk assessment can be used successfully to consider any course of action related to an exemption application, from the technical analysis of a single safety feature that does not conform to prescribed standards to the technical features of an entire vehicle, or to the strategic actions that the department may consider taking. The complexity of the exemption matter under consideration will likely influence the complexity of the risk assessment.

Multi-modal and road safety programs directorate evaluation model

Text description

This evaluation model consists of four steps: Initiation, Determination of risk, Risk Mitigation Analysis and Result.

At the first step, the application is received. Then, all harms that may occur are identified, as well as who may be harmed. For each harm, the risk is determined by asking: What is the likelihood of the harm and what are the consequences? The next step identifies the risks that require mitigation and the risk mitigation features/strategies. The next step is to determine any residual risk, and asking if the residual risks are tolerable and has the risk mitigation generated new harms. If the residual risks are tolerable, we proceed to the next step in the exemption process. If they are not tolerable, we revisit the risk mitigation features/ strategies. It is important to document every step of this evaluation model.

Appendix D: Exemption Request Evaluation Paper

Content

The purpose of the Exemption Request Evaluation Paper is to summarize key information related to the exemption request, including the following information:

Criteria to show that the exemption is likely to promote the development of new safety features or new kinds of vehicles, technologies, vehicle systems or components.
Criteria to show that the exemption is not likely to substantially diminish the overall safety performance of the model.
Terms and Conditions identified to mitigate any potential risk resulting from regulatory requirements being exempt.
Documentation of the decision to recommend the granting or denial of the request based on the information provided, including the risk assessment.
Conditions of the Exemption.
Validity period.

Subject Headings

The subject headings of the Exemption Request Evaluation Paper are:

Background
Criteria supporting the development of new safety features or new kinds of vehicles, technologies, vehicle systems or components
Criteria supporting the maintenance of the overall safety performance of the vehicle
Justification to support recommendation to grant/deny
Conditions
Validity
Consultation with Provinces and Territories (if required and subject to consent of applicant)
Final Disposition
- Proposed Regulatory Amendment Initiated (if applicable)
- Exemption to Expire on (date)
- Further Action (describe, if applicable)

Appendix E: Exemption Document Template

Pursuant to section 9 of the Motor Vehicle Safety Act, and after taking into account that the exemption is not likely to affect the overall safety performance of the vehicle, I hereby exempt (company) from the requirement set out in (provision) of the Canada Motor Vehicle Safety Standards requiring that (use text found in the provision), subject to the conditions set out below.

Purpose

The purpose of this exemption is to allow (company) to (describe what needs to be done to prevent the company from operating outside of the requirements of the provision, along with any other reasons that make the exemption necessary; e.g. to promote the development of new safety features, etc.).

Application

This exemption applies to (specify vehicle model).

Conditions

This exemption is subject to the following conditions:

. . . . .shall...;
. . . . .shall...;
. . . . .shall....

Validity

This exemption is in effect until the following:

(expiry date) at 23:59 EST; (There must be a termination date);

Dated (day) of (month), (year).

Signature Block of Director General, Multi-Modal and Road Safety Programs for and on behalf of the Minister of Transport.

Appendix F: Exemption Denial Template

Following a detailed assessment of your application for exemption from (provision) of the Canada Motor Vehicle Safety Standards, I am writing to inform you that your request has been denied based on the following reasons:

(list rationale for denying exemption here)

You may submit another request with new information and/or arguments; however, please note that duplicate requests will be automatically denied.

Dated (day) of (month), (year).

Signature Block of Director General, Multi-Modal and Road Safety Programs for and on behalf of the Minister of Transport.