Bill S-2: Vehicle dealers protected thanks to Senate work on recall bill

New Laws

Bill S-2: Vehicle dealers protected thanks to Senate work on recall bill

This new law gives the Minister of Transport new vehicle recall powers.


Recent motor vehicle recalls have highlighted significant enforcement gaps between Canada and the U.S. In May 2016, Senator Peter Harder introduced the Strengthening Motor Vehicle Safety for Canadians Act, which proposed to give the Minister of Transport new vehicle recall powers. It further allowed the Minister to fine manufacturers up to $200,000 per day and to provide Transport Canada inspectors with new inspection powers. The legislation also included a flexible regulatory model meant to safely foster and regulate emerging, innovative technologies in Canada. Bill S-2 built on legislation introduced by the previous government, which died when Parliament dissolved in August 2015.

The Senate’s Role

Concerns over dealers, who could potentially be put out of business over recalls and may not be afforded similar protections that are provided to other areas of the automotive industry, were raised in the Senate. The Canadian Automobile Dealers Association told the Standing Senate Committee on Transport and Communications: “It is unfair for auto dealers to take a loss in profits and to have vehicles depreciating in their lot when the problem lies with the manufacturer.” The committee amended the bill to ensure that manufacturers compensated dealers, who are unable to sell recalled vehicles on their lot. The amended bill was adopted in the Senate and sent to the House of Commons for consideration.

The Result

MP Karen McCrimmon (Parliamentary Secretary to the Minister of Transport) said at third reading in the House of Commons that the “well-intentioned amendments” made in the Senate delved into contractual relationships. She explained that another solution was found to protect dealers through the implementation of a new amendment presented at the Transport Committee in the House of Commons. “The amendments in the other chamber enabled the government to work with the Canadian Automobile Dealers Association to clarify concerns and come up with the mutually acceptable language proposed in committee. This back and forth between our stakeholders and the chambers is a positive product of our legislative process, leading to better outcomes for Canadians,” she said. The House of Commons sent a message to the Senate on Jan. 31, 2018 to detail its amendments.

Senator Stephen Greene, who introduced the initial amendment at the Standing Senate Committee on Transport and Communications, told the Red Chamber he supported this new approach. “This is a win for the Senate as it maintains the spirit of our amendments. It is a win for small businesses like the small-town car dealer, and it is, most importantly, a win for consumers and all Canadians because it ensures that cars sold in Canada are safe to be on the road,” he said. The Senate concurred with the message from the House of Commons.

Bill S-2: Vehicle dealers protected thanks to Senate work on recall bill