Regulations Amending Certain Regulations Made Under the Motor Vehicle Safety Act (Recall Information): SOR/2024-274

Canada Gazette, Part II, Volume 159, Number 1

Registration
SOR/2024-274 December 16, 2024

MOTOR VEHICLE SAFETY ACT

P.C. 2024-1330 December 16, 2024

Her Excellency the Governor General in Council, on the recommendation of the Minister of Transport, makes the annexed Regulations Amending Certain Regulations Made Under the Motor Vehicle Safety Act (Recall Information) under subsections 10(1)footnote a and 10.1(1)footnote b, section 10.3footnote c and subsection 11(1)footnote d of the Motor Vehicle Safety Act footnote e.

Regulations Amending Certain Regulations Made Under the Motor Vehicle Safety Act (Recall Information)

Motor Vehicle Safety Regulations

1 (1) Paragraph 15(9)(b) of the French version of the Motor Vehicle Safety Regulations footnote 1 is replaced by the following:

(2) Subsection 15(10) of the Regulations is replaced by the following:

(10) The company is not required to provide to the prescribed person the vehicle identification number under paragraph (9)(b) if

2 (1) Paragraph 15.01(9)(b) of the French version of the Regulations is replaced by the following:

(2) Subsection 15.01(10) of the Regulations is replaced by the following:

(10) The company is not required to provide to the prescribed person the vehicle identification number under paragraph (9)(b) if

3 Paragraph 15.02(1)(f) of the French version of the Regulations is replaced by the following:

4 The Regulations are amended by adding the following after section 15.03:

Publication of Information

15.04 (1) A company that gives a notice of defect or non-compliance to the Minister under subsection 10(1) or 10.1(1) of the Act must publish the following information, in both official languages, on the website that the company uses to communicate information directed at the Canadian market:

(2) The company must publish the information referred to in subsection (1) as soon as feasible, but not later than 60 days after the day on which the company gives the notice to the Minister, and must update the information within seven days after the day on which there is any change to it.

(3) Despite subsection (2), if the information referred to in paragraph (1)(d), (i) or (k) is not available on the day on which it is to be published, the company must publish the information within seven days after the day on which it becomes available.

(4) The company must ensure that the information referred to in subsection (1) remains displayed on the website for at least 15 years beginning on the day on which the company gives the notice of defect or non-compliance to the Minister.

(5) The information referred to in subparagraphs (1)(m)(i) to (iii) may be made available by way of a hyperlink.

(6) The company must ensure that the information referred to in subsection (1) is

(7) A company is not required to meet the requirements of this section if

(8) This section applies to a company beginning on the first anniversary of the day on which this section comes into force.

Publication of Information by Designated Companies

15.05 (1) A company that is designated by the Minister and that gives a notice of defect or non-compliance to the Minister under subsection 10(1) or 10.1(1) of the Act must publish on the website that the company uses to communicate information directed at the Canadian market the following information, in both official languages, and make it available by means of a vehicle identification number search tool:

(2) The information referred to in subparagraphs (1)(h)(i) to (iii) must also be displayed on the web page containing the search tool or be made available by way of a hyperlink from that page, unless that page is the website’s home page.

(3) The company must publish the information referred to in subsection (1) as soon as feasible, but not later than 60 days after the day on which the company gives the notice to the Minister, and must update the information within seven days after the day on which there is any change to it.

(4) Despite subsection (3), if the information referred to in subparagraph (1)(e)(v) or (vii) is not available on the day on which it is to be published, the company must publish the information within seven days after the day on which it becomes available.

(5) The company must ensure that the information referred to in subsection (1) remains displayed on the website for at least 15 years beginning on the day on which the company gives the notice of defect or non-compliance to the Minister.

(6) If no notice of defect or non-compliance is associated with a vehicle identification number when a search is carried out on the website, the company must ensure that a statement to that effect, as well as the following information, is displayed:

(7) If the search tool does not recognize the vehicle identification number, the company must ensure that a statement to that effect, as well as instructions on how to contact the company for more information, is displayed.

(8) The information referred to in subparagraphs (1)(h)(i) to (iii) and paragraph 6(c) may be made available by way of a hyperlink.

(9) The company must ensure that the search tool is available either directly on the website’s home page or by way of a hyperlink that contains the word “Recall” or “Recalls” and that is prominently displayed on that home page.

(10) The company must ensure that the information referred to in subsections (1), (6) and (7) is

(11) This section applies to a company beginning on the day that, in the eighteenth month after the month in which it is designated by the Minister, has the same calendar number as the day on which it is designated or, if that month has no day with that number, the last day of that eighteenth month, but this section does not apply if the requirements of this section have been met by another company that manufactured, sold or imported the vehicle.

Motor Vehicle Restraint Systems and Booster Seats Safety Regulations

5 The Motor Vehicle Restraint Systems and Booster Seats Safety Regulations footnote 2 are amended by adding the following after section 110.03:

Publication of Information

Information on website

110.04 (1) A company that gives a notice of defect or non-compliance to the Minister under subsection 10(1) or 10.1(1) of the Act must publish the following information, in both official languages, on the website that the company uses to communicate information directed at the Canadian market:

Date of publication

(2) The company must publish the information referred to in subsection (1) as soon as feasible, but not later than 60 days after the day on which the company gives the notice to the Minister, and must update the information within seven days after the day on which there is any change to it.

Exception

(3) Despite subsection (2), if the information referred to in paragraph (1)(d), (h) or (j) is not available on the day on which it is to be published, the company must publish the information within seven days after the day on which it becomes available.

Minimum period of availability of information

(4) The company must ensure that the information referred to in subsection (1) remains displayed on the website for at least 10 years beginning on the day on which the company gives the notice of defect or non-compliance to the Minister.

Hyperlink

(5) The information referred to in subparagraphs (1)(l)(i) to (iii) may be made available by way of a hyperlink.

Availability of information

(6) The company must ensure that the information referred to in subsection (1) is

Exception

(7) A company is not required to meet the requirements of this section if

Transitional provision

(8) This section applies to a company beginning on the first anniversary of the day on which this section comes into force.

Motor Vehicle Tire Safety Regulations

6 The Motor Vehicle Tire Safety Regulations footnote 3 are amended by adding the following after section 13.03:

Publication of Information

Information on website

13.04 (1) A company that gives a notice of defect or non-compliance to the Minister under subsection 10(1) or 10.1(1) of the Act must publish the following information, in both official languages, on the website that the company uses to communicate information directed at the Canadian market:

Date of publication

(2) The company must publish the information referred to in subsection (1) as soon as feasible, but not later than 60 days after the day on which the company gives the notice to the Minister, and must update the information within seven days after the day on which there is any change to it.

Exception

(3) Despite subsection (2), if the information referred to in paragraph (1)(d), (i) or (k) is not available on the day on which it is to be published, the company must publish the information within seven days after the day on which it becomes available.

Minimum period of availability of information

(4) The company must ensure that the information referred to in subsection (1) remains displayed on the website for at least 10 years beginning on the day on which the company gives the notice of defect or non-compliance to the Minister.

Hyperlink

(5) The information referred to in subparagraphs (1)(m)(i) to (iii) may be made available by way of a hyperlink.

Availability of information

(6) The company must ensure that the information referred to in subsection (1) is

Exception

(7) A company is not required to meet the requirements of this section if

Transitional provision

(8) This section applies to a company beginning on the first anniversary of the day on which this section comes into force.

Coming into Force

7 These Regulations come into force on the day on which they are published in the Canada Gazette, Part II.

REGULATORY IMPACT ANALYSIS STATEMENT

(This statement is not part of the Regulations.)

Executive summary

Issues: Transport Canada (TC) currently estimates that in excess of one in five vehicles in use on Canada’s roads today has an unresolved safety recall.footnote 4 Based on the 33.3 million registered vehicles in 2019, this means that approximately 6.6 million unsafe vehicles are circulating on Canadian roads, potentially endangering not only the occupants but also other road users. Unresolved safety issues affecting vehicles, restraint systems for children and disabled persons, and tires (restraint systems for children and disabled persons and tires are hereafter referred to as vehicle equipment) can lead to property damage, injury or even death.

Currently, regulations made under the Motor Vehicle Safety Act (MVSA) require companies to notify current owners and prescribed personsfootnote 5 of a safety recall and how to have it corrected. While a company must send notifications to current owners and prescribed persons of a safety recall, many still go unresolved.

An analysis of recall completion rates shows that older vehicles are more likely to have unresolved recalls. Several reasons could account for this, including a change of address that is not updated in a company’s database, or the fact that older vehicles with expired warranties are less likely to see regular servicing, particularly at the company dealerships where clients can be readily informed of any outstanding safety recalls. Furthermore, owners may not be aware of how to access safety recall information affecting their vehicles or vehicle equipment.

Description: The Regulations Amending Certain Regulations Made Under the Motor Vehicle Safety Act (Recall Information), hereafter the Regulations, will require companies that issue a safety recall to publish safety recall-related information on their website, in a timely manner, with the goal of increasing recall awareness and completion. The Regulations will standardize the availability and the type of information required, provide a timeline by which companies must make such information available, and facilitate Canadians’ ability to find recall information — especially relevant in cases where company notifications of safety recalls are not received by the current vehicle or vehicle equipment owner due to missing, erroneous, or incomplete owner’s contact information.

The Regulations will also require companies designated by the Minister of Transport (the Minister) to include an online search tool that provides safety recall information that is specific to one vehicle, using the unique 17-character vehicle identification number (VIN). In other words, the Regulations will require that certain companies provide a VIN lookup tool on their websites.

Rationale: Publishing safety recalls online will make safety recall information available faster and more accessible for vehicle owners, vehicle equipment owners and prescribed persons, as well as for the general public. The increased accessibility of recall information will also assist international partners for the purpose of identifying imported vehicles from Canada with an outstanding safety recall.

The Minister’s designation authority under section 10.3 of the MVSA provides the opportunity to establish unique requirements for designated vehicle companies, with a view to maximizing the effectiveness of the requirements while accounting for relative burden on businesses of different sizes.

Costs associated with the Regulations are expected to total $4.94 million over a 10-year time frame from 2024 to 2033. Costs will apply to vehicle and vehicle equipment manufacturers and importers for website development, and to TC for conducting audits. Qualitative benefits will stem from increased safety for Canadians, and a decrease in written re-notification costs for manufacturers and importers corresponding with the anticipated increase in recall completion. Costs are expressed in 2021 dollars discounted to the base year of 2024 at a 7% rate.

An estimated total of 37 small businesses will be affected, with a total cost of $25,939 ($701 per business) over the 10-year time frame, in 2021 dollars discounted to the base year of 2024 at a 7% rate. Small businesses will see benefits related to a decrease in written re-notifications due to increased recall completion.

TC expects that the Regulations will lead to the correction of a greater number of safety recalls and, as a result, benefit the safety of all Canadians. The Regulations are intended to directly influence recall completion rates and to reduce losses from property damage, injuries and death resulting from unresolved vehicle and vehicle equipment defects and non-compliances.

Issues

Safety recalls have increased over the past 20 years. The number of safety recalls issued each year has increased from 248 in 2002, to 710 in 2023. In 2023 alone, 111 separate companies issued safety recalls affecting over 4 million vehicles and vehicle equipment.footnote 6

TC currently estimates that in excess of one in five vehicles in use on Canada’s roads today has an unresolved safety recall. This estimation is based on TC’s analysis of recall completion rates reported by regulated companies. Based on the 33.3 million registered vehicles in 2019, this means that approximately 6.6 million unsafe vehicles are operating on Canadian roads, potentially endangering not only the occupants, but also other road users. Unresolved safety issues affecting vehicles and vehicle equipment can lead to property damage, injury or even death. This problem persists, even though companies must send safety recall notices to vehicle owners. A survey of safety recall information available on the Internet reveals that not all companies publish this information online, and there is a marked lack of consistency in what is made available. The Regulations will help make Canadians aware of unresolved safety issues by making safety recall information available faster and more accessible to Canadians by having it published online.

Background

Road safety in Canada is a shared responsibility among all levels of government, industry partners, and all road users. TC is responsible for developing and enforcing regulations made under the MVSA, including the Motor Vehicle Safety Regulations (MVSR), the Motor Vehicle Tire Safety Regulations (MVTSR), and the Motor Vehicle Restraint Systems and Booster Seats Safety Regulations (RSSR), hereafter collectively referred to as “the MVSA regulations”. Regulated companies must certify that all vehicles and vehicle equipment imported to Canada or manufactured in one province and sold in another comply with all applicable requirements and safety standards in effect on their date of manufacture. For clarity, the MVSA and its regulations do not regulate aftermarket or replacement parts such as brake components; therefore, such parts are not included in the Regulations.

A regulated company, as defined under the MVSA, is a company that manufactures, sells or imports any vehicle or vehicle equipment of a prescribed class.footnote 7 A regulated company is required, on becoming aware of a non-compliance or a defect in the design, construction or functioning of the vehicle or vehicle equipment that affects or is likely to affect the safety of any person, to notify the Minister, current owners and prescribed persons (e.g. a retailer, distributor, final-stage manufacturer) in accordance with the notification requirements set out in the MVSA regulations. However, the safety risk will continue to exist until the non-compliance or safety defect is corrected.

A written notice to the Minister is required at the time a company becomes aware of a defect or non-compliance with a vehicle or vehicle equipment. The information required is general in scope, with a view to expediting this initial notification. The MVSA regulations require companies to provide more detailed information in a written notice of defect or notice of non-compliance that is sent to current owners and prescribed persons as soon as possible, but no later than 60 days, after having notified the Minister. “Safety recall” is the common term used to describe both the notice of non-compliance and the notice of defect.

Companies must submit a follow-up report to the Minister, updating specific information regarding the scope of the issue and planned corrective measures within 65 days of providing the notice to the Minister. For two years following the original notice to the Minister, companies must submit quarterly reports to update the Minister on the progress of the corrective measures put in place. If the Minister determines that a safety recall has not been corrected in an adequate number of vehicles, tires, or restraint systems, the MVSA also provides the Minister with the authority to order companies to re-notify owners and prescribed persons.

Safety recall notices can be sent electronically or by mail to current owners and prescribed persons. Most notices are sent by mail, a process which can be time-consuming and does not guarantee that required information reaches its intended recipients, e.g. in the case of a change of ownership and/or address. This means that some owners may continue to use their vehicle or vehicle equipment without knowledge of an unresolved safety issue. Depending on the issue, an outstanding safety recall could lead to property damage, injury or even death.

Prior to the Regulations, companies were not required to publish the information about safety recalls online; however, some companies voluntarily did so. As there were no requirements around publishing recall information online, the information made available on websites was not always consistent, easy to find, and/or offered in both official languages.

Safety recalls have increased over the past 20 years. The number of safety recalls issued each year has increased from 248 in 2002, to 710 in 2023. In 2023 alone, 111 separate companies issued safety recalls affecting over 4 million vehicles and vehicle equipment. TC currently estimates that in excess of one in five vehicles in use on Canada’s roads today has an unresolved safety recall. Based on a total of 33.3 million registered vehicles in 2019, if one in five vehicles did not have the issue resolved, then approximately 6.6 million unsafe vehicles are operating on Canadian roads, endangering not only the occupants but also other road users.

In 2014, Bill C-31, An Act to implement certain provisions of the budget tabled in Parliament on February 11, 2014, and other measures, received royal assent. Among other changes, the Bill addressed key gaps in the motor vehicle safety notification regime, including providing the Minister with the authority to require that a company issue a notice of defect, and introduced new notice of non-compliance requirements. It also enabled the Governor in Council to establish regulations around the safety information contained in notices of non-compliance, and to revise the reporting regime to enhance TC’s oversight of notices of defect and non-compliance.

In 2018, the Government of Canada (the Government) amended the MVSA in An Act to amend the Motor Vehicle Safety Act and to make a consequential amendment to another Act, to strengthen the enforcement and compliance regime to further protect the safety of Canadians. Section 10.3 of the MVSA was amended to introduce a new authority to require companies, which are designated by the Minister to give notice of a defect or non-compliance, to make certain information about the vehicle or vehicle equipment available in the notice. Previously, the Minister did not have the authority to designate companies; therefore, potential solutions to reduce unresolved safety issues would have to be applied to all regulated companies. This added flexibility provides the Minister with the discretion to designate companies to which certain requirements will apply. The designation of companies will be made according to procedures established by the Minister. For example, one element that the Minister could consider when exercising discretion is a company’s total volume of importations or manufactured vehicles as this is a relevant consideration to reduce the overall risk of death, injury, and property damage.

TC is aware that, while a company may attempt to notify current owners and prescribed persons of a safety recall, a vehicle owner may not have the repairs completed promptly. In other situations, a notice may not reach the current owner, for example, where they have changed address, but have not registered the change of address with the company. An analysis of recall completion rates shows that older vehicles are more likely to fall in this latter population than newer recalled vehicles. Older vehicles with expired warranties are also less likely to see regular servicing or servicing at the company dealerships where clients are commonly informed about recalls. Owners may also not be aware of how to access safety recall information for older vehicles.

To make it easier for vehicle owners to find out if there is an unresolved safety recall notice on their vehicle, and to support any person seeking information on potential safety issues with a particular vehicle, the Regulations introduce a requirement that companies designated by the Minister provide a search tool for safety recall notices associated with the vehicle’s identification number. Under the MVSR, every vehicle of a prescribed class manufactured in one province and sold in another or imported for sale in Canada is required to have a unique 17-character VIN. The VIN is an alphanumeric code configuration that provides information regarding the manufacturer, year of production, make and model, and several technical details that uniquely identify a specific vehicle. The VIN is needed to facilitate vehicle identification for safety research and for vehicle safety recall campaigns. The VIN is also used by provincial and territorial jurisdictions for registration purposes. Several other entities, such as vehicle distributors, financial institutions, insurance companies and police departments, use the VIN for warranty validation, insurance claim verification, safety recall campaigns and vehicle theft investigation.

Objective

The objective of the Regulations is to make safety recall information available faster and more accessible (i.e. by publishing it online) for vehicle owners, vehicle equipment owners and prescribed persons, as well as for the general public who may have an interest but who do not necessarily own the vehicle or vehicle equipment. Increasing the availability and accessibility of recall information is intended to directly influence recall completion rates, and to reduce the risk of death, injury and property damage resulting from unresolved vehicle and vehicle equipment defects and non-compliances.

The Regulations will require companies to publish information online for all safety recalls in a timely manner. Although many companies already offer such recall information on their websites, the Regulations will standardize the availability and the type of information required, and provide a timeline by which companies must make such information available to facilitate Canadians’ ability to find recall information. The Regulations are expected to be particularly useful to people who have changed address, or purchased a vehicle or vehicle equipment second-hand, and where a company does not have the current owner’s personal contact information.

Description

The Regulations amend the MVSA regulations. Similar amendments are made to each of the MVSA regulations with an additional amendment made to the MVSR introducing requirements for vehicle companies specifically designated by the Minister. Further details about the specific amendments are provided below.

The Regulations will require that companies that issue a safety recall also publish certain information contained in the recall on their websites. This requirement will help fill the gap in situations where an owner has not registered a change of address with the company or where there has been a transfer of ownership. The Regulations will also allow any person to check if a vehicle or vehicle equipment is subject to a safety recall. For individual vehicles, as detailed further below, the Regulations will require companies designated by the Minister to include an online search tool that provides safety recall information that is specific to the VIN.

TC expects that the Regulations will reduce delays in disseminating safety recall information since such information will be published online and, therefore, will be available sooner than any mailed notifications.

The requirement for companies to publish safety recalls online is, in addition to written notifications, already required under the MVSA regulations.

Designated and non-designated companies

The Regulations introduce two separate sets of requirements for displaying information to be published on the companies’ websites: one set of requirements for vehicle companies that are designated by the Minister, and a separate set for all other (i.e. non-designated) vehicle and vehicle equipment companies. The requirements will improve the overall availability and accessibility of safety information for all Canadians. Having the authority to designate any company by way of section 10.3 of the MVSA, the Minister will carry out this designation by way of formal correspondence to respective companies. One of the factors that the Minister will likely consider when designating a company is the relative size of the company. For example, designating high-volume companies would be effective in reaching a larger population of vehicles affected by safety recalls, thereby improving the overall safety of Canadians, while at the same time minimizing the burden to other (e.g. smaller) companies.

Basic safety recall information required to be published online by companies

Designated or not, the Regulations require companies to publish safety recall information on their websites that is accessible and free of charge. In addition, designated companies will be required to have a free web-based service to allow any person to search for vehicle-specific recall information using the 17-digit VIN, hereafter referred to as the VIN Tool as detailed further below.

Companies will need to publish on their websites the same basic information for each safety recall, including contact information for any questions related to a safety recall, the method to use to report a suspected safety issue, and the process to follow to advise a company of a change in ownership. The Regulations do not require any new information to be provided; they only require the publication of the same information already provided in safety recall notices to owners and prescribed persons under the MVSA regulations. This information includes, but is not limited to, details such as

The published safety recall information will need to remain on the companies’ websites for at least 15 years for vehicles and 10 years for vehicle equipment, from the day the Minister is notified of the safety recall. A statement must be displayed and contact information included for interested parties to obtain any unpublished safety recalls that pre-existed the mandatory compliance date for publishing safety recalls as provided in the Regulations.

Non-designated companies with no pre-existing website will not be required to publish online and, therefore, are not required to develop a new website. Nevertheless, all companies must still provide their safety recall notices in paper or electronic form to inform the Minister, owners, and prescribed persons as specified in the MVSA regulations.

For non-designated companies, compliance with publication requirements will become effective one year after the day on which the Regulations are published in the Canada Gazette, Part II. At that point, safety recall information will need to be provided online within 60 days after the day on which the company gives the notice to the Minister and the information must be updated within seven days of any changes. As with designated companies, TC recognizes that some details may not be available on the required day for publication. Therefore, the Regulations will require that (i) a description of the corrective measures and (ii) an indication of when the parts and/or facilities are available to correct the issue be published within seven days of the information becoming available. This approach is consistent with the MVSA regulations for notifications to the Minister. Alternatively, non-designated companies could choose to comply with the requirements specific to designated companies. In other words, instead of publishing safety recall information for all vehicle models on the company’s website, a non-designated vehicle company could choose to include a VIN Tool, which would provide specific safety recall information only for that one vehicle.

VIN Tool requirement for designated companies

Designated companies are required to publish safety recall information on their websites through a VIN Tool. The public will have access to this VIN Tool on the company’s website. The VIN Tool must display a list of all safety recalls associated with the unique vehicle associated with its 17-digit VIN. Unless the corrective measures for a safety recall have been implemented, the same basic safety recall information as required by all companies will be available through the VIN Tool, as detailed above. For recalls where the corrective measures have already been implemented, details regarding the precautions to minimize the safety risk (e.g. noting that a vehicle should be parked outdoors if there is a fire risk), and when corrective measures would be available, would be redundant and, therefore, will not need to be published through the VIN Tool. If the VIN is incorrect or not recognized, a statement to that effect must be published through the companies’ VIN Tool to prevent the recipient from any potential misinterpretation and better ensure that important safety information is not inadvertently missed.

The Regulations will provide newly designated companies 18 months from the date that they are designated to establish a VIN Tool on their website. Following the initial 18-month period, all subsequent safety recalls will need to be available through the online VIN Tool within 60 days after the day on which the company gives the notice to the Minister. The published information will need to be updated within seven days of any change to the information. TC recognizes that some details may take more time to gather and, therefore, if this information is not available when the recall information is first published, the Regulations require that details regarding (i) a description of the corrective measures and/or (ii) an indication of when the parts and facilities are available to correct the issue be published within seven days of becoming available.

Other amendments

The Regulations amend the notice of defect and notice of non-compliance requirements within the MVSR, indicating that a company is not required to provide to a prescribed person the VIN for each affected vehicle, in the instance where safety recall information is published in accordance with the requirements for designated companies. In addition, the Regulations clarify that such details must be published on the company website when information is directed at the Canadian market.

Finally, the Regulations revise the French text in three locations under section 15 of the MVSR to reference “numéro d’identification du véhicule” in place of “numéro d’identification.” These changes are non-substantive clarifications. No incremental impacts to stakeholders are anticipated.

Regulatory development

Consultation

As detailed below in the section on “Preliminary consultations”, TC consulted extensively with stakeholders in a variety of ways, including through the TC online consultation portal, Let’s Talk Transportation (LTT); the publication of an informal consultation document to further engage stakeholders; and several informal discussions. The proposed Regulations were also prepublished in the Canada Gazette, Part I (see “Prepublication in the Canada Gazette, Part I” section below), followed by a 75-day comment period.

Preliminary consultations

An LTT notice was published onlinefootnote 8 on October 21, 2020, and was open for comment for 37 days (until November 27, 2020), to gather feedback from stakeholders and the general public. Among other details, the LTT notice requested comments on proposing that high-volume and low-volume companies would have different sets of requirements regarding the safety recall information to be published online. Several comments were received from industry associations, namely, the Canadian Vehicle Manufacturers Association (CVMA), Global Automakers of Canada (GAC), the Motorcycle & Moped Industry Council (MMIC) and the Truck & Engine Manufacturer Association (EMA).

Following the LTT notice, TC disseminated a discussion document to all interested stakeholders on May 5, 2021, to seek further input on proposed requirements. This discussion document included a listing of what information could/should be provided on companies’ websites, what criteria may be used to designate companies, and what timelines would be reasonable coming-into-force dates for the requirements. There were also questions for companies to ensure that regulatory text could be drafted in a way to minimize burden, while achieving the goal of providing the necessary safety information. TC subsequently held two information sessions to help guide interested parties through the document, highlight areas of particular interest for feedback, and provide input in the development of the proposed Regulations. Following the information sessions, TC hosted additional consultation sessions with interested stakeholders. Stakeholders were generally receptive and supportive throughout these consultations. Comments expressing concern and requiring further clarifications are highlighted below.

The United States’ National Highway Traffic Safety Administration (NHTSA) was also consulted and is supportive of the proposed requirements and has indicated that access to this type of recall data would be beneficial to them for the purpose of identifying vehicles imported from Canada with an outstanding safety recall before the vehicle is registered/operated in the United States.

Preliminary consultations mainly focused on establishing two sets of requirements regarding the safety recall information to be published online: one for high-volume vehicle companies referred to as designated companies, which would require a VIN Tool, and one for all other vehicle and vehicle equipment companies, referred to as non-designated companies.footnote 9

To ensure clarity and predictability about the potential impacts of the proposed Regulations for stakeholders, TC indicated that designation criteria would include (but would not necessarily be limited to) those companies that manufacture, import, or distributes a total of 2 500 or more vehicles of the following prescribed classes per year: passenger car; three-wheeled vehicle; multi-purpose passenger vehicle (with a gross vehicle weight rating [GVWR] of 4 536 kg or less); truck (with a GVWR of 4 536 kg or less); motorcycle; restricted-use vehicle; or snowmobile. A non-designated company would include the remaining companies that manufacture, import, or distribute vehicles, and all companies that manufacture, import, or distribute vehicle equipment. Stakeholders did not raise concerns about such designation criteria.

TC received several comments, questions, and concerns during these preliminary consultations. For example, stakeholders commented that the proposed requirements in the discussion document did not align fully with the NHTSA’s VIN-based recall online search tool, such as the suggested timelines for information to be made available online and requiring that outstanding safety recall notices be displayed first before those that were completed. Questions were raised such as who would be responsible for publishing information online for imported vehicles, and if it would be necessary to inform TC of any changes to the website where the safety recall information is published. Some stakeholders expressed concerns about the additional burden that would be placed on companies from a requirement to publish the completion date for a repair and that companies may be required to retroactively publish recall information. TC responses to these and more were provided in the Regulatory Impact Analysis Statement (RIAS) prepublished in the Canada Gazette, Part I.

Finally, TC consulted on the time frames under which companies would be required to comply with new requirements. During initial consultations, TC proposed that non-designated companies would have 90 days from the day on which the proposed Regulations are published in the Canada Gazette, Part II, to publish information online, and designated companies would have 180 days, from the date that the company is informed of its designation by the Minister, to publish a compliant VIN Tool. A consumer group advocate indicated that this was not aggressive enough while vehicle manufacturer associations expressed a need for more time.

Prepublication in the Canada Gazette, Part I

The proposed Regulations were prepublished in the Canada Gazette, Part I, on June 17, 2023, followed by a 75-day comment period. On that same day, an email with website links to the proposed Regulations was distributed to motor vehicle safety stakeholders, including information on how to submit comments to the proposed Regulations. TC also shared details about the public consultation via its social media platforms. Interested parties were invited to provide comments via the Canada Gazette online comment system, by mail or email.

Comments were received from nine stakeholders in response to the proposed Regulations including the CVMA, GAC, EMA, MMIC, Goodyear Canada Inc., the Canadian Vehicle Exporter’s Association (CVEA), the Association for the Work Truck Industry (NTEA) and the Automotive Industries Association of Canada (AIA Canada). Six of the stakeholders expressed general support; no stakeholders expressed opposition to the idea of making safety recall information available on company websites. One stakeholder requested further details about the cost-benefit assessment. TC engaged directly with the stakeholder, who subsequently provided additional details and an estimated range of costs that the proposed Regulations could impose. These details are discussed further below in the section on “Comments regarding cost-benefit analysis”.

General comments

While also indicating general support, three stakeholders expressed their opinion that the proposed Regulations will not have a significant impact on improving vehicle recall completion rates.

In the case of passenger cars, two stakeholders suggested that the benefits are only likely to be realized by owners that are proactive, and one stakeholder commented that completion rates are already generally high in the case of commercial vehicles.

In the case of non-commercial vehicles, stakeholders indicated that the underlying challenges to increase recall completion rates include: (i) difficulty reaching owners of older vehicles, or vehicles transferred across provincial and international borders; and (ii) difficulty getting owners to bring their vehicle in for corrective actions (e.g. a repair or replacement) as some owners chose not to get recalls completed. In recognition of these challenges, two stakeholders recommended that TC work with the provinces and territories (e.g. vehicle licence registrars’ offices) as well as manufacturers to improve recall completions.

Efforts to work with stakeholders, including the provinces and territories, were conducted as part of the LTT consultations. As presented in the initial LTT consultations, TC included a potential requirement for designated companies to allow direct database access that would enable batch search queries for information on vehicles with incomplete safety recalls. This requirement would have provided a means to make the safety recall information available to key stakeholders, including provincial and territorial vehicle registration authorities, insurance companies, commercial vehicle fleets and the NHTSA, thus providing other avenues through which the completion of safety recalls could be encouraged. Feedback from industry indicated that this would be complex and would require additional consultation and revisions. Given those parameters, this potential requirement was removed from the scope of this work.

Alignment with the United States requirements

Three stakeholders commented on the importance of having requirements that are aligned with those of the United States, particularly given that, in their opinion, the proposed Regulations would not have a significant impact on improving safety recall completion rates. These stakeholders argued that there is insufficient data to support the imposition of unique Canadian requirements. They further suggested that any differences in the requirements would increase burden and cost (i.e. the time and effort needed to revise and reformat information and processes). In light of these comments, the proposed Regulations were further modified to align with requirements in the United States; however, some minor differences remain. More details about these changes are provided below.

1) Time frame for publishing information

Three stakeholders requested that designated companies have up to 60 days to post recall information on the VIN Tool instead of the proposed 30 days after the day on which the company gives the notice to the Minister, in order to be consistent with the current 60-day requirement for providing a notice to owners by mail and also to align with the United States requirements. Stakeholders expressed concerns that a 30-day time frame would lead to publishing information that is not fully vetted and potentially different from that which is available in the notice sent electronically or by mail to owners, and that the dealer network and parts system may not yet be prepared to address, which could give rise to more complaints and potentially even discourage owners from completing recalls. Furthermore, they argued that early notification would have limited safety benefits as it would not help to resolve the ongoing issue of owner apathy, i.e. earlier notifications are not expected to change the minds of owners that are apathetic about addressing recalls in the first place.

Upon further consideration, TC acknowledges that earlier notification (i.e. 30 days instead of 60) would not affect vehicles on the road today with unresolved recalls, and that any publication earlier than 60 days could have the effect of discouraging the completion of recalls if the information is inaccurate and/or if the dealer network is not ready with a solution. Therefore, the proposed Regulations were revised to provide designated and non-designated companies up to 60 days to publish recall information on their websites. A 60-day time frame will align with the current notice of defect and non-compliance requirements, as well as requirements in the United States, and should help ensure that recall information is accurate and complete, and that solutions are in place, when a notification is first published.

2) Time frame for updating published information

The proposed Regulations included a requirement that the safety recall information published online be updated “within seven days after any change is made,” and also provided for delays in publishing certain details that may not be available within the proposed publication timeline, such as the requirement for publishing a date by which parts and facilities are expected to be available, with the understanding that this information be published within seven days after it becomes available. A stakeholder requested clarification as to whether or not the reference was to calendar days, and also suggested changes to the regulatory text to reflect the United States’ requirement that published information be “updated at least once every seven calendar days.” On review of this request, TC concluded that the regulatory text should be kept as proposed, noting that the requirement as written is less burdensome as updates are not necessary if no new information becomes available. Additionally, any companies that choose to follow the United States’ requirements would still be compliant with the Regulations. Finally, to be clear, the number of days referenced is calendar days. Under the Interpretation Act, Saturdays, Sundays and holidays are included in the calculation of time periods, and therefore it is not necessary to reference calendar days in the Regulations.

3) Requirements to publish company contact information

Two stakeholders suggested that the proposed requirements for providing contact information were restrictive and unnecessary. These stakeholders expressed a preference for the simplicity and brevity of similar requirements in the United States. For example, the stakeholders thought that the proposed requirement to provide “… contact information of the person at the company…” was misleading and should be revised to reflect that inquiries could be handled in different ways, such as through emailing, reaching out to a customer call centre or calling an automated service that may eventually lead to a person. In light of these comments, the Regulations were amended to remove the reference to a “person” at the company and expand the possible contact points for reaching a company or automobile dealership.

One stakeholder commented that a common company contact should be sufficient if a user has a question regarding safety recall information presented on a web page. The stakeholder suggested that it was necessary to require a company to display contact information for (i) questions related to a notice, (ii) how to report a potential safety concern, and/or (iii) how to inform the company of a transfer of ownership of a vehicle or a change of address. TC agrees that one general point of contact can be provided for each of these items; however, it is important to list what information can be obtained from or provided to the contact, which may prompt the user to seek or provide further information related to vehicle safety. Therefore, no changes to the Regulations were made in response to these comments.

The proposed Regulations included a requirement that the safety recall information in relation to a user-entered VIN be displayed on the companies’ web page. A stakeholder commented that the amount of detailed information to be displayed would not lend itself well to mobile applications, where screen space is at a premium and readability could be a challenge. To help present the information in a briefer form, where company contact information is required, the stakeholder suggested that manufacturers have the option to provide a link to a separate web page listing the information available through the company’s point of contact. Similarly, the stakeholder expressed that, should the VIN Tool be provided on the company home page, this contact information should only be required on or available through the page displaying the safety recall information related to a VIN. Transport Canada agrees with these two suggestions because they can help improve user experience and the VIN Tool and, therefore, the Regulations were revised accordingly to allow companies to provide a link to a separate page.

4) Requirements on publishing completed recalls

One stakeholder objected to the proposed requirement for companies to keep completed safety recalls posted even after the issue has been resolved. The stakeholder argued that this requirement would impose unnecessary burden as there is no equivalent requirement in the United States and the benefits would be marginal. The stakeholder suggested that keeping completed safety recalls posted should be at the discretion of the company. No changes were made to the Regulations in response to these comments. As noted in the discussion from earlier consultations, TC’s position continues to be that posting complete information on the status of all repairs, including completed repairs, will reduce ambiguity and provide clarity and certainty for consumers and vehicle owners.

5) Requirements on the presentation of published information

One stakeholder commented that the proposed requirements concerning the order in which information is to be displayed on a company’s website were very general and open to interpretation. The stakeholder requested clarification as to the intent of the requirements and suggested that Canada should harmonize the regulatory text with the United States’ regulatory text. As described in the RIAS pre-published in the Canada Gazette, Part I, the intent behind the display requirements is to ensure that other information, such as technical bulletins, does not appear before the safety recall notices. While text of the requirements in the Regulations differs somewhat from that in the United States’ requirements, TC believes that there is no substantial difference and expects that the practical impact of these differences will be negligible. Also, given that the intent of the requirements was well represented in the RIAS, no further changes were made to the Regulations in relation to this comment.

Two stakeholders raised a concern about the requirement that the availability of safety recall information be “prominently displayed” on a company’s web page. One stakeholder suggested that the term “prominently displayed” was vague and open to interpretation. The other stakeholder recommended using the term “conspicuously placed,” which is used in United States regulations. TC considered the comments, but ultimately determined that the term “prominently displayed” will help to impress upon companies the importance of making the availability of this information visible to anyone accessing their web page. No changes were made to the Regulations in relation to these comments.

Regarding the requirement to display information in both official languages, one stakeholder asked to clarify if the English and French texts can be provided on the same display, instead of individual displays for French and English texts. The stakeholder noted that it would be helpful for companies to have the flexibility to choose how they display the information in both official languages. The stakeholder also asked if TC needs to approve the website display. It should be noted that the display of the French and English information is left at the company’s discretion. Affected companies will have the flexibility to include bilingual information on one page or to have the French and English texts displayed on separate pages. Companies will not be required to seek TC approval of their website displays. TC does not have the mandate to preapprove a company’s website but is available to answer questions (through established communication channels) that companies may have about compliance with the Regulations. No changes were made to the Regulations in relation to these comments.

6) Transitional period for companies to meet requirements

Two stakeholders indicated that they would need more time to come into compliance with the proposed Regulations. The proposed Regulations included a 180-day transition period following the date of publication in the Canada Gazette, Part II, for non-designated companies to update their websites; for designated companies, the proposed Regulations stipulated that they would have one year from the day on which they are designated to implement a VIN lookup tool. During the prepublication comment period, stakeholders requested that non-designated companies have up to one year (instead of 180 days) from the date of publication in the Canada Gazette, Part II, and that designated companies have a two-year transition period (instead of one year) from the time they are designated by the Minister. Stakeholders noted that not all companies have a VIN Tool available on their website, and among those that do, none are already fully compliant with the proposed Regulations. Stakeholders indicated that to develop a new VIN Tool, or revise an existing VIN Tool, would require adjustments to back-end systems that support the process for safety recall notification, and that interface with other company and subsidiary company systems and subsystems. This work will necessitate significant coordination, scoping, development, and testing. Stakeholders also highlighted that the final regulatory text with confirmed effective dates for all new requirements are necessary before they can allocate resources and finalize their plans for updating their processes and websites.

While several changes were made to better align the Regulations with similar requirements in the United States, TC acknowledges that some unique differences remain, which will require companies to revise the information currently provided on their websites. These differences include requiring that companies indicate what precautions may be taken to minimize the safety risk until the corrective measures are implemented and requiring that completed recalls remain posted with a statement that the corrective measures have been implemented. TC also acknowledges that the requirements for non-designated companies are unique to Canada, and that they also apply to vehicle equipment. As summarized above, stakeholders indicated that these differences would require considerable coordination and effort, thus needing more time to achieve compliance.

In consideration of the challenges expressed by stakeholders, the proposed Regulations have been revised to provide additional time for compliance: non-designated companies will have up to one year from the date of publication in the Canada Gazette, Part II, and designated companies will have 18 months from the time they are designated by the Minister to comply with the Regulations.

In the event there is a shift to the Minister’s designation criteria resulting in the designation of a previously non-designated company, one stakeholder requested a longer, two-year transitional provision for meeting the VIN Tool requirements in consideration of the lost investment from efforts complying with non-designated requirements. The stakeholder also proposed that, should new designation criteria occur within the transitional period for non-designated companies, the affected company should not have to meet the requirements for non-designated companies. TC confirms that in the event there are new designations at any point in time within the transitional period following the publication in the Canada Gazette, Part II, the affected companies will not have to meet the requirements for non-designated companies.

For added clarity, for companies that are designated after the transitional period, the proposed Regulations were revised to include that such companies must continue to maintain and update safety recall information on their website (i.e. requirements for non-designated companies) until such time as the website complies with the VIN Tool requirements (i.e. requirements for designated companies).

Regarding the stakeholder’s request for a longer, two-year transitional provision specifically to meet the VIN Tool requirements due to a shift in the Minister’s designation criteria, while a new designation could add further burden to a non-designated company, the stakeholder does not indicate that it should take any more time to meet designated company requirements. TC notes that some of the work done in complying with non-designated requirements would be transferable to the VIN Tool and that the Regulations provide non-designated companies the option to comply with the VIN Tool requirements of designated companies. TC believes that an 18-month transitional period for all designated stakeholders, independent of their date of designation, provides a balanced and equitable requirement for affected companies. Therefore no changes to the Regulations were made in response to this comment.

Comments regarding cost-benefit analysis

Regarding the cost-benefit analysis, two stakeholders commented that the costs were underestimated. Feedback included that not all companies publish safety recall information on their website and of the companies that do publish safety recall information on their website, none would be considered fully compliant with the Regulations. Stakeholders expect the Regulations to impose a much greater burden and cost to those companies without such information on their website, something that they feel the cost benefit analysis failed to capture. These stakeholders emphasized that costs that were previously spent on the development of VIN search tools should be included in the cost-benefit analysis. It should be noted that these costs fall outside of the scope of the cost-benefit analysis because they were incurred voluntarily (i.e. not as a direct result of the Regulations) and, therefore, they have not been included.

One stakeholder provided supplementary information regarding the burden that the proposed Regulations could impose for a company with a VIN Tool already in place (but which is not yet fully compliant). The stakeholder estimated that the cost for companies to implement the VIN Tool as proposed would range from approximately $165,000 +/- 25% (based on use of in-house IT resources) to over $300,000. The stakeholder further noted that changes in scope could lead to significant cost overruns and the actual costs would vary based on the final requirements. This range of costs was used to update the analysis in the “Benefits and costs” section below.

As detailed above, several key changes were made in the Regulations to address stakeholder concerns. These changes include increasing the transitional period to meet requirements from 180 days to one year for non-designated companies and from one year to 18 months for designated companies; and, further aligning with the United States requirements, such as increasing the timeline by which designated and non-designated companies must publish safety recall information on their websites from 10/30 days respectively to 60 days. TC expects that the changes to the Regulations will reduce some burden on stakeholders.

Other general comments

One stakeholder raised concerns about the Minister’s power to designate companies and inquired about specific metrics or considerations — beyond production/import volumes — that may be used to ensure fairness for all affected companies. In the RIAS at prepublication, TC outlined the Minister’s intended criteria for designating companies to provide some clarity and predictability about the potential impacts of the proposed Regulations to stakeholders. TC further noted that the designation criteria could be subject to change. Section 10.3 of the MVSA does not require TC to inform industry of the Minister’s designation criteria, nor the time frames under which a designation may be made.

One stakeholder stressed the importance of transparency around when companies might expect to be designated, so that they can plan accordingly. While there is no stipulation in the MVSA or its regulations about when a company may be designated, TC expects that companies will be designated on or soon after the date of the publication of the Regulations in the Canada Gazette, Part II.

A tire stakeholder commented that the retention period for keeping posted recalls on the tire company’s website should be reduced from 10 to 5 years. The company believes that 10 years is unnecessary given several sources of information are available to Canadians for obtaining safety recall information, including TC’s online recall database, the tire company’s website, the U.S. Tire Manufacturers Association website, and the NHTSA online recall database. TC notes, however, that the information on TC’s online recall database may not include all the details that would be required by the Regulations on a company’s website, and TC does not regulate what recall information may be available through any other sources. Therefore, no changes were made to the 10-year retention period in response to this stakeholder comment.

Two stakeholders expressed concerns that the Regulations may subject companies to unnecessary compliance risks that might result in unintentional violations. For example, they expressed concerns that they may face penalties if their website goes offline for a period of time for website maintenance or due to an issue out of their control, such as a power outage, or for items not clearly defined and open to interpretation, such as the requirement that information be “prominently displayed” on the home page. TC believes that the Regulations are sufficiently precise without being overly restrictive, and that instances which can cause a temporary non-compliance, such as for maintenance, or that are beyond the control of a company, such as power outages, will be addressed as needed, in an equitable manner. Before taking an enforcement action, TC will always consider the circumstances under which an instance of non-compliance occurred, including the degree to which the non-compliance was within the control of the company. As noted in the proposal published in the Canada Gazette, Part I, and the section below regarding the implementation, compliance and enforcement, and service standards, when non-compliance is detected, TC uses a graduated approach to enforcement, which includes tools such as warnings, prosecutions, or revocations (see TC’s Motor Vehicle Safety Oversight Guidelines). In all cases, the enforcement response taken by TC will continue to be tailored to achieve both compliance and deterrence.

A stakeholder noted a possible error in the English text of the proposed Regulations in paragraphs 15.01(10)(a) and (b), specifically with the reference to “notice of defect.” Section 15.01 of the MVSR addresses the subject of non-compliance, not defects. TC acknowledges that the proposed reference to “notice of defect” was in error and the respective paragraphs have been revised to reference “notice of non-compliance.”

One stakeholder wanted to confirm that the VIN Tool is not intended for “upfitters,” i.e. the multistage manufacturers that complete a vehicle such as a dump truck by adding a dump body on a chassis, or an aerial bucket truck by mounting body and equipment on a chassis. For clarity, the Regulations apply to prescribed classes of vehicles which includes incomplete vehicles, such as the chassis on which upfitters add various equipment (e.g. dump body) as needed for the end user. Therefore, upfitters are not subject to the Regulations and are excluded from the requirements of posting safety recall information on their website.

Lastly, TC received comments from two stakeholders on matters that were deemed to be outside the scope of the proposed Regulations, as they concerned vehicle servicing for maintenance and repairs, vehicle crash testing, and emissions. These issues are not addressed in the Regulations.

Modern treaty obligations and Indigenous engagement and consultation

In accordance with the Cabinet Directive on the Federal Approach to Modern Treaty Implementation, an analysis was undertaken to determine whether the Regulations are likely to give rise to modern treaty obligations. The assessment examined the geographic scope and subject matter of the proposal in relation to modern treaties in effect and no modern treaty obligations were identified.

In accordance with Section 5 of the United Nations Declaration on the Rights of Indigenous Peoples Act (the UN Declaration), TC undertook an assessment of potential intersections between this regulatory initiative and the rights or objectives of the UN Declaration. No potential intersections between these Regulations and the UN Declaration were identified.

Instrument choice

The MVSA regulations require companies to notify owners and prescribed persons of a safety recall and how to have it corrected. Nevertheless, TC currently estimates that approximately 6.6 million vehicles are circulating on Canadian roads with an unresolved safety recall, potentially endangering not only the occupants but also other road users. Publishing safety recalls online will make this information available faster and more accessible for vehicle owners, vehicle equipment owners and prescribed persons, as well as for the general public. TC expects that this will lead to the correction of a greater number of safety recalls and benefit the safety of all Canadians.

TC examined a non-regulatory approach to making recall information available online; however, it concluded that this approach would lead to inconsistencies in how and what information was published online. For example, while some companies have decided to voluntarily publish information online or have created a VIN Tool, not all companies do. Of those that do make information available, the information is not always consistent or provided in an accessible format (i.e. bilingual). In some cases, necessary information is inadvertently omitted or the information is not easily found on the company’s website.

Some companies have indicated they are waiting for regulations before they commit to publishing recall information online or develop a VIN Tool. Establishing requirements in the MVSA regulations will ensure that a common approach is taken, that consistent information is available from different companies, and that recall information is available in both official languages.

Prior to the 2018 amendment to the MVSA, such requirements would have to apply to all companies, resulting in considerable burden for smaller companies. However, this was addressed in the amendment to the MVSA in 2018 introducing the authority to require companies designated by the Minister to make information available for vehicles or vehicle equipment affected by a safety recall. This allows the Minister to target companies where requirements will be most effective, without causing unnecessary burden to other smaller companies.

Regulatory analysis

The analysis that follows is based on the assumption that the Minister will designate companies based on criteria considered through pre-regulatory consultations. The designation criteria considered with stakeholders included those companies that manufacture, import, or distribute a total of 2 500 or more vehicles of the following prescribed classes per year: passenger car; three-wheeled vehicle; multipurpose passenger vehicle (with a gross vehicle weight rating [GVWR] of 4 536 kg or less); truck (with a GVWR of 4 536 kg or less); motorcycle; restricted-use vehicle; or snowmobile. While the threshold of 2 500 vehicles is also utilized for importation and interprovincial shipment requirements under the MVSR, it must be noted that by way of section 10.3 of the MVSA, the Minister has the authority to consider other criteria when exercising their discretion. Non-designated companies include the remaining companies that manufacture, import, or distribute vehicles, and all companies that manufacture, import, or distribute vehicle equipment.

These Regulations will improve the access to and availability of information, with the aim of improving the completion rate of safety recalls and reducing losses from property damage, injuries and death resulting from vehicle and vehicle equipment defects. The Regulations will result in present value incremental costs of $4.94 million to designated and non-designated companies, and to the Government of Canada over the 10-year time frame from 2024 to 2033 (discounted at a 7% rate to 2024). Non-designated companies will incur $0.23 million of the costs, and designated companies will incur $4.69 million of the costs over the same 10-year period related to website development. Government will incur $0.02 million in costs related to time spent conducting audits. In addition, the Regulations will result in a decrease in human consequences (e.g. injuries and fatalities) associated with outstanding safety recalls to vehicles and vehicle equipment, and a decrease in the number of safety recall re-notifications being sent electronically or by mail. Cost savings related to the decrease in human consequences and written re-notifications (which are a non-quantifiable benefit) are discussed further in the “Qualitative benefits” section. Despite the fact that the Regulations will result in a monetized cost, TC anticipates that the qualitative benefits to safety will outweigh the monetized costs.

Analytical framework

The costs and benefits for the Regulations have been assessed in accordance with the Canadian Cost-Benefit Analysis Guide of the Treasury Board of Canada Secretariat (TBS), which can be found through the Cabinet Directive on Regulation: Policy on Cost-Benefit Analysis. Where possible, impacts are quantified and monetized, with only the direct costs and benefits for stakeholders being considered in the cost-benefit analysis.

Benefits and costs associated with the Regulations are assessed based on comparing the baseline scenario with the regulatory scenario. The baseline scenario depicts what is likely to happen in the future if the Government of Canada does not implement the Regulations. The regulatory scenario provides information on the intended outcomes as a result of the Regulations.

The analysis estimates the impact of the Regulations over a 10-year period from 2024 to 2033. Unless otherwise stated, all costs are expressed in 2021 Canadian dollars and are discounted to 2024 at a 7% discount rate.

Please note that the formulafootnote 10 used to calculate annualized values in Tables 2 and 4 differs from that in TBS’s Canada’s Cost-Benefit Analysis Guide for Regulatory Proposals to align with the stated discounting approach.

Affected stakeholders

The Regulations will affect designated and non-designated companies, with the majority of costs being borne by designated companies. In total, 212 non-designated companies and 27 designated companies will be affected by the Regulations.footnote 11 Based on a scan of companies, 104 of the 212 existing identified non-designated companies are vehicle manufacturers/importers. All vehicle and vehicle equipment manufacturers will benefit from a decrease in the number of written re-notifications that will need to be sent, due to the anticipated increase in recall completion. In addition, having fewer vehicles operating with outstanding safety recalls may also reduce potential liability and reputational harm to companies. Costs for non-designated and designated companies will be related to publishing recall information on their websites.

Vehicles or vehicle equipment in use on Canadian roads with outstanding safety recalls can pose a risk to people inside and outside the vehicle. The Regulations are expected to increase awareness of recalled vehicles and equipment, and therefore decrease the number of recalled vehicles and equipment on the road. This awareness will provide a benefit to Canadians in the form of a reduction in human consequences.

TC will be affected by the Regulations, as existing officers will be conducting audits of company websites to ensure compliance. The Regulations will not be expected to increase the number of required inspectors; however, the estimated time costs for existing inspectors are calculated for this analysis.

Baseline scenario and regulatory scenario

In the baseline scenario, vehicle and equipment manufacturers will not be required to publish the information about their safety recalls online. As is currently the case, 13% and 74% of non-designated and designated companies, respectively, will continue to voluntarily publish their recall information online.footnote 12 Notifications and re-notifications of safety recalls will continue to be sent at the same rate. Recall completion is expected to continue at historical rates. Over the 10-year time frame, TC estimated that there will be an average of 360 annual recalls pertaining to non-designated companies, and 430 pertaining to designated companies.footnote 13 TC estimates, based on its analysis of recall completion rates reported by regulated companies, that at least one in five safety recalls are outstanding for Canadian vehicles. This is further substantiated by the NHTSA’s recall completion rate for vehicles under three years old, which has been estimated at 80%.footnote 14 Manufacturers are required to repair vehicles when a safety recall is addressed. Companies are required to notify Canadians of recall notices in both official languages. Only those companies regulated under the MVSR are required to provide contact information, located in the owner’s manual, indicating how the owner can contact TC to report a safety concern relating to a vehicle.

In the regulatory scenario, vehicle and equipment manufacturers will be required to publish their information about recalls online unless they are a non-designated company with no pre-existing website. TC anticipates that recall completion will increase for both non-designated and designated companies. This increase in recall completion is expected to cause a decrease in human consequences related to vehicle and vehicle equipment safety defects. The increase in recall completion will also result in a decrease in the number of written re-notifications sent to owners and prescribed persons by mail or electronically. Manufacturers will still be required to address a safety recall. Although there will be an increase in recalls completed, the requirement to apply corrective measures is part of existing requirements and is therefore excluded from this analysis. Companies will be required to publish recall notices on their websites in the prescribed format in both official languages. This will not result in incremental translation costs for companies, as they already have been sending written notices in both official languages. All companies regulated under the MVSA regulations (i.e. vehicle and vehicle equipment companies) will be required to provide information on their website for reporting a suspected safety issue. The information provided will be at the discretion of the company and could include contact information for TC, a company or a dealer. There will be no anticipated difference in costs regarding industry communication to TC related to the requirement to list a contact. This is because the requirement will not impact the number of companies listing TC as a contact relative to the baseline scenario. As a result of the requirements with respect to implementation, start-up costs for designated companies were assumed to occur in year two, while ongoing costs will occur for the years following. Costs are assumed to begin in year two for non-designated companies, as they will need to begin publishing recall information online for any recalls occurring one year or more after the mandatory compliance date provided in the Regulations.footnote 15

Changes since prepublication in the Canada Gazette, Part I

As previously discussed under Regulatory development – Consultation, changes were made to the Regulations based on comments from stakeholders. In addition, TC identified new information to inform the cost-benefit analysis. As a result, the analysis was updated as follows:

As a result, the total cost of this proposal increased from $1.20 million to $4.94 million. It is worth noting that the majority of the difference in costs is associated with the increase in costs for designated companies for VIN tool development.

Benefits and costs

In total, the Regulations will result in incremental present value costs of $4.94 million to non-designated companies, designated companies, and TC over the 10-year time frame. These costs will be related to the need for companies to set up or modify and maintain a website for publishing product recalls if the company did not already publish such information in alignment with the proposal. Costs to Government will be related to time spent conducting audits.

The Regulations are expected to increase the number of recalls being completed on vehicles and vehicle equipment with safety issues. The increase in recall completion would mean that fewer written re-notifications would be sent out by companies on a regular basis. The increase in recall completion would also result in a decrease in injuries and severe injuries resulting from unresolved vehicle or vehicle equipment safety issues. This decrease would depend on how much recall completion rates are increased over the time frame. Benefits are discussed further in the “Qualitative benefits” section.

Costs
Industry

The Regulations will require non-designated and designated companies to publish information about product recalls on their websites. Of the $4.94 million in total costs, $4.92 million is expected to be incurred by industry, with $4.69 million (95%) attributed to designated companies, and the remaining $0.23 million (5%) attributed to non-designated companies.

Designated companies

TC estimated that 20 of the 27 companies that are most likely to be designated, or 74%, are already voluntarily posting recalls to their websites via a VIN Tool.

Companies without a pre-existing VIN Tool will bear costs associated with the setup, updating, and maintenance of a VIN Tool on their website. Upfront costs of $300,000 (undiscounted) per company are anticipated to be incurred in year 2 of the analysis.footnote 16 In following years, based on a scan of website developers, the average annual undiscounted cost per company to maintain this type of tool is estimated to be $10,101. Total costs for companies with no pre-existing VIN Tool will be $2.36 million over the 10-year time frame, with per-company costs estimated to be $0.34 million over the analytical time frame.

For companies with an existing VIN Tool, TC estimated that costs will be $125,000 (undiscounted) per company to update their VIN Tool. These costs will be incurred in year two of the analysis and will total $2.34 million. The total present value cost per designated company with an existing VIN Tool is, therefore, estimated to be $0.12 million over the analytical time frame.

In total, designated companies are expected to incur $4.69 million in costs over the analytical time frame.

Non-designated companies

For non-designated companies, should they have a website, they will be required to publish recall information on their respective website. If the non-designated company does not have a website, it will not bear incremental costs. Currently (as of 2024), 28 of 212 of non-designated companies are already posting recall information on their websites on a voluntary basis. Ten additional companies do not have existing websites. From a scan of website developers, TC estimated that it will take the remaining 174 companies three hours at an hourly rate of $31.42 plus 25% overhead, to update a website upon issuing a recall. Assuming an average of 18.2 additional non-designated companies per year (based on the average number of non-designated companies issuing a recall for the first time from 2019 to 2023), TC forecasted that the total number of non-designated companies will increase to 394 by 2033, with 323 of these companies being impacted by the Regulations. Based on this forecasting, TC estimated that an impacted non-designated company will issue an average of 1.14 recalls per year over the analytical time frame, after the mandatory compliance date. Taking this into account, non-designated companies are expected to bear annual undiscounted website editing costs of $135, on average. The total present value per non-compliant non-designated company with websites is estimated to be $701 over the analytical time frame, which corresponds to a total cost of $0.23 million for the 323 affected companies.

Government

TC will incur some costs related to the Regulations regarding inspector audits of websites. Existing TC officers will audit websites twice annually to ensure compliance with the Regulations. TC estimated that this will take each inspector five minutes per website and will not result in any incremental costs to industry. Total present value costs for Government are expected to total $19,412 or an average annual cost of $1,941.footnote 17 Note that recall audits are already being performed in the baseline scenario by inspectors, and that the Regulations will not result in the hiring of additional full-time employees. These government costs will be managed within existing resources.

Qualitative benefits

Benefits associated with the Regulations will come from cost savings due to a reduction in the number of unresolved safety recalls, based on a greater awareness of recalls. TC assumed that there will be an increase in recall completion for non-designated and designated companies resulting from information being more accessible (this therefore assumes that the reason defects are not currently being repaired is due to lack of information on the customers’ end). This increase in recall completion would mean that there would be fewer human consequences caused by unresolved safety issues, less financial burden on companies to send re-notifications to owners and prescribed persons, and the potential for reduced liability and reputational harm to companies. There is also anticipated to be an increase in the speed of recall notification due to the new communication medium. This could provide benefits in the form of defects being repaired sooner than in the baseline scenario.

The decrease in the number of vehicles with outstanding safety recalls on the road would lead to a decrease in the number of injuries and severe injuries caused by collisions with these vehicles. The effect of repairing vehicle defects on the severity of collisions is calculated in Bae and Benitez-Silva’s paper The Effects of Automobile Recalls on the Severity of Accidents, where it is found that repairing recalled vehicles decreases the number and severity of injuries, as well as having a minimal effect on fatalities; however, there was found to be no effect on the number of collisions.footnote 18 Therefore, having fewer vehicles with outstanding safety recalls on the road would mean a lower number of injuries, severe injuries, and fatalities for Canadians. A table depicting the major and minor injury costs based on the Value of Statistical Life (VSL)footnote 19 ($2021 Can$) is presented below.footnote 20

Table 1: Major and minor injury costs
Degree of human consequence VSL fraction (% of fatality)
Fatality $8,254,709 (100%)
Major injury $1,107,782 (13.42%)
Minor injury $55,306 (0.67%)

The decrease in the severity of accidents would also likely result in a decrease in collision externalities, such as property damage, emergency service costs, vehicle repair costs, hospital costs, legal costs, delays, fuel consumption, and pollution.

The decrease in the number of vehicles with outstanding safety recalls on the road would also lead to a reduction in written re-notifications to owners. This reduction would result in cost savings for companies, who would have fewer owners and prescribed persons to re-notify of a safety issue with their vehicles or vehicle equipment. A reduction in negative outcomes from failures that are attributed to unresolved safety recalls can potentially reduce liability and reputational harm to companies.

The benefits in this section were not able to be quantified because of a lack of data on the exact amount that recall repairs will increase, or the increase in the speed of recall completion due to the Regulations. Without this information, the decreases in human consequences and time and mailing costs related to written notifications for companies are not quantifiable. A small increase in defect or non-compliance repairs would generate a small benefit, while a large increase would generate a large benefit. Given the potential safety benefits associated with the Regulations, TC anticipates that the benefits of the Regulations are likely to outweigh the monetized costs.

Cost-benefit statement
Table 2: Monetized costs (expressed in thousands, rounded to the nearest thousand; all values presented have been discounted)
Impacted stakeholder Description of cost 2024 2025 2033 Total (present value) Annualized value
Industry (designated) Website development cost $0 $4,299 $38 $4,694 $625
Industry (non-designated) Website development cost $0 $31 $20 $227 $30
Government Audit costs $0 $2 $2 $19 $3
All stakeholders Total costs table b2 note a $0 $4,333 $60 $4,940 $657

Table b2 note(s)

Table b2 note a

Values in table may not add to totals due to rounding.

Return to table b2 note a referrer

Positive impacts

Sensitivity analysis

VIN Tool Development Sensitivity

A sensitivity analysis was conducted on the cost of VIN tool development for companies with a pre-existing VIN tool. The central analysis used $125,000 as the cost for designated companies with a pre-existing VIN tool, which was included in a range of costs presented from a stakeholder. For the purpose of the sensitivity analysis, the table below presents the results for the range of values provided, as well as if the cost of this was less than the presented figures.

Table 3: Monetized costs (expressed in millions)
Cost to update VIN tool $62,500 $125,000 (Central Analysis) $165,000 $205,000 $300,000
Present value costs $3.77 $4.94 $5.69 $6.43 $8.21
Discount Rate Sensitivity

A sensitivity analysis was conducted on the discounting values used. The central analysis used a 7% discount rate as recommended by TBS. For the purpose of the sensitivity analysis, the table below presents the results had a 0% discount been used, as well as a 3% discount rate. Discount rates of 7% and 3% were selected as in line with the Treasury Board of Canada Secretariat’s Cost Benefit Analysis Guide for Regulatory Proposals. Undiscounted costs are also presented.

Table 4: Monetized costs (expressed in millions)
Discount rates 0% 3% 7%
(Central analysis)
Present value costs $5.51 $5.24 $4.94

Small business lens

Designated companies have high sales volume; therefore, they are not considered small businesses. Based on a scan of sources, TC estimated that 24 of the currently affected 212 non-designated companies would be considered small businesses.footnote 21 Four of these companies are already aligned with the Regulations by publishing recall information on their websites. Based on TC analysis, there will be an estimated 37 small businesses affected by the end of the time frame, which would not have been publishing information on their websites in the baseline scenario.footnote 22 Noteworthy is that there may be other small businesses that did not have a website and were not identified due to lack of publicly available information. These businesses will remain unaffected by the Regulations, as they do not have websites and will therefore not be required to publish information. If a non-designated company does not have an existing website, then it is not required to create one in order to publish information online.

Small businesses with websites will assume costs relating to publishing recalls on their existing website. This information will be similar to the information that they are currently required to share with customers via written notification; therefore, the costs of the Regulations to small businesses are expected to be low. The notification requirement will remain in place. Over the 10-year time frame, costs to small businesses are expected to total $25,939. This breaks down to a cost of $701 per impacted company over the 10-year time frame, or an annualized cost of $93.

While no specific flexibilities have been provided directly to small businesses with these Regulations, small businesses (as non-designated companies) will only be required to publish recall information online if they have a pre-existing website. Therefore, if the small business did not have an existing website, it is not incrementally impacted by the introduction of the Regulations.

Small businesses may benefit from the Regulations due to increased recall completion resulting in fewer written recall re-notifications being sent out by mail or electronically to those who did not repair their vehicle after the first notification.

The small business lens studies all costs to small businesses split into compliance and administrative costs. Compliance costs are costs related to complying with the Regulations, while administrative costs involve the administrative burden on industry. In this case, all costs to small businesses associated with these Regulations are considered compliance costs.

Small business lens summary
Table 5: Costs to small businesses
Activity Number of impacted small businesses Annualized value Present value
Compliance cost: website recall publications 37 $3,452 $25,939
Cost per impacted small business n/a $93 $701

One-for-one rule

The one-for-one rule does not apply to these Regulations, as they are not expected to result in any incremental change in administrative costs to or burden on business.

Regulatory cooperation and alignment

An analysis was undertaken to identify regulatory approaches being used in other international jurisdictions to determine where regulatory cooperation or alignment may be possible, while meeting the desired public policy objective. This analysis focused in particular on regulations in place or under development for adoption in the United States. Canada’s long-standing practice has been to consider alignment with the United States’ standards where they are compatible with Canadian requirements, given the integrated nature of the North American automotive market and manufacturing platform.

With respect to the online VIN-based search service, this analysis found that the development of regulations similar to those of the NHTSA would meet the Canadian objectives. The LTT was published in the fall of 2020 and further informal consultations took place in May 2021. The notice and informal consultations ultimately helped TC’s decision to align the Regulations with those of the United States by requiring a Canadian VIN-based search service through the Internet. However, there are certain aspects in which the Regulations differ from the United States’ requirements:

  1. Information in Canada must be made available in both official languages;
  2. While the United States scheme only regulates high-volume light vehicle companies, the Regulations include other (lower volume) companies that issue recalls, but hold them to a lesser requirement;
  3. Canada regulates additional prescribed classes of vehicles that are not regulated under the NHTSA (such as restricted-use vehicles and snowmobiles), which are included; and
  4. Some of the information required in the Canadian VIN-based search service is different from the United States system.

The requirement for information to be available in both official languages is part of the Official Languages Act. The Regulations will provide that owners and prescribed persons are able to access recall information faster through a company’s website. While designated vehicle companies (generally high-volume companies)footnote 23 must include safety recall information associated to a unique vehicle through a VIN Tool on their website, the remaining vehicle and vehicle equipment companies (i.e. non-designated companies) will be required to publish on their website common safety recall information similar to what is currently being mailed out to owners.

The MVSA regulates additional prescribed classes of vehicles other than those that are federally regulated by the NHTSA, including certain off-road vehicles such as snowmobiles and restricted-use vehicles. In the United States, off-road vehicles are regulated by the Consumer Product Safety Commission, which does not share NHTSA’s safety recall requirements.

In some instances, the requirements for the Canadian VIN Tool differs from the existing requirements of the United States VIN Tool. TC believes that these additional requirements will not place a significant burden on companies and will provide owners with necessary information and tools to reduce potential harm from outstanding safety issues. For instance, TC believes it is important for the VIN Tool to indicate if the VIN entered is not recognized by the company and to include information stating that the repair was completed. Requiring a company to list completed recalls provides an immediate and positive confirmation to the reader. TC believes that since a company will be required to display all outstanding safety recalls, displaying completed recalls should require little more than minor programming changes to display the status as completed, rather than remove the recall completely. TC also believes it is in the owner’s best interest to know of any precautions that they can take to minimize the safety risk until the vehicle is repaired. Lastly, the Regulations will require companies to provide contact information on their website to facilitate reporting a suspected safety issue.

The Regulations are not covered under the current Regulatory Cooperation Council Motor Vehicles Working Group work plans. Nonetheless, TC’s Multi-Modal and Road Safety Programs Directorate engages in dialogue and cooperation with the NHTSA on automotive safety. Discussions related to the Regulations took place with the respective programs at NHTSA, and the latter is supportive of the Canadian regulatory amendments.

Effects on the environment

In accordance with the Cabinet Directive on the Environmental Assessment of Policy, Plan and Program Proposals, and the TC Policy Statement on Strategic Environmental Assessment (2013), the strategic environmental assessment process was followed and a sustainable transportation assessment was completed. No important environmental effects are anticipated as a result of the Regulations. The assessment took into account potential effects to the environmental goals and targets of the Federal Sustainable Development Strategy.

Gender-based analysis plus

The Regulations are not expected to have differential impacts on Canadians based on factors such as gender, race, ethnicity, sexuality, disability status, age, etc. The Regulations are expected to benefit Canadians in general since they will add a way for people to access safety recall information in a faster and more convenient manner for affected vehicles and vehicle equipment, while still maintaining the existing requirements to be informed of safety recalls in the form of written notification. Canadians who do not have reliable access to the Internet (e.g. due to factors such as income or where they live) or who do not typically seek out information online are less likely to benefit from these changes than other Canadians. However, they will not be adversely affected by these Regulations since the existing means of communicating safety recall information will be maintained.

TC has evaluated feedback received from the public and stakeholders with regard to the proposal to introduce a VIN Tool. There were no concerns raised by the industry stakeholders or the public related to gender-based analysis plus (GBA+).

Implementation, compliance and enforcement, and service standards

The Regulations come into force on the day on which they are published in the Canada Gazette, Part II.

Currently, no companies have been designated by the Minister under the MVSA. Designation of companies is expected on or soon after the publication of the Regulations in the Canada Gazette, Part II. Companies that are designated by the Minister will be required to comply with the VIN Tool and website publication requirements within 18 months from the date that they are informed of their designation. Non-designated companies will be required to comply with the Regulations one year after the Canada Gazette, Part II, publication.

Companies are responsible for ensuring compliance with the requirements of the MVSA and its regulations. TC intends to conduct audits of information published by companies to verify compliance with the Regulations. TC will ensure that safety recall information published online contain, at a minimum, the information required by the Regulations, and that companies act in accordance with timelines specified by the Regulations. TC will also closely monitor public complaints and may undertake further audits and or requests for written records upon receiving information highlighting potential non-compliances.

Under the authority of the MVSA, designated inspectors may make written requests for records and/or enter a place believed on reasonable grounds to contain records related to a vehicle or equipment, with a view to verifying compliance with statutory and regulatory requirements. When a non-compliance is detected, TC uses a graduated approach to enforcement. As is detailed in TC’s Departmental Enforcement Standards, tools such as written or verbal warnings, prosecutions, or revocations can be used to address non-compliances. Training will be provided to TC motor vehicle safety officials to ensure that oversight and any related enforcement activities will be applied in a fair, impartial, predictable, and consistent manner. In all cases, the enforcement response taken by TC will continue to be tailored to achieve both compliance and deterrence.

Contact

Denis Brault
Senior Regulatory Development Engineer
Multi-Modal and Road Safety Programs
Transport Canada
330 Sparks Street
Ottawa, Ontario
K1A 0N5
Email: RegulationsClerk-ASFB-Commisauxreglements@tc.gc.ca