CADA continues to advocate for dealers' interests in Vehicle Recall Bill

Bill S-2, federal legislation dealing with government powers over new vehicle recalls, continues to make its way through the Parliamentary process in Ottawa. CADA proposed an amendment to the Bill last year in the Senate, which supported the notion of recognizing dealers in the Act and providing for reimbursement of carrying costs that dealers face in recall situations.

Now that the amended Bill has progressed to the House of Commons, government concerns with CADA’s amendment are being addressed: namely, that provisions imposing reimbursement obligations on manufacturers in the event of a recall fall outside the scope of the legislation, which at its heart, is a Bill about consumer and road safety. As such, CADA has engaged in exhaustive discussions with senior leadership at Transport Canada and Minister Marc Garneau and his team to ensure the Bill moves forward this spring through the Parliamentary process, and that it still addresses some of the concerns CADA brought forward through our 2016 Senate amendment.

The House of Commons has proposed its own amendment that would, if passed, accomplish some, but not all, of CADA’s objectives from the original Senate amendment. First, it would recognize dealers in the Act, which was not the case before we launched our advocacy on this Bill. Second, it would not impose any further responsibilities on dealers in the recall process, or financial penalties as currently exist in U.S. law. Third, the new amendment addresses the issue of dealers being saddled with unsellable inventory for months on end. It does so by imposing an obligation on OEMs to buy back vehicles at the dealer invoice price when a fix is not available if the OEM is ordered to do so by the Ministry.

The House of Commons amendment also acknowledges that nothing prevents the reimbursement for dealer carrying costs over the time period that inventory is rendered unsellable due to long-lasting recall processes. It also recognizes that cost recovery from manufacturers could be available to dealers through legal action when recalls impose long-term carrying costs.

CADA has made it clear to the government that dealers will continue to push for legislative fairness in long-delayed recall situations, but that in the end, we did not want to stand in the way of this Bill’s ultimate passage into law, which CADA has always supported.

For dealers across the country who engaged on this issue, who sent letters to their Members of Parliament and Senators, we owe a significant debt of gratitude. While we are not likely to achieve all that we set out to at the beginning of this process in 2016, if S-2 passes as proposed by the House of Commons, we will have achieved significant legislative victories for dealers.

As S-2 makes its way through Parliament in the coming weeks, we will keep all dealers apprised of its progress, including any further changes to the Bill that may take place.