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Since 2002, Transport Canada bureaucrats appear to have scuttled motor vehicle regulation harmonization with the US. NAFTA harmonization of motor vehicle regulations between Canada and the U.S. was an initiative that was started by former Transport Minister Allan Rock in June 2002 by the formation of the Canadian Automotive Partnership Council (”CAPC”). CAPC consists of the stakeholders in the harmonization process including Transport Canada and motor vehicle manufacturers.

In the May 4, 2007 Report referred to below, it was stated that “No regulations have been harmonized since the last CAPC meeting.

Excerpts from: Canadian Automotive Partnership Council

Regulatory Harmonization Working Group

Progress Report - May 4, 2007

and

Vehicle Manufacturers in the North American Environment

Security and Prosperity Partnership of North America

Canadian Automotive Partnership Council

June 2005 http://capcinfo.ca/english/reports/report_jun28_05.html#impact

May 4, 2007 Report

- Canada has not demonstrated that there is a field problem with the current occupant protection systems. With a non-harmonized regulation, Canada risks foregoing the benefits of U.S. advanced systems or compelling more expensive unique Canadian variants of vehicles, or both.

- TC has hired a U.S. academic to conduct additional cost benefit analysis and risk analysis.

- Revised proposals continue to seek unique Canadian requirements, so this issue is coded yellow

- It has been seven years since FMVSS 208 was finalized and TC still has not completed its analysis.

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June 2005 Report

- Transport Canada has proposed requirements for Canadian Motor Vehicle Safety Standard (CMVSS) 208 for Frontal Occupant Protection that are not harmonized with the belted requirements contained in the recently amended U.S. Federal Motor Vehicle Safety Standard (FMVSS) 208.

- Transport Canada acknowledges that no Canadian field data is available that would specifically support the intended unique Canadian chest protection requirements. In the absence of unique Canadian data, industry can see no technological reason for a different chest deflection standard in Canada.

- Transport Canada’s proposal would create a further disharmonized regulation despite the fact that they have failed to demonstrate material public benefit that would otherwise be observed from harmonizing with the equivalent U.S. 208. Transport Canada’s own benefit analysis, which the industry feels is overstated, indicates only a ½ of 1% reduction in fatalities and injuries. Considering that approx 40% of all vehicle related fatalities and injuries are still related to impaired driving and approximately 35% are related to unbelted occupants, the government may want to consider focusing their efforts on areas of occupant safety that present greater opportunities for reduction, such as these driver behaviors.

May 4, 2007 Report

- Canada has unique bumper requirements (damageability) and is not currently planning to harmonize this standard.

- This requirement has precluded products from the Canadian market; these are generally low volume or cost sensitive products.

June 2005 Report

- There is no evidence that (ed. Canadian motor vehicle) bumper standards provide any measure of on-road safety and therefore the standard is simply a damageability requirement that provides no safety benefit.

- In order for manufacturers to build a vehicle for both the Canadian and U.S. markets, it must be tested to both standards. This increases vehicle development cost and in some cases can and does result in limiting the choice of vehicles for Canadian consumers, particularly when projected Canadian sales volumes do not justify the additional engineering and testing resources to certify to the unique Canadian requirements.

- Canadian standards stipulate an impact to the front or rear of the vehicle at 8 km/h (5 mph) and pendulum impacts on the corner of the vehicle at 4.8 km/h (3 mph). The Canadian test allows for minimal exterior damage as long as there is no damage to or degradation of the performance of the overall vehicle safety systems or vehicle performance.

- The U.S. standard, by comparison, requires front and rear impacts at 2.5 mph (4.0 km/h) and pendulum corner impacts at 1.5 mph (2.4 km/h) - only half the speed of Canadian tests. The U.S. test permits no damage or permanent deformation of the vehicle, other than cosmetic scratches on bumper covers and sight shields.

May 4, 2007 Report

- The regulation contains performance requirements for which there is no test method or procedure to demonstrate compliance, contrary to government policy.

- TC without the knowledge of the Canadian industry proposed a revision to an ECE regulation (which was rejected) and TC added the new requirements to the final regulation in a manner inconsistent with regulatory process requirements.

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June 2005 Report

- Most new vehicles sold in Canada are currently equipped with immobilizers, which can shut the vehicle down or prevent the vehicle from operating if the ignition is by-passed. These immobilizers meet the level of performance required by Transport Canada, and it is felt that most of those vehicles currently not equipped will either soon be so-equipped or those models will be discontinued. In spite of this situation and extensive discussions towards an MOU (ed. Memorandum of Understanding), Transport Canada has amended the Motor Vehicle Safety Regulations to require immobilizers (ed.to Transport Canada standard) on all new vehicles under 4 356 kg gross vehicle weight, starting with the 2008 model year (effective September 1, 2007).

May 4, 2007 Report

- Transport Canada’s (TC) discussion paper on proposed revisions to the Motor Vehicle Safety Act (MSVA) would have the effect of restricting the automotive manufacturers’ ability to certify vehicles using available tools including advanced, state of the art, computerized techniques (correlated to physical tests) and engineering judgment. TC is attempting to prescribe how manufacturers certify their vehicles under the Canadian Motor Vehicle Safety Act in order to make compliance audits easier. The use of advanced methods to support certification speeds the implementation of advanced technologies and supports robust testing and compliance.

- TC, to date, has not indicated a change in its position on this issue or timeframe for its resolution.

May 4, 2007 Report

- The federal government is currently developing a GHG reporting system which may not be harmonized with the Ontario system.

- Environment Canada has proposed additional reporting obligations for process level emissions of Criteria Air Contaminants beyond those required of U.S. facilities.

June 2005 Report

- Current Canadian regulations require that new vehicles be certified to meet U.S. Environmental Protection Agency (EPA) Tier 2 emission standards.These Tier 2 standards are the most stringent emissions standards in the world. Through a phase in process that will be completed by 2009, both cars and light trucks, including Sport Utility Vehicles (SUVs), will be grouped for the first time into a common set of emissions requirements. Meeting these emission standards represents a challenge to reducing fuel consumption, and as a result reducing carbon dioxide (CO2) emissions which are directly related to the amount of fuel consumed. Consumption reducing technologies such as direct injection compression ignition (diesel) and direct injection (gasoline) engines are challenged by tight emissions standards. However, even with the introduction of new technologies and the common process with the U.S., Canada’s ability to meet these requirements is still severely challenged because of differing fuel quality. Under the Tier 2 program, the in-use performance of emission control systems must be maintained for the useful life of the vehicle or 190,000 kilometers.

Attaining this long life requirement is highly dependant on fuel quality, which in Canada, has been compromised by the addition of manganese-based fuel additives in most consumer purchased fuel. In general, fuel suppliers have temporarily suspended the use of manganese-based additives in gasoline refining pending the outcome of the Government’s independent scientific third party review.

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Unfortunately this review continues to be delayed by the government and seriously risks the re-introduction of this metal-based fuel additive.

Key Recommendations:

- Continued harmonization of fuel economy targets between Canada and the US remain a high priority in order to ensure Canadians benefit from the economies of scale associated with harmonized automotive product and the resulting technology and cost benefits associated.

- Maintain consistent fuel economy standards between Canada and the US.

Ensure Canadian CAFC remains a voluntary program with targets that are fully harmonized with US CAFÉ.

- Ensure implementation of harmonized vehicle emissions standards does not lead to costly duplication of in-use vehicle emissions compliance testing in Canada.

June 2005 Report

- CMVSS 101 - Requires metric cluster (speedometer/odometer) and permits/requires ISO symbols

- CMVSS 108 - Requires Daytime Running Lamps

- CMVSS 201 - Not as stringent as FMVSS 201 - CMVSS 201 was not amended to adopt the FMVSS Final Rule that was effective September 1, 1998

- CMVSS 205 - References ANSI Z26 1996, but allows testing to ANSI Z26 1990 at the manufacturer’s option.

- 208CMVSS 210.1 and 210.2 - equivalent to FMVSS 225 - minor differences

- CMVSS 214 - Does not include dynamic test requirements; however, manufacturers have signed a Memorandum of Understanding which commits us to market vehicles that meet FMVSS 214 and satisfy the OOP Guidelines developed by the Alliance Transport Canada requires Canadians to make certain modifications to certain admissable vehicles imported from the U.S.. For example, Transport Canada requires certain vehicles to have the U.S. foam bumper absorber to be replaced notwithstanding the U.S. bumper absorber meeting the FMVSS as set out below (including a comparison with the Canadian standard).

Transport Canada requires a Recall Letter for admissable vehicles imported from the U.S. The manufacturers or dealers charge for a Recall Letter ranges from approximately $27.50 for a GM product to $500.00 for a BMW to $5,000.00 for a Ferrari. An expensive one page print out.