Administrative Fines for Vehicle Safety

Summary#

The final rule titled Administrative Monetary Penalties (Motor Vehicle Safety) Regulations creates a monetary-fine system under the Motor Vehicle Safety Act to deal with certain safety and record-keeping breaches. It designates 26 specific legal provisions (from the Act and the Motor Vehicle Safety Regulations) that can now be punished with administrative fines instead of—or before—prosecution. The regulations took effect on October 3, 2023 (90 days after their publication).

What it does#

• Designates 26 provisions (23 from the Act and 3 from the Motor Vehicle Safety Regulations) and some orders as eligible for administrative monetary penalties (AMPs).
• Sets maximum fine amounts for each designated provision. The overall legal caps are $4,000 for an individual and $200,000 for a corporation, but many designated provisions have lower individual/corporate caps (examples below).
• Examples of maximums in the schedule: $400 / $20,000 for one listed item; $2,000 / $100,000 for several items; and many entries at $4,000 / $200,000.
• Allows enforcement officers to set the actual penalty up to the listed maximum by taking into account factors such as:
  • the harm or risk caused,
  • degree of negligence,
  • compliance history,
  • any economic benefit from the breach,
  • mitigation and cooperation, and
  • how the breach was detected.
• Some violations can be treated as separate penalties for each day they continue or for each non-compliant vehicle/item, depending on the provision.
• Requires payment within 30 days of a notice of violation. Affected parties can ask for a review and appeal to the Transportation Appeals Tribunal of Canada. AMPs must be issued no later than two years after the non-compliance is believed to have occurred.

Who's affected#

• Businesses that make, import, distribute, or sell motor vehicles, tires, child car seats, or related equipment. That includes manufacturers, importers, intermediate manufacturers, and distributors.
• People who import vehicles (for example under the Registrar of Imported Vehicles rules) or who bring in vehicles for testing or special purposes.
• Individuals and corporations that fail to meet the specific provisions listed in the schedule (record-keeping, labelling like GVWR/GAWR, notifying defects, data access from vehicles, export timing for certain rental vehicles, etc.).
• Transport Canada, which will apply the new AMPs regime, and the Transportation Appeals Tribunal of Canada, which will handle appeals.

Why it matters#

• The rule gives Transport Canada a middle option between a simple warning and full prosecution. That makes enforcement quicker and more flexible.
• For companies, this means compliance failures that previously might have only drawn a warning (or led to long, costly prosecutions) can now lead to fines. That can affect company finances and reputation even when a criminal prosecution is not pursued.
• The regulations do not add new safety rules. They change how breaches of existing rules are enforced. Businesses that already follow the rules should not be affected.
• The government estimated the administrative cost to run the AMP program at $1.74 million (present value, 2020 dollars) over 10 years. Transport Canada said it will provide training and information sessions to help industry understand how AMPs will be used.