Notice of Defect Handbook: chapter 3
3. Notice of Defect
3.1 What is an emission-related defect?
The term “defect” is not defined in the Canadian Environmental Protection Act, 1999 (CEPA 1999) or associated Regulations, but is generally understood as the following: Does the vehicle, engine or equipment do what it was intended to do or is there a fault or failure that affects or is likely to affect its compliance with a prescribed standard?
The following guiding principles may help to determine the existence of a defect. The issue:
- originated at the design, manufacturing or assembly stage, or interferes with the functioning of the vehicle, vessel or engine;
- is present in a group of similar units;
- could pose an undue pollution risk; and
- is not caused by everyday wear and tear, a lack of proper maintenance, or negligence on the part of the owner/user.
A defective product may be one which reasonable persons would not put on the market if they had knowledge of its harmful character.
Another key consideration is that there is no prescribed threshold (number of occurrences) for reporting of a defect. The number need be only significant enough to raise the real possibility of a failure occurring.
3.2 What is a notice of defect?
A notice of defect is a process that must be used by companies in order to provide the necessary information relating to an emission-related defect, its consequences and proposed remedial action.
A notice of defect may also be used, on a voluntary basis, to address issues that do not necessarily interfere with the functioning of the product such as an error on the emissions label or in the maintenance instructions.
3.3 When should a company submit a notice of defect?
A company must submit a notice of defect immediately upon determining/confirming the existence of a defect. The expression “on becoming aware”, in subsection 157(1) of the CEPA 1999, can be interpreted as meaning the moment at which the analysis is complete, the issue is defined and the defect is identified in a group of similar units.
The notice must be sent to the Minister, to dealers/retailers (having purchased the product from the company) and to each current owner. Suggested templates for such notifications are included in this guide.
3.4 Overview of the notice of defect process
The reporting process begins by filing a notice of defect with the Minister (see address in section 3.6). Whenever possible, the notice should be sent to the Minister prior to owner notification or release to news media agencies.
A typical sequence of events would be:
- Company submits notice of defect to the Minister.
- Environment Canada processes the information and issues a reference number.
- Company submits a draft owner letter to the Minister.
- Environment Canada reviews the information and, if required, suggests changes.
- Company notifies owners and dealers.
- Company submits the initial report to the Minister (which includes a copy of the final version of the owner letter and dealer bulletin).
- Company submits subsequent follow-up reports as outlined in Table 1.
The notice of defect is to include:
- The name of the company giving the notice.
- The make, model, model year and the period during which the item was manufactured. The Vehicle Identification Number (VIN) or VIN range (if available, otherwise this information may be submitted in the initial report).
- The number of units affected by the defect (if available, otherwise an estimate would be acceptable).
- The estimated percentage of the potentially affected units that contain the defect.
- A clear and brief description including the nature (contributing factors and known causes) and physical location of the defect.
- A clear and brief description of possible consequences and pollution risks arising from the defect.
- A clear and brief description of the measure(s) to be taken to correct the defect, and how they will be implemented. The description should indicate any precautions an owner can take in the interim (until the remedy is applied) to minimize risks and implications.
- A chronological summary (including dates) of all principal events that led to the determination of the existence of the defect (if this information is available at time of notification, if not it must be submitted in the following report).
- The estimated date of owner notification.
- A description of the means available to the company to contact the current owner of each affected unit.
- Contact person information (agent for the company).
The initial report is to follow the notice of defect (within 60 days) and contain:
- The reference number assigned by Environment Canada.
- Any revision to the information contained in the notice of defect, such as the total number of affected units, the chronology of events, and the Vehicle Identification Number (VIN) or VIN range.
- Copies of the owner notification letter, circulars, dealer communications, service bulletins, and anything else that pertains to the defect.
Quarterly follow-up reports are required unless otherwise directed by the Minister. Each report is to include:
- The name of the company giving the report
- The Environment Canada reference number.
- The company file number (if one was given).
- The revised number of affected units.
- The date of owner notification.
- The date that subsequent reminder notices were sent to owners, if applicable.
- The total number of units repaired, including those requiring inspection only.
Table 1 summarizes the reporting steps, frequency of follow-up reports and details of the required information to be submitted at each step.
Refer to the specific regulations for complete details.
3.5 Owner notification
The name and current address of owners may be determined by using the company’s warranty records or, in the case of vehicles, by searching provincial and territorial motor vehicle registration records. A company which cannot demonstrate, upon request by the department, that they possess the name and correct address information of every current owner, may be required to publish notice by newsprint, as prescribed by Section 157(4) of the CEPA 1999.
Unlike communications with the Minister or with dealers, the owner notification letter should only contain commonly used language. Technical jargon not ordinarily understood by the general public may confuse the reader and cause them to dismiss the issue.
Owner notification shall be given in writing, and should be in both official languages or in the person’s official language of choice (if it is known).
Finally, the owner letter should contain specific opening statements and conform to the template supplied in Appendix D.
3.6 Contact Information
Whenever possible, all documentation should be submitted electronically to the Transportation Division
Alternatively, documents may be sent by mail to:
Chief, Regulatory Administration Section
351 St-Joseph Blvd.
Gatineau, Quebec K1A 0H3
3.7 Dissemination of information by the Minister
Pursuant to subsection 157(6) of the CEPA 1999, Environment Canada will forward pertinent information of each notice of defect to the person responsible for vehicle or engine administration in each provincial and territorial government. Select basic information will also be made available for public scrutiny. This may include details such as make, model and model year of the affected products, as well as a short description of the defect, its consequences and proposed corrective measures.
3.8 Other considerations
Even though, in some instances, a notice of defect is not required under CEPA 1999, Environment Canada would appreciate receiving:
- a copy of all notices of defect filed with Transport Canada under Section 10 of the Motor Vehicle Safety Act for issues which may also affect compliance with a prescribed emissions standard.
- the details and remedial plan of any issues where all affected units are still under the company’s possession or control.
As well, the company is encouraged to:
- share with Environment Canada the details of issues that may affect the emission performance of products originally sold in Canada (even if still operating within the prescribed standards), as well as the outcome of any investigation. This information can be shared using whatever means the company prefers, including reports submitted to the U.S. EPA.
- undertake voluntary actions in Canada to remedy the aforementioned issues, and inform Environment Canada of such actions (Environment Canada expects that voluntary actions undertaken in the U.S., such as warranty extensions, would also be offered in Canada if similar conditions exist).
- provide Environment Canada with the reasons why an action would only apply to units originally sold in the U.S., as well as the assurance that no units originally sold in Canada are affected.
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