The German auto maker admitted that it had installed so-called defeat devices that enabled diesel engines to pass regulatory emissions tests, then disabled the devices during regular use.The Associated Press
It could take years for the Canadian government to complete an investigation into Volkswagen AG and environmental officials still can't say if the company did anything wrong – even though the German auto maker has already admitted to the so-called diesel engine scandal.
A day after reaching a $2.1-billion proposed settlement with Canadian owners of Volkswagen and Audi vehicles, it was still unclear on Tuesday whether officials at Volkswagen AG would face penalties – including fines of up to $6-million per offence, or prison time – under the Canadian Environmental Protection Act.
"We're not at a point yet where I can tell you conclusively whether or not Volkswagen's done something wrong. The investigation has to unfold the way the investigation will unfold," Heather McCready, director general of environmental enforcement at Environment and Climate Change Canada, said in an interview.
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"It's not unusual for an investigation to take one, two or potentially more years than that. Environmental infractions are actually quite complicated to prove."
Ms. McCready said investigations unfold similarly to criminal ones, and investigators have to gather all the evidence, including possibly seizing electronic information, to prove beyond a reasonable doubt that an offence has occurred. Any charges would ultimately be laid by the Public Prosecution Service of Canada, and fines would be directed to the Environmental Damages Fund.
"This is a really big file for us, and we are making sure that the people working on it have all the resources they need do this properly," Ms. McCready said.
"It wouldn't be good for the Canadian public … for us to jump the gun too early and potentially miss out on something that could end up being important for us."
Lawyers for Volkswagen Group Canada Inc. and affected owners reached a tentative settlement of a class-action suit on Monday. The Canadian settlement comes more than a year after the diesel-engine scandal erupted. The German auto maker admitted that it had installed so-called defeat devices that enabled diesel engines to pass regulatory emissions tests, then disabled the devices during regular use.
But Canadian owners have questioned why that settlement took six months longer than a U.S. agreement reached last June, and some are wondering what actions the Canadian government has been taking amid agreements and penalties already agreed to by the company in the United States.
Unlike the American system, Canada can't pursue the same kind of civil action against companies, Ms. McCready said. She added that the U.S. government is still investigating the company criminally.
A spokeswoman for Environment Minister Catherine McKenna said the minister would not be available for an interview to discuss the investigation.
"The minister is not going to be commenting on the details of an ongoing investigation. She can't do that. Nor can she interfere, I might add. That would be totally inappropriate as well," spokeswoman Caitlin Workman said.
Volkswagen AG agreed to buybacks and payments of $10.33-billion (U.S.) for U.S. owners of the affected vehicles. That amounts to $28,217 when converted to Canadian dollars at an exchange rate of $1.30 (Canadian), so some Canadian owners are feeling short-changed about their compensation, which is $20,000 on average based on $2.1-billion handed out to 105,000 owners.
"Canadian owners are getting ripped off again," said Doug Turner of London, Ont., who owns one of the affected vehicles.
"Everyone knows we spend more money on cars than Americans – shipping, taxes, delivery. So a Canadian would have spent more to purchase their VW diesel cars and you would expect them to get more compensation per vehicle," Mr. Turner said.
Volkswagen also agreed to pay $4.7-billion (U.S.) in remedial environmental payments and to develop clean-vehicle technologies.
The only fine paid in Canada is the $15-million (Canadian) the company agreed to pay to settle a Competition Bureau charge of misleading advertising.
Absent strong actions by the federal government, Canadian owners effectively had to ride the coattails of the U.S. process, said George Iny, who heads the Automobile Protection Association, a Montreal-based consumer advocacy group.
"If it weren't for the existence of the American class action, we wouldn't see this kind of money, this kind of an offer, and it would never have proceeded on a track this quickly," Mr. Iny said.
Canadians won't receive their compensation until after courts in Ontario and Quebec issue final approval of the proposed settlement – expected in March, 2017. That will be nine months after the U.S. settlement was announced last June.
He noted that while the $15-million fine for misleading advertising seems small in comparison to the U.S. amounts, it's actually large in Canadian terms.
And while Canadian owners are receiving a lower settlement than U.S. drivers, European owners of diesel-equipped Volkswagens are receiving even less than Canadians.
Separately, U.S. government officials and Volkswagen agreed Tuesday on a settlement that covers owners of 3.0-litre diesel equipped vehicles. The previous settlement–as in the Canadian agreement announced Monday –covered only owners of 2.0-litre diesel engine equipped vehicles.
Laura Stone