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GM Canada may avoid penalties over deadly safety flaws

This April 1, 2014 photo shows the ignition switch of a 2005 Chevrolet Cobalt in Alexandria, Va. A federal judge in Texas on Thursday, April 17, 2014 denied an emergency motion that would have forced General Motors to tell owners of 2 million recalled cars to stop driving their vehicles until their ignition switches are repaired.

Molly Riley/The Associated Press

General Motors of Canada Ltd. has told Transport Canada that the company did not know before February that some vehicles it was selling here contained defective ignition switches, raising questions about whether Ottawa can penalize the auto maker as the U.S. government has, with a record fine on General Motors Co.

The Detroit-based parent of GM Canada acknowledged last week that it broke U.S. laws by failing to notify the U.S. government in a timely manner that Chevrolet Cobalts, Saturn Ions and other vehicles built in the 2000s contained defective ignition switches. The defects led to car accidents that killed 12 Americans and contributed to the death of a Canadian driver in a crash last year before the vehicles were recalled in February.

GM Canada has made no such admission and has said it is assisting investigations being undertaken by Transport Canada.

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"In order for us to have a good case to prosecute, it does matter when GM Canada knew," Transport Minister Lisa Raitt said Thursday, hours before officials from her department said they had been told by GM Canada that the company was unaware of the defects until it issued the recall.

"What usually happens is that GM Canada finds out at the same time as everybody else, because that's how it's handled; the decision is made at the head office in the United States," Ms. Raitt told reporters on a conference call from Germany, where she was attending a conference.

If the federal government prosecutes GM Canada under the Motor Vehicle Safety Act, the company could face a fine of $1-million. The U.S. Transportation Department fined the company $35-million (U.S.) and is penalizing it an additional $7,000 a day until GM submits a report to the government on why it did not recall the vehicles until this year despite evidence of problems going back to at least 2007.

Ms. Raitt's office said she was unavailable later Thursday to discuss what the government will do now that GM Canada has said it had no knowledge of the defect until the recall in February.

In some cases, the defective ignition switches led to engine shutdowns, which meant drivers were unable to steer their cars and airbags did not deploy.

Dany Dubuc-Marquis of Granby, Que., was killed last year after he lost control of the 2007 Chevrolet Cobalt he was driving and went off the road. His father, Normand Dubuc, complained to Transport Canada, when he noticed that the car's airbags did not appear to have deployed.

In an interview, Mr. Dubuc said he's certain even more people have been injured or killed as a result of the faulty ignition switches. He acknowledged the $35-million fine the U.S. government imposed on GM, but called the amount "ridiculous" compared with the damage the faulty vehicles have caused.

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The family of Nick Baker, a Cornwall, Ont., man, is suing GM Canada, its parent company and the supplier of ignition switches after he died when his Saturn Ion compact veered across a county road in a crash for which a cause has not been found.

The company has recalled 368,000 vehicles in Canada and 2.6 million because of the ignition switches and millions of other vehicles since then to address other problems.

U.S. regulators and politicians have been aggressive in seeking answers from GM since the recalls were announced in February, although the National Highway Traffic Safety Administration has been criticized for not being aggressive enough when it first became aware in 2007 that there might be problems with defective ignition switches in GM vehicles.

GM's chief executive officer Mary Barra was summoned to Washington to appear before two Congressional committees to explain why it took so long for the auto maker to recall the vehicles.

Attempts by opposition MPs to force Ms. Raitt and company officials to appear before the House of Commons Transport Committee failed earlier this year, when the Conservatives sent a motion on the issue by NDP MP Hoang Mai to an in-camera session.

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About the Authors
Auto and Steel Industry Reporter

Greg Keenan has covered the automotive and steel industries for The Globe and Mail since 1995. He also writes about broader manufacturing trends. He is a graduate of the University of Toronto and of the University of Western Ontario School of Journalism. More

Parliamentary reporter

Kim Mackrael has been a reporter for The Globe and Mail since 2011. She joined the Ottawa bureau Sept. 2012. More


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