This is John Schmeiser, CEO for the Western Equipment Dealers Association. Thank you for joining us for this edition of Legislative Landscape. The topic that we would like to address today is the connectivity or interoperability of farm and construction equipment. WEDA members may recall that back in April we asked you to send a letter of support on this issue to the Chair of the Standing Committee on International Trade. I am pleased to advise that we are making progress, and felt it was necessary to provide you with an update.
Interoperability means the ability to “connect,” or “plug and play” pieces of equipment made from different manufacturers. Connecting pieces of equipment or implements from different manufacturers has been an accepted and legal practise within the industry for over the past 100 years. We seen many Canadian based manufacturers, like Honey Bee or MacDon to name a few, develop innovative combine headers that are in demand by our customers, and are perhaps more suited to local conditions and commodities than the original OEM header.
It goes without saying that our dealers listen to our customer needs and provide solutions at the time of equipment purchases. Customers demand connectively between implements and equipment and this flexibility is very important as they consider the equipment needs for their farming operations.
However, interoperability in Canada is being challenged with the advent of new technologies, encrypted digital interfaces, digital locks, computer programs and most critically, the copyright protection provisions outlined in the new USMCA.
When our association had the opportunity to review the copyright language in the new USMCA, we noticed that the language proposed does not provide the clarity that a Canadian manufacturer or dealer needs to ensure that different pieces of equipment can connect and operate in a straightforward manner.
In contrast, current U.S. law makes exceptions for legally modifying motorized agricultural equipment for the purpose of connectivity. The North American agricultural equipment market is fully integrated, so having two sets of rules does not make sense. Without a language change in the USMCA, Canadian manufactures are at serious financial risk, dealers will have less product options to present to the customer, and customers will have less choice. It’s definitely not in the public interest of the industry to have this discrepancy between Canada and the United States.
According to the Government of Canada trade data, the agricultural equipment industry in Canada exports over $2.3 billion of agricultural equipment a year. The U.S. accounts for about $1.9 billion of this. Therefore, it is very important that Canadian agricultural equipment be able to interoperate with American platforms for this continued success. It is crucial that the USMCA ensures that it protects and allows the Canadian agricultural industry to not only maintain its status as a world leader, and that dealers and customers continue to have the choice of implements that has become common in the industry.
Therefore, due to the seriousness of the issue, WEDA has taken an aggressive lobbying approach with the Canadian government. In addition to many letters of support that dealers sent in, we are working in partnership with the Agricultural Manufacturers of Canada.
Key association members have appeared before the Standing Committee on International Trade to seek language clarity. And we have had meetings and discussions with Canada’s Competition Bureau as this can be viewed as restricting healthy competition.
We also reached out to Member of Parliament Jeremy Patzer of Cypress Hills- Grassland. He and his staff have provided us with a lot of guidance and assistance and have opened doors for us to ensure we are speaking to the right people.
MP Patzer also raised this on the floor of the House of Commons and when he did that, it got the attention of Minister of Justice & Attorney General, Hon. David Lametti. Prior to entering politics, Minister Lametti was a copyright lawyer. It was satisfying to get his support as he quickly understood the issue.
This led to discussions with Members of Parliament (MPs) from all political parties, and we have received all party support on this national issue.
The lead on the file is Minister of Innovation, Science and Industry, Navdeep Bains. Minister Bains has provided his support and has directed his department officials to address this issue in a timely manner.
The federal government is in the process of preparing the necessary language in Regulation form as an interim step, with the ultimate goal of changing the language in the Canadian Copyright Act. Addressing this through regulation is a quicker avenue for us than through Parliament, especially with the House of Commons currently not meeting on a regular basis due to the Covid-19 pandemic.
Both WEDA and the Agricultural Manufacturers of Canada have been invited to review the proposed language and we will ensure that the language includes the commercial application of interoperability and that it is consistent and harmonized with the U.S. language. We also want the language to remove any ambiguity, so Canadian and U.S. based manufacturers and dealers can continue to operate under the same rules.
In closing, connectivity of farm equipment ensures that no one manufacturer can have a monopoly in the market. Connectivity spurs innovation and creativity while giving our agricultural producers choices that best suit their farming needs and conditions. Continued connectivity allows for the Canadian agricultural manufacturing industry to continue to thrive and develop first-class products that are in demand across the world. And continued connectivity will allow dealers to offer more choices and options to their customers at the time of purchase.
This issue is also a great example of where dealers and manufacturers, through their associations, can come together to jointly address issues for the betterment of our dealers and industry. WEDA believes that our dealer members want to see us work in cooperation with the manufacturers and we will continue to explore issues where we have common goals and interests.
Although we are not there yet, we are confident that with our joint effort on this connectivity issue, that we will get this done. We will keep you updated as things progress. If you have questions or concerns on this, or any other government affairs initiative, please do not hesitate to contact our office.
Podcast Host John Schmeiser