The COVID-19 pandemic has been not only causing major social upheaval but disrupting business development and the economy as well. Nevertheless, since last March, we have seen many developments and new projects involving self-driving vehicles (SDV). Here is an overview. Distancing made easy thanks to contactless delivery In mid-April 2020, General Motors’ Cruise SDVs were dispatched to assist two food banks in the delivery of nearly 4,000 meals in eight days in the San Francisco Bay Area. Deliveries were made with two volunteer drivers overseeing the operation of the Level 3 SDVs. Rob Grant, Vice President of Global Government Affairs at Cruise, commented on the usefulness of SDVs: “What I do see is this pandemic really showing where self-driving vehicles can be of use in the future. That includes in contactless delivery like we’re doing here.”1 Also in California in April, SDVs operated by the start-up Nuro Inc. were made available to transport medical equipment in San Mateo County and Sacramento. Toyota Pony SDVs were, for their part, used to deliver meals to local shelters in the city of Fremont, California. Innovation: The first Level 4 driverless vehicle service In July 2020, Navya Group successfully implemented a Level 4 self-driving vehicles service on a closed site. Launched in partnership with Groupe Keolis, the service has been transporting visitors and athletes on the site of the National Shooting Sports Centre in Châteauroux, France, from the parking lot to the reception area. This is a great step forward—it is the first trial of a level 4 vehicle, meaning that it is fully automated and does not require a human driver in the vehicle itself to control it should a critical situation occur. Driverless buses and dedicated lanes in the coming years In August 2020, the state of Michigan announced that it would take active steps to create dedicated road lanes exclusively for SDVs on a 65 km stretch of highway between Detroit and Ann Arbour. This initiative will begin with a study to be conducted over the next three years. One of the goals of this ambitious project is to have driverless buses operating in the corridor connecting the University of Michigan and the Detroit Metropolitan Airport in downtown Detroit. In September 2020, the first SDV circuit in Japan was inaugurated at Tokyo’s Haneda Airport. The regular route travels 700 metres through the airport. A tragedy to remind us that exercising caution is key On March 18, 2018, in Tempe, Arizona, a pedestrian was killed in a collision with a Volvo SUV operated by an Uber Technologies automated driving system that was being tested. The vehicle involved in the accident, which was being fine-tuned, corresponded to a Level 3 SDV under SAE International Standard J3016, requiring a human driver to remain alert at all times in order to take control of the vehicle in a critical situation. The investigation by the National Transportation Safety Board determined that the vehicle’s automated driving system had detected the pedestrian, but was unable to classify her as such and thus predict her path. In addition, video footage of the driver inside the SDV showed that she did not have her eyes on the road at the time of the accident, but rather was looking at her cell phone on the vehicle’s console. In September 2020, the authorities indicted the driver of the vehicle and charged her with negligent homicide. The driver pleaded not guilty and the pre-trial conference will be held in late October 2020. We will keep you informed of developments in this case. In all sectors of the economy, including the transportation industry and more specifically the self-driving vehicles industry, projects have been put on hold because of the ongoing COVID-19 pandemic. Nevertheless, many projects that have been introduced, such as contactless delivery projects, are now more important than ever. Apart from the Navya Group project, which involves Level 4 vehicles, all the initiatives mentioned concern Level 3 vehicles. These vehicles, which are allowed on Quebec roads, must always have a human driver present. The recent charges against the inattentive driver in Arizona serve as a reminder to all drivers of Level 3 SDVs that regardless of the context of an accident, they may be held liable. The implementation of SDVs around the world is slow, but steadily gaining ground. A number of projects will soon be rolled out, including in Quebec. As such initiatives grow in number, SDVs will become more socially acceptable, and seeing these vehicles as something normal on our roads is right around the corner. Financial Post, April 29, 2020, “Self-driving vehicles get in on the delivery scene amid COVID-19,”.
Our lawyers are experts in all legal aspects of transportation and transportation infrastructure, able to draft innovative agreements tailored to every mode of operation and analyze carrier liability for any mode of transportation.
Our lawyers are experts in all legal aspects of transportation and transportation infrastructure, able to draft innovative agreements tailored to every mode of operation and analyze carrier liability for any mode of transportation.
- Civil liability of air, road, and rail carriers
- Marine, air, and land transport insurance
- Civil liability of owners and operators of aircraft, ships, and vehicles
- Transportation and charter contracts and charter-parties
- Purchase, sale, and financing of ships and aircraft
- Provincial and federal regulations and shared jurisdiction
- Agents, forwarders, and other intermediaries
- Partnership agreements
- Design, construction and operating agreements
- Concession agreements
- Financing agreements
- Surveillance, maintenance and tolling agreements
- Negotiations pertaining to rights-of-way and other real rights required to exploit rights-of-way
- Agreements for services incidental to transportation
- Represent businesses and insurers in connection with liability claims for property damage and personal injury suffered in transit (various modes of transportation)
- Represent businesses and insurers in connection with claims for losses and damage to cargo (various modes of transportation)
- Represent insurers and owners with regard to damage to aircraft or airport facilities and personal injury and damage resulting from air accidents
- Strategic advice to clients regarding excess liability insurance in cases of catastrophic events with damage in excess of $100 million
- Strategic advice to clients on the interpretation of operating, cooperation, and indemnity agreements applicable in cases of catastrophic events involving multiple carriers and several categories of victims, including multi-jurisdictional class actions
- Advise a bidder for the construction, operation, maintenance, and financing, on a public-private partnership (PPP) basis, of road infrastructure for highways A-25 and A-30
- Trade negotiations with suppliers in the rail transportation sector and representation in connection with warranty claims
- Interpretation of service agreements in the public transit sector
- Draft and implement an agreement for public transit ticket sales and revenue collection
- Represent a resource development and transportation company before the Canadian Transportation Agency
- Acquire dedicated rights-of-way and negotiate with government authorities and regulators for the creation of a bus lane
- Analyse the scope of acquired rights for carriers and representation before municipal authorities
- Sale of affiliates of a rail transportation company and a railcar ferry operation
- Legal opinion, advice, and representation in anticipation of the operation of a rail link between downtown Montréal and the Pierre-Elliott-Trudeau airport
- Legal advice on the obligation to decontaminate certain rail infrastructure
- Legal advice and representation in several matters regarding the application of provincial and municipal legislation at the Pierre-Elliott-Trudeau and Mirabel airports
- Negotiation and conclusion of a cost-sharing agreement for the construction of road infrastructure for a mining company in connection with the Plan Nord
- Represent the seller in connection with the transfer of a rail line to an Aboriginal cooperative
- Negotiate an agreement for the operation of a rail link by car blocks in connection with a mining project, including the analysis of the tax efficiency of the operation
Introduction In January 2018, the Senate's Standing Committee on Transport and Communications (hereinafter the "Committee"), chaired by the Hon. David Tkachuk, published a report on the impact of automated vehicles in the country at the behest of the Minister of Transport of Canada. The first generation of these vehicles are already travelling on our roads, and their increased use will probably have far-reaching social consequences, such as a reduction in the number of accidents 1 and greater transport freedom for the elderly, but also, potentially, the loss of jobs in the country. The Committee issued sixteen (16) recommendations relating to smart vehicles2, in particular on these vehicles' cybersecurity and insurance coverage, urging the government to act now, since "technology will overtake regulations". Automobile manufacturers seem to hold the same opinion. Shawn Stephens, Planning and Strategy Director at BMW Canada, says that "the technology is ready. The manufacturers are ready. It is the laws and the government that are slowing us down [our translation]"3. Plug-in vehicles and automated vehicles Plug-in vehicles are described by the Committee as relying on to two kinds of technologies: the ones designed for “infoentertainement” and the ones relating to communication between vehicles. These plug-in vehicles can therefore receive information on approaching vehicles, for example on their speed, relevant routes, and on the services available along the selected route. For their part, automated vehicles make different degrees of autonomous driving possible by relying on various technologies. The automation of these vehicles is classified between levels 0 and 5, that is, from no automation at all to complete automation, which refers to a vehicle that is entirely self-driven, without any possibility of human input.4 The smart cars designation encompasses both these categories. Cybersecurity The Committee recommends that a best practices guide be adopted with regard to cybersecurity. Indeed, the threat of cyberattacks targeting smart cars has been worrying the automobile industry for some years, to such an extent that the Automotive Information Sharing and Analysis Centre was established in July 2015, to allow various manufacturers to share their knowledge and cooperate on this topic. A cyberattack against a smart vehicle could target the integrity of its electronic data, and therefore the safety of its passengers, as well as the personal information of the drivers obtained from the vehicle. As a matter of fact, a recommendation for drafting a bill aimed at protecting the personal data of smart vehicles' users was also issued. Insurance Considering the real threat of cyberattacks targeting smart vehicles, manufacturers must to take out an insurance policy covering cyberattacks. On another note, KPMG deems that, as a result of the use of automated vehicles, accidents will drop by 35% to 40%, while repair costs will increase by 25% to 30%5. So, one can reasonably expect an impact on drivers' insurance premiums. Moreover, it is possible that the liability in an accident involving an automated vehicle be transferred from the vehicle's driver to its manufacturer by means of amendments to the Automobile Insurance Act6, or of new laws specifically relating to the driving of automated vehicles. These changes could have significant consequences on the various laws regulating automobile insurance in the country7. The Committee therefore issued the recommendation for Transport Canada to oversee the impact of plug-in and automated vehicles on the automobile insurance industry. Some initiatives and challenges The Motor Vehicle Test Centre in Blainville is currently working on establishing whether or not smart vehicles comply with current Canadian security standards. We have also learned from the Committee's Report that the Canadian Regulatory Cooperation Council is currently working with the United States on the various issues connected to plug-in and automated vehicles. Despite the numerous initiatives on record, so far only Ontario has introduced legislation specifically regulating the use of automated vehicles on the province's roads. 8. Québec will have to go down this path in order to fill the current legal vacuum9. Conclusion As discussed in our bulletin of February 201710, the growing number of automated vehicles on the roads of Québec cannot be taken lightly. A legislative framework specifically providing for this kind of vehicle is of the essence when we consider that, by some projections, a quarter of the total worldwide vehicles will be defined as smart by 203511. Plug-in vehicles are already traveling on the roads of Québec, as are various levels of automated vehicles. It is therefore vital for all levels of government to catch up with these technologies. Regulating the driving of smart vehicles is a hot topic pertaining to the development of artificial intelligence. As such, it needs to be followed closely. It is estimated that up to 94% of road accidents are caused by human error, see Standing Senate Committee on Transport and Communications, "Driving Change: Technology and the Future of the Automated Vehicle", Ottawa, January 2018, page 29. Standing Senate Committee on Transport and Communications, "Driving Change: Technology and the Future of the Automated Vehicle", Ottawa, January 2018. MCKENNA, Alain, La Presse, « Véhicules autonomes : « Ce sont les lois et le gouvernement qui nous freinent », Montréal, 1 February 2018, online: http://auto.lapresse.ca/technologies/201802/01/01-5152247-vehicules-autonomes-ce-sont-les-lois-et-le-gouvernement-qui-nous-freinent.php. See GAGNÉ, Léonie, Need to Know, Bulletin Lavery, de Billy, “Autonomous vehicles in Québec: unanswered questions” Montreal, February 2017. Standing Senate Committee on Transport and Communications, "Driving Change: Technology and the Future of the Automated Vehicle", Ottawa, January 2018, page 65. Automobile Insurance Act of Québec, CQLR c. A-25.Automobile insurance falls under provincial jurisdiction. Pilot Project - Automated Vehicles, O Reg 306/15. The Government of Québec is currently assessing Bill 165, which aims at, among other things, amending the Highway Safety Code and regulating the driving of autonomous vehicles. Supra, note 4. Boston Consulting Group, (2016), Autonomous Vehicle Adoption Study.
The March 22, 2017 Budget of the Government of Canada, through its “Innovation and Skills Plan” (http://www.budget.gc.ca/2017/docs/plan/budget-2017-en.pdf) mentions that Canadian academic and research leadership in artificial intelligence will be translated into a more innovative economy and increased economic growth. The 2017 Budget proposes to provide renewed and enhanced funding of $35 million over five years, beginning in 2017–2018 to the Canadian Institute for Advanced Research (CIFAR) which connects Canadian researchers with collaborative research networks led by eminent Canadian and international researchers on topics including artificial intelligence and deep learning. These measures are in addition to a number of interesting tax measures that support the artificial intelligence sector at both the federal and provincial levels. In Canada and in Québec, the Scientific Research and Experimental Development (SR&ED) Program provides a twofold benefit: SR&ED expenses are deductible from income for tax purposes and a SR&ED investment tax credit (ITC) for SR&ED is available to reduce income tax. In some cases, the remaining ITC can be refunded. In Québec, a refundable tax credit is also available for the development of e-business, where a corporation mainly operates in the field of computer system design or that of software edition and its activities are carried out in an establishment located in Québec. This 2017 Budget aims to improve the competitive and strategic advantage of Canada in the field of artificial intelligence, and, therefore, that of Montréal, a city already enjoying an international reputation in this field. It recognises that artificial intelligence, despite the debates over ethical issues that currently stir up passions within the international community, could help generate strong economic growth, by improving the way in which we produce goods, deliver services and tackle all kinds of social challenges. The Budget also adds that artificial intelligence “opens up possibilities across many sectors, from agriculture to financial services, creating opportunities for companies of all sizes, whether technology start-ups or Canada’s largest financial institutions”. This influence of Canada on the international scene cannot be achieved without government supporting research programs and our universities contributing their expertise. This Budget is therefore a step in the right direction to ensure that all the activities related to artificial intelligence, from R&D to marketing, as well as design and distributions, remain here in Canada. The 2017 budget provides $125 million to launch a Pan-Canadian Artificial Intelligence Strategy for research and talent to promote collaboration between Canada’s main centres of expertise and reinforce Canada’s position as a leading destination for companies seeking to invest in artificial intelligence and innovation. Lavery Legal Lab on Artificial Intelligence (L3AI) We anticipate that within a few years, all companies, businesses and organizations, in every sector and industry, will use some form of artificial intelligence in their day-to-day operations to improve productivity or efficiency, ensure better quality control, conquer new markets and customers, implement new marketing strategies, as well as improve processes, automation and marketing or the profitability of operations. For this reason, Lavery created the Lavery Legal Lab on Artificial Intelligence (L3AI) to analyze and monitor recent and anticipated developments in artificial intelligence from a legal perspective. Our Lab is interested in all projects pertaining to artificial intelligence (AI) and their legal peculiarities, particularly the various branches and applications of artificial intelligence which will rapidly appear in companies and industries. The development of artificial intelligence, through a broad spectrum of branches and applications, will also have an impact on many legal sectors and practices, from intellectual property to protection of personal information, including corporate and business integrity and all fields of business law. In our following publications, the members of our Lavery Legal Lab on Artificial Intelligence (L3AI) will more specifically analyze certain applications of artificial intelligence in various sectors and industries.
Drones, also known as “UAVs” (for Unmanned Aerial Vehicles) have become more popular in Quebec over the past few years. From the surveillance of quarries and gravel pits, industrial sites, pipelines, farmland, open air mines and construction sites to package delivery, the collecting of aerial images to promote municipalities, film-making and property sales, there are countless uses for drones. However, it should be kept in mind that the use of drones is regulated by the federal government, and certain uses are subject to special rules that may include obtaining a special flight operations certificate (“SFOC”). Legislative and regulatory framework The use of drones is governed by the Aeronautics Act1, and in particular the Canadian Aviation Regulations2. The applicable rules differ depending on whether the drone constitutes an “unmanned air vehicle” or a “model aircraft” within the meaning of the Regulations. The difference between these types of aircraft depends on how much they weigh (more or less than 35 kg) and the proposed use (whether recreational or non-recreational). A “model aircraft” is an aircraft weighing up to 35 kg that is used for recreational purposes and that is not designed to carry persons or other living creatures3. An “unmanned air vehicle” is a power-driven aircraft, other than a model aircraft, that is designed to fly without a human operator on board4. In other words, an unmanned air vehicle is a drone that weighs over 35 kg, or one that weighs less than 35 kg if it is used for nonrecreational purposes. Unmanned air vehicles: SFOC required unless exempted Section 602.41 of the Regulations5 prohibits the operation of an unmanned air vehicle in flight except in accordance with an SFOC or an air operator certificate6. Section 603.66 of the Regulations also prohibits the use of an unmanned air vehicle unless the terms of an SFOC issued by the Minister are complied with. An SFOC is issued by the Minister pursuant to section 603.67 of the Regulations. The applicant must demonstrate the ability to conduct the proposed flight operation in accordance with the Special Flight Operations Standards7, which also indicate the form and manner of submitting an application. In theory, an SFOC is therefore required to use an unmanned air vehicle. However, the Act8 allows the Minister or a Department of Transport official authorized for such purpose to exempt, on any terms and conditions that may be specified, any person, aeronautical product, aerodrome, facility or service, or any class of persons, aeronautical products, aerodromes, facilities or services, from the application of Regulations. Two exemptions are currently available for individuals operating unmanned air vehicles for non-recreational purposes. The first exemption covers the use of drones with a take-off weight of more than 2 kg but less than 25 kg, subject to compliance with several conditions, including the following: General conditions: have at least $100,000 of civil liability insurance and at least $100,000 of insurance covering the operation of a UAV, not operate a UAV within eight hours after consuming an alcoholic beverage, not operate a UAV if the pilot is likely to suffer from fatigue making him unfit to properly perform his duties, make operational and emergency equipment available to the flight crew, etc. Flight conditions: be able to see the UAV directly, not fly the UAV at an altitude of more than 300 feet, not fly in Class G airspace9, only operate the UAV from a single control station, not conduct a take-off if the UAV has frost, ice or snow on its critical surfaces, not operate a UAV over a built-up area or open-air assembly of persons, maintain unassisted visual contact with the UAV to be aware of its position and able to visually scan the airspace in which it is being used in order to identify and avoid air traffic or objects, etc. Conditions related to the crew (pilot): have successfully completed a ground training program for pilots and be trained on the UAV system and qualified for the area and type of flight, etc. The second exemption applies to drones weighing less than 2 kg that are used for non-recreational purposes, which involve similar conditions to the first exemption, although they are fewer in number. If these conditions are not met, an SFOC must be obtained, just as for the use of drones weighing more than 35 kg for recreational purposes. Model aircraft: safety first The use of a “model aircraft” (a drone weighing less than 35 kg used for recreational purposes) does not require a specific permit. However, such an aircraft must be flown safely. Section 602.45 of the Regulations prohibits any person from flying a model aircraft into a cloud or in a manner that is or is likely to be hazardous to aviation safety. In the absence of a definition in the Regulations of what constitutes the “safe” use of a model aircraft, Transport Canada has published a circular to inform operators of model aircraft and unmanned air vehicles of the general guidelines and safety practices. In the circular, Transport Canada recommends for example that certain safety considerations be followed, such as not using a drone: within 9 km of an aerodrome (ex. an airport); within 150 m of people, animals, buildings, structures or vehicles; in populated areas or over a crowd, such as during sporting events, concerts, festivals or fireworks; near moving vehicles, highways, bridges, busy streets or any other place where drivers could be endangered or distracted; in restricted airspace (over military bases, prisons or forest fire areas), etc.10 Penalties for not following the rules A person operating a flight without an SFOC when one is required is liable to a fine of up to $5,000 for an individual and $25,000 for a corporation, and a person who fails to comply with the conditions of an SFOC is liable to a fine of up to $3,000 for an individual and $15,000 for a corporation11. The Criminal Code12 also creates an offence for the unsafe operation of an aircraft that endangers the safety of other aircrafts,13 which could lead to a fine or imprisonment for life. Compliance with the Regulations does not release the drone operator from complying with applicable provincial (and municipal)14 or federal15 regulations. In conclusion, note that an SFOC is required in the following cases: The aircraft weighs more than 35 kg, regardless of the proposed use; The aircraft weighs less than 35 kg and the proposed use is nonrecreational. Where an aircraft weighing less than 25 kg is used for non-recreational purposes, the operator may be exempt from the requirement of obtaining an SFOC provided he meets several conditions. If the operator cannot comply with the conditions to be met for any of the applicable exemptions, he will have no choice but to apply for an SFOC. Lastly, no permit is required to use a drone weighing 35 kg or less for recreational purposes, although the drone must be operated safely. Since the current exemptions will expire on December 21, 2016, the rules could change. Aeronautics Act, R.S.C. 1985, c. A-2 (the “Act”). Aviation is considered by the courts to be a matter of national importance and it therefore falls under the federal government’s jurisdiction to make laws for the peace, order and good government of Canada; see in this regard Johannesson v. Municipality of West St. Paul,  1 S.C.R. 292; Air Canada v. Ontario (Liquor Control Board),  2 SCR 581; Quebec (Attorney General) v. Canadian Owners and Pilots Association  2 SCR 536. Canadian Aviation Regulations, 1996, SOR/96-433 (Can. Gaz. II) (the “Regulations”). Supra, footnote 2. S. 101.01 of the Regulations. Supra, footnote 2. We will not discuss this type of certificate, which applies to commercial air service operators. Special Flight Operations Standards, in the “General Operating and Flight Rules Standards”, Part VI, Standard 623 of the Regulations. Supra, footnote 1. Section 601.02 (1) of the Regulations states that “Class G” is uncontrolled airspace. General Safety Practices, in “Model Aircraft and Unmanned Air Vehicle Systems”, 2014, Advisory Circular (AC) No. 600-002. Section 103.08 (1) and (2). R.S.C. 1986, c. C-46. For example, section 77 of the Criminal Code, supra, footnote 12. For example, section 85 of the Municipal Powers Act, CQLR, c. C-47.1 (which allows municipalities to adopt a by-law to ensure peace, order, good government and the general welfare of its citizens) could give municipalities the authority to regulate drones. Would such a regulation be constitutional? According to the jurisprudence, the federal government’s jurisdiction over aviation is exclusive, which means, according to the doctrine of interjurisdictional immunity, that a province would not have the authority to regulate or prohibit the use of drones. However, if the effect of a valid provincial statute (adopted in accordance with a matter of provincial jurisdiction) is to govern the use of drones, the question is whether the courts would apply the doctrine of federal paramountcy, allowing the provincial legislation to apply concurrently in the absence of an actual conflict. See, among other things, the Canadian Charter of Rights and Freedoms, S.C. 1982, c. 11 (U.K.); the Criminal Code, R.S.C. 1986, c. C-46.; the Environment Quality Act, CQLR 1978, c. Q-2; the Privacy Act, R.S.C. 1985, c. P-21; the Personal Information Protection and Electronic Documents Act, S.C. 2000, c. 5; the Radiocommunication Act, R.S.C. 1985, c. R-2; the Transportation of Dangerous Goods Act, S.C. 1992, c. 34 and the National Parks of Canada Aircraft Access Regulations, 1997, SOR/97-150 (Can. Gaz. II).