Harper government misled Canadians about Volkswagen investigation

The federal government misled Canadians about its investigation into Volkswagen during the fall election campaign, erroneously suggesting that it had acted swiftly on the emerging pollution cheating scandal, despite the absence of a paper trail to confirm its claims.

Internal emails from a federal vehicle testing facility showed no signs that enforcement officials had asked the top scientists at the lab to proceed with a full investigation, prior to September 2015 when the U.S. Environmental Protection Agency and the California Air Resources Board went public with details about their own probes. There was only a flurry of emails from the research facility about an investigation after the U.S. announcement on Sept. 18.

This was despite the fact that the manager of the section — responsible for emissions research, measurement and housing the testing facility — said that his division was aware of research showing a problem with pollution from Volkswagen vehicles at least since April 2014.

“We (the emissions research section) looked at it as the interest in doing on-road work and the value added to that,” said Fred Hendren, who manages the emissions research and measurement section at Environment and Climate Change Canada, when reached at his office last week. “That’s how we looked at it - not specifically to any other issue. But that’s all I can really say to you about that.”

The U.S. announcement set off waves of chatter within the Canadian department as news quickly spread that Volkswagen had been cheating on pollution tests for nearly seven years, fooling its customers and authorities about excessive levels of toxic gases released from their vehicles.

The scandal is forcing the German automaker to recall about 11 million vehicles worldwide to correct the problem.

The internal emails, released through access to information legislation, show that a series of September meetings were scheduled among the Canadian scientists and other government officials, soon after the American announcement. The staff also circulated the 2014 West Virginia University study that prompted the probe, along with media releases or public statements from the EPA in their email exchanges.

Four days after the EPA announcement, Environment Canada made its own announcement, stating that it “works closely with the EPA” and that it was responding rapidly to the emerging scandal by launching its own investigation.

“Upon becoming aware of this issue, Environment Canada acted quickly to examine potential implications for Canada and is in communications with its U.S. EPA counterparts and representatives of Volkswagen Group Canada Inc,” the department had said.

“After careful assessment of the known facts, Environment Canada has opened an investigation into this matter. An investigation involves gathering, from a variety of sources, evidence and information relevant to a suspected violation.”

The statement explained that in Canada, auto manufacturers must limit pollution from their cars based on rules set under the Canadian Environmental Protection Act. People who violate the rules can face penalties of up to $6 million for each offence and can also be imprisoned if convicted.

However, it didn't mention that an Environment Canada scientist attended a conference that began on March, 31, 2014 in San Diego where a member of the research team from West Virginia University gave a presentation about research showing that two Volkswagen models were releasing excessive amounts of nitrogen oxides, also known as NOx, into the atmosphere.

But it wasn't up to the Canadian scientists to decide whether to investigate in 2014, Hendren said. Instructions to probe the issue or begin new testing would need to come from a transportation division at the department that stays in contact with the EPA and other regulators, he explained.

The internal records, released through access to information legislation, show that the department's scientists were asked to test other manufacturers for compliance in 2014 and 2015, with one document showing that a 2012 Volkswagen Golf was to be tested for research purposes only.

“They provide us with the samples to test,” Hendren said. “All of the decision-making is done outside our group.”

Several Canadian officials declined to answer questions about the issue, with one scientist suggesting that there were still excessive federal efforts to control communications and prevent federal experts from speaking about their research, despite the newly-elected Liberal government's promise to end muzzling.

National Observer contacted Environment Canada's transportation division last Friday to ask about Hendren's comments. Its director responded on Wednesday saying that the department's media relations division would eventually respond to all questions.

A department spokeswoman said on Thursday that it was still working on responses, but needed more time to answer them and subsequent follow up questions.

The International Council on Clean Transportation (ICCT), based in Washington, D.C., which commissioned the original research project that prompted the investigations, said the case highlights the need for strong programs in government that ensure businesses aren't breaking the rules. This is something that North American regulators say they are starting to do - at least with vehicle manufacturers.

“We need to focus and fund compliance and enforcement programs that are robust and independent and that can actually take action, when there is a need to take action,” said Anup Bandivadekar, an engineer who is also director of the passenger vehicles program at the ICCT. “That’s really what it has highlighted for us.”

Bandivadekar said ICCT - a non-government organization - spent $70,000 on the project, originally awarding the contract to researchers at the Center for Alternative Fuels, Engines and Emissions at West Virginia University to demonstrate the importance of strong regulations in the U.S. The ICCT had expected the research team would conclude the U.S. cars were meeting standards and performing better than European models.

But instead, the researchers found excessive amounts of the smog-causing NOx pollution, which can cause acid rain as well as harmful pollution linked to respiratory illnesses or even premature deaths.

Both the California Air Resources Board and the U.S. Environmental Protection Agency have been praised for pursuing the matter and uncovering that the German manufacturer was cheating on its tests since 2008.

But if it hadn't been for the West Virginia University research, it isn’t clear how the U.S. Environmental Protection Agency and the California Air Resources Board would have pursued their own investigations. And Volkswagen owners around the world might have still been driving around today believing they were commuting in “clean diesel” cars.

The West Virginia University centre's research didn't initially reveal the names of the vehicle models it tested, but its director, Daniel Carder, said that the descriptions and specifications in the study would leave little doubt that Volkswagen models were the culprits.

“It’s rewarding that we were recognized for what we did,” said Carder in an interview. “We obviously don't set out to find fault with the manufacturer or even find fault with an agency.”

CARB spokesman Stanley Young noted that it had supported the research with Carder's team since it had concerns about diesel vehicles going back to 2012 due to reports about high pollution levels in European cars. Young also said CARB collaborated with the West Virginia University researchers because it wanted to find out whether there were similar problems with American cars.

"Once we realized this was the case, at least for VW models, CARB dedicated staff and lab time to finding out why this happened," Young said, adding that CARB also kept the EPA apprised of its concerns and testing.

But prior to the university study, Young said Volkswagen's vehicles were certified based on standardized testing that they were passing, year after year.

Volkswagen has since admitted that it installed software on its cars to cheat on the lab pollution tests and it has apologized for the deception, while committing to take responsibility and cooperate with investigators to resolve the situation.

But while the U.S. regulators launched a rigorous investigation to catch the problem in response to the new research, their federal counterpart in Canada was facing other challenges.

The Environment Canada branch that enforces environmental laws has also come under some scrutiny in recent weeks following embarrassing revelations from an internal report, obtained by Globe and Mail reporter Mark Hume, that recommended major improvements in the wake of internal surveys that found its enforcement officers were ignoring infractions and allowing people to break the law in order to keep in line with “priorities” established by the former Harper government.

Meantime, the department censored large portions of the internal records that it released about its response to the Volkswagen issue, citing sections of federal access to information legislation that can allow the government to withhold information about ongoing investigations or internal consultations, deliberations or advice within government. The response only said that some emails after the U.S. announcement would potentially affect the ongoing Canadian investigation.

Some internal emails from Environment Canada's emissions research division, sent before the investigation began, provided a glimpse into possible organizational issues affecting the Canadian department’s research and enforcement efforts. In one set of messages, the head of the engineering and vehicle testing facility at Environment Canada noted that scientists were being rushed to complete the pollution testing on the treadmill-like dynamometer in the lab.

“Just be cognisant of how much work we are doing in there on a daily/weekly basis,” wrote Peter Barton, the head of the testing facility, in the email, sent on Nov. 14, 2014, and released through federal access to information legislation. “In the past I have noticed that calibrations and verifications are being put aside to try and meet the schedule.”

Barton’s email came in response to a message from an analyst who informed him of a growing list of vehicles to test, including a VW Golf vehicle.

“Yes we do have a number of diesel vehicles that we’d like to test… which will keep things busy for a while,” the analyst wrote.

When asked what he meant, Barton referred questions to his department's media relations section. It replied in a statement, released two weeks later, saying that he was trying to encourage high quality results and was not expressing concerns about inadequate federal resources.

Several experts on emissions testing told National Observer that a failure to calibrate instruments prior to the tests could taint data and results.

Although in this case, calibrations would not have had any impact on detecting the cheating in an indoor lab since Volkswagen had installed software in its cars to control their toxic pollution levels, whenever it sensed that a test was underway, the experts explained.

Young, from the California Air Resources Board said it rigorously calibrates its own testing equipment in laboratories as well as its portable equipment on the roads, but explained that calibration wasn't the issue for VW vehicle testing.

“The issue for the VW diesel engines was the discrepancy between the NOx emissions in the laboratory while the car was being tested and the results outside of the laboratory, which was up to 40 times higher,” said Young. “The cheating was in the software that ran the emissions control (system).”

The scandal is also similar to another case involving cheating by seven heavy-duty vehicle manufacturers from the late 1990s that resulted in them paying more than a billion dollars to settle charges that they illegally poured millions of tonnes of toxic pollution into the atmosphere, the U.S. Department of Justice said in 1998. At that time, U.S. officials described the settlement as the largest in environmental enforcement history.

In Volkswagen's case, its engine software could detect common signs of a lab test on the dynamometer such as having only two wheels turning or no movement in the steering wheel.

Speaking at a sustainability conference hosted by Professional Engineers Ontario in Ottawa, on Feb. 3, Barton said that Volkswagen may have programmed its cars to have higher NOx emissions on the road in order to improve the fuel consumption performance.

“We’re doing a lot of testing, but I can’t really talk about it,” Barton told a small crowd, following a general presentation about the department's research.

Environment and Climate Change Canada said it has also expanded the scope of its vehicle testing, along with additional efforts to do on-road testing in partnership with the U.S. EPA and the California Air Resources Board.

But Barton said that his own division was not speaking directly to Volkswagen to get answers.

“We’re testing a lot of their cars and products but we’re not talking to them (at Volkswagen),” Barton said.

Spokeswoman Barbara Harvey also said in a statement that Barton was “not available for an interview” two days after National Observer had met the engineer at the Feb. 3 event and asked him questions about his research.

But Barton had noted at the event, with some amazement, that he had recently been allowed to give an interview regarding the Volkswagen saga to the Radio-Canada current affairs show, Découverte.

Harvey provided a statement after declining the interview request, explaining that the testing methods used by the West Virginia team to verify emissions with portable equipment was normally used for research and not for enforcement or compliance purposes. Environment Canada also considered the methods of the American research to be "innovative" when compared to the "usual" testing.

The department said it was still working on answering questions about why it failed to expand its testing of Volkswagen vehicles after it learned about the new research by Carder’s team at the West Virginia University centre.

The German automaker is still working with regulators on a fix to resolve the cheating, but its most recent proposal to fix its 2.0L vehicles was rejected by California regulators as inadequate. Overall, the company could be facing billions of dollars in costs associated with upgrading vehicles, class action lawsuits and fines associated with the scandal.

While the ICCT, which financed the study, was aware that regulators from California and the EPA had started to investigate the issues they had raised after the spring of 2014, Bandivadekar said his organization received no updates about the investigation until last September.

Carder, who also said he only learned about the cheating software in September, suggested that the scandal will lead to more improvements in different vehicle technologies.

“Things like this tend to be a catalyst for technology,” said Carder. “You’ll probably see an acceleration and more emphasis on some of the alternative strategies, like hybrid, or plug in hybrid or full hydrogen or whatever it may be.”

About 500,000 Volkswagen and Audi vehicles are affected by the cheating scandal in the U.S. and about 100,000 in Canada, estimate the government regulators. The affected models have been sold since 2008 up until 2015 and collectively represent tens of thousands of tonnes of toxic gases poisoning the atmosphere every year.

The ICCT’s Bandivadekar, who is based in San Francisco, said the large scope of this scandal demonstrates the importance of having strong government expertise, particularly at a time when regulators are expanding rules to crack down on pollution, including the heat-trapping greenhouse gases that contribute to climate change.

Regulators will need to achieve high standards, he explained, to ensure that new government policies can be enforced in the real world.

“This issue is not just about NOx,” Bandivadekar said. “We are making commitments on greenhouse gas emissions and fuel efficiency standards for cars and consumers. But also our policy people need to be quite cognisant that these standards are translating into real-world emissions reductions because at the end of the day, that’s what’s going to count when it comes to air pollution or the climate.”

Vehicle photos courtesy of Marc Besch, research associate at the Center for Alternative Fuels, Engines and Emissions at West Virginia University.