VW diesel emissions scandal: What Canadians need to know

A VW Golf is pictured inside the so-called cat towers of car manufacturer Volkswagen AG (VW). (AFP / Tobias Schwarz)

German automaker Volkswagen AG admits that it rigged emissions tests so it would appear that its diesel-powered cars were emitting fewer nitrogen oxides, which can contribute to ozone buildup and respiratory illness.

The crisis widened on Tuesday as the company made the stunning admission that 11 million of its diesel vehicles worldwide were fitted with same cheating software.

Here are the answers to some questions Canadians are asking about the ongoing crisis.

Q. What appears to be wrong with the vehicles?

A. The software turned on the cars' full emissions control systems when the cars were being tested by the U.S. government, and then turned off those systems during normal driving. Experts think VW may have wanted to avoid the cost of additional hardware to meet tough U.S. emissions standards, so it came up with a cheaper software fix. The software also would have helped the cars' fuel economy numbers, since they get better gas mileage when the emissions control system is turned off.

Q. Which vehicles has Volkswagen Canada told dealers to stop selling?

Vehicles worldwide with Type EA 189 diesel engines are affected. Volkswagen Canada has said it will stop selling diesel versions of the 2009 through 2015 Jetta, the 2010 through 2015 Golf, the 2013 through 2015 Beetle, the 2012 through 2015 Passat and the 2009 through 2015 Golf Wagon.

Q. Volkswagen owns Audi. Are any Audis affected?

Audi Canada confirmed that 2009 through 2015 Audi A3s featuring 2.0-litre Diesel engines are also affected.

Q. What should customers consider doing?

A. Volkswagen will fix the cars for free as soon as it develops a remedy. Owners will be notified when there's a fix. In the meantime, the cars are safe to drive. Car buying site Edmunds.com cautions owners against selling the cars right now if they don't have to, since they can expect a lower trade-in value.

Q. Are any owners seeking legal recourse?

The Ontario law firms Sutts Strosberg LLP, Koskie Minsky and McKenzie Lake have jointly filed a class-action lawsuit against Volkswagen Canada and Volswagen AG seeking damages on behalf of Canadian owners. Merchant Law Group LLP has also launched a class-action suit.

Q. Is Environment Canada taking action?

Environment Canada issued a statement Tuesday that said it has opened an investigation. “Canadian legislation and regulations prohibit vehicle manufacturers and importers from equipping a vehicle with a defeat device,” the statement said. “If officers uncover sufficient evidence of violations, enforcement action will be taken in accordance with the Compliance and Enforcement Policy for the Canadian Environmental Protection Act,” it went on.

Q. What are potential penalties under the Canadian Environmental Protection Act?

“The maximum fine which a large corporation would face for conviction on indictment is $6 million for each offence,” according to Environment Canada’s statement. “Violators may also have to forfeit any profits earned as a result of an offence,” the statement went on. “Corporate officials can be prosecuted if they authorize, accept or participate in any violation … (and) a range of sentences may be available upon conviction, including fines and possible imprisonment.”

Q. How has Volkswagen responded?

A. Volkswagen Group CEO Martin Winterkorn has ordered an internal probe. In a video statement Tuesday, he said: "I am endlessly sorry that we have disappointed this trust. I apologize in every way to our customers, to authorities and the whole public for the wrongdoing."

Q. Does this affect other diesel vehicles?

A. West Virginia University, which conducted the tests that led to the discovery of Volkswagen's software, has also tested BMW diesels and the BMWs passed.

Q. What's next?

A. The U.S. government could fine Volkswagen US$37,500 per vehicle for the violations, a total of more than US$18 billion. The U.S. Justice Department, the California Air Resources Board and German authorities are also investigating. Winterkorn could also face scrutiny from Volkswagen's board, which will meet soon.

Q. How has this affected VW stock?

During the past two days, the VW stock price has fallen more than 30 per cent.

With files from The Canadian Press and CTV Windsor