Volkswagen and Canadian Competition Bureau Agree Multi-Billion Settlement over Emission Scandal

Published: December 19, 2016

Updated: July 24, 2018

Author: Luke Jones



German automobile manufacturer Volkswagen has reached a settlement agreement with Canada’s Competition Bureau over the VW and Audi “emissions scandal”. The agreement now goes through an approval phase, which if passed would set in motion the buyback and compensation payments VW will need to make to consumers.

The settlement, which the Competition Bureau says will be up to $2.1 billion, will be the among the largest consumer settlements in Canadian history. In a statement on Monday, the bureau said its investigation found that Volkswagen Canada and Audi Canada has purposely misled customers as part of a wider global conspiracy.

In 2015, it was found that the German carmaker had been lying about the emissions sent out by diesel motors on a number of its vehicle models. The on-board technology had been purposely changed to show lower emissions output to fool regulators. It was found the engines were actually pushing out emissions far beyond legal amounts.

The scandal affected vehicles across the world and VW has faced similar investigations and settlements in other countries. In October, the company agreed a US$15 billion settlement in the United States. Canada’s settlement is similar to the one agreed south of the border. Volkswagen will either have to fix or buyback affected vehicles and pay owners a cash settlement.

“The result of this settlement was a determining factor in the Bureau reaching a consent agreement with Volkswagen Group Canada Inc. and Audi Canada Inc. (Volkswagen Canada and Audi Canada) that provides for an additional monetary penalty of $15 million,” the Bureau said in the statement.

“Consumers expect and deserve truth in advertising, particularly when it relates to such a significant investment,” said John Pecman, Commissioner of Competition, in the statement. “We are pleased that Canadians will now begin to receive compensation and that Volkswagen Canada and Audi Canada will address the impact this matter has had on the marketplace. The Bureau works to ensure that Canadians can trust advertising claims made by businesses and can be confident in their purchasing decisions.”