Volkswagen's emissions test-rigging scandal is shocking many in the industry because of how intentional the auto company's deceit seems to have been.

The German automaker said Tuesday that 11 million diesel vehicles worldwide were outfitted with software designed to rig emissions tests. The so-called defeat device is illegal in Canada and the U.S., and the company could face billions of dollars in fines for using it. On Tuesday, VW said it would set aside $9.6 billion to deal with the consequences of the scandal.

VW's president has apologized, but the scandal has sent the company's shares plummeting, and on Monday, the company's Canadian division said would also stop selling some 2015 models of diesel vehicles.

Kumar Saha, with the international business research and consulting firm Frost & Sullivan, said the situation is extremely uncommon. He said that while recalls happen all the time — it's just part of the engineering process — this scandal is shocking due to its large scale and the element of intentional deceit.

"This boils down to that trust between the consumer and the manufacturer that a product you're selling on the market, to the best of your knowledge, works a certain way. But this shows that they knew that it didn't work in a certain way but they were still trying to pass it off as something else," he said.

How testing works

Environment Canada requires vehicle manufacturers to follow testing methods laid out by the government, and then submit those results to the government.

All tests are done in manufacturers' labs. In Canada, vehicles to be tested must already have about 6,000 kilometres on them. Then, the vehicle's aerodynamics, weight and other factors are measured.

A trained driver runs the vehicle through test scenarios meant to simulate both highway and city driving conditions.

As of this year, the government rolled out new lab tests to simulate more driving conditions, such as driving in cold weather, driving with the air-conditioning on, and driving in high speed or quick acceleration scenarios. Vehicles are then rated based on the government's EnerGuide system

In addition to the federal government's regulations, some provinces have their own testing systems, such as the Drive Clean program in Ontario.

In Ontario, if a vehicle was made after 1998, emissions are tested via the vehicle's computer system, called an "on board diagnostic test."

If the vehicle was made before 1998, equipment is plugged into its exhaust pipe to measure emissions.

'The carmaker prepares the vehicle for the test, sort of like a student who crams for the exam, but three weeks later hasn't really integrated most of the material.'
- George Iny, Automobile Protection Agency

In light of the VW scandal, the Ontario government said it is looking to the federal government to see if changes need to be made.

"We are going to be working with the federal government in terms of determining an appropriate course of action," said Kate Jordan, a spokeswoman with the Ontario Ministry of Environment and Climate Change.

Environment Canada spokesman Mark Johnson said the government has stringent emission standards.

"The moment Environment Canada became aware of this issue, it acted quickly to examine potential implications for Canada, and is in communications with its U.S. EPA (Environmental Protection Agency) counterparts and representatives of Volkswagen Group Canada Inc.," said Johnson in an email. "If violations to Canadian regulations are found, enforcement action will be taken."

Call for updated tests 

George Iny, from the Automobile Protection Association, said cars are only tested in labs, not in real-world situations. As a result, emissions testing is not as accurate as it could be.

"The carmaker prepares the vehicle for the test, sort of like a student who crams for the exam, but three weeks later hasn't really integrated most of the material," he said.

"Now we need to see how the vehicles are performing in the field so that these things would be flagged more readily."

Saha said one of the biggest takeaways from the scandal is that emissions tests need updating.

"Because the level of technology or electronics and software in cars has just tripled over the last few years, and it's going to keep on growing, [regulatory agencies] might need to take into account the new reality of these hyper-technical cars."

Mileage is easier for consumers to track — but both Saha and Iny said the VW example is an unusual circumstance.

"There's no way for a customer to know if something like this is going on," Saha said. "Unless you find someone who's a hacking genius or something and an automotive buff at the same time, but there are not too many of those."


Volkswagen shares plunged more than 20 per cent on Monday, their biggest ever one-day fall, after news that the German carmaker had rigged U.S. emissions tests. (Shannon Stapleton/Reuters)

Past auto scandals 

VW is far from being the first car manufacturer to be hit with a scandal. Here are some of the biggest in recent years:

  • Kia, Hyundai fuel efficiency: The affiliated companies inflated their fuel efficiency figures and were forced to pay out almost $70 million after losing a class-action lawsuit.

  • Fiat Chrysler hack: The company was forced to recall 1.4 million vehicles after hackers showed they were able to take control of a Jeep via the internet.

  • GM ignition switch: 2.6 million General Motors vehicles had faulty ignition switches, which caused at least 100 deaths and forced the company to pay millions in claims and lawsuits.

  • Takata airbags: The company declared 33.8 million airbags defective because they could activate with too much force, blowing apart a metal inflator and sending shrapnel into the passenger compartment. 
  • Toyota accelerator, brake problems: The company recalled more than 14 million vehicles starting in 2009 to deal with sticking gas pedals, floor mats that could jam the accelerator, and brake issues. It paid more than $1.2 billion in fines and penalties for delays reporting information about defects.