Lots of work ahead, says new CADA Chairman

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Steve Chipman

Steve Chipman

Steve Chipman, CADA Laureate and one of Canada’s most respected and influential dealers, is the newly-elected Chairman of the Canadian Automobile Dealers Association (CADA).

Canadian auto dealer sat down with Chipman for an exclusive interview at the Western Canadian Dealer Summit in Las Vegas, Nev. Chipman is the President & CEO, of the Winnipeg, Man.-based Birchwood Automotive Group.

During his tenure as CADA Chairman, Chipman says he will follow the good advice that a former law school associate provided him when he accepted a senior leadership position with a law society at that time. “It’s working well. Don’t break it.”

“CADA has strong staff in Ottawa and Toronto. They are on the right path,” says Chipman. “They are working for the best interests of dealers in Canada.”

The highest profile issue that CADA is wrestling with at the moment is battling the Canada Revenue Agency’s (CRA) contention that the income dealers earn for arranging for financial services for their customers should no longer be considered GST or HST exempt. The CRA has been auditing dealers and demanding that they pay back taxes that dealers have never collected.

CADA assembled a specialized team of lawyers, including those who specialize in finance and tax law, accounting firms, and a research firm to vigorously defend the positions that dealers are not simply being paid a referral fee but are actually arranging financing for customers. “We’re giving customers financial advice,” Chipman says. “That’s what arranging for financial services is all about.”

While the CRA is maintaining its position, CADA continues its lobby efforts and we can expect to see more in the months ahead, he says.

The Ministry of Natural Resources (NRCan) continues to review its next steps regarding making the display of vehicle labels on new vehicles mandatory. CADA argues that the voluntary agreement in place for many years is adequate, and having government officials monitor and enforce the mandatory labels goes against its own Red Tape Reduction Program.

Chipman says consumers are well informed and can easily locate fuel efficiency information about vehicles they are considering. “People are better informed than they ever have been because of the Internet,” says Chipman. “Putting a piece of paper on the window is old technology that’s going to come off and get torn.”

Factory image programs continue to be a hot topic and to help dealers in this area, CADA created a handy guide to help them through the process.

In reality, at one level or another they are here to stay. “How do you convince a manufacturer not to do this?” says Chipman. He says the free CADA document can help them learn which questions they should ask as they undertake a dealership overhaul or factory image program. Chipman had just received his guide, and says they have been sent out to dealers across Canada.

Canada’s anti-spam legislation (CASL) has been in effect since July 1, 2014 and it’s critical that dealers comply with the new rules for contacting their customers by email. In April, CADA published a 30-page document that outlines the day-to-day realities of CASL as it applies to a dealership.

“You have to follow the steps and be careful,” says Chipman. “We have to be alert.”

One of the primary tools that CADA is able to call upon in its dealings with manufacturers is its annual CADA Dealer Satisfaction Index (DSI) surveys. Chipman says its important for dealerships to accurately fill out the surveys each year. “It’s like any survey,” says Chipman. “The more responses you get, the more credible the survey is.”

In regards to OEM and dealer relationships, Chipman says that “there tends to be better listening on behalf of manufacturers. There’s more a sense of partnership, it’s more collaborative.”

A lawyer himself, Chipman understands the value of having a well-funded legal defence fund that is able to vigorously defend the interests of dealers. This year alone, he says, the CADA’s Legal Action Fund has provided in excess of $430,000 in grants for precedent setting cases that could impact other dealers. “Every dollar helps,” says Chipman, urging provincial associations and individual dealers to continue to contribute to the fund. “We need to be well funded. It gives us strength. We never want to hear a dealer say; ‘We can’t afford to go to court.’ You don’t want to go down that road.”

CADA is also working with and supporting a new national management executive training program for dealership employees that will be offered through the Automotive Business School of Canada, at Georgian College in Barrie, Ont. For his own large dealership group, Chipman says it’s important to continue to provide training for team members. “You’ve got to give these people opportunities and they have to see a career path,” says Chipman. “There’s a whole gap that I see in the car business of managers between 45 and 60 years of age.”

CADA has spearheaded an initiative that will help ensure the Canadian dealer network in 2020 and beyond remains robust. CADA, their provincial counterparts and dealer representatives have set up a National Working Group to discuss and tackle these issues.

The group has met several times, and will meet again in February in Toronto. With dealer consolidation, and with groups operating across multiple provinces, it’s important that all dealer associations continue to be relevant to their members. Chipman says it’s critical that dealers are strongly united. “A lot of what we do concerns lobbying the government,” he says. “To me the most important thing is that we have a strong, united voice.”

Chipman says he thoroughly enjoyed the first two CADA Summit events held in Toronto and is looking forward to the next one on Feb. 11, 2015. He says it’s critical for dealers to stay ahead of the trends that are shaping the auto retail industry. “The industry is changing very fast,” he says, encouraging dealers to attend the third CADA Summit.

Chipman also praised the efforts of outgoing CADA Chairman Ron Loveys, who he says did an exemplary job in that role. “I was flabbergasted by how many hours he spent as CADA Chairman,” says Chipman, acknowledging how big a commitment the role actually represents.

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