The Canadian Automobile Dealers Association launched an automotive competitiveness framework yesterday on Parliament Hill that outlines the steps the next federal government should take to remain competitive, while also addressing the pending consumer vehicle affordability crisis.
The official announcement took place in the West Block of Parliament Hill in press conference room 135-B on April 22 at 10 a.m. Tim Reuss, CEO of CADA, along with the association’s lead economist Charles Bernard, and spokesperson Huw Williams, were all present for the event.
“Today, we are launching CADA’s “Automotive Competitiveness Framework” which outlines concrete regulatory actions we urge the next Canadian Federal Government to take in order to protect consumers, small business auto dealers and the economy,” said Tim Reuss, CADA’s President and CEO.
“The Canadian automotive sector is in turmoil as a result of the U.S. tariffs and, while we applaud the current Canadian Government on its measured response to not make this situation worse, it is clear that we are fast approaching a consumer affordability crisis as the added costs of the tariffs work their way through the different supply chains of all manufacturers and will soon be reflected in higher prices in the market place.”
The association said “urgent crisis action” is needed, which is why CADA’s framework outlines five key steps they believe the government must take to strengthen the automotive industry, address affordability concerns, and ensure the country remains competitive on a global scale.
The five steps are:
- End Canada’s EV mandates;
- Expand Canada’s Automotive Regulatory Framework to allow for the importing of more vehicles from other countries;
- Keep the big banks out of the vehicle leasing business;
- Scrap the luxury tax on vehicles; and
- Pay the debt owed to dealers who subsidized EV purchases prior to the iZEV incentives being shut down.
Canadian auto dealer asked CADA some questions during the press event, and Reuss expanded on the impact that changing regulatory standards would have on models and choices from Korea, Japan, and European OEMs that would be available for Canadian buyers.
“Pretty much all manufacturers in Canada are producing vehicles in other jurisdictions that Canadians would love,” said Reuss in response to a question.
Reuss said, for example, that Canadians love hatchbacks and that there are many models that would be popular here. But hatchbacks aren’t popular in the U.S., because Canada reflects a smaller volume opportunity. The OEMs can’t justify adjusting these types of vehicles to satisfy the North American standards.
“It’s not that the standards are more stringent, they’re just different in execution,” he said. “These jurisdictions, the European Union, Korea, and Japan are already very, very stringent in their regulations and how they would apply them.”
If the requirement for harmonized standards with the U.S. were dropped, we would see a lot more vehicles offered in Canada that are different from the U.S. offerings, he added.
In terms of the impact of tariffs on Canadian car buyers, Reuss said there continues to be “a lot of confusion.”
“That has now transitioned to more of a cautionary approach,” he said, adding that dealers are spending a lot of time explaining to consumers things they know, things their brand has shared with them, and things they don’t know.
The biggest concern dealers face, and the reason for CADA’s five-point framework, centres around vehicle affordability. “Will they still have vehicles available at a price point that Canadians want to buy? What’s going to happen to used car valuations? All of those things are still open questions,” he said.
“So there’s yes confusion, but that’s turning into action at dealerships across the country. As you know, our 3,400 members are very good entrepreneurs and are able to adjust to very tumultuous environments. By and large, most manufacturers are doing actually a pretty good job in keeping dealers informed about what they know and what they don’t know in this rapidly changing environment,” said Reuss.
Huw Williams, CADA’s Director of Public Affairs, said manufacturers will be looking at changing which vehicles they can bring into Canada and the U.S. based on the impact of tariffs, and we can now expect to see different models in showrooms on both sides of the border.
