There is no question that affordability has become a major defining issue facing British Columbians and Canadians.
Whether it’s housing, groceries, fuel or transportation, families are feeling the cumulative impact of rising costs. But while consumers continue to face mounting financial pressures, government policy too often adds to those costs rather than helping reduce them.
That reality was the central message I recently delivered on behalf of B.C.’s New Car Dealers to the provincial government as part of its Budget 2027 consultation submission.
Our message was straightforward: If affordability truly is a priority, transportation policy must become part of the solution.
For today’s consumers, the cost of owning a vehicle extends far beyond the purchase price. Financing, insurance premiums, maintenance and repair costs have increased alongside advances in vehicle technology. At the same time, taxes and regulatory costs continue to accumulate, adding thousands of dollars over the lifetime of vehicle ownership.
Individually, each cost may appear manageable. Collectively, they have become a significant and growing burden for British Columbians.
Government cannot control every factor affecting affordability, but it can ensure its own policies are not making the problem worse.
One example is British Columbia’s Luxury Vehicle Tax. When introduced in the 1990s, the levy was intended to apply to truly high-end luxury vehicles. Today, however, the market has changed dramatically while the tax threshold has not. It has remained fixed at $55,000 for more than 15 years, even though the average price of a new vehicle now exceeds $66,000.
That increase reflects not just inflation, but also the fact that modern vehicles include advanced collision avoidance systems, improved occupant protection, lower-emission powertrains, sophisticated driver assistance technologies and connectivity features that consumers increasingly expect. These innovations make vehicles safer, cleaner and more reliable, but they also make them more expensive to build.
As a result, many practical family vehicles, including SUVs, pickup trucks and minivans, are caught by a tax that was never intended to apply to them.
Taxing safety and practicality was hopefully never the objective.
Modernizing the threshold to reflect today’s marketplace would restore the original intent of the policy while providing meaningful relief for working families. At the federal level, the luxury tax applies to vehicles priced above $100,000.
Affordability pressures don’t end there.
When introduced in the 1990s, the levy was intended to apply to truly high-end luxury vehicles. Today, however, the market has changed dramatically while the tax threshold has not.
Dealerships, like countless other businesses, are facing higher operating costs across virtually every aspect of their operations. One example is the B.C. government’s planned expansion of the Provincial Sales Tax to professional services, including security.
Security is no longer optional for many dealerships. It protects employees, customers, facilities and millions of dollars in vehicle inventory. Adding PST to those services effectively becomes another cost of doing business — and amounts to a tax on safety.
Affordability also depends on having enough skilled people available to keep vehicles on the road.
British Columbia is projected to require approximately 20,000 additional automotive workers over the next decade, particularly technicians trained to service today’s increasingly sophisticated vehicles. Without greater investment in automotive education and training, consumers could face longer wait times, higher service costs and reduced access to qualified technicians, particularly in rural and northern communities.
The transition to electric vehicles presents another challenge. Many British Columbians want confidence that charging infrastructure will be available, reliable and convenient before making the transition. They also want certainty about the province’s long-term zero-emission vehicle policies. Building consumer confidence, not uncertainty, is what will ultimately support greater adoption.
None of these issues exists in isolation. That’s why our Budget 2027 recommendations focus not on a single issue, but on a comprehensive approach that recognizes how interconnected these challenges have become.
The automotive retail industry provides more than 30,000 family-supporting jobs in British Columbia and contributes nearly $17 billion in annual retail sales. More importantly, it serves millions of British Columbians who rely on personal transportation every day.
If governments are serious about improving affordability, transportation must be part of that conversation. Our recommendations represent practical steps that can help make vehicle ownership a little more affordable for the families who depend on it every day.
