Up next in 10
Ending EV mandate among tariff responses proposed by Canada's auto dealers association
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Apr 24, 2025
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. The Canadian automotive sector is in turmoil as a result of the US tariffs. And while we applaud the current Canadian government on its measured response to not make the situation worse. It is clear that we are fast approaching a consumer affordability crisis.
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0:01
good morning uh my name is Hugh Williams
0:03
and I am the national spokesperson for
0:05
the Canadian Automobile Dealers
0:06
Association so this morning we're going
0:08
to be making some remarks on the
0:10
Canadian competitiveness automotive
0:12
competitiveness framework and uh we'll
0:14
be led off by Mr royce followed by Mr
0:17
bernard in French and then we'll be able
0:19
to take some questions from there and do
0:21
interviews later thank you Mr
0:25
royceour good morning my name is Tim
0:28
Royce thank you for joining us today we
0:31
are launching CADA's automotive
0:34
competitiveness
0:36
framework which outlines concrete
0:38
regulatory actions we urge the next
0:41
Canadian federal government to take in
0:44
order to protect consumers small
0:46
business auto dealers and the
0:49
economy the Canadian automotive sector
0:52
is in turmoil as a result of the US
0:54
tariffs and while we applaud the current
0:58
Canadian government on its measured
1:00
response to not make the situation worse
1:03
it is clear that we are fast approaching
1:06
a consumer affordability crisis as the
1:10
added cost of the tariffs work their way
1:13
through the different supply chains of
1:15
all the manufacturers and will soon be
1:17
reflected in a higher prices in the
1:19
marketplace
1:21
faced with this our automotive
1:24
competitiveness framework outlines five
1:26
concrete actions that the next federal
1:29
government can take on behalf of the
1:31
consumers and industry first end
1:36
Canada's EV mandate canada has been very
1:40
successful in increasing the number of
1:42
electric vehicles on the road over the
1:44
last years as consumer demand charging
1:47
infrastructure and per purchase
1:49
incentives were aligned most recently
1:53
however the buildup of charging
1:55
infrastructure has not kept pace
1:57
especially in multifamily homes and
2:00
downtown
2:01
condominiums both federal and provincial
2:04
purchase incentives have been curtailed
2:06
and partially eliminated
2:09
consumer demand while still growing is
2:12
nowhere near where it needs to be in
2:14
order to support the numbers
2:16
contemplated by the federal and
2:18
provincial EV mandates despite the
2:20
tremendous investments made into new
2:22
products by almost all manufacturers
2:26
when recently discussing the decision to
2:28
end BC's consumer carbon tax BC Premier
2:32
David Evie said that he does not want
2:34
people to choose to have to choose
2:36
between affordability and climate action
2:40
and we wholeheartedly agree however if
2:44
Canada's federal and provincial EV
2:46
mandates remain in place in their in
2:48
their current form exactly that will
2:51
happen very soon
2:53
we urge the next federal government to
2:56
adjust update and recalibrate the
2:59
original plans to take into account the
3:02
changed market
3:04
realities second expand Canada's
3:07
automotive regulatory
3:09
framework for far too long Canada has
3:12
been beholden to the US defined
3:15
environmental and safety standards for
3:17
vehicles at the exclusion of all others
3:21
this means that Canadians only get those
3:23
vehicles and brands that Americans
3:25
consider attractive and affordable
3:28
because Canada's volume alone doesn't
3:31
justify the cost involved in making the
3:34
vehicles compliant to North American
3:36
standards almost all manufacturers
3:39
including American ones currently
3:42
produce attractive and afford affordable
3:44
vehicles in the European Union Korea and
3:47
Japan that Canadian consumers would be
3:50
very interested in and there are also
3:53
quite a few brands that would like to do
3:55
business in Canada those vehicles and
3:58
brands comply with the stringent
4:00
environmental and safety standards in
4:03
those
4:04
jurisdictions after all do you really
4:07
believe a vehicle that has been
4:08
environmentally certified and deemed
4:10
safe enough to be driven on a German
4:12
autobond of over 200 km an hour is not
4:15
safe enough to be driven in Canada
4:18
we are proposing what we are proposing
4:20
is for the Canadian government to accept
4:22
the vehicle compliance certificates of
4:25
Japan Korea and the European Union with
4:28
whom by the way we have free trade
4:30
agreements this measure would represent
4:33
an expansion of Canada's trade horizons
4:36
is supported by almost all manufacturers
4:39
including American ones and would not be
4:42
seen as a retaliation for any US
4:44
activity it is something we can do
4:48
additionally third do not allow big
4:52
banks to compete with the small
4:54
businesses that they
4:56
finance canada's Bank Act is up for
4:59
regular review and the big banks are
5:01
once again trying to muscle their way
5:03
into be being able to lease vehicles to
5:06
consumers what this would mean is that
5:09
the same banks that provide floor plan
5:11
financing for our dealer members and
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therefore have all relevant financial
5:16
information from them and have a
5:18
tremendous lever over them would now be
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competing with them for the same
5:24
customer with the amount of power the
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big Canadian banks already have it would
5:29
be impossible for our small business
5:31
dealers to compete fairly in the
5:34
marketplace especially if their
5:36
competitor is the one holding their
5:37
hands behind the back with their floor
5:39
planning
5:40
conditions we should also not forget
5:43
that during the financial crisis of 2008
5:46
Canada's banks panicked and pulled out
5:48
of the retail finance market in some
5:51
cases banks pulled long-established
5:53
financing from successful profitable
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dealers that had 80-year relationships
5:58
with their bank two things saved the
6:01
retail car industry at that time first
6:03
the strength and resilience um the
6:07
strength and resilience of the
6:08
manufacturer affiliated finance and
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lease companies and secondly the
6:12
Canadian Secure Credit Facility
6:14
purchased up to 12 billion of term
6:16
assetbacked securities backed by loans
6:19
and leases on vehicles and equipment if
6:23
the banks had also controlled leasing
6:25
during the crisis it would have been
6:27
been even more
6:29
catastrophic we therefore urge the
6:31
Canadian government not to expand the
6:33
business power of big banks into leasing
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fourth scrap the inefficient luxury tax
6:41
on vehicles since its inception a few
6:44
years ago the vehicle luxury tax has
6:47
been an unmitigated disaster and a clear
6:49
example of an inefficient tax even the
6:52
parliamentary budget office correctly
6:54
predicted that it would never have its
6:57
intended effect as consumers would
6:59
adjust their behavior and buy around
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this tax what was portrayed as ha having
7:05
the rich pay a fair share but in reality
7:08
was mere populist virtue signaling has
7:11
ended hurting hardworking Canadians such
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as lot attendants sale consultants
7:16
service advisors and technicians that
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have been let go at dealerships directly
7:20
affected by the drop in sales as
7:22
consumers adjusted their purchases
7:25
in addition the administration of this
7:28
tax through a completely new system and
7:31
process instead of through existing
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mechanisms such as HST GST is very
7:37
costly to the government manufacturers
7:39
and dealers and is so fraught with
7:42
problems and inconsistencies that the
7:44
CRA has been forced to issue countless
7:48
clarifications it is time for this
7:50
inefficient tax to
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go and finally
7:55
fifth pay the debt owed to car dealers
7:58
for the ISF incentives
8:01
as I'm sure many of you have seen
8:03
reported in the press a few months ago
8:05
Transport Canada announced on a Friday
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that the federal EV incentive program
8:10
might be running out of money in the
8:12
coming weeks and then allowed one US
8:15
company that hardly has any investments
8:17
in Canada be they in manufacturing or
8:19
dealerships to submit claims for over
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8,000 vehicles totaling over $48 million
8:26
over that weekend which led to the
8:28
program having to shut down on
8:31
Monday while there's still a number of
8:34
unanswered questions in this matter one
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thing is clear the ones left holding the
8:39
bag were our members to the tune of 8 to
8:42
11 million that they had fronted on
8:45
behalf of the Canadian government to
8:47
consumers at the time they bought an EV
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this is unacceptable and undermines the
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entire EV support system by which our
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members agree to front the money on
8:58
behalf of the government in order to
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facilitate the transaction at the point
9:02
of sale under the assumption and
9:05
trusting that they would be reimbured
9:07
accordingly
9:09
irrefocably breaking that trust by not
9:12
paying the debt currently owed to
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dealers would undermine our members
9:16
ability to continue transacting with EV
9:19
customers in the way it is currently
9:22
designed while we have received some
9:24
political assurances that this will be
9:26
done nothing has happened yet on the
9:30
contrary we have recently received a
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written communication from Transport
9:33
Canada that in their opinion did they
9:36
did everything right and by the book
9:39
which is quite interesting in and of
9:41
itself since we have yet to see the
9:43
results of the thorough internal
9:45
investigation announced by the minister
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in closing this automotive
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competitiveness framework will go a long
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way in ensuring the continued
9:55
competitiveness of the automotive retail
9:58
business in Canada and will enable our
10:01
members to continue to deliver
10:02
exceptional products and services at
10:05
affordable prices to Canadian consumers
10:08
despite the tumultuous situation we find
10:11
ourselves in thank you for your
10:13
attention i would like you our first
10:15
question comes from Todd Phillips
10:17
Universe Media please go ahead
10:22
yes hello good morning good morning Todd
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we can hear you okay great so Todd
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Phillips the editor of Canadian Auto
10:29
Dealer so the first question I have is
10:31
on the environmental standards safety
10:33
regulations what would this opening up
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of standards to imports from other
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countries mean for vehicle choices and
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pricing for Canadians and maybe if you
10:42
can answer it in the short term and
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maybe what that longer term outlook
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would look like sure perfect Tim yeah um
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thanks for that uh question Todd it it
10:50
it is currently the the fact that um uh
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pretty much all manufacturers in in
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Canada are producing vehicles in other
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jurisdictions that Canadians would love
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um in Europe and Japan and Korea um for
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example uh hatchbacks um Canadians would
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love hatchbacks smaller vehicles very
11:09
affordable and by the way also uh very
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environmentally friendly uh but calling
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anything a hashback as you might well
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know is is almost the kiss of death for
11:19
a vehicle in the US and with consumers
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the consumers don't like it so Canadian
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volume alone is not enough for these
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companies so we've had concrete
11:26
discussions with manufacturers that are
11:27
looking at bringing vehicle X into
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Canada that they could sell anywhere
11:32
between 8 to 10 or 12,000 vehicles of
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those in in Canada would be perfect for
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Canadian consumers but they're saying
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that volume alone of Canada is uh is not
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enough to to uh uh uh pencil if you will
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the investments that have to be made to
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comply with the North American standards
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and it's not that the standards are more
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stringent they're just different in its
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execution because again these
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jurisdictions uh European Union Korea
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and Japan are already very very
12:00
stringent in their regulations and how
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they apply them so um if this would be
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implemented short-term we would foresee
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a lot more vehicle offering somewhat
12:09
different than the US being available
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for Canadian consumers again very
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attractive products for the marketplace
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and actually environmentally even even
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better than uh uh some other products
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do you have a followup Todd
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uh yes if I could another comment would
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just be Tim obviously you're in contact
12:29
a lot of dealers across the country what
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are you hearing from them about what
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they're seeing in the showrooms now with
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uh you know the chaos over tariffs are
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they looking to buy Canadian-made
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vehicles are they looking to you know
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buy now before the full impact of the
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tariffs hits what what's going on if you
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will on the on the showroom floor right
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now as a result of the the tariff
12:48
upheaval yeah there there there's there
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continues to be um a lot of confusion
12:53
obviously uh that has now um
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transitioned to more of a of a
12:59
cautionary approach okay what does this
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really mean for the next months uh what
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we are actually currently seeing in the
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marketplace is uh dealers being able to
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advise consumers very closely on listen
13:11
this is what I know currently this is
13:13
what I don't know this is what my brand
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has told me might happen or this is
13:17
where we currently are and advise them
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if they're uh close to or around their
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purchase decision um and uh they still
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have inventory on ground um and coming
13:28
in from from the manufacturer so uh
13:31
dealers are are are not necessarily
13:34
worried for right now but they are
13:36
looking forward because they already see
13:38
what's coming the affordability crisis
13:40
that we were talking about and how will
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they be able to handle that will they
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still have vehicles available at a price
13:46
point that Canadians want to buy uh
13:49
what's going to happen to used car
13:50
valuations uh all of those things are
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still open uh questions so there's uh
13:55
yes confusion but that's turning into
13:57
into action at dealerships across the
13:59
country as you know our 3,400 members
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are uh very good entrepreneurs and are
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able to adjust to very tumultuous
14:06
environments and by and large uh most
14:08
manufacturers are doing actually a
14:09
pretty good job and in keeping dealers
14:11
informed about also what they know and
14:13
what they don't know in this rapidly
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changing environment
14:18
yeah Todd uh Hugh Williams one thing I
14:20
would add to that is that we haven't
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seen the second uh shoe drop in all of
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this the the US administration's
14:26
automotive tariffs includes automotive
14:28
parts and the knock-on effect of that to
14:31
the supply chain remains a concern but I
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think you know one of the key things
14:34
that we've noticed in dealing with
14:36
federal officials on this is that this
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government has taken a smart strategic
14:39
approach to retaliation they put a
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number of measures in in the mix uh to
14:44
to lessen the impact on the competitive
14:46
structure here but again we remain
14:48
concerned going going forward the other
14:50
thing I would highlight as well is that
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it's clear from me dealers meeting with
14:54
their individual line manufacturers that
14:56
not every showroom in Canada and the US
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will look identical as they have over
15:00
the last 10 years so as we manage this
15:03
crisis uh they'll certainly be be
15:05
changes on both sides of the border to
15:07
reflect the tariffs that have been put
15:08
in place
15:11
we will now take another question online
15:13
i have David Kennedy with Auto News
15:15
please go ahead
15:19
hi thanks for taking questions uh just a
15:21
just a quick one uh Tim you pointed off
15:23
the bat uh to consumer affordability
15:26
crisis and obviously this plan from CADA
15:28
is designed to uh help that um could you
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just give me a little bit on um you know
15:34
what uh if implemented by the government
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uh you know will CDA's plan hold prices
15:39
steady during the tariff uh fight will
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it you know mitigate some of the price
15:43
hikes that we expect to see uh can you
15:45
just expand a bit on that for me uh yeah
15:48
obviously we have not necessarily done a
15:50
calculation um overall because it's very
15:53
difficult to do because different
15:54
manufacturers are affected in different
15:56
ways right um and in different uh uh in
16:00
in different amounts obviously uh
16:01
depending on where they're currently
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producing where they get their products
16:05
um uh etc but what is clear is that the
16:09
measures that we are proposing um
16:11
especially the EV mandate the expansion
16:14
uh getting rid of the EV mandate and
16:16
expansion of of the regulatory framework
16:19
uh that would have a fairly uh almost
16:22
immediate effect in the marketplace
16:23
because on on EV mand let's not forget
16:26
that we're getting very close in the
16:28
provinces of BC and Quebec next year
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where manufacturers will be uh
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constrained to to uh restrict the
16:36
numbers of internal combustion engines
16:38
that they sell to those provinces
16:40
because they're not able to meet and
16:41
consumer demand is not as high plus
16:43
charging infrastructure is not there and
16:45
incentives are not there to to reach the
16:48
prescribed volumes in in certain
16:50
provinces so restricting uh supply into
16:53
a province obviously is going to drive
16:54
up prices right so um so this is would a
16:58
me would be a measure that that prevents
17:00
something from from from happening in
17:01
the marketplace as well as we deal with
17:03
all the turmoil from tariff so um will
17:07
it will all of these measures be able to
17:10
dampen all of the tariff effects to your
17:12
question um will remain to be seen and
17:15
and is also dependent on on different
17:17
and individual manufacturers what type
17:18
of decisions they take because some
17:20
manufacturers uh might decide to take uh
17:22
different decisions as well long-term um
17:25
on their production facilities and their
17:27
arrangement of supply uh where they
17:29
might be getting a vehicle currently out
17:31
of the US they might uh uh change that
17:34
supply chain for those vehicles to be
17:35
now coming from another country right to
17:38
avoid some of the cost so uh that will
17:40
have to be considered as well
17:43
yeah uh David Hugh Williams I would just
17:45
add to that that it's important to
17:46
remember as as as you certainly know
17:48
that there's more people working for
17:50
dealerships uh in the new car supply
17:53
chain than any other sector we have over
17:55
170,000 uh individuals working in
17:59
communities across Canada to serve
18:01
millions of cons customers you know
18:03
close to two million new transactions
18:05
and certainly 5 million or more used in
18:07
parts transactions so these are these
18:09
the these measures have impact on that
18:11
and I think when you look at all of the
18:13
governments the premers have come
18:15
together with uh Prime Minister Carney
18:17
and talked about eliminating barriers to
18:20
trade if you look at the Quebec uh
18:22
vehicle mandate and the BC vehicle
18:24
mandate these are really interprovincial
18:26
trade barriers uh Canada and those two
18:28
jurisdictions in particular is known
18:30
among auto manufacturers as being a very
18:32
expensive jurisdiction to do business in
18:35
and one of the things we're going to
18:36
have to do to be more competitive and
18:37
it's recognized across the board by all
18:39
political leaders is clean up our own
18:42
house and getting rid of these mandates
18:43
could certainly be part of that and I'll
18:44
just invite Do you have a followup David
18:53
did we lose you David
19:00
i do have another question please yes so
19:02
we have a question from Grace Auto News
19:05
please go ahead
19:09
good morning Grace good morning thank
19:11
you for taking my question when you talk
19:12
about bringing in vehicles uh you know
19:15
that are popular with consumers from
19:17
other parts of the world and you cited
19:19
Germany an example of uh you know Canada
19:23
adopting uh safety standards for for
19:26
some of these vehicles are you thinking
19:29
about or do you have in mind uh vehicles
19:31
that are that would be more affordable
19:33
for Canadian consumers and do you have
19:35
any name plates in mind always tricky to
19:39
name name plates but I'll let Tim uh Tim
19:40
handle that yeah um uh Grace I I would
19:44
encourage you to to have those
19:46
discussions with individual
19:47
manufacturers pretty much all of them
19:48
from the three uh jurisdictions that we
19:51
mentioned European Union Japan and Korea
19:54
uh they already all have in their in
19:56
their potential product plans for for
19:58
Canada uh uh quite a few um ideas of
20:02
what they would like to bring into
20:03
Canada but uh as I mentioned as well uh
20:06
and this is maybe different than than
20:08
what it was 10 or 15 years ago there's
20:10
also uh American uh manufacturers the
20:14
the industry has changed has globalized
20:16
over the last uh uh 15 years and and
20:19
they also find themselves in a situation
20:21
where they're currently producing in
20:23
those jurisdictions certain vehicles
20:24
that would be perfect for Canadians i
20:26
mentioned a couple of types of vehicles
20:28
so I'm not at liberty to discuss uh
20:30
brands or or uh uh models if you will
20:34
i'm fairly certain you will be hearing
20:35
in the coming days from from all of the
20:37
manufacturers on their specific examples
20:39
of what they would like to to bring to
20:41
Canada and again we're only talking
20:43
about those three jurisdictions
20:46
uh Japan Korea and European Union with
20:48
which Canada already has free trade
20:51
agreements and with and jurisdictions
20:55
that have a very stringent also
20:57
environmental and safety standards right
21:00
yeah because I think that that quite
21:02
frankly that would be an idea that would
21:04
be popular with a lot of Canadian
21:06
consumers yes yes and you might see name
21:09
plates that you currently don't have in
21:11
Canada they might be part of a larger
21:14
conglomerate that already does business
21:15
in Canada but uh brands that are
21:18
currently not represented you're an
21:20
expert in the industry Grace so you know
21:21
exactly what brands I'm talking about uh
21:24
that form part of of uh you know in
21:26
Europe and Japan and Korea part of
21:28
larger conglomerates where certain
21:30
brands that are currently not doing
21:32
business in Canada would like to come to
21:33
Canada uh and with this uh framework
21:36
they could do so and by the way our
21:37
members would be very very willing to
21:39
take on the business and and and work
21:41
with those brands thank you
21:45
Grace i would just say as well that that
21:47
opens up opportunities for reciprocal uh
21:49
benefits for for those that are
21:50
manufacturing Canada as well um any
21:53
other question Grace or others
21:56
no I'm good thank you thank you Grace we
21:58
have time for one question with no
22:00
followup i have David Kennedy please go
22:02
ahead
22:04
[Music]
22:05
i think just do one more uh while we're
22:07
here um just wondering uh Hugh you
22:10
mentioned uh off a few minutes ago
22:12
talking about um you know expected
22:14
changes at dealerships um in Canada
22:16
versus what they look like in the US um
22:19
so I'm just hoping you can uh give me a
22:22
little bit more on that obviously we
22:23
know you know Mazda is one example the
22:25
CX-50 is going to get dropped at least
22:26
for the time being uh based on um US
22:29
production it sounds like you
22:34
Uh David we we lost you there uh
22:36
temporarily so I I can answer the base
22:38
question if if if you like i think you
22:40
know one of the things that's become
22:42
clear uh as we go through this tariff
22:44
war certainly there's the
22:45
unpredictability of the US
22:47
administration and how they're handling
22:48
tariffs i mentioned the auto parts uh
22:51
element which where the US is tariffing
22:54
auto parts but the Canadian government
22:55
in my opinion our opinion has been very
22:57
smart in terms of not uh tariffing auto
23:00
parts and we hope the US administration
23:02
takes that lead as well which helps
23:03
protect the supply chain and of course
23:05
our overall goal is to get rid of any
23:07
automotive tariffs at all the industry
23:09
has thrived in Canada both on the
23:11
manufacturing side and on the dealer
23:13
side by having a unified harmonized
23:16
North American market that market is
23:18
better for the economies in both
23:20
countries it's better for the dealers in
23:22
both country and most importantly it's
23:24
better for the consumers in both
23:25
countries we need to live in an
23:27
autotariff-free environment here in
23:29
North America until that time comes
23:31
however to the essence of your question
23:33
David you've got manufacturers looking
23:35
at their product line and making
23:37
inordinately difficult calculations as
23:39
to what content is coming from which
23:42
side of the border and what is compliant
23:44
under the current trade agreements and
23:45
how that will be be treated and we know
23:48
that the manufacturers are meeting
23:50
proactively with their dealers to talk
23:52
about the potential implications if we
23:53
don't get this solved over the next
23:55
little little while we know of course
23:57
that there's a lot of product that's
23:59
already landed before the tariffs uh
24:01
have taken place and for those consumers
24:03
that we've certainly been talking to
24:04
consumers and consumer groups if they're
24:06
nervous about the tariff situation the
24:08
most important thing is to go visit your
24:10
dealer uh and to to purchase a vehicle
24:12
before we see the effect of this and
24:15
with the restricted demand presumably
24:17
we'll see prices increase so uh that's
24:20
that that that is a certainty and it's
24:22
also a certainty that the manufacturers
24:24
will be calibrating to figure out which
24:26
cars they can bring in tariff-free to
24:28
the US market and the Canadian market
24:31
and therefore you just won't have that
24:33
um uh com compatibility and I've been
24:35
privy to numerous conversations that
24:37
dealers have made on this with with
24:39
their manufacturers but of course we
24:41
can't share that between manufacturers
24:43
to manufacturers because of those are
24:44
enormously important competitive
24:46
decisions but we know those discussions
24:48
are going on
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