Corporation des associations de détaillants d'automobiles

The Chair (Mr. James Rajotte (Edmonton—Leduc, CPC)): I call to order the 55th meeting of the Standing Committee on Finance continuing our pre-budget consultations in Ottawa.

This afternoon we have two panels of an hour and a half each. We have eight organizations per panel. There's a lot of witnesses to hear from and a lot of discussion.

I'll read the organizations in order of presentation to the committee.
We have with us here this afternoon the Canadian Public Works Association, the Canadian Museums Association, the Canadian Institute of Chartered Accountants, the Canadian Library Association, the Canadian Home Builders' Association; the Canadian Bankers Association, the Canadian Centre for Policy Alternatives, and ParticipACTION.

I welcome all of you. Thank you very much for being here with us.

.......(edited)

The Chair ......... We'll now hear from the Canadian Automobile Dealers Association.

Mr. Huw Williams (Director, Public Affairs, Canadian Automobile Dealers Association):

Hi. My name is Huw Williams and I'm the Director of Public Affairs with the Canadian Automobile Dealers Association.

It's been a very interesting year in the car business so we appreciate the opportunity to come and update you on the situation.

As you know, we represent 3,500 franchised automobile dealers of all makes and models from across the country, 140,000 employees, so we are the largest employer in the car sector. And I'm proud say we just got back from our board of director's meeting in Edmonton where, tying into our last speaker, the Alberta motor dealers were recognized as the largest contributor to the Special Olympics hitting over the half million dollar mark in terms of contributions.

One of the things that I'm conscious of is that our written submission to the committee deals with vehicle scrappage. Events have overtaken us a little bit with respect to that because the Minister of the Environment has made it clear that we're not going to see an advanced vehicle scrappage program like they have in the United States with the cash-for-clunkers program. We respect that decision, but felt it was important to highlight a couple of public policy elements of that decision and the overall need to support getting older vehicles off the road.

First of all, many committee members may not be aware that Canada already has a $300 program, the Retire Your Ride program to get older vehicles off the road. That $300 program was a world-leading program when it was introduced in January of this year. We got calls from jurisdictions all around the world asking how that program worked and how it was applicable. The genesis of that program was a $92 million investment, over four years, to get older vehicles off the road. The public policy objectives behind that were basically to get older, higher polluting, vehicles off the road.

Just to paint a picture for you, if you take one 1990 or pre-1990 vehicle and you picture an older vehicle at the lights, that produces 33 times more smog and regulated emissions than a new vehicle. For each one of those older vehicles you remove off the road it's like removing 33 new vehicles off the road. Overall, removing 100,000 older vehicles is like removing 3.3 million new vehicles from the road. So there's a significant air quality investment that is part of the equation to get older vehicles off the road. Even if you look at a 1995 vehicle, just as an example, that produces 18 times more regulated emissions in smog than a new vehicle does today.

Our major message with respect to vehicle scrappage is that $95 million investment over the next four years should be maintained and perhaps modestly adapted to reach its public policy objectives going forward in the future.

One of the ironies, and I'd be remiss if I didn't point this out to the committee, is that while the government on one hand paying $300 to get older vehicles off the road there's a loophole in Canadian importation legislation that allows older, higher polluting vehicles to be dumped into the Canadian marketplace. Vehicles that are over 15-years of age are allowed to be imported into Canada and they don't have to comply with either the Canada Motor Vehicle Safety Standards or emission standards. Most of these vehicles are coming from the Japanese marketplace where they're banned from the road. The steering wheels are on the right hand side so you're talking about vehicles that are a safety danger. Obviously they don't meet the emissions requirement, up to 30 times more regulated emissions than Canadian vehicles. Independent studies by the insurance industry show—and this is just common sense—the steering wheel is on the wrong side of the car and they get into 40% more accidents than ordinary vehicles.

These vehicles are being dumped into Canada because the rules that deal with vehicle importation were set up in the early 1970s and at that point in time a car that was over 15 years old was considered to be an antique. If you think about that, a 1955 car, it kind of made sense that it was an antique in that day and age. But now, what we have happening is that these vehicles are being dumped into the Canadian marketplace. Australia has moved to put a 30 year threshold on this, there's a raft of Asian and European countries that have moved in a similar direction, and the United States has a 25 year threshold that they've put in place. So, as a result, Canada is really the last bastion where they're allowed to dump these older, higher polluting vehicles.

We're talking about 15,000 vehicles a year. It's not a sales issue for us. We sell 1.6 million new vehicles a year so losing 15,000 sales is not a concern for us in this issue, but this is an environmental and public policy issue that needs to be address.

I'd be happy to answer the committee's questions with respect to the role-out of the CSCF program. We highly support the government's initiative on the $12 billion worth of financing.

I'd also be happy to address other issues related to the budget going forward.

Thank you.

(1720)

****Questions from Members****

The Chair: Thank you very much.

Hon. John McKay: Mr. Williams, with respect to your 15-year issue with respect to clunkers in our country, it seems to me the only other jurisdictions that have relatively new Japanese vehicles under 15 years aren't allowed any longer to drive on Japanese roads in primarily African countries. Is that correct?

Mr. Huw Williams: Yes.

Certainly, we've seen a broad array of Asian countries stop the imports; Australia I mentioned right off the top. The EU has moved in that direction as well, so you're looking at very select examples in Africa and South America.

Hon. John McKay: So we rank right up there with Malawi?

Mr. Huw Williams: Yes.

It's just one of those ridiculous anomalies that we're letting these cars come into the country while paying to take them off our roads.

Hon. John McKay: Thank you.

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[Français]

M. Jean-Yves Laforest: Merci, monsieur le président. J'aimerais poser ma première question à M. Williams.

La semaine dernière, à Toronto, le Comité permanent des finances était en consultations pré-budgétaires. Nous avons entendu un témoin qui nous a parlé d'un programme qui s'apparente un peu à celui que vous proposez aujourd'hui, soit la mise au rancart de véhicules vieux d'une quinzaine d'années, qui consomment beaucoup d'essence et qui sont très polluants.

Ce programme comportait un volet particulier. Malheureusement, je ne me souviens pas du nom du témoin ou de celui de son programme. Il disait qu'une automobile vieille de 15 ans serait mise au rancart. Toutefois, il y aurait aussi possibilité que quelqu'un qui possède une voiture âgée entre zéro et dix ans d'âge pourrait aussi être inscrite dans un programme où il y aurait des deuxièmes acheteurs de véhicules. Cela avait l'air très complexe. De la façon dont je l'explique, c'est assez difficile à imaginer. Il y aurait des crédits pour les acheteurs de voitures neuves, en retour de leur vieille voiture. Il y aurait aussi des crédits pour ceux qui achètent une auto de moins de 15 ans. Selon lui, des associations, notamment des détaillants d'automobiles, pourraient gérer ce programme.

Avez-vous déjà entendu parler de cela?

(1755)

[English]

Mr. Huw Williams: Thank you for the question.

I'm not familiar with the specific witness testimony that you referred to. I can say, generally speaking, that all around the world they've looked at programs to try to bring about the public policy objectives of getting rid of higher polluting vehicles. Here in Canada, the government came down on the side of one simple program that was aimed at primarily the 1995 vehicles with a simple $300 program. Anybody who's retired the vehicle under the current Canadian program would get that money from the government of Canada. However, there are a number of provincial initiatives that exist such as a $1500 program in the province of British Columbia and the vehicle manufacturers just add to it.

[Français]

M. Jean-Yves Laforest: Je dois vous interrompre parce que je n'ai pas beaucoup de temps.

Vous avez répondu à ma question en ce sens que vous n'avez pas entendu parler de ce projet. En fait, cela va nous éclairer plus tard quand on fera le résumé des mémoires qui nous ont été présentés.

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