New Parliament poses challenges for auto sector
September 27, 2021
As one of its key priorities post-election, CADA will be tackling the issue of the Liberals’ proposed luxury tax, which was introduced in the 2021 budget and aims to tax luxury vehicles and boats of more than $100,000, and aircrafts with a higher value threshold.
“This is an issue that we will be dealing with on an immediate basis,” said the association’s Director of Public Affairs, Huw Williams, adding that CADA “won a major concession from the Liberal government prior to the election on the luxury tax front, ensuring that the tax only begins at the marginal tax rate of $100,000 compared to the full amount.”
This, he said, significantly lessens the tax cliff at $100,000, and lessens the overall impact of the tax on dealers and dealer customers.
Williams said the association is now shifting its focus to the details of the legislation, which will be a legislative package to be introduced in the fall session of Parliament that will outline the details of how the tax is applied and to what extent it will impact the auto sector.
Two key concerns that CADA will be focused on is the issue of double taxation on luxury vehicles that exist most prominently in the provinces of British Columbia and Quebec. Williams said they will be advocating for an approach that exempts provinces from the luxury tax at the federal level where a provincial luxury tax already exists.
The adoption of zero-emissions vehicles is also on the table as all of the major parties made campaign promises surrounding the aggressive adoptions of ZEVs, which is similarly being proposed by multiple European jurisdictions in GA countries—including very proactive approaches by the United States.
“CADA will be working closely with the Canadian Vehicle Manufacturers’ Association and the Global Automakers of Canada to highlight the fact that solutions on EV sales is not as simple as setting a mandate or targets, but really requires an entire socio-economic transformation in the personal and commercial transportation sectors,” said Williams.
The association will be working with the government to ensure consideration and support are provided to issues involving power/electricity generation, electricity transmission and distribution, charging infrastructure, public charging, infrastructure, building code changes, and harmonization between Canada and the United States at multiple levels.
“While OEMs and dealers are optimistic about the technological developments in ZEVs, this transformation has to be dealt with at multiple levels of government and in a way that doesn't throw the Canadian economy and the auto industry into chaos,” said Williams.
However, while a new Parliament is being ushered in, the return of the Liberal government in a minority status continues to pose some logistical and policy challenges for CADA and the automotive sector that will require a non-partisan approach.
Williams said the first challenge on the logistical side for any advocacy group is that there is more than one party in the decision-making mix. As a result, the association will continue its tradition of being non-partisan, speaking to the governing Liberals, but also to those parties that they will need to support or try to shape the governing agenda.
“This just means that every riding and every Member of Parliament counts, which plays well to our grassroots strategy of connecting auto dealers with their local MPs,” said Williams. “Beyond that, the structure of committees and the passage of legislation becomes more uncertain.”
CADA must remain on top of its game to ensure issues do not arise that may cause challenges for small businesses to run smoothly.
More details and updates about CADA’s advocacy efforts will be included in future CADA Newsline issues.