I don't think there's a contradiction. And perhaps I did not articulate the position well enough for you.
But all the data show—and I can particularly cite data from Ontario, for instance, showing that when they introduced their tax for fuel conservation, it retarded new vehicle sales by upwards of 3%. And, by the way, Ontario will get hit with that, plus this.
The key thing here in terms of environmental benefit is turning the fleet over. While we may see an increase in sales of one smaller vehicle, for instance, that may receive a feebate, other vehicles will receive a penalty.
So there are several factors that come into play. It does get complicated, but clearly when you delay the fleet turnover, you delay environmental benefit. When you tax the vehicles that are primarily the ones we produce here in Canada, they too get hit with a penalty. And it's not just my member companies, but it's other manufacturers here in Canada as well who produce larger vehicles.
But to the extent that people delay their purchase of a new vehicle because of that tax—again, fleet turnover is delayed, and there is no environmental benefit—they will go elsewhere to get a vehicle, or a nearly new vehicle, that meets their needs. This means they could go to the United States to get a vehicle. Generally, the United States has an unlimited supply of nearly new vehicles, and in many instances, because of the different nature of their vehicle fleet, those vehicles are less fuel efficient, meaning again there is no environmental benefit.
The impact of that, of course, is that to the extent we produce some of those vehicles in Canada, we will produce and sell fewer of them.
We're in a situation now where there is overcapacity globally and in North America, and we will decide to produce vehicles where we can do it the most effective way. If we have a plant that's underutilized in Canada, we'll go elsewhere. Capital is extremely fluid now. We will go offshore to produce vehicles. We are the most open market in Canada. We will produce vehicles offshore and bring them into Canada.
So it does come back down to whether this is a hostile regulatory environment in Canada. The levy side of it presents a real obstacle to creating the most positive business plan or business case you can make to bring new investment into Canada. This is where the negative implications occur.