Thank you very much, Mr. Chair.
Good morning, and thank you for inviting us today.
The Canadian Automobile Dealers Association represents 3,400 franchise new car and truck dealers across Canada and directly employs over 178,000 people. It contributes $28 billion to Canada's GDP and pays over $6 billion in federal, provincial and municipal taxes. This year, our members will sell over 1.9 million new vehicles, sell over 1.3 million used vehicles and write 31 million repair orders.
I would like to start by applauding the federal government on the recently announced auto strategy. The expanded and adjusted support measures aimed at maintaining Canada's vital automotive manufacturing sector are essential as we enter the critical phase of the CUSMA review.
Dealers across Canada particularly applaud the government for ending the EV mandate and choosing a better path forward for emissions reductions that is more in line with diverse technology, charging infrastructure and overall consumer demand. While the federal movement away from an EV mandate is a positive step, two things are important.
First is that the EVAS regulation be immediately withdrawn. Allowing it to remain in place while a detailed regulatory framework is worked out on greenhouse gas emissions maintains uncertainty in the industry and leaves automotive companies in the position of managing regulatory decisions and potential penalties via press release.
Second, the remaining provincial electric vehicle mandates in British Columbia and Quebec must also be removed. While we recognize that these are provincial decisions, they are clearly interprovincial trade barriers that make Canada grossly inefficient. Ottawa must call on the provinces, and the provinces must recognize that this internal trade barrier can be damaging, not just to consumers and dealers but to manufacturers' ability to operate in Canada. Removing the EV mandate was the first of five points in our automotive competitive framework that we released a year ago.
Since then, the government has also listened to us during the review of the Bank Act by not allowing big banks to unfairly compete with the small businesses they finance. The federal government also finally paid the debt of over $11 million owed to dealers for the iZEV incentives.
The two matters still pending for us are the expansion of Canada's automotive regulatory framework and scrapping the inefficient luxury tax on vehicles.
On the first one, we encourage the government to continue along the path of diversifying Canada's economy. For our industry, we have recommended that Canada consider expanding its automotive regulatory framework, particularly concerning safety and emissions standards, to accept vehicles that have been deemed safe and environmentally compliant in other jurisdictions with which Canada has free trade agreements, specifically, the European Union, South Korea and Japan. These vehicles are not often introduced in Canada because of the substantial investment required to adapt their engineering and design to comply with the current Canadian and American regulatory frameworks for safety and emissions.
CADA urges the Canadian government to consider alternative methods for effectively regulating new vehicles sold in Canada. The primary goal to ensure vehicle safety and environmental protection remains while simultaneously offering a broader selection of vehicles that are potentially more fuel efficient and more affordable for consumers.
As for the second one, the luxury tax, that has been an unmitigated disaster and a clear example of an inefficient tax. Even the Parliamentary Budget Officer correctly predicted that it would never have its intended effect, as consumers would adjust their behaviour and buy around this tax. By administering the tax outside of tested systems such as HST/GST, costs have increased for the government, dealers and consumers. The process is so fraught with problems and inconsistencies that the CRA has had to issue countless clarifications. It is time for this inefficient tax to be eliminated.
Thank you for your time.
I would now like to turn it over to our chief economist.