Thank you very much, Mr. Chairman.
My name is Tom Donnelly, and I am the chairman of the Canadian Automobile Dealers Association, also known as CADA. I'm accompanied today by Mr. Huw Williams, who is our public and government affairs director with CADA.
CADA is a national trade association that represents franchised dealerships of new cars and trucks. We have over 3,000 members and we are a presence in virtually every community in Canada. We employ approximately 140,000 people nationwide.
I'm especially pleased to be here today to talk about the important issue of vehicle theft, a problem too often forgotten until it directly affects you. In addition to my role as chairman of CADA, I also operate a medium-sized, family-run GM dealership here in Ottawa. Most dealerships in Canada are much like mine, family owned and operated, independent small businesses, not, as some may think, creatures of the manufacturers.
As you can imagine, when an expensive vehicle worth $30,000 or more is stolen from my lot, it has a real and direct effect on my business's bottom line. Most of my remarks will emphasize that by driving up the cost of purchasing and insuring a vehicle, such theft is a problem to more than just a person whose car has disappeared.
Additionally, too often such crimes are the results of organized crime networks and bring with them all the associated negatives of such organizations. This is especially true when looking at thefts from dealerships like those I represent.
It's important to talk a little bit about vehicle theft in Canada and take a quick look at some of the statistics. As Canadians, we often assume our peaceable kingdom has less crime than the United States. Usually this is a safe assumption, but when it comes to vehicle theft, we actually have the dubious distinction of beating our American neighbours' per capita vehicle theft rate by 26%.
Moreover, there are 56% more vehicle thefts in Canada than there were two decades ago. From 1991-2001 alone, we saw vehicle theft increase by 10%, despite a 38% decline in the rate of all other property crimes. Of those cars that are stolen, about 30% are never recovered and only 13% of the cases are ever solved by the police. Clearly, there's room for improvement.
On a personal note, I'll give you an example that happened to us in south Ottawa about 18 months ago. At about 4:30 on a Sunday morning our fences were cut, and four $60,000 diesel extended-cab pickup trucks were stolen in less than three or four minutes. When we discovered this on the Monday when we returned to our premises, we phoned to make a police report, and the police gave us our file number to contact our insurance company.
It's become a real issue with some of the police departments because it's not something they seem to be winning a war on. That's not a slight against police, it's just a problem with respect to the way things are today.
It's easy to think of a vehicle theft as an insurance problem, a hassle for those whose car or truck is stolen, with damages largely offset by the victim's insurance policy, yet with little direct effect on the population at large. Nothing could be further from the truth. While it is certainly true that the victim of a car theft is most directly harmed, society at large is certainly affected as well.
The Insurance Bureau of Canada estimates the cost to Canadian insurers, and by extension its policyholders, is more than $600 million a year, and that's just the cost to the insurance companies. According to studies, the number doubles to $1.2 billion when health care costs, policing, and out-of-pocket costs such as deductibles are added. These costs drive up the price of insurance for all policyholders, not just those unlucky enough to wake up to find their car is no longer in the driveway.
Costs to consumers from vehicle theft are not limited to insurance policyholders but are also found in the sticker prices of new vehicles. Theft of merchandise is an issue for all retailers, be they selling groceries, general merchandise, or cars, and as such theft hurts retailers' bottom lines, it ultimately only serves to increase the costs to the paying customer.
Unlike us, other retailers are rarely targeted with specific shopping lists of goods to be stolen. In separate studies, Statistics Canada and the RCMP found an increasing involvement from organized crime groups in the theft of specific vehicles. Specific makes, models, and years are targeted. They're stolen and in less than 48 hours they're in a shipping container bound from ports like Halifax, Vancouver, and Montreal for eastern Europe, China, and elsewhere. Other models are often stolen to be chopped for parts, often sold back to unsuspecting consumers as genuine merchandise.
This sort of theft is a large reason why 41% of the vehicles stolen from dealerships are never recovered, which is almost three times higher than that of thefts from parking lots and four times higher than that for thefts from the street.
Numbers like these are part of the reason why auto theft and auto-related claims are, with the exception of the odd catastrophic loss, the highest loss experienced for insurers. This has also meant that fewer and fewer companies are willing to offer the sorts of garage policies that dealerships need. This has left little in the way of competition, leaving dealers to pay exorbitant premiums, beyond even what could be expected because of what the risk is.
Dealers are trying to do their part. We've tried to reduce thefts in a number of different ways, such as adding floodlights, fencing, hiring night-time security guards, but such measures are still imperfect. The nature of a dealership is that millions of dollars of assets sit in a parking lot on display exposed to potential thieves. As thorough as we are with security, we are still dealing with a complex criminal network that reaps substantial financial benefits from stealing cars. Even if we could turn every dealership into the urban equivalent of Fort Knox, the tenacity of organized crime knows no bounds in circumventing our precautions.
It is imperative that the government act to curtail such thefts. Certainly they harm business and consumers through added security and insurance costs, but also the profits of the stolen car networks finance additional criminal activities in organized crime--things like the trade of drugs, prostitution, murder-for-hire, etc. While business dealerships across Canada would benefit if thefts from car dealerships were stopped tomorrow, it would even be of greater benefit to Canadians by hindering such criminal activities.
One of the strongest parts of this legislation is that it creates a separate crime for the theft of a vehicle. As I am sure the committee is familiar, the status quo is that if someone is charged with stealing a car they're actually charged with theft over or under, as appropriate, $5,000.
On every practical level a stolen car is not the same as other stolen property. Unlike televisions, china, jewellery, etc., cars are essential to individuals for mobility and independence. Cars allow a family to take their kids to school, the doctor, and the hockey rink. It is a car that gets people to work, or to the ski hill or beach on the weekend. These functions aren't dependent on the cost of the vehicle and are taken away just as much when a $30,000 car is stolen as when a $3,000 car is stolen. That's why vehicle theft can't be measured by the value of the asset, as the nature of the harm is not really dependent on the value in the same way that other property is.
Some parts of government already treat vehicle theft differently. Statistics Canada keeps a separate record for cars stolen, and the average person on the street would likely feel the same. It would seem that for the last instance of a stolen car being treated as just a property crime in the Criminal Code, this legislation would fix that.
The legislation brings important focus on the issue of vehicle theft, a problem that adds cost to consumers and business and fuels organized crime in addition to the individual effects on those who actually have their cars stolen. Importantly, it makes stealing a car its own offence and better reflects the function of a car, which often belies its strict monetary value as property.
While I'm sure that there will be some discussion about the length of the proposed sentences as well as the inclusion of so-called mandatory minimums, I think it is important to stress that this legislation offers real improvements over existing legislation and can only serve as an added deterrent for a problem that has only gotten larger as other crimes have declined.
Thank you very much.