BRITISH COLUMBIA – The New Car Dealers Association (NCDA) of BC say they want to be part of keeping BC’s economy moving – but suggest they require government attention to three priorities, which include the negative impact of the BC Luxury Tax on vehicles, in particular pickup trucks; a critical labour shortage facing the sector; and the need for ongoing funding to maintain BC’s leadership position in zero emission vehicle (ZEV) adoption.
Blair Qualey, NCDA President and CEO, highlighted for the BC Standing Committee on Finance’s pre-budget consultations, the economic impact of the sector on the provincial economy. This includes $15.6 billion in retail activity each year and $260 million of direct tax revenue and $610 million of total tax revenue for all three levels of government – along with an estimated $1.2 billion in total tax revenue to all levels of government when factoring in the federal and provincial sales taxes paid by consumers on purchases of new cars. On the employment front, the study finds the new car dealers are responsible for almost 27,000 FTEs of total employment in BC, including 18,000 FTEs at the direct level.
“This government has proven to be a valuable partner,” said Qualey. “Our submission is focused on building on areas in which we have enjoyed collective success, but also ensuring we are identifying those areas that require attention because of their impact on consumers and the economy.”
Qualey highlighted three issues that are of primary concern:
- The BC Luxury Tax on vehicles kicks in at a $55,000 purchase price but hasn’t been adjusted for inflation for many years. As a result, many standard vehicles of today, are captured by the tax, including vans and larger SUVs that families rely on to shuttle their children around – and pickup trucks that are required by many businesses, and individuals, such as those who live and work in resource communities. This presents another layer of taxation on BC residents who already face considerable cost of living challenges.
The NCDA is recommending the Luxury Tax threshold be raised and eliminated over time because of the present impact and the fact that the average prices of a new vehicle in Canada reached $54,000 in May, only slightly below the present luxury tax threshold.
Further compounding the issue is the pending introduction of a federal luxury tax in September that will create a double-tax for consumers, while also putting BC companies and family-supporting jobs at risk.
- The BC automobile sector faces a critical labour shortage, with industry projecting the need for 20,000 workers over the next decade. The NCDA currently works with the Industry Training Authority (soon to be SkilledTradesBC), WorkBC and other labour agencies, and suggests that continued funding to support apprentice and jobs training programs are critical to the industry and consumers.
- The NCDA is also recommending an ongoing funding commitment to support the CleanBC Go Electric vehicle purchase rebate program along with key investments in critical charging infrastructure where people live, work and play. The NCDA is proud to administer the ZEV (zero emission vehicles) rebate program on behalf of the provincial government, through which BC has taken a leadership role in ZEV adoption in North America. Despite the pandemic and supply chain issues, more than 18,000 rebate transactions were processed last year. Today, there are more than 70,000 ZEVs travelling our highways and in the first quarter of 2022, more than 17% of new vehicle sales were zero emission vehicles.
“Our members want to be part of the solution in keeping the economy moving in the right direction,” said Qualey. “Our recommendations will help encourage consumer spending and increase jobs by removing or adjusting tax barriers such as luxury tax and surtaxes, incentivizing consumers through EV purchases and charging rebates and investments, and ongoing investments in skills-training, which is central to future success for our sector, the broader economy, but also in the lives of a new generation of young people who are exploring career opportunities.
About the New Car Dealers Association of BC: The NCDA is the provincial industry association that represents over 400 new car and truck franchised dealers throughout British Columbia. Members of the Association provide 27,000 family supporting jobs for British Columbians and are responsible for $15.6 billion in retail activity. The Association speaks on behalf of the retail new automotive industry to the public, media, and government, and deals primarily with the legal, environmental, and consumer issues relating to new vehicle sales in BC.