By CRM Staff
Toronto, Ontario – April 3, 2019 – Overall, Canada’s collision industry entered into a period of relative stability in 2018 and early 2019, with profits, labour rates, and costs generally rising marginally faster than inflation. While the consolidation trend that so defined the earlier part of the decade continued, the pace at which major franchises and companies purchased shops slackened. Not unlike American collision facilities, Canadian ones are becoming more and more influenced by OEMs through certification programs, and insurers through direct repair networks. The impact of these two emerging industry winds varies considerably from business to business as a result of geography. Larger facilities located just beyond the urban areas of major cities have, generally, been more likely to pursue OEM certification programs, as the enable the businesses to draw clientele from the nearby metropolitan centres. Within more remote communities, direct repair network memberships are more actively pursued, as businesses are less likely to benefit from brand specialization.
Unlike the collision industry, Canada’s automakers have faced a tougher start to 2019. While the conclusion of trade negotiations between Canada, the United States, and Mexico ended satisfactorily for Canadian auto manufacturers, the American President’s imposition of special tariffs on steel and aluminum have raised their costs. Considerable coverage has been given to the imminent closure of the General Motors Oshawa Plant, located in a Toronto suburb. The Ontario facility, which has been a staple of the Canadian auto industry for the past century, will close its doors in 2019. The shutdown will cost approximately 2,600 factory workers their job, along with significantly affecting other automotive related businesses dependent on the plant. Unfortunately for the Ontario auto industry, these workers won’t be the only ones to lose their jobs. An additional 1,500 workers will also be facing a similar fate as Fiat Chrysler plans to eliminate the third line at its assembly plant in Windsor, Ont.
In response to the deteriorating state of the industry Ontario premier Doug Ford announced that the province would be investing $40 million towards the auto sector, through a 10-year plan. Part of the $40 million investment will go towards an automotive modernization program which will help parts suppliers become more innovative by making $10 million available to small and medium suppliers, who can each qualify for up to $100,000 if they chose to match the funds. The plan will also work towards creating a more competitive business climate- which includes removing some regulatory barriers, streamlining approvals and certification for auto manufacturing sites, reviewing the industrial rate, and international electricity rate and international promotion of Ontario’s auto sector.
It isn’t just automakers that were stung by a tough start to the year. Drivers, too, have felt their wallets lighten as insurance premiums have generally risen across the nation, despite several provincial initiatives to curb them. This is particularly stark in British Columbia drivers began paying approximately $60 extra a month, on top of already having the highest insurance premiums in the country. With the province’s public insurer continuing to lose money despite a number of cost-cutting measures, considerable public support exists for the industry’s privatization.
In an attempt to strengthen both the auto industry and increase the number of electric vehicles on the road, the federal government recently announced a $300 million investment in carbon-free vehicle incentives in its proposed budget. The investment would provide consumers with a $5,000 incentive for the purchase of a vehicle under $45,000. Also included in the proposed federal budget is a tax write-off for EVs for the year they are put in use and a new EVSE investment of $130 million over five years. In March Petro-Canada announced that 50 high-powered electric vehicle charging stations will be installed along the country’s 4,860-mile Trans-Canada highway by 2020.
