TIMES ARE TENSE IN THE CAR BUSINESS THESE DAYS
B.C.’s new car sector generated $16 billion in retail sales last year, employed 30,000 people
In every province across this country, the automotive sector is and will continue to be a key economic driver — but storm clouds are gathering that could have a very real and tangible impact on the industry and communities where new car dealers are a significant underpinning of the local economy.
According to Statistics Canada, the auto manufacturing sector employs about 130,000 Canadians, while new car dealers employ approximately 156,000 Canadians, a statistic that, according to the Canadian Automobile Dealers Association (CADA), represents the largest and most geographically diverse employer in the Canadian auto sector.
In B.C., the new car sector generated more than $16 billion in retail sales last year and its share of retail sales is now 19 per cent, second only to food and beverage sales. The industry is also responsible for some 30,000 family-supporting jobs across the province.
As resilient as the sector is, today’s international political sphere is creating the biggest threat to our economy and industry since the 2008-2009 recession. The U.S. administration has imposed tariffs on steel and aluminum imports from Canada and other countries, and recently launched an investigation into automotive imports with a tariff as high as 25-per cent being contemplated.
Canadian-United States automotive trade is worth close to $150 billion a year, and as CADA’s John White correctly states, we simply cannot afford a tit-for-tat, dollar-for-dollar tariff escalation with our neighbour. A report released just days ago by the CADA outlined that 80 per cent of Canadian automotive production goes to the U.S. — and suggests a tariff of this nature could be enough to send our entire economy into recession similar to what we faced in 2008.
More than 100,000 manufacturing jobs and 25,000 to 30,000 retail jobs would be in jeopardy nationwide, in a worse-case scenario if Canada were to escalate the situation. In the U.S., over 700,000 jobs are at stake. Not only would dealers be affected, but customers would be especially impacted, potentially seeing the prices of vehicles rise by a significant amount.
Apart from job losses that have the potential to occur as the result of a U.S – Canada trade war, it would impact the economies and social fabric of communities across B.C. New car dealers have an obvious impact through sales transactions that occur, but many dealerships create new opportunities for workers through bursaries and by contributing to educational funding, along with their contribution to local charitable organizations and local fundraising efforts.
The New Car Dealers Association of B.C. is in full support the of the position being taken by our national Association. We are hopeful that cooler heads and common sense will prevail — and that the Federal Government will do everything in its power to de-escalate the current situation.
If you are concerned about this, contact your local Member of Parliament today.