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MVRO Makes Budget Recommendations to Minister Freeland Ahead of 2024 Budget

Autosphere » Dealerships » MVRO Makes Budget Recommendations to Minister Freeland Ahead of 2024 Budget
MVRO Makes Recommendations for the 2024 federal budget. Photo Adobe Stock

The Motor Vehicle Retailers of Ontario (MVRO) has written to federal Finance Minister Chrystia Freeland with recommendations for the 2024 federal budget.

As Ontario’s new car and truck retailers suffer a historic labour shortage of automotive technicians, the MVRO is asking the federal government to cut red tape when welcoming qualified technicians from abroad.

As of Q1 2023, there were over 3,000 vacancies in the automotive trades in Ontario alone—double the pre-COVID level. It’s estimated each vacant technician position costs the federal government up to $10,000 in foregone income tax every year.

The MVRO recommends the federal government:

  1. Temporarily remove the Labour Market Impact Assessment (LMIA) advertising requirement and,
  2. Speed up the Temporary Foreign Worker (TFW) application process.

“Ontario new car and truck retailers desperately need technicians to meet the service and auto body repair demand from customers. As Ontario waits for more students to complete post-secondary and become automotive technicians—we require qualified technicians from abroad as a short-term measure to repair and maintain the vehicles on the road today,” said Frank Notte, Director of Government Relations for MVRO.

In the letter to Minister Freeland, Notte writes:

“The process of having to advertise for job openings—while knowing full well there aren’t enough qualified people to apply—is incredibly frustrating. That money, often tens of thousands of dollars in many cases, is better spent on wages for new employees. Furthermore, the amount of time to advertise these openings directly contributes to the delay in repairing and maintaining vehicles for Canadian drivers.”

Labour Market Report

Earlier this year, the MVRO, with support from the Canadian Automobile Dealers Association (CADA) released its Labour Market Report produced by professional services firm MNP. The report shows:

  • Each vacant technician position costs the federal government up to $10,000 in foregone income tax every year.
  • The automotive trades labour force is aging and the number of people entering apprenticeships is declining. As a result, the number of people in the automotive trade labour force is declining and vacancies are increasing.
  • It takes between 12 and 16 months to fill a position through the TFW program, due in part to the requirement by the federal government to demonstrate that there is a lack of available workers locally through an LMIA.
  • It’s estimated that between 20 to 30 percent (up to $9,000 per vacancy) of the TFW costs are associated with the LMIA process.
  • It can take less than four weeks to process foreign worker applications in New Zealand and Australia – compared to 10 weeks in Canada.
  • Depending on the Labour Rate, the estimated annual revenue loss of one technician vacancy per retailer is $429,600 – $644,440 per year.

“Every day an automotive technician position remains vacant results in fewer paycheques being collected, and less government revenue being generated. We hope the federal government includes these recommendations in Budget 2024 to help reverse Ontario’s automotive technician shortage,” said Notte.

The federal budget is usually delivered in March or April.

 

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