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Budget Considerations

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Alana Baker, Senior Director, Government Relations, Automotive Industries Association of Canada. PHOTO AIA Canada

On April 7, the Government of Canada unveiled Budget 2022. Contained within it was a core priority toward mainstream electric vehicle (EV) adoption. 

From mining and sourcing critical minerals and materials to manufacturing and purchasing, all of these aspects featured provisions in the budget. Missing, however, was any specific reference to the automotive aftermarket. 

A critical role

When it comes to transportation and the Canadian economy, the aftermarket plays a critical role in keeping 26 million vehicles in a safe and roadworthy condition. It also contributes nearly 500,000 jobs and $32 billion annually to the economy. Independent auto repair shops are found in every single constituency across the country and their presence and operation ensure Canadians have continued and reasonable access to vehicle maintenance and repair.

Therefore, independent service centres and supply networks are critical to the successful deployment of EVs on a large scale in this country, which means that the government must consider the aftermarket as a key component and not simply an afterthought when it comes to its overall EV strategy moving forward.

While incentives can prove an effective way to entice consumers into purchasing an EV, they are not the entire solution. Public opinion research has demonstrated that Canadians are far less likely to choose an EV if they are unable to get it serviced at their choice of repair shop. In fact, 77% of Canadians would be less likely to purchase, or would not purchase at all, a certain vehicle if it could only be serviced at an OEM franchised dealership. Therefore, when it comes to EV adoption, we cannot forget about the consumer confidence factor. That’s why it is crucially important that we have meaningful right-to-repair legislation that provides consumers with a choice in where they get their vehicle serviced.

Largest impact

This becomes even more important as the pace of vehicle electrification and connectivity intensifies, requiring access to the Internet and specific data and repair information, as well as new tools and technician skills. A recent survey of apprenticeship stakeholders found that compared with other significant Red Seal trades, automotive service technicians are reporting the largest impact of technological change in their workplace. Additionally, that same survey found that both seasoned technicians and apprentices are concerned about the ability to service EVs in their shops, given how fast vehicle technology is changing.  

There’s also the question of the ongoing vehicle and component supply shortages, as well as rising inflation which are having a significant impact on Canadians’ pocketbooks. This is why incentives need to be balanced with the ability for consumers to make informed choices, not only for purchasing vehicles but also for servicing them.

Jurisdictions around the world, including the U.S., recognize that a successful transition to EVs is only possible when the automotive aftermarket is able to support it. Therefore, ensuring a level playing field between the OEMs and the aftermarket, with clear, concise, right-to-repair legislation, consumer choice and competition is essential in making it work. 

Moving quickly

While our federal government in Canada has committed to fair right-to-repair legislation, it must move quickly to translate this into law. Doing so will define the right of data ownership as well as enshrine the ability of vehicle owners to choose where they take their vehicle for maintenance and repair.

By taking this path and supporting our aftermarket industry, the result will protect Canada’s skilled trades, the nearly 500,000 jobs the aftermarket supports as well as ensure a strong economy and effective environmental measures—key objectives the government outlined in Budget 2022. 


Alana Baker is Senior Director, Government Relations, for AIA Canada. You can reach her at [email protected]

 

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