New car dealers are facing numerous challenges today B次元官网网址� a shortfall of new car products in a post-COVID shutdown economic world, shortage of microchips needed for those new cars, shortfall of car parts, and pressure on used vehicles market availability.
So when provincial and federal taxation imposes further burdens on the industry, it becomes that much more frustrating, says Blair Qualey, president of the New Car Dealers Association of BC (NCDA).
B次元官网网址淲e are making our case but nobody is listening, paying attention,B次元官网网址� said Qualey.
The NCDA contends the B.C. luxury tax on vehicles still kicks in at $55,000, which Qualey says has not been adjusted for inflation and the overall cost of new vehicles with all the new technology B次元官网网址榖ells and whistles.B次元官网网址�
With B.C. and Quebec the only provinces to impose such a tax, it leaves open the options for consumers to shop elsewhere for a new vehicle to save money, which not only reduces sales revenue for car dealers but a loss in tax revenue.
B次元官网网址淭hat tax has been in place since the B次元官网网址�90s and never been adjusted. That tax threshold needs to be looked atB次元官网网址he average new vehicle now starts at about $55,000 with all the modern bells and whistles,B次元官网网址� he said.
And now the federal government plans to live up to an election campaign promise to impose a 10 per cent federal luxury car tax in September on vehicles over $100,000 in price.
Qualey said the NCDA has made presentations on the potential negative impact of the tax on consumers and his industry B次元官网网址� placing B.C. car dealerships and the jobs it creates at risk.
B次元官网网址淚t will provide an even greater incentive for consumers to take their business elsewhere, greatly impacting the more than 400 new car dealerships in 55 communities across this province, generating $15.6 billion in economic activity, and 27,000 family-supporting jobs,B次元官网网址� Qualey said.
B次元官网网址淲e have made our case to Ottawa. We know it was an election campaign promise but now we are waiting to hear back from the federal folks on what happens come September.B次元官网网址�
The imposition of luxury taxes on new vehicles, he says, is placing an unfair burden on new car dealers, citing for example how boats and recreation vehicles donB次元官网网址檛 face the same taxation.
B次元官网网址淲e just want a level playing field,B次元官网网址� he said.
The NCDA cites a May 26 report by the Parliamentary Budget Officer, suggesting the new tax on luxury vehicles would add $572 million to government coffers through the 2026-27 budget year but reduce sales by $566 million, or 19 per cent, over the same period.
He said the vehicle retail industry is still struggling to recover from the manufacturing slowdowns imposed by COVID-19.
B次元官网网址淓veryone on the vehicle manufacturing side put the breaks on production not knowing how things would unfold and it takes a while for that to kick back in,B次元官网网址� he said.
B次元官网网址淐ar manufacturers are trying to catch up to market demand but there are issues with availability of microchips you need for these new vehicles. And manufacturers have to pillage their own parts supply to get more product off the factory floors, and that in turn creates a parts shortage.
B次元官网网址淎nd with interest rates going up, it continues to pile on as that can present car loan challenges for consumers. And we donB次元官网网址檛 seem to get any relief from the government on some of these challenges.B次元官网网址�
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