Langley, BC – As we enter a period of significant economic turbulence, the New Car Dealers Association of BC (NCDA) says the outlook for the New Car industry will be extremely negative and immediate for consumers – in the form of higher prices for vehicles, and the parts used to service them, and BC Budget 2025 may do little to lessen that impact.
The NCDA says while the Budget speaks in broad strokes about British Columbia’s approach to punishing US tariffs implemented today, there is nothing of consequence to support consumers and a sector that generates $17 billion in retail activity, $775 million in total tax revenue for three levels of government, and directly and indirectly employs 30,000 British Columbians.
The NCDA is urging government to pull three levers at their disposal:
Put the Brakes on ZEV Mandates
British Columbia is entering uncharted waters and because of that reality, the government would be well served to put the brakes on their unattainable Zero Emission Vehicle (ZEV) mandates because they will only serve to exacerbate a dire situation.
“The auto sector remains fully committed to the transition to ZEVs. However, by keeping its foot on the accelerator, government will be inviting unintended consequences that will negatively impact the economy, our sector, and most notably consumers,” says Blair Qualey, NCDA President and CEO. “Now is the time to take a pause on mandate targets and their enforcement, as we navigate a challenging and changing landscape.”
A critical aspect of the legislative framework is the inclusion of significant financial penalties for auto makers ($20,000 per vehicle) for failing to meet mandated targets. Even prior to the threat of US tariffs, the prospect of major penalties already had some manufacturers reducing the allocation of vehicles into the province in order to meet quotas – which can only mean consumers will pay more, because limiting inventory means a higher price point for all new and used vehicles, as we experienced during the COVID pandemic.
Enhance Support for the CleanBC Go Electric Vehicle Rebate Program
The NCDA suggests, if the government is committed to the transition to clean energy vehicles, they need to support the CleanBC Go Electric Vehicle Rebate Program, especially as we see a softening in the ZEV market. Where two years ago ZEVs represented almost 23% of light duty passenger vehicle sales in British Columbia, in 2024 we saw sales slip to 20.9% in Q3 (per stats Canada), so initiatives like this are critical.
The NCDA has raised concerns about the government’s commitment to the program, both short and long-term, and suggest a February 15th Fairchild TV interview with Premier David Eby underlines the nature of those concerns. In the interview, the Premier indicated that changes made in 2024 that reduced the threshold of qualifying vehicles – and removed 75% of vehicles previously eligible for a provincial rebate, occurred, “…to ensure we are targeting lower value vehicles so that middle class British Columbians have access to the program.” In fact, the program was already income-tested.
The Premier went on to provide an ominous warning about the future of the program, suggesting it is the subject of a current government review, adding, “every program is going through that review right now, including this program. So, if people are looking for an electric car, maybe now would be a good time because every program like that is going through this review.”
Of note, effective May 1, 2025, used Zero Emission Vehicles (ZEV) will be subject to provincial sales tax. The exemption for used ZEVs that was introduced in Budget 2022 was originally scheduled to end in 2027.
Adjusting the Threshold of BC’s New Car Luxury Tax
The present Tax extends to vehicles that are by no means a luxury item; trucks, minivans and SUVs that British Columbians rely on to shuttle their children around, or for work. With the average cost of a new vehicle totaling approximately $66,000, the threshold for BC’s Luxury Tax kicks in at $55,000. The additional cost is pushing the price of a new vehicle beyond the reach of many families – and if government won’t remove this regressive tax, it must be addressed by adjusting the threshold to a much higher level.
The NCDA also suggests as BC’s automotive sector faces a wave of retirements in the coming decade, there is a lack of programs and spaces in post-secondary institutions to train the next generation of industry workers. New Car Dealers say there must be an ongoing commitment for programs such as those that train service technicians who repair the more advanced vehicles and EVs today.
“As we enter a critical period of time, the people of British Columbia are looking for its government to provide sound leadership,” continues Qualey. “And that means, ensuring we are best positioned to adapt to a landscape that is poised take a dramatic turn.”
About the NCDA: The New Car Dealers Association of BC (NCDA) represents over 400 new car and truck dealers throughout British Columbia who employ 30,000 British Columbians and are responsible for close to $17 billion in retail sales in the province. The Association speaks on behalf of the retail automotive industry and advocates on legal, environmental, and consumer issues relating to vehicle sales in British Columbia.
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Contact:
Kelly Gleeson
604-240-6231
[email protected]
