By Blair Qualey
As Canada and British Columbia enter a period of significant economic turbulence, industry experts suggest the outlook for the new car sector will be extremely negative and immediate for consumers – in the form of higher prices for vehicles, and the parts used to service them.
Unfortunately, BC Budget 2025 may do little to lessen that impact. While the Budget speaks in broad strokes about British Columbia’s approach to punishing US tariffs, 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.
New Car Dealers are recommending government pull three levels that remain at their disposal:
1. Put the Brakes on Zero Emission Vehicle 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, the new car sector, and most notably consumers.
A critical aspect of the ZEV 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.
2. Enhance Support for the CleanBC Go Electric Vehicle Rebate Program
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 NDP’s long term commitment to the Program is being called into question as a result of the Premier’s comments during a recent media interview, suggesting the CleanBC Go Electric Vehicle Rebate Program is the subject of a government review and, “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.
3. 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 and the additional cost is pushing the price of a new vehicle beyond the reach of many families.
If government won’t remove this regressive tax, we urge them to adjust the threshold to a much higher level.
The NCDA is also recommending government to address a lack of programs and spaces in post-secondary institutions to train the next generation of industry workers. Simply put, 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 – and that means, ensuring we are best positioned to adapt to a landscape that is poised take a dramatic turn.
On a much happier note, the Vancouver International Auto Show is only two weeks from now, March 19-23. Don’t miss out! Get your tickets today at vancouverautoshow.com, contact [email protected] or call us at 604-214-9964 for more details.
Blair Qualey is President and CEO of the New Car Dealers Association of BC. You can email him at [email protected].
