Latest News from the CVMA

Auto sector response to the Federal budget.

Toronto, ON – 2005-02-23

The Canadian Vehicle Manufacturers’ Association (CVMA) and the Association of International Automobile Manufacturers of Canada (AIAMC) today commented on Budget 2005 announced earlier today by the Honourable Ralph Goodale, Finance Minister.

While the industry has made major gains in introducing new Tier 2 vehicles which are now 99% smog free and continue to introduce new fuel saving technology that will reduce greenhouse gases, it is disappointed with the Budgets’ direction with respect to consideration of “feebates”.

“There are smarter ways to reduce GHG emissions from vehicles,” said Mark Nantais, President of the CVMA. These kinds of taxes are ineffective and will keep older vehicles on the road longer and delay the adoption of cleaner vehicles that consume less fuel. We expect that farmers, families and people in rural areas, along with dealers and the members of our industry, will have strong views to share with the government.”

Independent research has shown that feebates have a negative impact in the marketplace and:

	Increase vehicle ownership costs for both Canadian consumers and businesses;
	Delay the rate at which new technologies are adopted.
	Unfairly target vehicle purchasers who legitimately require particular vehicles for business, geographic or family needs.
	May harm the environment because they may encourage consumers to keep older, higher polluting vehicles on the road longer.

The auto sector also suggested that a more efficient way to reduce GHG emissions would have been to introduce financial incentives for consumers to purchase advanced fuel-saving technology, such as hybrids and other alternative fuel vehicles. British Columbia, Ontario and Prince Edward Island have recently introduced incentives for fuel-saving technologies in vehicles.

“Financial incentives would have accelerated the uptake of fuel-saving technologies by Canadian consumers,” said Bob Armstrong, President of the AIAMC.

The automotive sector is currently in negotiations with the Government of Canada to reach an effective and responsible agreement to meet the government’s GHG reduction goals for vehicle emissions in Canada.

CVMA was founded in 1926 and represents the Canada’s largest manufacturers of light and heavy duty motor vehicles including, DaimlerChrysler Canada Inc.; Ford Motor Company of Canada, Limited; General Motors of Canada Limited and International Truck and Engine Corporation Canada and Volvo Cars of Canada Limited. CVMA members produce over 75% of light duty vehicles built and sell roughly 58% of the new vehicles sold annually.

The AIAMC was incorporated in 1979 and represents the interests of thirteen member companies engaged in the manufacture, importation, distribution and servicing of light duty vehicles in Canada. AIAMC membership includes BMW Canada Inc., Honda Canada Inc., Hyundai Auto Canada, Kia Canada Inc., Mazda Canada Inc., Mercedes-Benz Canada Inc., Mitsubishi Motor Sales of Canada, Inc., Nissan Canada Inc., Porsche Cars Canada Ltd., Subaru Canada, Inc., Suzuki Canada Inc., Toyota Canada Inc., and Volkswagen Canada Inc. In 2004, AIAMC members sold 59% of all new passenger cars in Canada.

For further information please contact:

Mark Nantais
President
Canadian Vehicle Manufacturers' Association
416.364.9333

Adrian Coleman
Association of International Automobile Manufacturers of Canada
416.595.8251, extension 25

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