Automotive News Canada - January 2021- v2 - 19

* J A N U A R Y 2 021

For suppliers, border restrictions
are living up to their name
CONTINUED FROM PA GE 1

importance of maintaining cross-border
supply chains between Canada and the
United States " to ensure the continued
flow of goods, including food and medical supplies for all Canadians, " Mary-Liz
Power wrote in an email to Automotive
News Canada.
Restrictions at the border are evolving
based on the best public health information available, she said. " We continue to
work with our partners across government
and with commercial stakeholders to provide assurances that commercial traffic is
not impeded. "

TO PASS, YOU MUST PROVE IT
Under those border restrictions, anyone
from the United States who wants to enter
Canada must prove to border agents that the
purpose of the trip is not optional or discretionary.
As well, all travelers entering Canada
- including Canadians - are required to
quarantine for 14 days, unless they qualify
for an exemption.
Two of the exemptions could apply to the
auto suppliers' situation, said Henry Chang,
a partner in the business immigration group
of Dentons Canada LLP in Toronto. They
include exemptions for technicians and specialists involved in maintaining equipment
essential to critical infrastructure, such as
health care and transportation, and for regular border crossers who work in essential
services.
" In terms of the exemption
for technicians and specialists, it is more for the handson people, not the president
of the company, " Chang told
Automotive News Canada.
" You also have to prove
Chang:
Businesses there's an urgency for this
must prove exemption, why you can't
wait 14 days. "
urgency
The other exemption,
to get
for regular border crossers,
technicans
could potentially be used by
across the
senior auto industry managborder.
ers and executives if they are
FILE PHOTO
supporting essential services
in Canada and are crossing the border frequently enough, he said.
Whether someone will qualify for the
quarantine exemption can be difficult to predict, Chang said.
" I quite often hear stories from applicants. They'll say, 'My colleague or my competitor got in with this, and you're telling
me that it's not sufficient,' " Chang said.
" Most of the time, if a client's facts clearly fit the eligibility requirements, they can
receive an exemption. Even if they don't,
they may still get in at the discretion of the
officer. "
Those restrictions and the way they're
enforced are making it difficult to do business, Windsor-area auto suppliers said.
Steve Del Duca, president of Ro-Matt
International Ltd., which designs and builds
welding and assembly systems, said officials
of Volkswagen in Tennessee flew to Detroit
to meet with his customer, a Tier 1 supplier,
on Nov. 4 in Windsor to see a piece of equipment that Ro-Matt was building for them.
They were denied entry at the land border.

YOU GET IN. YOU DON'T
Border enforcement appears to
be arbitrary and unpredictable, said
Don Rodzik Jr., corporate manager at
The Narmco Group, a Windsor supplier
of metal stampings and assemblies.
While Narmco has not lost any U.S. business, it faces ongoing inconsistencies at the
border, he said. In late November, " we had
OEM reps from the U.S. who were denied
access to our facility. Another group of [cus-

Steve Del Duca, president of Ro-Matt
International Ltd., said a group of
Volkswagen representatives headed to
Windsor to view a piece of equipment
were denied entry into Canada.
PHOTO VIA STEVE DEL DUCA

tomers] were able to cross at the same time
with the same paperwork. "
The uncertainty could jeopardize future
production, said Tim Galbraith, sales manager at Cavalier Tool & Manufacturing Ltd.,
a Windsor-area mold maker. " We're negotiating some very large contracts for 2021.
Invariably, what we're hearing is, 'Why
should I place it with you when I can't come
and check you out?' "
The Canadian Border
Services Agency (CBSA)
and the union representing
border guards both said the
guidelines on who is or isn't
exempt from restrictions are
clear and are being properly
enforced.
Galbraith:
" Being considered an
Customers
essential worker or essenneed to
tial employee does not autoinspect
matically mean the person
what they
want to buy.
is exempt, " Rebecca Purdy,
a Border Services Agency
FILE PHOTO
spokeswoman, wrote in an
email to Automotive News Canada.
" CBSA officers use the information available to them at the time the traveller is seeking entry into Canada to determine if the
traveller is eligible to enter the country. "
" I can guarantee you I'm satisfied they're
following all the rules, " said Jean-Pierre
Fortin, national president of the 11,000-member Customs and Immigration Union, whose
membership includes border guards.
Multinational automakers said they're
also feeling the impact.
" Absolutely, it's an issue, " said Brian
Kingston, CEO of the Canadian Vehicle
Manufacturers' Association, which represents General Motors Canada, Ford of
Canada and Fiat Chrysler Automobiles
Canada. " Whether it's repairs to an existing piece of equipment or installation of new
equipment, there's no longer any certainty
around when you can get that done. "
Canadian automotive suppliers have
noticed border restrictions tightened with
the second wave of COVID-19 in the fall.

BUSINESSES WANT CERTIFICATION PROGRAM
" What we're hearing is this is impacting small and medium-size business
more than larger industries, " said Marta
Leardi-Anderson, executive director of the
Cross-Border Institute at the University
of Windsor. " Even if there's a vaccine, it's
going to take time for people to get vaccinated. "
Auto suppliers said they would like
to see the government introduce a certification program that identifies companies with safe COVID-19 practices, such as
requiring masks and providing separate
bathrooms and meeting rooms for visitors.
They also want to see the government
create a trusted-traveller program, similar
to Nexus, that identifies individuals considered essential to the industry, to remove
the current uncertainty about who can
cross. - ANC

Canadians who have been in
save mode will boost 2021 sales
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The 20-per-cent slide in 2020
was the second-largest percentage decline on record, falling
between the 22.7-per-cent decline
of 1982 and the 17.3-per-cent drop
of 1954, according to DesRosiers
Automotive Consultants.
But a vaccine is now on the
horizon, household debt is down
and Canadians are conserving
money. Those factors bode well
for sales in 2021 - maybe not
immediately, but eventually.

FOR MORE 2020
SALES INSIGHTS, VISIT:

canada.autonews.com/
2020bythenumbers

credit cards and other high-interest
loans. Household debt as a percentage of disposable income is 170 per
cent, down from 175 per cent.

THE CURE: VACCINES, VEHICLES

All the math could equal sales,
that is if provincial governments
can efficiently roll out COVID-19
Typically, Canadians save
vaccines and automakers can operabout three per cent of their disate assembly lines uninterrupted.
posable income, said Rebekah
Young and Kingston said
Young, Scotiabank's director of
the industry is still suffering
fiscal and provincial economics.
from inventory shortages, with
But during the pandemic, they
Kingston noting that the ripple
were saving upward of 30 per cent
effect of last year's shutand at last look, during
downs is still taking " some
the third quarter, were
time to work out. "
still saving 14 per cent. By
" It's working its way
contrast, Canadians went
through, and it's going to
into save mode during the
take a little bit longer, " he
financial meltdown of 2008
said.
and 2009 and were putting
Ontario was to remain
away seven per cent.
Young:
locked down - meaning
" We would be expectCanadians
appointment viewing in
ed to draw down on that
showrooms between 7 a.m.
[savings] as the crisis pass- are saving
at a greater and 8 p.m. - until Feb.
es, " Young said. " People
10. Ontario implemented
see a light at the end of the rate than
during the
a 28-day state of emergentunnel. People think now
financial
cy Jan. 14. Quebec, where
might be a good time to
crisis.
showrooms remain closed,
buy a car. "
FILE PHOTO
implemented a curfew
According to the
Jan. 9.
Conference Board of
" I'm not too optimistic that
Canada, 52 per cent of Canadians
we're going to see the end of this
surveyed in December said it's a
until some point in the spring, "
good time to make major purchasKingston said. " It's not impossible
es such as homes, cars and applito imagine a situation where we're
ances. That's down slightly from
trying to vaccinate the population
November and October but right
into summer.
around where sentiment was in
" And economic recovery won't
June, July and August, when lockfully take hold until this is truly
downs had just lifted.
behind us, until companies see
" Consumers are sitting on
there won't be further lockdowns,
cash surpluses - not everymore investments can start being
one, of course, " said the CVMA's
made and Canadians can go back
Kingston. " So much has been
to their regular behaviour. "
pumped into the economy, there
When they do, Kingston wants
is pent-up savings. So when we
them armed with an incentive to
do hit that transition point, we
buy new, green vehicles. He reitermight see an aggressive period of
ated calls for a national scrappage
growth. "
or cash-for-clunkers program.
Scotiabank's Young said
" That will kick-start sales and
Canadians have also " built in
help the government achieve its
breathing space " for themselves
environmental objectives. " - ANC
by paying down " bad debt " -

SURGING SAVINGS

CEWS criticized
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cant benefit to our people.
" By the end of the year many
parts of the business, excluding
our [aerial work platforms] business, were running more strongly, meaning the subsidy would be
significantly lower given its linkage to sales. Cash flow was good,
and as such the company decided
to restore the dividend to the original level. "
She said the company " has
always maintained a philosophy
of running a balanced business
with the needs of our employees,
customers and shareholders of
equal value. "
Some critics of the CEWS program as it is currently structured
are calling for change.
Michael Smart, a professor of

economics at the University of
Toronto, wrote in December that
the subsidies are " poorly targeted " and are not saving as many
jobs as they should, estimating
that the government is spending
about $14,500 for
each job saved over
a four-week period.
" If CEWS
funds are not savHasenfratz: ing many jobs,
Linamar
that means they
decided
end up in busidividend
ness profits, " he
was
wrote on the webwarranted.
site Finances
FILE PHOTO
of the Nation, a
partnership between academic
researchers and the Canadian Tax
Foundation. He pointed to a special dividend that furniture retailer Leon's issued to its shareholders in 2020 after it had received
CEWS subsidies. - ANC

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Automotive News Canada - January 2021- v2

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