Automotive News Canada - September 2022 - 3

* SEPTEMBER 2022
3
SECOND FRONT
Luxury levy
taxes
patience
Retailers have plenty of
questions about details
but few answers from
the federal government
By KELLY TAYLOR
WINNIPEG CORRESPONDENT
CANADIAN LUXURY-AUTOMOBILE
dealers are still waiting for details
about the federal luxury tax, which took
effect Sept. 1, and are lacking guidance
on many aspects, such as how it applies
to leases.
" If [the tax] isn't
delayed, then the
Canada Revenue
Agency (CRA) is going
to have to come back
to the industry on
a lot of answers to
a lot of questions in
short order, " Michael
Wyant, COO of the
Saskatchewan-based
Wyant Group, told
Automotive News
Canada before Sept.
1. The group owns 29
dealerships, including
Mercedes-Benz,
Porsche, Audi, Jaguar
and Land Rover stores.
" It just doesn't seem
In a letter to Finance Minister Chrystia Freeland, industry leaders said
the new tax being imposed on luxury vehicles such as this Lamborghini
Aventador " is riddled with unanswered questions and layered with glaring
uncertainties for which there are no answers. "
PHOTO: LAMBORGHINI
The letter states that even though
the associations have " worked collaboratively
with officials, " the industry is
" faced with complying with a tax system
that is riddled with unanswered
questions and layered with glaring
uncertainties for which there are no
answers. "
The letter said the CRA and Finance
Department officials participated in
an online webinar, hosted by CADA,
with more than 1,000 dealers across the
nation. Wyant, who participated in the
webinar, said it left dealers in the dark.
Wyant: Feds
don't seem
prepared to
impose the
new luxury
tax. " There's
so much
ambiguity, it
doesn't feel
right. "
FILE PHOTO:
as though they're ready yet. There's so
much ambiguity, it doesn't feel right. "
Wyant's comments echo those in an
Aug. 25 joint letter to federal Finance
Minister Chrystia Freeland from
the Canadian Automobile Dealers
Association (CADA), Canadian Vehicle
Manufacturers' Association (CVMA),
Global Automakers of Canada (GAC)
and the Canadian Finance and Leasing
Association. CVMA represents the
Detroit Three in Canada and GAC lobbies
for overseas automakers.
LEASES, SNOW TIRES AND MORE
The letter states that dealers want
answers on such questions as whether
necessary accessories such as winter
tires should be included in the sale
price for tax purposes, as well as how
to handle taxation of leases and demonstrator
vehicles.
" As an industry, we are concerned
about the chaos that will occur as substantial
details remain unclear, " the letter
stated, noting that the industry has
been raising these questions " for the
past year. "
An appendix to the letter lists questions
about how the tax applies to
extended warranties, GAP insurance,
prepaid maintenance plans, loan life
insurance plans, protection packages,
security etching, administrative and
document fees, pre-delivery fuel tank
filling and the various add-ons already
in place, such as tire fees, air-conditioning
tax or environmental levies.
Wyant said he expects only a shortterm
impact on the luxury market,
based on his dealers' experience in
British Columbia, which already has a
similar tax. Some buyers in B.C. held
back initially, he said, but returned to
the market when it became clear the tax
was there to stay.
The federal tax, which will also
apply to B.C., is 10 per cent of the purchase
price of more than $100,000, or 20
per cent of the amount above $100,000,
whichever is less.
An example provided by CRA is
of a vehicle sold for $150,000. In the
first instance, 10 per cent of $150,000
is $15,000, while 20 per cent of $50,000
($150,000 minus $100,000) is $10,000. In
this case, the $10,000 figure would apply.
" If the vehicle is, say, $110,000, an
extra $2,000 in tax shouldn't affect the
viability of that person, " he said. " It's
frustrating and aggravating, but people
will still buy what they want. "
A tax notice supplied to Automotive
News Canada by the CRA said the new
tax applies to any vehicle with four or
more wheels in contact with the ground,
that transports 10 or fewer individuals
and was manufactured after 2018.
It does not apply to recreational vehicles
with at least four of the following:
cooking facilities, refrigerators, self-contained
toilet, a heating or air-conditioning
system that functions independently
of the engine, a potable water supply
with faucet and sink, and a 110- or 125volt
electric-power supply.
The notice doesn't answer the industry's
questions regarding winter tires
but says the tax is applied to the total
price of the vehicle, including any government
levies and accessories not
related to trailering. It also applies to
leasing and is calculated based on the
value at the time of the lease.
The tax notice also said improvements
to any vehicle subject to the tax
SEE LUXURY TAX PAGE 29
TRANS-CANADA NEWS 5,000 KILOMETRES OF STORIES
Luxury dealer buys
Mont-Tremblant track
MONTREAL - OWNER
of Quebec-based Holand
Automotive Group Gad
Bitton has purchased a historic
racetrack for an undisclosed
sum, with an eye to
developing the surrounding
property.
The 4.26-kilometre MontTremblant
circuit hosted
Formula One races in
1968 and 1970 and has been
owned by Quebec billionaire
Lawrence Stroll for two
decades. The part owner of
Aston Martin and its Formula
One team put the track on the
market about a year ago.
Holand, which owns luxury
vehicle dealerships in
Quebec and Florida, said
the acquisition will allow
it to offer clients exclusive
track experiences. The company
also plans to " develop
and embellish " the 299-acre
(121-hectare) site to attract
" highly desirable clientele " to
the scenic region.
- Steve Mertl
Pricey hail protection
saves (most) inventory
CALGARY - INVESTMENTS
in tents and netting by several
Calgary dealerships have
" paid for themselves " after
just one storm in June.
When other area dealerships
suffered from golf ballsized
hail, those that had in
recent years installed protective
shelters over their inventories
avoided overwhelming
damage.
" Without these [tents] ... it's
already a pretty big disaster, "
About 300 vehicles on the lot at
Country Hills Toyota were spared hail
damage in June, as they were covered
by protective tents and netting.
PHOTO: COUNTRY HILLS TOYOTA
said Brian Schmidt, general manager at
Country Hills Toyota.
The dealership spent about $2 milEVA
WIESE'S SUDDEN DEPARTURE AS
president of Mercedes-Benz Canada after only
two years at the helm
disappointed Canadian
dealers, but they understand
her decision to
move back to Germany
for family reasons.
" We really got to
know her, we worked
through some things,
and we really had some
stability, " said Brian
Lowes, president of
Pinnacle Automotive,
which owns MercedesBenz
dealerships
in Winnipeg and
Kitchener-Waterloo,
Ont. " We liked Eva.
She really listens and was a good fit for our
market. "
Tetzloff:
30-year
Mercedes
veteran
moving to
Canada
from his
role in
Russia.
SUPPLIED
PHOTO
Wiese will be replaced by
Andreas Tetzloff effective Oct. 1.
Lowes, who also chairs the
Mercedes-Benz Canada dealer
advisory board, said Wiese performed
well despite arriving at
a " difficult time " with the country
in various stages of pandemic
lockdowns. The Automotive
News Research & Data Center
shows Mercedes-Benz sales in
Canada grew 2.4 per cent in 2021
and are up 7.4 per cent through
the first half of 2022.
" It was a deeply personal,
family-based decision, " Lowes
said. " And as we know, those
never come at a good time. "
SEE M-B's PAGE 29
lion in 2017 to erect large
tents, he told Global News
Calgary.
About 300 vehicles
were sheltered when the
storm struck; those that
remained exposed sustained
about $2 million in
damage, Schmidt said.
Nearby Country Hills
Hyundai did not have nets
or tents installed and suffered
" significant " damage,
said General Manager
Jordan Romeril.
" By this time next year,
we will have nets. "
- Joe Knycha
SEE TRANS-CANADA PAGE 23
Her successor, Andreas
Tetzloff, 'brings a wealth
of experience in retail
and customer service'
By KELLY TAYLOR
WINNIPEG CORRESPONDENT
03
09.22
Exit of M-B's
Eva Wiese
is a surprise,
not a concern
Wiese: Returning
to Germany as
managing director
of Mercedes-Benz
Customer Solutions
GmbH. FILE PHOTO
Automotive News Canada - September 2022

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