What About a Scrappage Program in Next Federal Budget?
At the peak of the coronavirus crisis last spring, the Canadian Automobile Dealers Association (CADA) applauded efforts by the federal government to help mitigate the impact of COVID-19 on businesses, but they still wished for additional measures.
With public consultations now underway for a 2021 federal budget that will serve as a post-pandemic recovery plan, the group is pressing Ottawa for tax breaks and other incentives, including a national scrappage program.
CADA president Tim Reuss said this week the entire industry—from manufacturers to suppliers and even the labour unions—is aligned behind this proposal.
New vehicle sales in Canada have been declining for the past three years, including a 20-percent drop in 2020 due to the pandemic.
CADA would like the federal government to pay consumers up to $3,000 to trade in a vehicle that is at least 12 years old. Right now, that would mean 2008 and older models.
Such an incentive would help boost sales while replacing obsolete or dirty vehicles by others equipped with cleaner, more modern technologies. In fact, it could take up to two million older vehicles off the road while reducing greenhouse gas emissions by up to seven megatonnes, according to the Global Automakers of Canada (GAC).
Prime Minister Justin Trudeau and his administration have reportedly been receptive to the idea so far, but they might want to use it as an excuse to drive sales of electric vehicles first and foremost.
Would that severely limit the program’s uptake? It’s a valid question, but we already know how dealers feel about that.
The pre-budget consultations will end on February 19 and the 2021 federal budget is expected to be announced in March.