Quebec auto dealers voted for rules that Ontario dealers are lobbying against
What if we didn’t need auto dealers?
A committee of Quebec’s National Assembly held hearings last week on updates to that province’s Consumer Protection Act. Some of the proposed changes to auto sales will sound very familiar to Ontarians: they’re among similar regulations that Ontario was being asked to consider:
- Extending the two-day cooling-off period to closed-term leases (it already applies to open-end leases and auto financing).
- Prohibiting selling a vehicle for a higher price to a cash customer.
- Regulating negative equity financing (but not prohibit it entirely).
You might recall back in May when Driving.ca reported on the failure of the Ontario government to go ahead with tougher consumer protections in the auto industry: specifically, the massive downvote of a “cooling-off” period would have given shoppers some pre-delivery breathing space if they’d signed the paperwork but second-guessed within 48 hours. To clarify: not after they’d taken delivery of a vehicle, just after they’d signed the contract.
In April, Ontario’s Auditor General “proposed changes to update the Motor Vehicles Dealer Act (MVDA). Ontario’s sales regulator (OMVIC) oversees the MVDA.” Despite the list of 14 changes requested by these two government bodies, the government tossed the cooling-off period after intense lobbying from the Motor Vehicle Retailers of Ontario (MVRO). They said, in essence, that someone cancelling a car contract would simply cause too much hassle; the Used Car Dealer Association (UCDA) concurred, saying that people understood what they were getting into.
George Iny, executive director of the Automobile Protection Association (APA) sits on committees of dealer regulators in both Ontario and Quebec; in an industry that chafes under many consumer protection regulations, he’s a bit of a thorn, yet the CCAQ invited him to their annual meeting. This is progress.
The Quebec dealer body voted 85 per cent or more on the customer-focused initiatives presented. The change of heart was clearly explained according to Iny. “[Quebec dealers] want to win back the confidence of their customers. They foresee the need to protect their relationship with consumers as a backstop to any future attempts by the automakers to switch to direct selling.”
Shari Prymak is a senior consultant with Car Help Canada. A survey earlier this year of over 600 respondents — all Ontario consumer members of CHC — revealed what those consumers overwhelmingly want: over 98 per cent wanted a two-day cooling-off period after signing a contract (again, not after delivery of a vehicle), something Quebec dealers have accepted and the Ontario government turned down at the behest of Ontario dealers; 98 per cent wanted an end to tied selling, ie. dealers forcing unwanted extras onto consumers. Again, Quebec dealers have accepted this, but Prymak is not optimistic that this, and other initiatives focusing on consumer protection, will survive any more than the cooling-off period amendment did in Ontario. “These proposed amendments are just sitting there,” he said. “These things would have a real meaningful impact on consumers.”
“Quebec is the most progressive province in terms of new consumer protection legislation,” says Prymak. “British Columbia is doing good work, too. But Quebec should be used as an inspiration, and hopefully enforcement will be efficient.” It’s like Ontario looked at Quebec’s gains and instead said, “nah, we’re good.”
OMVIC is Ontario’s vehicle sales regulator, but the extraordinary meeting of Quebec’s new car dealers has proposed not using OMVIC as a template anymore. Iny agrees that OMVIC has been focused on “busting curbsiders, consumer awareness and dealer training, none of which will improve the poor state of auto retailing at dealerships.” Cleaning up curbsiders is important, but there should be a broader mandate focusing on far bigger sales outlets. Iny goes on to say that “in the absence of effective enforcement, experience gained over many years shows that enhanced dealer education just gets you smarter cheaters.” Watching Ontario lose out on a two-day cooling-off period while other proposed measures face the same threat shows engaged organizations of sellers hold an inappropriate amount of power over consumer protections.
Effective July 1, 2024:
- Motor vehicle dealers and salespersons are no longer required to return their registration certificates when they cease to be registered.
- Registrants have 30 days to provide warranty documents and payments to warranty sellers.
- Registrants can include contact information of their choice (instead of a business telephone number) in advertisements, provided this contact information is published on OMVIC’s public database of registrants.
- Cross-appointments between OMVIC’s Board of Directors and the Motor Vehicle Dealers Compensation Fund (MVDCF) Board of Trustees are prohibited.
Effective January 1, 2025:
- The required Canadian Motor Vehicle Arbitration Plan (CAMVAP) statements will be simplified. Registrants must include a general statement on CAMVAP in all contracts.
Effective January 1, 2026:
- Registrants must complete continuing education requirements specified by the registrar before renewing their registration.
This sounds like the CCAQ has peered over the horizon and glimpsed a world where consumers might prefer to forgo a dealer, a practice Tesla has embraced. While there are enough consumer horror stories at the dealer level to merit the idea, Iny is in favour of dealers selling vehicles. “They should be incentivized to do their jobs well. Those who break the law receive too much advantage over their competitors.” A level playing field where those who obey the law aren’t penalized into uncompetitiveness would ultimately give consumers the experience they want while providing good service.
I happen to agree with Iny: there are fair dealers out there, and it’s time to protect them.
I guess Quebec dealers too, have pondered the opening question: what if we didn’t need auto dealers? Ontario consumers deserve better protections than its current government appears willing to allow.
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