Luxury Tax, Make Sure You’re Calculating it Right: Use the CRA Guide

Luxury tax on new “subject” vehicles above the $100,000 price threshold has been in effect for several years now. By now, most dealers dealing with new vehicles will be familiar with the basics of calculating luxury tax, (e.g. luxury tax is equal to the lesser of 10% of the taxable amount of the subject vehicle and 20% of the amount above the price threshold). Dealers should also be familiar with the definition of “subject” vehicle.

A subject vehicle is a vehicle that:

  • is designed or adapted primarily to carry individuals on highways and streets
  • has a seating capacity of not more than 10 individuals
  • has a gross vehicle weight rating that is 3,856 kg or less
  • has a date of manufacture after 2018
  • is designed to travel with four or more wheels in contact with the ground

Some examples of subject vehicles include sedans, SUVs, hatchbacks, coupes, convertibles, and light-duty pickup trucks.

However, some dealers are still confused about the details of calculating the luxury tax. Are certain add-ons included when calculating luxury tax? What about other fees? The Canada Revenue Agency (CRA) has a very clear guide located on their website explaining how to calculate luxury tax and what additional items need to be included when calculating it.

What to include

The following are examples of what to include in the value of consideration for calculating the luxury tax on the sale of a luxury item. The following are not exhaustive lists.

Improvements

  • Motor and engine upgrades
  • Engine block heaters
  • Remote starter and keyless entry systems
  • On-board audio, entertainment, navigation, communication and lighting systems
  • Extra options including power windows, sunroof and Wi-Fi capabilities
  • On-board solar panel systems
  • Heating and air conditioning systems
  • Exterior upgrades including cosmetic and equipment installations
  • Interior upgrades including upgrades to upholsteries and cabins
  • Upholstery treatments
  • Exterior paints, vinyl wraps and window tints
  • Protective films and coatings
  • Undercoating and rustproofing
  • All-season, winter and performance tires that are installed on vehicles at the time of sale
  • Etchings, immobilizers and other anti-theft systems

Incidental goods and services

  • Motor and engine fuel in the fuel tanks of luxury items
  • Chargers for electric vehicles
  • Floor liners, cargo organizers and other interior accessories
  • Lifejackets, embarkation ladders, parachutes, signal flare kits and emergency roadside kits
  • Splash guards, deflectors and other exterior accessories
  • Key chains, key fob covers, waterproof tarps, sunshades and other miscellaneous accessories
  • Detailing and delivery services that are supplied with the sale of luxury items

Fees

  • Administration and documentation fees
  • Regulatory fees (e.g. OMVIC fee and AMVIC fee for vehicles in Ontario and Alberta)
  • Title and ownership transfer fees
  • Licencing and registration fees
  • Finance arrangement fees
  • Fees for registering liens and other security interests against luxury items (e.g. PPSA fee)
  • Transportation and freight fees
  • Pre-delivery inspection (PDI) fees

Federal and provincial levies

  • Import duties and taxes
  • Federal green levy on fuel inefficient vehicles
  • Federal excise tax on air conditioners in vehicles
  • Federal and provincial levies on motor and engine fuel in the fuel tanks of luxury items
  • Provincial battery levies
  • Provincial tire levies

What not to include

The following are examples of what not to include in the value of consideration for calculating the luxury tax on the sale of a luxury item. This is not an exhaustive list.

  • GST/HST
  • PST in British Columbia and Saskatchewan (Note: the luxury vehicle tax in British Columbia is a form of PST)
  • RST in Manitoba
  • QST in Quebec
  • Software upgrades that are performed remotely
  • Extended warranties
  • Repair, maintenance and service plans
  • Emergency roadside assistance plans
  • Road hazard protection plans
  • Payment protection plans
  • Insurance products
  • Guaranteed asset protection coverages
  • Seasonal storage services
  • Paid subscription services that do not modify luxury items including navigation, media and internet subscription services
  • Extra sets of tires that are not installed on vehicles at the time of sale

Members are encouraged to review the luxury tax calculation guide, which provides detailed examples, by following this link: Consideration and retail value – Canada.ca

Members that still have questions about luxury tax can reach out to the UCDA’s Legal Department by telephone at (416) 231-2600 or toll-free at 1-800-268-2598.

The So-Called OMVIC Industry Advisory Council

Members will recall, prior to his resignation in September 2023, over a spot of bother in Las Vegas, that then Minister of Public and Business Services, Kaleed Rasheed, followed through, earlier in 2023, despite strenuous industry objections, with a gutting of OMVIC’s Board.

Reducing the number of Directors on the OMVIC Board from 12 to 9, and reducing the number of dealers on the Board to 3 from 9, the Ministry effectively ended industry self-management; the very reason OMVIC was created in the first place.

In its stead, the Ministry gave industry an Industry Advisory Council (IAC). Trade associations, like the UCDA, dealers, salespeople and others could be on the Council and raise issues of importance to the industry with OMVIC. In theory.

The reality is, unlike other advisory councils in Ontario, the OMVIC Council Chair is appointed by OMVIC, from OMVIC’s own Board of Directors and it is the Chair, and the Registrar of OMVIC, who sets the Agenda for the IAC.

The effect of that, as we feared, is that much that is presented to the Council, is what OMVIC wants to talk about, not what concerns industry. And most of what OMVIC wants to talk about concerns consumers, not dealers.

In addition, the IAC is more and more being expected to have joint meetings with the Consumer Advisory Council, rather than just meet on its own … care to guess the subjects that come up at those meetings? OMVIC performance metrics, registrant non-compliance reporting, OMVIC branding, a Quebec class action on hidden fees and consumer survey results.

Are those issues top of mind in your business? No? Here either.

With caution, we decided to give this process a chance, on certain conditions. OMVIC agreed to approach the Ministry for a meeting after 18 months to seek an amendment to allow the IAC to appoint its own Chair and set its own Agenda. To create circumstances where industry would have the autonomy to tell OMVIC what IT wants to discuss and what IT considers of importance.

That time has passed and we have given OMVIC until the end of August to honour their commitment to set the meeting or will we will resign from the IAC.

We want our Members to know where things stand and the reasons why.

We will continue to advocate for UCDA members and this industry, as we always have, with OMVIC, and where necessary, the Ministry in charge of OMVIC over things that really matter to industry like, for example, OMVIC spending, fee increases, OMVIC communications, poor service, policy and curbsiders.

We will continue to do so in our own way and always on your behalf.

Less Fraud … More TRUSTii

For months now we have been sharing a new tool for fighting finance fraud for dealers, TRUSTii.

Finance fraud is almost as big a problem as auto theft in our sector, and ID theft, fake ID’s and other scams are at the heart of the problem.

In recent weeks we have seen messaging from banks, like the CIBC and TD, suggesting the kind of tools TRUSTii offers dealers will no longer just be a nice thing to have, but more like a requirement banks will look for in making their funding decisions.

More and more financers are expecting to see ID verification happening at the point of sale.

The solution TRUSTii offers you means, in minutes, any photo ID, drivers licence, Indian Status Card, passport, etc., can be run on the system to check if the photo and ID are real and can be trusted.

All UCDA members can access this affordable tool at www.ucdaseaches.com

By verifying both the individual and their ID, the risk of fraud is significantly reduced and it can also streamline your process by quickly and efficiently verifying customers’ identities.

The customer does not have to be at the dealership, since the verification is completed by the customer.

The verification process involves five simple steps:

  1. Sign in to ucdasearches.com
  2. Click on the “Trustii Identity Verification Service” button at the bottom of the page
  3. Fill in the customer’s name, cell phone number, email address and click “submit”
  4. The customer receives a link, takes a photo of their ID, and a selfie using their own cell phone.
  5. Results are displayed within minutes at ucdasearches.com

Take advantage of this program, strengthen your security measures, protect your bottom line AND GET FUNDED with legitimate buyers.

UCDA members pay only $3 per completed search ($3.99 to everyone else).

Join an expert-led webinar session by TRUSTii to learn about howbiometricverificationworksforyourlendingpartnersandthe FINTRAC requirements on August 13th at 11 AM – sign up https:// solution.trustii.co/mnp-trustii-ucda.

Even Small Claims Court Judges Can Get the RSLA Process Wrong:

Make Sure You Get It Right

The Repair and Storage Liens Act (“RSLA”) is a great option to ensure you are paid for your repair or storage work. If you carefully follow all of the rules under the RSLA, you can ultimately sell the vehicle to get what you are owed.

We have written about the different types of RSLA liens (possessory vs. non-possessory) and the steps that need to be followed in order to claim and act on a lien in the past. However, a recent case in the Ontario Divisional Court, makes it clear that some are still struggling to understand the process.

A customer was involved in a car accident. A tow truck company came to the scene and had the customer sign a contract for the tow and storage of the vehicle. The contract made it clear that if the customer did not pay their bill, the tow truck company would keep and sell the vehicle as they saw fit. When it came time to pay the towing company’s bill, the customer was surprised to see that the tow truck company was charging a $2500 “cancellation fee”.

The customer, and their insurance company, refused to pay this cancellation fee. The tow truck company claimed a possessory lien on the vehicle and refused to release it to the customer. The customer, through their insurance company, took steps to formally challenge the tow truck company’s lien under the RSLA and paid the amount claimed into court.

The tow truck company did not take any formal steps to challenge the amount of money that the customer paid into court. Normally, this would require the tow truck company to release possession of the vehicle and prove its case in court.

The tow truck company instead proceeded to sell the vehicle without any notice to their customer as required by the RSLA and apparently ignored the court process (never a good idea). The tow truck company failed to send a letter by registered mail informing the customer that they were planning to sell the vehicle as required. Instead, the tow truck company sent an email to the customer with only their original signed contract as an attachment.

The tow truck company also failed to give the customer back any remaining money, from the sale of the vehicle, after the tow truck company had taken their share of what they claimed to be owed under their tow and storage bill.

The customer took the tow truck company to Small Claims Court and disputed their lien. The Small Claims Court took the tow truck company’s side. The Small Claims Court found that the email satisfied the notice requirements and that the terms of the contract allowed the tow truck company to sell the vehicle and keep all of the money.

The customer appealed this decision to Divisional Court. The Divisional Court disagreed with the Small Claims Court and instead sided with the customer. The Divisional Court made it clear that the Small Claims Court misinterpreted the RSLA. The RSLA has very clear rules that must be followed to claim and act on a lien. You must provide clear notice of the sale. This can be done by sending a registered letter, to the customer, owners, and lienholders. Simply emailing the customer a copy of the original contract, with little to no context, is not enough.

The Divisional Court also made it clear that you cannot ‘contract-out’ of the RSLA. If you sell a vehicle using the RSLA process, you can only keep the money that you are owed to cover your repair or storage bill.

Any remaining money must go back to the customer, lienholders, and other interested parties. You must return the remaining money even if you have a clause in your contract that says otherwise. This is because contract law cannot change the process, or the rights of the customer, under the RSLA.

Even judges can get the RSLA process wrong; contact the UCDA to make sure you get it right.

Members can contact the Legal Department by telephone at (416) 231-2600 or toll-free at 1-800-268-2598.

Members interested in reading the full Divisional Court decision can do so by following this link: https://tinyurl.com/3rd2nvvn

Don’t Charge Interest Rates So High, They’re Criminal

The Government of Canada has recently introduced the Criminal Interest Rate Regulations, to reduce the threshold of what is considered a ‘criminal’ rate of interest. As of January 1, 2025, it is now a criminal offence to offer loans at an interest rate higher than 35% annual percentage rate (APR). It used to be 60%. There are some exceptions to this law, but they only apply to (1) commercial loans; (2) pawnbrokering loans; and (3) payday loans.

The change is important not only because of the reduced rate, but also the difference between EAR and APR for the purpose of calculating interest. EAR takes into account ‘compounding interest’. APR is used to calculate the annualized rate, without considering compounding interest.

If you are selling a vehicle to a customer, particularly with in- house financing, make sure that you do not charge your customers a criminal rate of interest. Failure to follow this rule could mean severe consequences. For less serious offences, you may be fined up to

$25,000.00 and be imprisoned for almost 2 years. For more serious offences, you may be imprisoned for almost 5 years.

At the end of the day, dealers should be looking to sell their customers a vehicle—not a problem. While it’s true that customers are free to choose to enter into ‘bad’, but not illegal, contracts, don’t make a habit of trying to sell your customers vehicles that are outside of their budget. Selling vehicles that meet your customers’ needs, and budget, is just good business practice.

Word of mouth gets around, especially in today’s digital age. A customer that can afford their vehicle is a happy customer. Customers who find themselves lagging behind on payments, may not end up being so happy. Create a reputation for yourself as a dealership that doesn’t try to push their customers beyond their budget. The positive word of mouth will get around, and you may find yourself with more customers in the long run.

Members interested in reviewing the Criminal Interest Rate Regulations can do so by following this link: https://tinyurl.com/mrxjysrz

UCDA Now Offers A Fillable Form

You asked for it, you got it!

We are thrilled to announce the launch of our latest offering— our newest digital Used Vehicle Bill of Sale, designed to make your transactions smoother and more efficient.

This easy-to-use, fillable document is perfect for handling your sales contracts providing members with professional looking Bill of Sale (BOS).

And it only costs $2.49 per bill of sale, offering exceptional value!

Key Features

Available to all members: Access is provided to members using your dealer number.

User-Friendly

No more hand bombing multipart bills of sale. Simple to complete and customize to suit your needs. Preview at any time to ensure accuracy then download the final UCDA BOS in Portable Document Format (pdf).

Logo & Dealer Information

Your dealership logo, dealership name and address can easily be added to the BOS.

Does the Calculations

Sub-totals and taxes calculated automatically with over-ride capabilities if required.

Powered by Surefire Solutions Inc:

Provider of SureFire DMS solutions for Automotive, RV, and Marine Dealership operations in Canada. Ensuring reliability and top-notch digital performance. Existing SureFire DMS clients already have this feature included in their subscription.

Don’t miss out on this convenient new tool, crafted to support your dealership. Visit our website at https://www.ucda.org/easybos/ to get started today!

Launching in July! Stay tuned for more updates.

Breaking Down Trade Barriers InCanada

One lesson we have learned quickly as tariff pressure from the U.S. mounts is that we have too many trade barriers right here at home. This is not a new concern actually, we have known this for years, but the Provinces are protective of their turf, and we have feet of clay when it comes to change. To some degree our hand is now being forced.

The fact is barriers to trade between Canadian Provinces is estimated to cost Canada as much as $200 Billion per year, and eliminating them could grow our economy by as much as 8% (based on a 2022 study By
Ryan Manucha, lawyer and trade researcher at the C.D. Howe Institute and Trevor Tombe, Economist).

It seems the Ontario Government agrees, which is why they have introduced the Protect Ontario through Free Trade within Canada Act. Its design is simple, Ontario proposes to eliminate identifiable barriers to trade in specific industries and if other Provinces do the same, then their trade is welcome in to our Province and ours is welcome there.

https://tinyurl.com/38smvk6e

One such industry that has been identified is ours.

You may not know it, but there is a free trade agreement between Provinces. It’s called the Canadian Free Trade Agreement, but there are a number of carve-outs the Provinces inserted in this agreement to
protect certain industries. Those carve-outs are called “party-specific exceptions” and the one for our industry said:

“… that motor vehicle dealers operating in Ontario and registered with the Ontario Motor Vehicle Industry Council maintain a physical place of business in Ontario.”

Ontario has removed that exception, and expects other Provinces to do so as well. The idea being if you are a dealer or a salesperson in another Province, you should be able to be treated as such in Ontario, and our registrants have the same right in the other Province.

As you might expect, the devil is in the details, and we have many questions and concerns. We attended information sessions on this legislation and have raised our queries with them, see what follows:

Transition Timelines

As we understand the timeline, assumedly from the time the out of province (OOP) registrant notifies OMVIC of their intention to sell cars either as a salesperson or dealer, they are permitted to do so in Ontario
for up to 6 months while they finalize their formal application and then OMVIC would have another 30 days to approve or disapprove.

  • In the 7 month potential period, what protections do consumer have who deal with these OOP registrants?
  • Will consumers who deal with them have access to the Ontario Dealer Compensation Fund and if so, will such OOP dealer registrants pay into it?
  • Will consumers be able to see registrant names on a publically accessible database like OMVIC maintains for dealers and salespeople in Ontario during this 7 month period?

Additional Questions:

  1. The requirement in Ontario that a dealer maintain a physical place of business in the province has always been a cornerstone of consumer protection. Knowing that there is an operating business where you can go to sign contracts, address concerns and see inventory is a key element to this industry’s professionalism. If an out of province dealer can ‘open up shop’ in Ontario with a physical place of business, does that not put Ontario dealers at a competitive disadvantage (assuming of course we wish to maintain the requirement here, which we think we do)?
  2. Ontario dealers must pay into a compensation fund to protect Ontario consumers who suffer a financial loss from a purchase or lease where the dealer is unable or unwilling to compensate. Will out of province dealers be required to pay into such a fund?
  3. Implementing “as of right” entry to the automotive sales industry raises concern over the Ontario Motor Vehicle Industry Council’s ability to enforce:
  • existing and proposed educational requirements on new entrants from out of province
  • restrict access to out of province registrants with whom they have concerns over past discipline records or financial capacity
  • cases where revoked registrants leave the province, register in another, and re-enter the Ontario market

Our main concern with this legislation, at first blush, is that we don’t want to sacrifice Ontario consumer protection for commercial expediency.

The legislation is expected to pass before the end of this legislative session, sometime in June.

OMVIC Education For Dealers

We told them so …

When we first started talks with OMVIC about their proposed mandatory education for registrants, we told them we supported the idea. Our industry needs to modernize and improve, like all professions, and Continuing Professional Development (CPD) is not unique to our industry. It is necessary to keep up with laws and regulations that are constantly changing and we want to maintain Ontario’s position as the most progressive consumer protection oriented motor vehicle sales market in Canada.

CPD

Launching April 1, 2026, all dealers and salespeople renewing on or after July 1, 2026, must complete OMVIC’s CPD program prior to renewal. Dealers will have to do this every year and salespeople every
two years. CPD will be accessible online on desktop, mobile, and tablet.

We told OMVIC we are concerned with cost, a proposed passing grade of 80% (we felt that was too high for CPD), fail rates and time.

We won on the issue of fail rates, as we suggested the CPD should be a non-fail test format, but many of our other concerns were ignored or have gone unanswered. Many of the issues we raised are the main objections registrants are now raising. No surprise there.

We still don’t know how much CPD will cost dealers every year or salespeople every two.

When we ask why the pass rate is set at 80% or the CPD course is going to take as much as 6 hours!!! we are told, as you are, that is what the “environmental scan” suggests everyone else is doing. We
pointed out long ago that is not actually so, but again, nada. It’s also concerning you will only have 90 days prior to renewal to complete it. Even lawyers get a year!

We asked why dealers can’t renew every two years, like salespeople, so they don’t have to do CPD every year … no reply.

Grandfathered Registrants

Dealers and salespeople registered before January 1, 2010, who renew after July 1, 2026 and who have not completed the Key Elements course offered by Georgian College, will need to do so prior to their renewal.

We were told Grandfathered registrants would have to pay $175 for the Key Elements course, we thought that was too high, and now it turns out even that was not true, it is $200.85:

https://www.georgiancollege.ca/omvic/#tab/mvda-key-elements

Interestingly, they say the passing grade is 75%, so it seems their “environmental scan” was more like ours was.

We are still waiting for an answer on grandfathered registrants who fail the Key Elements course. How much will it cost to re-write? According to Georgian College, a re-write will cost $200.85, so no credit for a re-write.

Anyway, what we do know is this education is coming in 2026, and we will be ready to support our members, whatever it looks like.

UCDA IN-CLASS EDUCATION

All of the OMVIC options are online, self-study only.

The UCDA will offer in-class training to grandfathered registrants to help them pass the Key Elements course and to help other
registrants pass their CPD. For grandfathered registrant dealers who take our course and who are UCDA members, WE WILL PAY FOR THE COST OF A RE-WRITE.

These options will be in place by January 1, 2026.

Fighting The Phenomenon OfVehicle Thefts In Canada

As our members know, Auto Theft has become such a problem that the cries of outrage were finally heard in Ottawa. The Feds held an important Summit in February of 2024 and among many things that followed from that is this report by the Standing Committee on Public Safety and National Security, released in December:

https://tinyurl.com/2sb2wze5

Among the 44 recommendations emerging, some standouts are:

Recommendation 5

That the Government of Canada review existing legislation and regulations, such as the Customs Act, with a view to:

  • Enhance compliance with export controls;
  • Increase accountability for all partners and facility operators involved in export operations;
  • Increase penalties for non-compliance and false reporting; and
  • Benefit from international best practices.

Recommendation 10

That the Government of Canada review the export surveillance aspect of the Canada Border Services Agency’s (CBSA) mandate by:

  • requiring a minimum percentage of random examinations of export containers at Canadian ports;
  • allocating more resources to this aspect of the CBSA’s mandate; and
  • introducing legislative amendments and regulations to compel rail and port operators to provide adequate accommodations for the examination of exported containers by CBSA officers.

Recommendation 11

That the government of Canada enhance collaboration between the Canada Border Services Agency and port authorities, rail network, and shipping partners to expand export cargo container examinations,
notably to include urgent, significant, and random deployment of scanning and detection technology in new locations.

Recommendation 12

That the Government of Canada continue to provide adequate resources to the Canada Border Services Agency to maintain their 100% response rate in conducting container examinations when information
is provided by law enforcement agencies.

Recommendation 13

That the Government of Canada invest in combating vehicle theft by:

  • Increasing the complement of border officers by hiring new frontline officers and deploying them to ports, rail yards, and intermodal hubs to expand examination capacity in response to intelligence developed by the Canada Border Services Agency and law enforcement;
  • Dedicating new resources to intelligence and targeting capabilities specific to stolen vehicles; and
  • Identifying and testing new detection technology tools to expand capacity to screen containers for stolen vehicles.

Recommendation 18

That the Government of Canada amend the Customs Act to make changes to the conditions under which containers may be searched and expand the powers of police officers working at ports to open containers when they suspect fraudulent contents.

Recommendation 22

That the Canada Border Services Agency undertake the following measures:

  • Verify the vehicle identification number (VIN) by decoding;
  • Improve targeting techniques and verification of export declarations;
  • Implement automated VIN duplication and national stolen vehicle database checks (Canadian Police Information Centre); and
  • Improve analysis of submissions to the Canadian Export Reporting System.

Recommendation 27

That the Government of Canada amend the Criminal Code to provide additional tools for law enforcement and prosecutors to address vehicle theft by:

  • Including new offences related to trafficking and exporting stolen vehicles.
  • Including new criminal offences related to auto theft involving the use of violence or links to organized crime; possession or distribution of an electronic or digital device for the purposes of committing auto theft; and laundering proceeds of crime for the benefit of a criminal organization.
  • Adding a new aggravating factor at sentencing if an offender involved a young person in committing an offence under the Criminal Code.
  • Increasing the Criminal Code penalties for motor vehicle theft, such as escalating terms of imprisonment for subsequent offences and increasing the penalties for motor vehicle theft when it has been committed for the benefit of or in association with a criminal organization.

Recommendation 28

Recognizing that the bail system is a joint responsibility between the federal, provincial and territorial governments, that the Government of Canada, in consultation and collaboration with the Provinces and
Territories, review the bail system to reduce recidivism and deter auto theft.

Recommendation 40

That the Government of Canada update and modernize the Canadian Motor Vehicle Safety Standards under the Motor Vehicle Safety Regulations, to ensure manufacturers include technological advancements to deter and prevent vehicle theft, such as tracking or anti-theft devices, in new vehicles.

Recommendation 42

That the Government of Canada amend the Radiocommunication Act to regulate the sale, distribution, and importation of radio devices used for vehicle theft.

Recommendation 43

That the Government of Canada encourage provincial and territorial governments to take steps to:

  • Combat revinning or the use of fraudulent vehicle registrations to re-sell stolen vehicles;
  • Ensure the verification of third-party vehicle registration and the physical inspection of problematic Vehicle Identification Numbers take place during registration; and
  • Ensure vehicle sellers are required to prove ownership before resale.

Recommendation 44

That the Government of Canada invest and participate in the interprovincial records exchange to improve data sharing across jurisdictions on vehicle registration.

We don’t know, at this time, how many, if any, of these recommendations will be implemented, but the fact these issues are being brought to the forefront is a good thing.

Many of these issues were known only to a select few in the customs and export game and now some obvious systemic problems are being brought to light.

Hopefully this leads to solutions that will make life better for all of us and much worse for criminals.

DEALERS CAN’T AFFORD OMVIC

With OMVIC salaries and Board benefits eating up almost of 90% of OMVIC revenue, who can afford OMVIC?

With pressures on dealers from all sides – Trump’s Tariffs, the Feds FINTRAC nonsense, inflation and lack of inventory – OMVIC thinks now would be a good time to slap more fee increases on dealers.

Transaction Tax Increases

Hot on the increase from $10 to $12.50 in 2024, OMVIC now want $22 for every vehicle you sell to a consumer. A 76% increase. This is to come into effect on September 1, 2025, unless we can stop it.

We estimate this will bring an additional 8 to 10 million dollars into OMVIC’s coffers, the new car dealers association thinks it might be much more.

In any event, it far exceeds OMVIC’s needs. The problem with that, is they will simply find ways to spend it all and come back asking dealers for more, in the way of all out of control bureaucracies.

Fee Increases

Following across the board fee increases by as much as 75% in 2024, OMVIC now plan more fee increases in every fee category from renewals to branch applications once again effective September 1, 2025.

Late Fee Increases

From $0, dealers now pay $300 and salespeople $150 as of Feb. 1, 2025.

Mandatory Education Costs Coming In 2026

We still don’t know what those costs will be because, despite asking, they have still not told us. Now we hear we may not know until the end of the year

OMVIC says they need more money, from dealers, their only source of funds.

Why?

Well, in 2022 OMVIC had about 140 employees. By 2026 they plan to have 180 of them. You do the math:

  • OMVIC needs 180 employees to manage 38,000 registrants.
  • Real Estate (RECO) has 170 employees for 112,000 registrants.
  • Travel (TICO) manage 1,996 registrants with 28 employees.

Large new car dealer franchises and groups will find these fees eat into their bottom line, but for smaller one-person or mom and pop dealerships, these costs, fees and expenses might very well spell the end of their businesses. Many new Canadians will have to find another path to the Canadian dream.

 

Consumers will all pay more for new and used vehicles as a result of all this. Where does all this money go? With an abysmal Google Rating below 2, it seems neither registrants nor consumers are happy with OMVIC. Everyone but OMVIC loses, as they build their Empire bigger. Do they really need the population of a small Ontario town to do their job?

Meanwhile, OMVIC refuses to tell dealers which warranty companies are insured, so dealers can meet their MVDA requirements. OMVIC layers on cumbersome record keeping requirements to track transaction fees with a ledger which is completely unnecessary in light of the already existing garage register requirement.

If these ‘death by a thousand fee increases’ continue, OMVIC won’t have a an industry to regulate; they will all be curbsiders.

What OMVIC needs is some serious belt-tightening. It’s high time for OMVIC to get their fiscal house in order. We call on them to have an open and honest third party audit to appraise where efficiencies might
be found to cut some fat before they ask dealers for another dime.

We asked OMVIC to agree to this, they refused. So now we look for the means to FORCE THEM TO. Political means.

It might be time for the Ontario Government to consider some other means of funding OMVIC operations. Perhaps taxpayers should pay for consumer protection, because there is a limit to how much dealers can be expected to bear.

While UCDA has, and will continue to communicate its concerns to the Premier and the Minister, one effective way to bring your concerns about excessive OMVIC fees is for you to write to the Minister and the Premier.

Ask to meet with your local MPP to brief them on the impact of these fees on your operations, especially in light of the current economic uncertainty, and request that they communicate your concerns to the Minister.

We invite dealers to have their voices heard and let your representatives at Queen’s Park hear from YOU. If you need help with a letter, we drafted one for you at https://www.ucda.org/omvictransaction-fee/

Send it to your MPP:

https://www.ola.org/en/members/current

Contact Premier Doug Ford:

https://correspondence.premier.gov.on.ca/EN/feedback/default.aspx

https://fordmpp.ca/contact/

Contact the Minister of Public and Business Service Delivery and Procurement:

The Hon. Stephen Crawford

InfoMPBSDP@ontario.ca

Contact OMVIC

chair@omvic.on.ca