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.