An estimate from the Canadian Automobile Dealers Association (CADA) reveals the Canada Emergency Wage Subsidy (CEWS) helped protect nearly 48,000 dealership employees across the country during the COVID-19 pandemic.
The data was pulled from the association’s one-year dealer survey, pointing to the CEWS as a critical lifeline for automotive retailers. (Read the latest updates about the wage subsidy here.)
“It continues to be clear that the CEWS program has been instrumental in helping dealers bridge the gap and retain their employees during the pandemic,” said Tim Reuss, President and CEO, CADA.
The association advocated for important changes to the wage subsidy starting in 2020, to ensure more dealerships would have access to it and to a greater amount of support. For example, the initial subsidy was 10 per cent, but was increased to 75 per cent in April 2020. The government also introduced a sliding scale to the wage subsidy last year, among other things.
“The federal government responded swiftly and made the necessary adjustments to the program to ensure businesses and workers received adequate support throughout this pandemic,” said Reuss.
He said the wage subsidy helped dealerships bring employees back to work sooner than anticipated, while ensuring that the transportation services that dealerships provide were maintained during the pandemic.
“We are very proud that dealerships — through sales and repair and maintenance operations — kept emergency services rolling and made sure delivery services and health care professionals could serve the community,” said Reuss.
The survey also found that vehicle supply remains a key concern for auto retailers, as the pandemic has impacted the production of microchips and has led to a shortage in supply — which in turn has impacted the production of many vehicles and supply remains lower than is typical.
Nearly 91 per cent of dealer respondents said they were concerned about new vehicle supply in the near future, and 87 per cent of respondents believe it will take at least six months to see an increase in supply. Furthermore, 57 per cent said they do not believe that Canadian dealers are getting their fair share of global vehicle allocation.
“The chip shortage and recent COVID-related restrictions across Canada will weigh heavily on the recovery of the auto sector this year,” said Oumar Dicko, CADA’s Chief Economist. “While we were pleased to see the extension of the CEWS to the end of September 2021 in the recent federal budget, more support and sound policies are needed to allow for jobs and business recovery.”
Dicko also pointed to the proposed luxury tax in the federal budget as another concern for the industry during a period of recovery. Canadian auto dealer will release a video interview with Dicko next week, which will explore some of the findings of the survey, his thoughts on the luxury tax, and what the association is doing to mitigate this issue.
The survey was conducted from April 1 to 15, 2021 and collected responses from 535 dealerships.