Toronto Ontario — Findings from the Canadian Automobile Dealers Association’s (CADA) one-year survey regarding the impact of the COVID-19 pandemic on automobile dealers shows that the Canada Emergency Wage Subsidy (CEWS) has been a critical lifeline for dealerships and employees across Canada.
The survey, conducted from April 1 to 15, 2021 collected responses from 535 dealerships and provided key insights on how dealers are navigating the pandemic over a year into the crisis.
“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. 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 Tim Reuss, president and CEO of CADA.
Over the past year, dealers have made difficult decisions and cost adjustments to keep their businesses afloat, and those adjustments would have had to be substantially higher without the CEWS support.
“CEWS helped bring them back to work sooner than anticipated. Our internal estimate based on the survey responses indicates that upwards of 48,000 people were protected at dealerships across the country since the onset of the pandemic,” added Reuss.
In addition, Reuss pointed out the role of auto dealerships and CEWS in keeping the transportation infrastructure open.
“CEWS not only helped protect employees at vehicle dealerships, it also ensured that the essential transportation services dealers provide were maintained during the pandemic. We are very proud that dealerships – through sales and repair & maintenance operations – kept emergency services rolling and made sure delivery services and health care professionals could serve the community.”
The survey also revealed that a key-top-of-mind concern for dealers is vehicle supply, in part, due to the current microchip shortage, with close to 91 percent of respondents stating they are concerned about new vehicle supply in the near future.
This concern is amplified by the expectation of the time it will take for supply to increase, with 87 percent of respondents believing that it will take at least six months to see an increase in supply and 57 percent saying that they don’t believe that Canadian dealers are getting their fair share of global vehicle allocation.
While federal government relief programs like the CEWS have provided necessary support to dealerships, vehicle sales declined by close to 20 percent in 2020.
“The chip shortage and recent COVID-related restrictions across Canada will weigh heavily on the recovery of the auto sector this year. 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,” said Oumar Dicko, CADA’s Chief Economist. “The proposed luxury tax in the budget is also concerning for an industry in the midst of recovering from a crisis like no other in recent history.”