Canadian dealership service departments in major population centres are averaging an effective labour rate of $163.82, while rural service departments have recorded the fastest year-over-year rate growth, according to new national data from automotive software provider Reynolds and Reynolds.
The figures cover dealership fixed operations and mechanical service work, not collision repair or auto body operations. Reynolds and Reynolds, a dealership software and services provider, examined customer-pay service repair orders from dealerships across Canada for its 2026 Fixed Operations Golden Metrics report.
Average effective labour rates reached $163.82 in large population centres and $156.14 in medium centres. Small and rural markets averaged $138.76 and $138.18 respectively.
Rates increased in every market. Large-city dealerships recorded a 2.6% year-over-year increase, compared with 5.5% in medium centres, 6.6% in small centres and 7.6% in rural areas.
The busiest service departments did not post the highest effective labour rates. Stores handling between 500 and 849 customer-pay repair orders per month averaged $161.49, while stores processing more than 1,200 averaged $153.26.
Reynolds and Reynolds officials wrote that the Canadian pattern differed from the company's U.S. data, where effective labour rates tend to decline steadily as shop volume increases.
Profit per customer-pay repair order rose faster than labour rates. Dealerships in large population centres averaged $354.97 in profit per repair order, followed by $255.95 in medium centres, $254.42 in small centres and $205.63 in rural markets.
Year-over-year profit gains ranged from 5.8% to 11.3%.
“The gains aren’t purely driven by price,” Reynolds and Reynolds officials wrote, adding that the complexity of work sold also contributed to the increase.
Recent Canadian collision repair data have recorded a decline in average insurer-paid repair order values.
The July Pulse of the Industry report from Collision Repair magazine and AutoHouse Technologies, a Vancouver-based provider of collision repair performance analytics, found average insurer-paid collision repair order values had fallen in each of the previous three reports. The cumulative decline between March and June was $281.
Average collision repair cycle time declined from 13.8 days in April to 13.2 days in May and 13.1 days in June. Average touch time increased from 2.5 hours per repair per day in April to 2.6 hours in May and June.
Mike Gilliland, president and founder of AutoHouse Technologies, said the highest-performing facilities were recording substantially different production results from the wider industry.
“Top-performing collision repairers — the top 10% — are separating themselves through disciplined operational controls that create consistency across intake, WIP, repair planning and production flow, not simply by increasing car count or working longer hours,” Gilliland said in the April Pulse report.
That report found top-performing collision repair facilities averaged a 6.0-day cycle time, compared with 13.8 days across the wider industry. Their average touch time reached 4.7 hours per repair per day, compared with 2.5 hours for the industry overall.
The Reynolds report also recorded lower work per repair order during periods of higher service volume.
Large-market dealership service departments handled about 48% more customers in November than July, but hours sold per repair order fell from 2.02 to 1.79. Total hours sold rose about 36%, from 1,054.84 to 1,435.42.
Profit per customer-pay repair order also fell during the spring and fall tire-change peaks.
“The data shows us what is being sold in those hours is not as profitable as what is being sold at other times during the year,” Reynolds and Reynolds officials wrote.
Rural service departments recorded some of the largest year-over-year increases in the report. Customer-pay repair orders increased 15.5% to an average 282 per month, while total hours sold rose 21.2%. Average hours sold per repair order increased 4.6%.
Reynolds and Reynolds officials also compared service departments where technicians used automated recommendation software with departments where technicians did not have such a tool.
In large population centres, stores using the technology averaged 2.05 hours per repair order, compared with 1.84 without it. Effective labour rates averaged $166.76 compared with $160.42, while profit per customer-pay repair order reached $389.90 compared with $314.53.
At the segment's average volume of 595 customer-pay repair orders per month, Reynolds and Reynolds calculated a $44,845.15 difference in average monthly profit.
Medium-market dealerships recorded a $68.64 difference in profit per customer-pay repair order, equivalent to $29,858.40 per month at the segment's average volume of 435 repair orders.
Small-market dealerships recorded a $31.07 difference per repair order, equivalent to $11,185.20 per month at an average 360 repair orders.
“When done manually, such processes are prone to inaccuracies in quotes and time wasted,” Reynolds and Reynolds officials wrote of tasks such as checking parts availability and pricing before technicians send recommendations to service advisors.
Results differed in rural markets. Service departments using the technology sold an average 195.08 additional hours and recorded an $8.72 higher effective labour rate, but profit per customer-pay repair order averaged $254.30 compared with $255.40 for stores without the technology.
Separate Canadian dealership research has also identified fixed operations as a major source of expected profitability. Canadian Automobile Dealers Association survey results published in 2025 found 80% of dealers expected fixed operations to be the most important contributor to dealership profitability, ahead of used vehicles, new vehicles and finance and insurance.
U.S. dealership results have also recorded higher fixed-operations profits. Haig Partners reported that same-store fixed-operations gross profit among publicly traded U.S. dealership groups increased 7.5% in 2025.
