Governments at every level are opening their wallets to try and help offset the losses caused to the economy by the COVID-19 virus.

The 2020 Ontario Budget contains many goodies for businesses, some large, some small, and many of which will be of interest to Members.

We have tried to summarize the highlights below:

Electricity Costs

The Province will subsidize up to 16 per cent of electricity costs for industrial users and 14 per cent for commercial users starting Jan, 1, 2021.

Amending Payroll Taxes for Private-Sector Employers

30,000 small businesses with payrolls of less than $1 million will be exempted from paying the Employer Health Tax (EHT).

The EHT exemption (the payroll threshold above which employers are subject to EHT, on an associated basis) had been temporarily increased to $1 million (from $490,000) for 2020. The budget proposes to make the $1 million EHT exemption permanent.

The government is also proposing to increase the payroll threshold for payment of monthly EHT instalments to $1,200,000 (from $600,000), starting 2021.

Amending Business Education Tax (BET)

The province announced it would be levelling the playing field by lowering BET rates on over 94% of all business properties to a rate of 0.88 per cent in 2021 thus creating $450 million in immediate annual savings for Ontario businesses.

Property Tax

The province will provide municipalities with the ability to cut property tax for small businesses and has committed to giving consideration to matching those reductions.

Pending municipal adoption, this could provide small businesses with as much as $385 million in total property tax relief by 2022–23.

This could permit municipalities to:

• adopt a new optional property subclass for small business properties
• reduce property taxes to eligible small business properties

Previously Announced $1,000 Grant

In October the government announced Ontario’s Main Street Recovery Plan. The plan includes: providing $60 million in one-time grants of up to $1,000 for eligible main street small businesses.

The grant is available to help offset the unexpected costs of personal protective equipment (PPE) for businesses with 2 to 9 employees in retail, food and accommodations, and other service sectors.

To help as many businesses as possible, PPE purchases made all the way back until March 17, 2020 can be submitted for reimbursement.

Eligible businesses, whether applying for the Main Street Relief Grant for PPE – or for property tax or energy rebates in affected regions – will be able to do it all through one application on a new online portal.

If you qualify, this is the link where you can apply:
https://tinyurl.com/y37zmaxs.

For a good summary of these and other measures to help business in Ontario please visit https://tinyurl.com/y67bskvh.

Repairs

The Consumer Protection Act requires that repair facilities offer written estimates on all repairs (unless the customer declines and instead authorizes a maximum repair amount which cannot be exceeded).

If the repairer charges a fee for the estimate, and the actual repair is later authorized to proceed, the estimate fee must be waived. The total price cannot exceed the estimate by more than 10%.

Repairers, and dealers with service facilities, need to remember that if a vehicle comes in with a problem that will likely take significant time to diagnose before repairs can even proceed, you are better to bill separately for diagnostic time, rather than charge a fee for an estimate.

You can take verbal authorizations, but in that case you must write down and keep the name of the person giving it. Record the date and time, and if by phone or other means, the phone number or contact by the other means used.

Failure to follow the correct process can mean the repair bill may not have to be paid.

Consult your UCDA Repair Sign, which explains how all this works to your customers.

If you don’t have a Repair Sign visible to the public, as the law requires, please contact the UCDA at 416-231-2600 or 1-800-268-2598 for more information about getting one.

In House Financing

Anytime you allow a vehicle to go out on the road without payment in full there is risk. Many dealers accept that risk and allow customers to finance part or all of their payment over time. We call this “lease to own”, “buy here, pay here” or “in-house financing”.

A lawyer might call it a conditional financing, but whatever you call it, there are things dealers can do to reduce the risk present in all such sales.

Let’s not beat around the bush, the risk is the customer will default, or damage the vehicle, or write it off, or take off with it … and you won’t get paid. You cannot eliminate all the risks, but there are some basic things you can do.

An Ounce of Prevention – Lien Registration

The vehicle should be registered in the consumer’s name to avoid insurance risks and a lien should be registered on the vehicle to secure the dealer’s interest in it.

Insurance

Specify on the contract how much insurance, $1 or $2 million? Collision? Comprehensive?

Ask to be listed not just as a lienholder on the insurance, but also as a co-insured so the insurance company in the event of a claim, is required to treat you just as it would treat the consumer.

Consumer Protection Act

A UCDA Bill of Sale is designed to allow for financing terms to be described, but you probably want to go further and create a payment schedule to set out the payment terms with cost of credit and annual percentage rate clearly described and incorporated into the contract.

A useful website for these calculations is:
https://tinyurl.com/y6sdd2vr

GPS

It can be helpful to use tools to help locate vehicles when and if default happens (and it will from time to time).

You will never be able to eliminate risk, but you can reduce it and if you do, you may find lease to own is an excellent means by which to move more inventory from your lot to the consumer’s driveway.

Vehicle Registration & Bank Loans

When a dealer sells a vehicle to a customer, and assists the customer in finding financing to pay for it, it’s very important that the dealer fully understands the terms of the loan agreement. 

Loan Agreements

Loan agreements contain standard contract language about the customer’s obligations to the lender, to maintain adequate insurance, make timely payments, truthfully disclose income and so forth. These agreements also frequently place obligations upon the dealer.

A common contract clause that dealers encounter relates to the issue of vehicle registration. Some loan contract language requires that the dealer ensure that the lender is protected and that the vehicle is registered into the name of the buyer.

Vehicle Registration

With the high cost of insurance, some buyers will want the vehicle to be registered into the name of someone else, to get a lower rate.

For example, the buyer may want the vehicle to be registered into the name of their mother or grandfather, who may be accepted by the insurance company as the primary driver and quote a rate lower than if the buyer alone was the registered owner.

Others may ask you to put the vehicle in the name of a corporation for some perceived tax advantage.

Resist the impulse to just go ahead and do what the customer asks without clearing it with the lender first. Get any direction to do so from the lender in writing.

Don’t Forget About the Lender

Unfortunately, dealers sometimes forget about the lender. One of the most important aspects of the sale, from the lender’s point of view, is that the vehicle will be registered into the name of the buyer.

The lender will register a lien on the vehicle. If the buyer defaults on the loan agreement, the lender will recover the vehicle and sell it to offset its losses. 

However, if the dealer does not ensure that the vehicle is registered in the name of the buyer, the lender may not be able to act on their security because the loan agreement and the lien registered on the vehicle, each assume that the vehicle is in the buyer’s name.

If the buyer goes into default on the loan and the lender cannot proceed against the vehicle, it may hold the dealer responsible for its loss. The dealer failed to honour the agreement it made to protect the lender’s security in exchange for the loan in the first place.

Read and understand your obligations under loan agreements. If you are ever unsure about what you may be agreeing to, contact the UCDA Legal Department for guidance.

All dealers must be closed on Christmas Day, Friday, December 25 and New Year’s Day, Friday January 1, unless their local municipality has passed a by-law, exempting retail businesses from the requirement to close on these statutory holidays.

Very few municipalities will allow Christmas Day openings, and Members should contact their local municipalities for more information if needed.

All dealers may be open on Boxing Day, Saturday, December 26, should they wish to be. However, please remember that in all cases, staff must be given three days off with pay for Christmas, Boxing Day and New Year’s Day, if not on those days, than on other agreed upon days.

Employees who do not normally work on Saturday, must be given another day off. This could be the following Monday, December 28. Alternatively, it could be Thursday, December 24.

Members can come up with different variants, as long as all staff end up with three paid days off for Christmas, Boxing Day and New Year’s Day.

The UCDA office will be closed on Christmas Day, Monday, December 28 for Boxing Day as well as New Year’s Day.

The UCDA search facility office will be open during the following holiday hours:

We’re always excited to secure a new member service – especially one that we know has your best interests in mind.

Now that Desjardins has wrapped up their credit card processing program altogether, we were tasked to research and find a merchant Point of Sale provider who met our expectations in terms of cost effectiveness, transparency and ease of use.

The UCDA has done just that and has negotiated a very competitive Point of Sale program for processing rates and equipment with Global Payments.

They’ve been in the payments business for over 50 years and are one of Canada’s leading credit card processors.

Global Payments is a leading worldwide provider of payment technology and software solutions. They help UCDA members, like you, simplify the ever-growing complexity of the payment experience so that you can seamlessly accept any form of payment – any time, anywhere, any way.

But they’re more than just payments. With access to emerging technologies and software solutions, you’ll be fully equipped to meet the needs of your customers and keep them coming back.

With Global Payments, You’ll Benefit From:

• Preferred pricing for UCDA members on all credit and debit transaction processing
• Acceptance for all major card brands
• Fleet, commercial and private label card processing
• Gift and loyalty card programs
• Value-added solutions that can help you attract more business, increase revenues and offset your costs
• Satisfaction guaranteed

They also offer both hardwired and cellular mobile devices that are very easily set-up. Members will receive the most current Ingenico terminals, like the Desk5000 countertop terminal or the Move5000 mobile units.

Global Payments may not always have the lowest prices, depending on the types of credit cards that you take, but we are very satisfied that there won’t be any surprises down the line.

In a nutshell, they are committed to delivering world class service and solutions at a competitive price. If you’re interested in signing up, please contact the UCDA office at 416-231-2600 or 1-800-268-2598 and we’ll put you in touch with a local representative!

We are pleased to announce proposals for the most significant regulatory changes to Ontario’s Dealer Plate rules in 16 years. That’s how long its been since the UCDA successfully worked to create the Dealer Plate currently used by dealers.

As in business, in politics timing is everything. We have been seeking the type of reform that has now been proposed for over two decades.

When we re-opened reform discussions with the Ministry of Transportation (MTO) in the spring of 2019, we found that they were serious about reducing barriers to business … what Premier Ford’s government calls “red tape”. All Ontario Ministries have been asked to find ways to reduce regulatory barriers to both business and consumers.

We asked the Trillium Automobile Dealers Association to work with us and together we approached MTO with a list of asks. We had an important meeting in late January with MTO, and other stakeholders such as the police, to explain why these reforms were necessary and why, without them, barriers to effective use of Dealer Plates would remain.

Happily, our submissions took root and in a flurry of announcements just before Thanksgiving, the Ontario Government announced the following proposals:

• Dealer Plate on Light Duty Commercial Vehicles (i.e. pickup trucks) for Private Use “loaded with goods”
  Dealer Plates cannot currently be used on commercial motor vehicles carrying goods for private use. MTO is proposing to amend Regulation 628: Vehicle Permits, to allow the use of a Dealer Plate on a light duty commercial vehicle for private use that is “loaded with goods” for personal use (i.e. pickup trucks displaying a Dealer Plate).
• Allow vehicles equipped with Dealer Plates and a New Vehicle Information Statement to drive on Ontario roads
  The Ontario government is proposing to reduce the burdens on business by clarifying that New Vehicle Information Statements (NVIS) can be used in place of a valid registration permit when a new motor vehicle with a Dealer Plate is driven on the road in Ontario.
  This would reduce the administrative burden and costs for businesses and the courts by eliminating tickets that are incorrectly issued to motor vehicle dealers driving new vehicles with Dealer Plates prior to sale.
• Reduce costs and increase opportunities for businesses by making it easier to buy and sell vehicles at auction
  Ontario proposes to permit people to drive motor vehicles with Dealer Plates without a registration permit when purchased at auction. This would make it easier for dealers to buy and sell vehicles at auction, would create new opportunities for small businesses and reduce the administrative burdens on business and customers.

You can submit your support for the proposal by November 1st at: https://tinyurl.com/yxp96pat

Repair And Run

Maybe it’s the hard times lately, but we are hearing more and more from Members who do repairs about folks running out on their repair bills.

Everyone has heard of the old pathetic tactic of running out on a restaurant bill, “dine and dash”. The latest is “repair and run”. The dealer/repair facility fixes the vehicle, but before they can present the bill, the customer gets in the vehicle and drives away!

Unfortunately, we are also finding many of our members are far too relaxed when taking customer vehicles in for repairs in the first place. Some members do a bit of paperwork, but often get very little information beyond name (sometimes just the first name) plate and VIN. Others complete no paperwork at all!

It’s pretty hard to collect a repair bill when “Jim” from Toronto takes off with his car. You don’t even know where Jim lives, much less his last name!

At a minimum, don’t start a repair without paperwork containing full name, address, VIN, plate, and driver’s licence number. No consumer will be surprised by this. Most large repairers do this all the time.

Better yet, once the repair is done, secure the vehicle and get the customer to review and SIGN the work order or invoice before you let them have access to the vehicle. If they take off, at least then you can slap a repair lien on it and repossess it (which you can’t without a signed acknowledgment of the debt).

Even without a signed invoice, with a name and address, you can send them a letter and if need be, serve a lawsuit to collect the debt in small claims court.

Dressing it up – Dress Codes and Probationary Workers

In Ontario, the Employment Standards Act does not require any specific minimum notice for an employee dismissed in his or her first three months of employment. As a result, many people believe every employee is on “probation” for the first 3 months of their employment and can be fired for any reason, without consequence.

This is incorrect. First, employees are only on “probation” if it is a specified term of their initial employment. This must be made clear at the outset and agreed to. Second, such an employee may be entitled to damages during this period for wrongful dismissal or … a human rights violation.

Damages may be minimal, but who needs the hit to reputation such an action could cause a dealer?

In Alberta, one dealer is learning that lesson the hard way.

The firing of a 20 year old female “probationary” employee appears to have been caused by a perceived violation of the dealer’s dress code for employees. As is often the case in such disputes, the “fog of war” clouds the facts, so all we have to go by is the jousting in the media and input from various “experts”. The firing of a 20 year old female “probationary” employee appears to have been caused by a perceived violation of the dealer’s dress code for employees. As is often the case in such disputes, the “fog of war” clouds the facts, so all we have to go by is the jousting in the media and input from various “experts”.

But given comments from the young woman and the dealer, it would seem some employees took offense to the blouse the woman chose to wear to work. Some apparently felt it was “see-through”, provocative or inappropriate for the workplace. For her part, she says she was wearing the same top when she was hired!

The real problem, as is often the case in such matters, is the employer does not seem to have had a clearly spelled out policy and no written employment guidelines, to which they could point. Such rules should be clear, enforced evenly and fairly and violations punished in proportion to the severity of the violation.

Now the woman is threatening to bring a human rights violation claim against the Edmonton-based dealer and, while the damages will likely be minimal, the legal fees, and negative press, will not be.

https://tinyurl.com/y3bbq5b5

Online Defamation

We have written about the growing body of caselaw developing over the wild and woolly world of social media “complaints” about businesses.

Social media has become very important to dealers and ratings matter to many. Dealers have often noted the small but vocal group of “entitled” consumers who are set off by even minor problems or complaints with their used vehicle and who resort to rantings and ravings on the internet.

The trend seems to suggest that it’s getting harder and harder for businesses to resort to the courts to take action against the more outrageous “critics” out there.

When you start to read the following recent case, you might think it’s a slam-dunk that the business will be successful. The sheer nastiness and personal nature of the online posting certainly seems to “cross the line”. Read on however:

https://tinyurl.com/y38bucmz

This whole silly dispute started over what the customer felt was an inexcusable delay in obtaining the faucet and toilet roll holder she had ordered.

It degenerated into accusations and counter-accusations of assault. The police were called and even though the items arrived the next day and were paid for and picked up, the customer and her mother simply could not leave it alone!

They began posting to social media and, as the judge in the case observed “[t]o say the posts were offensive and virulent fails to do them justice. It was more a personal attack than it was a true review …”.

You might think the lawsuit that the store and the store’s owner brought for defamation would be a slamdunk, right?

Wrong!

Apparently the judge felt there was a “public interest” somewhere in these postings. That finding is important because of what is called anti-SLAPP legislation in Ontario, meant to protect a consumer’s right to free expression from the oppressive threat of litigation by businesses.

The trouble is, the law is supposed to facilitate a balance between the right to speak one’s mind on the internet and the damage done to personal/business reputations by the allegedly defamatory words.

It’s hard to see much balancing done in this case or to see where the “public interest” lies in any of this.

Having said that, until appealed or overruled in another similar case, this reasoning stands and should be a caution to dealers contemplating court as an option to deal with the more outrageous social media ‘warriors’ out there.

Our advice is to ignore this silliness. Trust that most readers will determine such posts say much more about the person posting, than they do about the business being targeted!

If you must respond on social media, state your response without emotion, stick to the facts, be courteous and brief. Depending on how ridiculous the post is, you might invite the poster to contact you to see if things can be worked out.

Do not, under any circumstance, stoop to their level and be rude, offensive or discourteous in any social media reply.

Invariably, that would only make things worse!

Minimum Wage

Minimum wage rates in Ontario increased on October 1, 2020. This increase is tied to the Ontario Consumer Price Index for 2020.

The increase to the general minimum wage was 25 cents, which brings the new rate to $14.25 an hour from $14.00 an hour.

For a chart showing all minimum wages in Ontario, including for students, etc., please see this link:

https://tinyurl.com/y9j4bk2m

James Bond Would Have Paid

A woman in B.C., who owned a valuable “James Bond” edition Aston Martin DB9 made the wrong decision not to pay her repair bill and then doubled-down and tried to sue the dealer and the mechanic who fixed her car!

She bought the vehicle for $200,000 in 2014 and in 2015 she ran it into a rock. Carrying minimal insurance, the $85,000 to $135,000 estimated cost to repair was her responsibility. But, when she was presented the final repair bill, she felt it was too high.

She sued the dealer for selling her the vehicle in the first place, claiming they took advantage of her wealth and poor English skills. She sued the garage for “hiking” the bill and both of them for $300,000 in “pain and suffering”, a term much used and rarely successfully proven in court.

The judge was not having any of it. The court dismissed her claim and ordered her to pay the repair bill of $85,549, pre-judgement interest of $4,078, legal fees and storage fees.

Her legal adventure ended up costing her $328,930.50.

We have to assume she left the courtroom shaken … but not stirred?

https://tinyurl.com/y3tjkufk

Think E-Transfers Are Secure?

Think Again

Pat Foran of CTV News reported on a case of a woman who sold jewelry and accepted payment by e-transfer. The woman thought once the $1,750 was deposited to her account it was final and secure.

Think again. Apparently, 5 months after this transaction, her account was frozen as the TD Bank identified that the funds deposited to her account were “fraudulent”.

Her mistake, according to the bank, was accepting funds from someone she did not know. More specifically, the bank says:

“When sending an Interac e-transfer, it’s important to ensure the recipient’s email address is correct, and the security question and answer is not easily guessable.”

In another case identified in the report, a man thought he was sending $1,000 to his lawyer. Somehow, the funds never made it to his lawyer and were in fact “intercepted” by some unknown third party.

The woman eventually got her $1,750 back in her account, but the man never did.

https://tinyurl.com/y2opm6wp

As dealers use this method of payment more and more these days, please take the bank’s advice to heart and be absolutely sure about the email address you use for sending or receiving funds. And make those security questions difficult enough so that some bad actor cannot easily guess the answer.

It seems e-transfer is only as secure as YOU make it.