The Ontario government will not be giving OMVIC the ability to use Administrative Monetary Penalties (AMPS) against dealers. That’s the word from officials with the Ministry of Government and Consumer Services, following our front page report in last month’s Front Line.

We have been told by the Ministry that “the proposed changes would not give any authority to OMVIC to issue AMPs”. The proposals contained in Bill 159 to establish the use of AMPs in enforcing the Consumer Protection Act (CPA), will be restricted to the Consumer Services Operations Division of the Ministry. No other regulatory bodies will be given the power to issue AMPs.

This assurance follows our Front Line story, several UCDA meetings with Ministry officials and a formal submission to the Ontario legislature’s Standing Committee on Justice Policy. The committee held public consultations and review of the proposals contained in Bill 159, a bill to amend the CPA.

While it’s welcome news for members that OMVIC will not be able to issue AMPs, this doesn’t mean that AMPs would not be used against dealers by Ministry compliance officers. Whether AMPs charges are laid by OMVIC investigators or by Ministry compliance officers, our concerns about what this could mean for members still exist.

As we wrote in the last Front Line, our concerns stem from what AMPs are and how they work. Generally, the process for laying charges under provincially administered legislation, like the CPA or the Motor Vehicle Dealers Act, begins by issuing a summons to the accused to appear in court. An AMP is more like a speeding ticket.

An accused does not automatically get their day in court. An AMP means a fine is issued and the accused is presumed guilty and expected to pay the penalty. An accused can appeal to court, but because AMP offences are considered to be “strict liability” offences, the only defence available is to deny having committed the illegal act.

It doesn’t matter whether there was any intent to commit the offence or if the accused used reasonable due diligence to avoid committing the offence. In short, the due process that is usually afforded an accused is gone.

AMPs have been used for many years to deal with offences, such as environmental spills, which can cause serious and often irreparable harm. However, their use in regulated consumer-oriented industries is quite new. The UCDA’s position on the use of AMPs against MVDA registrants is that they are not necessary, since OMVIC has multiple enforcement options when violations occur.

The details of how AMPs will work and what types of offences they may relate to, will be set out in regulations that are expected to be drafted in March. The UCDA will be participating in a comprehensive review of whatever these draft regulations might say.

The UCDA is monitoring this very closely and will engage in consultation with the Ministry about the draft regulations, to seek clarification on how, if at all, our members will be affected and to ensure that what comes out of amendments to the CPA, is fair to members.

We’re pleased and relieved to have received clarification about AMPs from the Ministry, but the UCDA will continue to be watchful, to ensure that the rights of members are not compromised.

More to come!

Extended Warranty Update

We have added another extended warranty provider to our recognized list at: https://tinyurl.com/w29crcg

Guarantee VC / GVC Premium Warranty Company
1-800-268-3284

Each of the companies listed has provided the UCDA with a copy of its insurance agreement, along with a written undertaking by the insurer to notify the UCDA in the event that the coverage is cancelled or changes are made. The UCDA asks the recognized warranty companies to have insurers provide annual updates to us, confirming that insurance remains in place.

The UCDA does not endorse any specific warranty company or product, but strongly recommends that members only offer warranties that are insured by a licensed Ontario insurer.

Who Should Receive a LightDuty Vehicle Inspection Report?

It’s already been five years since the Ministry of Transportation modernized the requirements for safety inspections. While there were early concerns about the time needed and the extra cost of more onerous inspection requirements and paperwork, the industry quickly became accustomed to the changes and it is now the new normal.

A significant change to the legislation brought in by the new standards was the requirement for the technician performing a safety inspection on a light-duty vehicle to complete an inspection report and provide it to the customer. This has always caused some confusion and we still receive inquiries from time to time about it.

The inspection report is meant to provide the “customer”, for whom the inspection is being performed, with information on the thickness of brake rotors and pads, in the case of disc brakes and the condition of brake shoe lining and drums, in the case of drum brake systems. Tire tread depth and condition is also required to be recorded on the report. As well, “tell tales” (warning light indicators) also need to be made note of by the inspector on the report.

The confusion about the report stems from the requirement to provide the completed form to the “customer”. Dealers, of course, think of their customer as any client purchasing or leasing a vehicle from the dealer. If the dealer has its own service department, clients for whom service is performed are also the dealer’s customers. So when a dealer does a safety on a vehicle as part of the sale, the report should be given to the dealer’s customer who is
purchasing the vehicle.

But, if a dealer sends its vehicles out to a third party service centre to perform repairs and service work, the dealer is the customer, as far as the service facility is concerned. Same for a garage which is a licensed Motor Vehicle Inspection Station (MVIS). If a dealer sends its inventory to an MVIS facility for safety certification, the station likely doesn’t know, or care, who the dealer’s customer is. As far as the station is concerned, the dealer is the customer. So the station will provide the inspection report to the dealer.

In this case, does the dealer need to pass the report on to its customer who is buying the vehicle?

Well, that’s a good question. The legal answer is “No, they do not need to”.

The rules about safety inspections, including the need to supply a customer with an inspection report, apply to MVIS stations. Unless the selling dealer is the MVIS station that issued the safety, the rule does not apply to the dealer.

Having said that, should a dealer supply a copy of the report received from an outside station to its customer when selling the vehicle? That’s entirely up to the individual dealer, but being fully transparent will likely go a long way towards earning the customer’s confidence and trust about the vehicle’s condition.

Curbsider New Year

A new decade begins with new convictions.

OMVIC got the New Year started with Ontario courts accepting some hefty curbsider guilty pleas; all on January 17th, 2020.

In Paris, Ontario, Robert Mcglogan a.k.a. “Kelly” pleaded guilty to one count of curbsiding under the Motor Vehicle Dealers Act, 2002 and was given a fine of $5,000.

In Kitchener, Robert Klein pleaded to one count of curbsiding and received a fine of $2,500.

Finally, in Cambridge, a company called Motorhead Classic Cars Ltd. o/a Motorhead Classics, made more noise than the old metal-rock band of the same name, when they pleaded guilty to one count of curbsiding and were handed a fine of $10,000!

Competition Bureau Priorities for 2020 and Beyond

Everyone likes to make ‘to do’ lists when a new year dawns, especially when a new decade dawns. When the Deputy Commissioner of the Deceptive Marketing Practices Directorate at the Canadian Competition Bureau shares her list, it’s hard not to take notice.

In recent remarks, Deputy Commissioner Josephine Palumbo identified four enforcement priorities for her office going forward into 2020:

(a) influencer marketing;
(b) false online consumer reviews;
(c) dishonest information about data privacy; and
(d) dishonest price claims.

For our members, in this digital age of online marketing, probably the two that could most affect members are false online consumer reviews and dishonest price claims.

These two issues speak for themselves, so we don’t need to go into a whole lot of legal mumbo jumbo for dealers to understand. First, it is not a super idea to post fake reviews
to try and make your dealership (or your products) look better in rankings on Google, Yelp, car listing sites and so on. Second, dishonest price claims are a very bad idea.

1. Astroturfing – This is the posting of reviews that speak highly of your dealership, but which are actually posted by your employees or friends of the dealership, not by “real” customers. Creating a falsely positive image of your business is not just silly, it can cost you big bucks. In 2015, this kind of practice cost Bell Canada over one million dollars in fines to resolve the Bureau’s concerns.
2. Dishonest price claims – Ads that suggest your vehicles are somehow magically lower priced than your competition are risky. Why? Because the Bureau might come calling and expect you to actually be prepared to prove that! As reported in earlier Front Lines, this kind of deceptive pricing cost the Hudson’s Bay Company over $4.5 million in penalties and costs.

As Ms. Palumbo said in her remarks on January 22:

“It is also important for advertisers operating within this fast-paced economy to know and adhere to the rules of fair competition, as set out by the Competition Act.

Because strong, vigorous competition benefits Canadians.

It means better choices, better prices and fairer business practices, and it means a stronger economy where everyone can prosper and thrive.”

The Luxury of Time

The Federal Government plans to introduce a 10% luxury goods sales tax (excise tax) on purchases of personal automobiles, boats, and aircraft valued at $100,000 or more (indexed to inflation). Commercial use of automobiles, boats and aircraft will likely be exempt.

As we have not yet seen the 2020 budget, we don’t know many details, such as when it will be implemented, how it will affect sales already made, and whether it will also apply to leases.

What we do know is that the Liberal Government is a minority government and this proposal likely faces some pretty stiff opposition, so stay tuned.

Defamation

Members know the power of social media, both good and bad. While often on the receiving end of negative consequences, businesses are not the only ones who can find this medium cuts both ways.

A woman has learned the hard way that you can’t say anything you want about a business in an email.

A disgruntled woman whose parents had sued a furniture store over a dining room table and won a small award in small claims court, sent emails to family, friends and colleagues calling the company “untrustworthy” and “deceitful”.

The company considered the emails to be defamatory and sued her. It WON!

Because the woman showed malice (she admitted her motivation was “revenge”), refused to apologize and encouraged others to republish the email, the court awarded the company $15,000 in damages and $25,000 in court costs!

https://tinyurl.com/yx3e23rs

In another, more recent, case a disgruntled bride was so dissatisfied with her wedding planner that she mounted an online campaign. The wedding planner was convinced that this drove its customers away, and effectively put her out of business.

She sued the bride and WON $115,000 in damages!

The judge said: “This case is an example of the dangers of using the internet to publish information without proper regard for its accuracy.”

https://tinyurl.com/tawucys

Every case is unique and Members shouldn’t expect to be able to sue over any negative comment made by an unhappy customer. However, these cases show that, in the right circumstances, a business can successfully take action for unjustified defamatory comments that may damage its reputation.

No, this has nothing to do with your electricity bill!

Way back in the Fall of 2013, Ontario’s then Liberal government made a lot of noise about bringing in something called Administrative Monetary Penalties (AMPs) as a means of fining businesses, including motor vehicle dealers, for violating various laws.

Back then, the UCDA filed a submission with the Ministry of Consumer Services expressing our serious concerns about the proposal. So did other business organizations.

The government backed away and the proposal did not go anywhere …. or so we thought.

Now, more than six years later, the Conservative government is resurrecting the AMP idea as part of Bill 159, introducing amendments to the Consumer Protection Act (CPA).

The government is proposing to add AMPs as a tool that could be used, not only by the government, but also by regulators, including OMVIC, as an option to enforce compliance with the law.

We are once again concerned for our Members.

Why?

Well, we are concerned because of what an AMP is. Unlike laying a charge for violating the Motor Vehicle Dealers Act, or CPA, and issuing a summons to the accused dealer to appear in court, an AMP is a conviction on the spot.

Even if you appeal an AMP and get your day in court, you are denied the defence of due diligence available to most accused. You are issued the fine, presumed guilty and you are expected to pay it. The usual due process is gone.

The 2013 proposal was very specific about what kind of charges an AMP could be used for and how much an AMP fine could be (up to $20,000). The current proposal is very vague and difficult to get a handle on at this early stage, with the details to be left to regulations that would be brought in later.

We do know AMP fines could be as high as $50,000!

We don’t know who would keep the money from an AMP fine (the government or OMVIC).

We don’t know what type of offences the government would allow AMPs to be used for.

We don’t want to wait around to find out, so the UCDA has made a written submission to the Standing Committee on Justice Policy, which is reviewing Bill 159, expressing our concerns and asking, at least, for restrictions on how AMPs could be used and in what circumstances they could be used.

OMVIC currently has more than enough tools in its arsenal to deal with contraventions by both dealer and salesperson registrants.

OMVIC can lay charges against registrants in Provincial Offences Court.

Through a Notice of Complaint, OMVIC can initiate a Discipline Hearing, with penalties as high as $25,000.

In appropriate situations, OMVIC can Propose to Revoke a dealer’s or salesperson’s licence.

Does OMVIC really need more power to do its job?

We’ll keep you posted.

Extended Warranty Update

We have added additional warranty providers to our list, which we updated in our last newsletter. They have satisfied the UCDA that their warranties are fully insured by a licensed Ontario insurer:

Assurant Vehicle Protection Services 1-800-387-0119 (formerly Coast to Coast)
People’s Choice Warranty Ltd. 1-888-284-2356

Each of the companies listed below have provided the UCDA with a copy of its insurance agreement, along with a written undertaking by the insurer to notify the UCDA in the event that the coverage is cancelled or changes are made. The UCDA asks the recognized warranty companies to have insurers provide annual updates to us, confirming that insurance remains in place.

Verified Insured Warranty Companies

After receiving updates from insurers, here is the current alphabetical list of warranty companies that have met our requirements for insurance recognition:

The UCDA does not endorse any specific warranty company or product, but strongly recommends that members only offer warranties that are insured by a licensed Ontario insurer.

Out-of-Province Buyers And Tax

As surprising as this might sound, despite the fact these tax rules have been in place for years now, dealers keep getting tripped up on sales to out of province buyers. Even large financial organizations, who fund a lot of these deals, don’t seem to have a standard protocol to make it easy for dealers and consumers.

Suppose you have a buyer from Quebec. In most cases, Ontario dealers are not registered with the Quebec Government to collect Quebec tax (some Members close to the border who do a lot of business with Quebec buyers are registered to collect and remit Quebec Sales Tax [QST]).

That means the consumer will have to pay the QST, which is 9.975%, at the Quebec licence office when they register the vehicle. Don’t forget that part. We get calls from consumers who were not told that and they are very upset when they get home to find out!

So what does the Ontario dealer actually have to collect and remit to the Federal Government (because all dealers are required to collect Federal tax)? The answer is simple.

If the vehicle is delivered in Ontario, charge 13% (HST). If the dealer ships the vehicle to the buyer in Quebec, charge 5% (GST). A Quebec consumer who takes delivery in Ontario, pays 13% and drives back home, can apply for a rebate from the Federal Government to get the 8% Ontario portion of the 13% HST back, so long as they have proof of the tax they have paid.

But, we still see deals where a dealer sells a vehicle to a consumer who takes delivery in Ontario and charges 5% federal tax and 9.975% QST on the bill of sale, messing things up considerably.

The dealer has not collected enough Federal tax. They have no way of sending the QST to the Quebec government, their paperwork is all wrong and the purchaser will be asked for the QST when registering the vehicle in Quebec. As we say, a mess.

We spoke with one lender about their process and as you might expect, they leave this pretty much up to the dealer. The dealer requests the loan advancement, including the tax that they determine needs to be collected to get the deal done. If the dealer chooses to send the customer with a cheque including the QST, that is entirely up to them.

All advancements are made to the dealer, so it is only through the dealer that the customer will get the money they need to pay the QST on a financed deal, or it will have to come out of the customer’s own pocket. Dealer’s need to keep this in mind and make sure the buyer understands, as well.

Of course, dealers get buyers from all Provinces and different issues arise depending on the tax regime in any given Province.

For a summary of all these rules and GST and HST rates in all Canadian jurisdictions, please visit our website at:

https://tinyurl.com/r8d4drz

The Resignation Boomerang

Our legal department recently received an interesting call from a Member. Apparently, one of the Member’s employees, a service technician, exercised a fantasy many of us have had at least once in our working lives and told the boss to ‘take this job and shove it, I ain’t workin’ here no more …’.

Unlike in the old Johnny Paycheck song, however, the fellow was back the next day. Having cooled off, he decided the place wasn’t so bad after all and he changed his mind about quitting.

Trouble was, the Member kind of liked his first answer!

As we’ve mentioned in Front Line before, employment law is littered with all kinds of land mines for unsuspecting employers. We urge any Member confronted with these sticky questions to consult the experts, a lawyer specializing in employment law preferably, as our legal folks here are no experts in this area. Like criminal law, it is a delicate area in which to give advice.

Having said that, there are some interesting takeaways from past court decisions.

The decision to leave one’s job is a big deal. Courts will expect the intention to be crystal clear, so no one can doubt the person really meant to quit. Employers should try to get such a decision from the employee in writing; a temper tantrum and storming out may not be enough.

Even in a simple case, the decision can be pulled back by the employee unless and until the employer has made its intention to accept the resignation crystal clear. It should be in writing, such as a confirmation letter, email or text. Further evidence would include the hiring of a replacement.

Consider this Court of Appeal case, Kerr v. Valley Volkswagen, 2015 NSCA 7 (CanLII) in Nova Scotia. Mr. Kerr worked as a parts manager at the dealership and told his supervisor that he wanted a raise or he would quit, because he had another dealer who would pay him what he wanted.

Mr. Kerr was told if his performance improved in three weeks, he could earn the raise. His performance did not improve and his ultimatum was not withdrawn. After the three weeks, the dealer formally accepted his resignation. Mr. Kerr tried to revoke his ultimatum at that point, but it was too late.

The court found that a reasonable person would agree that Mr. Kerr had intended to quit.

We can’t think of anyone more reasonable than a UCDA Member!

Over 250 Charges Laid Following Investigation

The following comes from globalnews.ca.

Police have laid more than 250 charges following an eightweek investigation into tow truck companies.

Durham Regional Police launched Project Bondar, which focused on several tow truck companies in the Greater Toronto Area. It was all sparked after a series of complaints from drivers following an accident.

“They were told they had to pay a very high fee in order to get their vehicles back,” says Const. George Tudos with Durham Regional Police.

That fee sometimes reached thousands of dollars, according to a Global News investigation. Tudos says the issue was the car was being held for ransom as well.

“A lot of times the companies would not return them unless those monies were paid,” Tudos explained.

Global News spoke to a customer whose car was being held for more than $4,000. It was later released after our investigation.

Through Project Bondar, more than 30 vehicles have been recovered — including two luxury cars, a Ferrari 488 and a BMW M4, among a number of vehicles police believe may have been stolen.

“Both of these vehicles were in the process of being taken apart,” Tudos said.

“We had eight tow trucks, two of which were engulfed in flames.”

The team executed warrants in Brampton, Scarborough, Etobicoke, Ajax, Clarington, Pickering and Whitby. As a result, a range of charges were laid.

“There were a lot of contraventions against the Highway Traffic Act and Consumer Protection Act,” Tudos said.

Police say they also met with tow truck drivers to educate them on best practices as well. Investigators say they also want drivers to be mindful of who they allow to tow their car.

“Make sure you’re aware of what your insurance company covers,” Tudos said.

“Make sure the tow company removing your vehicle is a legitimate one.”

This comes just weeks after Toronto police investigated a number of tow truck fires in Toronto and York Region. Three vehicles were set ablaze within 30 minutes of each other, and police believe accelerant was used in two of those cases.

It appeared that tow truck drivers were competing for business, according to Mark Graves with the Provincial Towing Association of Ontario.

Graves told Global News in December it appears there was “a significant amount of escalation” recently, adding several companies seem to be challenging each other for work.

It’s not clear if Project Bondar is connected with this, but Const. Tudos says they are working with other police agencies.

If you have any information that could help, contact Durham Regional Police or Crimestoppers.

The UCDA was founded by a small group of dealers in 1984, including our first Executive Director, Bob Beattie.

Thanks to their tireless efforts along with the generous assistance of Homer Stephens and his wife Ruth HartStephens, who actively promoted the benefits of joining the fledgling association at the Toronto Auto Auction, membership soon numbered in the hundreds. The momentum has continued without slowing ever since and this summer UCDA membership soared past 5,000 members!

On November 26, UCDA directors and staff were on hand as Manheim Toronto hosted a celebration of the UCDA’s 35th anniversary. Dealers at the auction were treated to a delicious lunch and anniversary cake for dessert.

Following the sale, a special draw was held for a 65 inch LG television. Dealers that bought or sold a vehicle on the UCDA lane that day were eligible to win. Robinson Buick GMC Ltd. was the lucky winner !

A few photos of the celebration.

Read Your Bill of Sale

Yes really; read the whole thing, front and back.

It’s a legal contract. It describes the rights and obligations of the buyer and seller (you). We have all become a little numb to standard form contracts. They are slid in front of us when we rent a car, do a home renovation or buy a cell phone. And let’s not forget the 15 plus page micro-print contracts displayed to us when we buy, book or reserve things on-line that literally no one reads.

We want you to break that habit when it comes to your standard form bills of sale and leases. They all have clauses designed to protect you and some that are important for you to follow in relation to your customer.

For example, we have mentioned many times how often we get calls from consumers and dealers over deposit disputes. When a buyer wants to back out of a deal, they will sometimes call us weeks after the deal was cancelled. Not only did they not get a refund of their deposit (which is what they really wanted), but they also did not receive a letter from the dealer explaining what the process is.

If you read the terms on your contract, you will see that it contains a clause requiring that you send a notice and follow certain steps with respect to a deposit. On UCDA forms, it is clause 4 on used and new vehicle bills of sale, and clause 17 on UCDA lease agreements.

It can be more than embarrassing to a dealer who ends up in front of OMVIC or a court over a deposit dispute if the dealer has failed to follow the requirements of their own contract! More than embarrassing … it can be fatal to the dealer’s case.

In another example, we took a call in October from a dealer on a new car sale. He was waiting on a new build since April. The delay was upsetting the customer, for sure, but also causing the dealer concern. The valuable trade-in appraised back in April was now, months later, depreciated and, the dealer was feeling trapped in a deal that was swiftly looking sour to him.

He wasn’t trapped. In fact, this situation was anticipated in the contract. He didn’t even know it. He was told to flip over his UCDA New Vehicle Bill of Sale and read clause 5 which provides:

5. DELIVERY (NEW VEHICLES): If the vehicle being purchased is a new vehicle which the dealer is ordering from the manufacturer and the dealer is unable to deliver the vehicle to you within ninety (90) days of the date of this agreement, the dealer will notify you in writing. The dealer or you may then cancel this agreement, in writing. This agreement will automatically be cancelled five (5) days following receipt of notice of delay unless a  new delivery date is agreed to in writing. Further delays in the delivery date will result in automatic cancellation of this agreement. The dealer will return your deposit if this agreement is cancelled as a result of this clause and no further obligations will be owing.

Contracts in use in our industry are not overly complex. UCDA forms are designed to be as clearly worded and concise as possible, but you have to read and understand them to enjoy the full benefit of the protections and guidance they provide to both you and your customers.

Extended Warranty Update

The UCDA regularly updates the list of extended warranty companies that have satisfied the UCDA that their warranties are fully insured by a licensed Ontario insurer.

Each of the companies listed below have provided the UCDA with a copy of its insurance agreement, and a written undertaking by the insurer to notify the UCDA in the event that the coverage is cancelled or changes are made. The UCDA asks the recognized warranty companies to have insurers provide annual updates to us, confirming that insurance remains in place.

Verified Insured Warranty Companies

After receiving updates from insurers, here is the current alphabetical list of warranty companies, updated as of November 1, 2019, that have met our requirements for insurance recognition.

The UCDA does not endorse any specific warranty company or product, but strongly recommends that members only offer warranties that are insured by a licensed Ontario insurer.

MVDA Regulations

The Motor Vehicle Dealers Act, 2002 prohibits dealers from offering third party warranties to their customers unless:

• The warranty is insured by a licensed Ontario insurer; or
• The warranty company has posted a $500,000 irrevocable letter of credit to the Motor Vehicle Dealers Compensation Fund

OMVIC also lists the companies it recognizes in each category on its website:

https://tinyurl.com/yaczkjaz

The UCDA considers full insurance coverage to be the best form of protection to adequately shield consumers and dealers in the event that a warranty provider fails to honour its obligations. A letter of credit can quickly be used up, which could then potentially leave the dealer that sold a failed warranty on the hook for consumer claims.

Contact James Hamilton at j.hamilton@ucda.org if you’d like more information.

Insurance Rates

The UCDA’s Insurance Program is celebrating 25 years of providing Members with a quality, stable and affordable service.

Over this time, our program has performed better than most rate groups and hasn’t seen significant rate increases. On the contrary, members get rebates for being claims free.

But things are changing. Over the past ten years, cars and trucks have become high tech marvels and high performance luxury machines. In the old days, a simple fender bender or bumper “bump” was a nothing claim, but today that claim can be in the thousands of dollars. There is no such thing as a “nothing claim” today.

Another term dealers need to understand is “frequency”. The more often “you come to the well”, the bigger the insurance risk you are. Even if you didn’t cause the accident, the more times you are involved in one, the more problematic you become for the insurer.

“No Fault” is Not “No Cost”

Probably the most misused and misunderstood term in the insurance world is “No Fault”. If you are involved in an accident and it is determined by the police that you didn’t cause it, it doesn’t mean that there won’t be a claim against your policy. Your policy pays to fix your car and if you are hurt, the cost to your policy could be hundreds of thousands of dollars.

Add that to the accident benefits and bodily injury legal battles and we have an insurance industry crying the blues. According to them “they are in crisis”.

The Facility Fund

This is another insurance term dealers need to understand. Under Ontario law the insurance industry must offer you insurance. In their wisdom, the industry developed the “Facility Fund”. This is where high frequency claimers, whether at fault or not, get their insurance, when no one else will insure them.

It is not the place you want to end up. The annual premium of a recent past member went from$7,500 a year to $97,000 a year in facility, due to frequent at fault and not at fault accidents!

This year, many insurance companies have dropped dealers, taxi/ride-share, and trucking programs entirely due to significant losses.

The UCDA will continue our efforts to work with our partners to get the best deal possible for Members. We have a proven track record and you have proven to be a good risk over the years. We will keep you advised.

Having an accident or any loss incident is why you have insurance. However, today you need to make claims wisely, because more than ever, you need insurance to stay in business.

Exporting Concerns

We have written in the pages of Front Line repeatedly warning members against the practice of exempting “export buyers” from paying HST. There are several good reasons to avoid this:

1. You are underwriting the buyer’s exemption. Canada Revenue Agency, not dealers, should be deciding whether HST paid by a purchaser is refundable.
2. It is difficult to export vehicles properly. You can’t give delivery to the buyer in Canada and giving it to a “shipper” is not enough. You need solid and correct paperwork to back it up; paperwork few dealers receive and which may be hard to get, time consuming to collect and complex to organize.
3. In many cases “export buyers” are actually curbsiders in the business of exporting vehicles overseas without being registered with OMVIC.

Think a “bill of lading” is good enough? Think again.

First of all, a bill of lading is not something a shipper in Mississauga can give you. It is issued only when the vehicle is loaded on a ship in Halifax, Montreal, Vancouver, or from whatever port it is being shipped. 

Also, we have heard of Canada Revenue Agency auditors asking dealers for proof of entry from countries such as Nigeria, Dubai, Kazakhstan and others. It must show that the vehicle actually arrived and was “registered” there. What form such proof would take … WHO KNOWS?

Care to guess how “easy” it will be to get this paperwork from some of these places with different degrees of social order not to mention cultures, language and practices?

Our advice (unless selling to a Status Indian and following correct procedures); charge HST on every sale no matter where the buyer says the vehicle is going.

If you decide to proceed and not collect and remit HST, be sure to handle the export yourself and use a trusted shipper who is working for you and who will help ensure you are in compliance. Learn the rules and FOLLOW THEM to the letter.

The rules being cited by the CRA can be found at https://tinyurl.com/t7foyoz.

Small Claims … Getting Bigger

The Ontario Government has announced that, effective January 1, 2020, the limit for lawsuits in Small Claims Court will increase from $25,000 to $35,000.

This is the first increase in ten years (when it was increased in 2010 from $10,000 to $25,000) and should reduce the strain on caseloads at the higher court levels. It will also make it easier for parties to sue for higher sums of money without needing to retain a lawyer.

Holiday Hours

Dealers must be closed on Christmas Day, Wednesday December 25 and New Year’s Day, Wednesday 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, Thursday December 26, should they wish to be. However, members must 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.

Dealers have some options when it comes to Boxing Day. For example, they may choose to be open on Thursday, December 26th and be closed on Christmas Eve, Tuesday, December 24th.

Another option would be to be open with partial staff on both December 24th and 26th, as long as all staff get three paid days off for all the required holidays. Dealers can come up with different variants on this, as long as all staff end up with three paid days off for Christmas, Boxing Day and New Year’s Day. Staff must agree to the days.

The UCDA office will be closed from Christmas Day until Monday, December 30. The office will also be closed on Wednesday, January 1st.

The UCDA search facility office will be open as indicated below:

The UCDA and OMVIC are delighted to announce the long-awaited launch of the new Motor Vehicle Dealers Act Key Elements Course. This program was designed to benefit dealers, managers and salespeople who have not yet taken an OMVIC Certification Course (those registered before 1999). It is also for those who have taken the Certification Course prior to the new MVDA being introduced in 2010.

This is a significant expansion of the current education program. With classes held in major cities across Ontario, most UCDA members will not have to drive more than one to two hours to get to a course.

The Key Elements Course will help dealers and salespeople comply with current regulations and legislation governing the wholesale and retail automotive industry. This includes the Motor Vehicle Dealers Act, the Consumer Protection Act and the Sale of Goods Act.

Individuals who successfully pass the MVDA Key Elements Course and maintain registration with OMVIC are entitled to use the OMVIC designation “C.A.L.E. — Certified in Automotive Law and Ethics.”

Class Options…

We’re giving students the option of taking just the 1-Day, Key Elements portion or, taking the class as part of the UCDA’s three-day, comprehensive Dealership Manager Professional Certification Program*:

Option 1:

As part of the UCDA’s management course, students can take the 1-day, Key Elements portion; a multiple choice test is taken in-class at the end of the course day.

Option 2:

Students may take the 3-Day Dealership Manager Professional Certification Program, with the Key Elements Course incorporated on day two. Testing will take place in class, immediately following the Key Elements session.

For those apprehensive about writing a test … don’t worry … the results do NOT in any way affect your OMVIC license! The test is for your benefit, to help ensure you are better informed.

Courses begin in January, 2020. Reserve your spot today!

*Dealership Manager Professional Certification Program

The Dealership Manager Program provides best business practices, processes, strategies and tools to succeed in the areas of leadership and managing people, managing the daily operations of a dealership, marketing and managing the Used Vehicle Department. The program is designed to provide dealers and managers with professional, integrity based management training that also protects both consumers and dealerships through legal compliance.

Insurance Pink Slip May Now Be Displayed On Cell Phone

The Ontario Government has announced, effective September 5, that drivers may now display proof of insurance on their cell phone instead of by way of a paper pink slip, if they wish.

There are a number of conditions to this, of course. Chief among them is not all insurance companies may offer this feature. It’s not clear how this may affect travel outside of Ontario. There is also concern that at some future point, insurers may stop offering paper slips entirely, or charge the insured extra fees for issuing paper slips.

Dealers might wish to check with their insurer as to whether this has any effect on them. The UCDA’s garage insurance program through Baird MacGregor, will continue to issue pink slips to insured members and will not be charging extra fees to do so.

https://tinyurl.com/yy9gsvzu

Possible Changes Coming To The Consumer Protection Act (CPA)

Several pieces of legislation have a direct and immediate effect on the day-to-day business of motor vehicle dealers.

One is obviously the Motor Vehicle Dealers Act, others include the Sale of Goods Act and the Consumer Protection Act. The CPA is wide-ranging consumer protection legislation covering everything from repairs, to door-to-door sales to unfair or unconscionable business practices.

So, when the Ontario Government proposes changes to the CPA, dealers need to be aware.

One right the CPA presently gives consumers who can prove they are victims of false, misleading or deceptive business practice is to fully cancel the contract within one year of the date of the agreement.

In a consultation paper released in this summer, the Government proposes changing this to one year from the time the consumer discovers they have been the victim of an unfair practice. This could extend the right of rescission (as it is known) far beyond one year from the date of the sale.

The UCDA has been in touch with the Ministry and made our concerns known. It’s still unclear at this point, if the proposals would be restricted to in-home sales, or be extended more generally into the marketplace … including to sales made by motor vehicle dealers.

Among other proposed amendments that may cause dealers further concerns are:

• expanding the mandate and authority of those charged with enforcing the Act (including OMVIC) to ensure they have the powers necessary to compel businesses to comply with the Act;
• requiring businesses to ensure that, upon cancellation by a consumer of a service contract that is subject to the Act, all related agreements consumers were subject to (such as financing arrangements or registered security interests relating to the primary contract) are also fully terminated; and
• amending the Act to allow for Administrative Monetary Penalties (AMPs), (basically fines imposed through receiving a “ticket”, rather than through the order of a judge) to be imposed on parties that contravene the provisions of the Act.

It remains to be seen whether any of these changes will actually be implemented and if they are, what if, any powers will be extended to organizations like OMVIC. The UCDA will monitor developments closely.

Social Media … Live by the Sword, Die by the Sword!

Businesses have come to rely, perhaps too much, on good reviews on Google, Yelp, and so on. Dealers are no different.

Have you ever taken the time to go on to other dealers’ sites and read the reviews that are posted there? It can be entertaining … even educational.

Of course, there are the suspicious looking ones that praise the business to the heavens, but appear never to have left another review about anyone, anywhere. There are the strange ones posted by angry people (what the internet world might call ‘trolls’), which tend to say more about the person posting them, than the business they’re attacking.

Then there are the legitimate posts that either praise a dealer or offer criticism. The best of them explain what their concern is and often, in those cases, you will see the dealer offer their side of the story and perhaps even a solution where appropriate.

We have, however, noticed a disturbing trend lately.

Apparently, some dealers have decided it is an appropriate use of their time to post negative comments on other dealers’ review sites!

As was noted earlier, since negative posts often say more about the party posting than about the business they are commenting on, we would urge dealers to avoid this at all costs.

In one instance we are aware of, a dealer posted a review on another dealer’s website that they felt this dealer was “fake”, that they “lied”, “falsified information” and are a “horrible business”.

Aside from the fact this can get the dealer leaving such a post sued for libel, as the dealer who received this review is considering, it is unseemly and must stop.

If the dealer who posted this review were a member of the UCDA, which thankfully they are not, they would be subject to expulsion from UCDA membership for a violation of our Code of Ethics, key components of which are:

• To promote and convey a positive image on behalf of all dealers and support efforts to improve the industry’s products and services; and
• To promote the benefits of industry products and services, without being unfairly critical of those offered by other dealers.

Social media is a powerful tool. It can provide an excellent forum for dialogue, but when misused it can be a dangerous sword that can cut both ways.

Certification Course Classes

We have 5 OMVIC certification classes currently scheduled through the end of October at the Wye Management Training Facility in Vaughan (unless otherwise noted).

The classes are taught by UCDA trainers.

For more information and to register, please contact Michelle, at education@ucda.org or Val, at v.maclean@ucda.org .

UCDA at Habitat for Humanity Automotive Industry Build Day

The weather couldn’t have been nicer on September 18, as UCDA Executive Director, Warren Barnard, armed with a hammer and tool belt, joined other volunteers from several automotive industry organizations to kick off the first-ever Canadian Automotive Industry Build for Habitat for Humanity Canada.

A t t e n d i n g the ceremony with the UCDA were team members from Cox A u t o m o t i v e C a n a d a , as well as partners from Canadian B l a c k B o o k , CARFAX Canada and Hyundai Canada.

Other sponsors included Desjardins, the Bank of Montreal, Scotiabank and TD Canada Trust.

Together, these sponsors presented a cheque for $100,000 to Habitat. The UCDA and Manheim Canada donated money raised at the 2018 and 2019 Ruth HartStephens and Bob Beattie Golf Tournaments.

The Canadian Automotive Industry Build allows the automotive industry to help build stronger communities by assisting families to achieve strength, stability and self-reliance. On average, Habitat generates $175,000 of benefits to society for every home built.

• In 2018, 238 families began building strength, stability and independence through affordable homeownership.
• Since 1985, 3,619 Canadian families have partnered with Habitat Canada to get access to a decent and affordable home.
• In 2018, Habitat’s affordable homeownership program generated almost $42 million in societal benefits to the community.
• In Canada, Habitat’s affordable homeownership program has added $68 million to the affordable housing portfolio in 2018 alone!

Habitat homes are sold at fair-market value, with an interest free mortgage, to selected families who may not be eligible for a conventional mortgage, and who are also expected to contribute up to 500 volunteer hours to Habitat.

Canadian Automotive Industry Build volunteers will be at the Mississauga build site, along with other volunteers and Habitat c o n s t r u c t i o n staff, through to the end of October. On October 4, six U C D A s t a f f members will join volunteers from Manheim C a n a d a t o continue the construction of the two homes on the site. The homes should be ready to be occupied sometime in 2020.

For more information about Habitat for Humanity, please visit: https://habitat.ca/

This month the UCDA achieved a milestone. We reached 5,000 members!

When the UCDA’s first Executive Director, Bob Beattie, and 7 other used car dealers got together at a restaurant in 1984 to discuss how they could unite the used car industry in the face of proposed changes to rules governing used vehicle sales, they could not have foreseen what their creation would grow to become in the future.

The UCDA became the first non-profit organization in Canada established to represent the needs of dealers who sell used vehicles. The early years focused on lobbying efforts with government, aimed at making government aware of the concerns of an industry that was often ignored, or worse, sneered upon. It was for good reason that the Association’s mission statement was and remains, “To enhance the image of the industry”.

The UCDA grew rapidly. The single most important factor in our early growth was the introduction of a phone-in lien search for members, to by-pass what was at the time a very cumbersome government phone service.

The early lien search has surpassed everyone’s wildest dreams, having now grown into the largest online vehicle information search portal in Canada, www.ucdasearches.com.

Member services have always been the priority of the UCDA. The better the services … the more likely a member will renew year after year. Keeping members was a favourite mantra of Bob Beattie.

In the 1990s, used car dealers needed an insurance program and today Baird MacGregor Insurance Brokers remains the UCDA’s only insurance brokerage. Today more than 1,600 members enjoy rate stability and a unique annual claims free rebate.

A few years later, we added our NAPA parts program, which each year provides more than a million dollars in rebates to members. Throw in an affordable health plan and a credit card merchant discount program and the value of a $200 annual membership is pretty clear.

The auto industry has changed a lot in the past 35 years. We have seen industry self management (OMVIC), and completely overhauled regulation with the Motor Vehicle Dealers Act, 2002.

The industry has seen mandatory disclosure requirements, mandatory education requirements, and some of the strictest advertising regulations in Canada.

Through it all, the UCDA has played a significant role in the development of Ontario’s auto industry. And we’ll be here as the industry undergoes even more significant changes in today’s digital world.

With this in mind, you and all members now have exclusive access to list vehicles for sale on your vehicle listing site: ontariocars.ca

We would not be where we are without the strong support of members … and now there are 5,000 of you.

Congratulations and “Thank You” from all of us at the UCDA!

The Uber of Insurance Relief Should Give Lessors a Lyft

Since the disruptors of the people moving business entered the scene, lessors have wondered about their exposure for lessor’s liability on vehicles used by drivers for companies like Uber and Lyft.

Leasing companies enjoy a cap on liability exposure of a maximum $1,000,000 for any loss or damage from personal injury resulting from the use of one of their leased vehicles.

It was an open question whether such a cap applied to leased vehicles used for ridesharing services.

That question was answered when the provincial government’s Bill 107 (Getting Ontario Moving Act, 2019) received Royal Assent on June 6.

The Act extends the liability cap as long as the parties are “dealing with each other at arm’s length”.

This is a huge relief for commercial auto lessors whose leased vehicles could be used by ridesharing companies.

What Employers Need To Know 2019

It can be really hard for today’s employers to keep track of all the expectations placed upon them by the provincial government.

Courtesy of Littler LLP (Labour & Employment Law Solutions,) we have a neat summary, all in one place, of the high points.

Covering expectations, training, posters, handouts, representative and committee requirements (depending on number of employees) … it’s all here.

The publication, can be found at:

https://tinyurl.com/y62fzskw

It covers Employment Standards, Workplace Safety, Violence and Harassment, Disability and Accessibility, Pay Equity, Hazardous Materials (WHMIS) and Smoke Free postings.

It is all current as of 2019, which is useful as the ground keeps shifting for Ontario’s Employers.

Ford Thief

From the wacky news files comes this story reported on by media out of Detroit.

While theft is no laughing matter, and this story would not have as much impact if this guy was stealing tires and so forth off of say Hondas or Chryslers, but this was a Ford and his name is:

Henry Ford!

He is presently a fugitive at large.

Says deputy chief Aaron Garcia: “So Henry Ford, he’s stealing GPS units out of vehicles, he’s stealing tires, he’s robbing these cars, … it’s almost like a disgrace to the Ford Motor Company.”

Meanwhile, if you see Henry Ford jacking a Ford, there is a reward for his capture:

https://tinyurl.com/yxc522kg

Consumers Vote “No” On Data Sharing

While we can’t speak to the science behind it, or the questions, or how they were asked, it is interesting what consumers say when they are asked about data.

83% say no to selling their data.

The short answer seems to be, when they are asked, consumers don’t want their personal data monetized or shared with third parties.

Dealers, Manufacturers, Advertisers, Web Sites and other stakeholders would be wise to pay attention.

Based on a survey of 1,403 current car shoppers by Autolist, 83% think no one should be allowed to sell their data.

70% think they should control (and own) the data that their own vehicle creates.

53% feel that laws are not properly addressing vehicle data, privacy or were not aware of the issue at all.

https://tinyurl.com/y6hbrwm6

Odometer Bonus

Most dealers know about the famous cancellation law in the Motor Vehicle Dealers Act. It allows a consumer the right to cancel … no questions asked, no deductions, no appeal … within 90 days of delivery of a purchased or leased vehicle, if the dealer fails to declare or properly describe on the contract, any of the listed items which relate to odometer, rental, police or emergency vehicle, branding, make, model or model year.

Most dealers understand that if they make a mistake on the bill of sale and record an odometer reading that is lower than the true reading, the customer has the right to cancel.

But, what if the reading you record on the odometer section of your contract states the reading is HIGHER than the true reading on the vehicle? In other words, your customer gets an odometer bonus!

This is an interesting question, because we all know (or we assume) the general intent of the law is to prevent consumers having vehicles forced on them that have higher kms (or miles) than is declared on the bill of sale. But what does the law actually say?

Section 50 of the General Regulations to the MVDA contains the 90 day cancellation rights available to any consumer (ie. non-dealer) on purchase or lease.

With respect to the odometer:

https://tinyurl.com/y3x4qaa4

Cancellation of contracts for non-disclosure

50. (1) For the purposes of section 30 (2) of the Act, if a registered motor vehicle dealer entered into a contract under which another person, who was not a registered motor vehicle dealer, purchased or leased a motor vehicle from the dealer, the person may cancel the contract if,

(a) the dealer has not accurately disclosed, in the contract, the information required under any of paragraphs 3, 7, 17 and 23 of section 42;

(4) A disclosure of a distance required under paragraph 3 or 4 of section 42 shall be deemed to be accurate if it is within the lesser of 5 per cent or 1,000 kilometres of the correct distance required to be disclosed. O. Reg. 333/08, s. 50 (4).

(5) A person may not cancel a contract under subsection (1) more than 90 days after actually
receiving the motor vehicle. O. Reg. 333/08, s. 50 (5).

The Section makes no distinction between errors that are lower than the true reading or higher, it focuses simply on accuracy and the requirement to declare on the contract the “correct distance”.

Despite what might seem logical, even if your customer gets an “odometer bonus” by taking delivery of a vehicle with lower actual kilometers than the contract promised them, they may still exercise the right to cancel.

Identity Theft … Fake Buyers … Dealer Charge Backs

Who’s Job is it to Verify that the Customer Information is Accurate?

The auto industry wants instant approval for car loans and the lenders want efficient data handling and processing. So, we now have instant “Auto Approve”. Problem solved … except when it all goes wrong!

Lenders Say… “It’s Your Job”

The lenders say that the dealer stands “in the shoes of the lender” so verification is your job. The dealer sees the customer and receives their information.

The lender gets the dealer’s paper work weeks after the deal is funded and trusts the dealer has done their “due diligence”. The contract between the lender and the dealer contains a “total recourse” clause and thus the demand for their losses.

Dealers Say … “We Are Not The Police For The Lenders, We Are Not Trained To Spot Identity Theft”

What is reasonable “due diligence” by the dealer? What should you have to do with the customer to satisfy the lenders that you are complying with the contract you signed with them? Unfortunately, the contracts don’t spell out what “your job” is.

• How many pieces of ID do you get?
• Do you phone the employer to confirm employment details and salary?
• Do you call landlords to confirm how long the customer has lived there or get proof of home ownership?

There is a real disconnect here, and the UCDA would like to hear from you …Who’s Job is Verification?

Please send your response to r.pierce@ucda.org.

Telus Is Coming …

Soon, the UCDA and Telus will be announcing a new member service. For the first time a leading phone company will be offering special UCDA rates for business mobile phone and tablet plans and line charges. These new rates are very attractive … details coming soon.