Monthly National Survey Outlines Need to Extend and Scale Federal Wage Subsidy Program

Canada Emergency Wage Subsidy (CEWS) program made it possible for over 85% of dealerships to hire back staff

TORONTO, ON / ACCESSWIRE / June 10, 2020 / Findings from the Canadian Automobile Dealers Association’s (CADA) national monthly survey regarding the impact of the COVID-19 health pandemic on automotive dealers shows that the Canada Emergency Wage Subsidy (CEWS) program has been a critical lifeline for dealerships and employees across Canada. However, with revenues starting to increase, dealers are worried about access to CEWS vanishing once revenue declines return below the 30% mark. The survey, conducted from June 1-5, saw 425 respondents representing over 867 dealership rooftops across Canada.

“It’s become clear that the CEWS program is a critical support measure that’s been instrumental in helping dealers bridge through the pandemic and hire their employees back, with over 85% of dealers utilizing the program and 92% reporting the program is easy to use with no issues,” said Tim Reuss, President and CEO of CADA. “The challenge now is as revenue begins to return, access to CEWS is measured by an all-or-nothing approach of a 30% revenue decline for a 75% wage subsidy. We’ve started the conversation with government on whether there is a way the CEWS can be scaled according to revenue – for instance, implementing lower subsidy levels at revenue declines of 20% and 10%.”

The monthly survey conducted since the start of the pandemic shows that dealers have been hit extremely hard, but the various government support programs coupled with the gradual reopening of provinces have started to shift the tide. “The bulk of dealership services that are currently open remains on the parts/service and sales sides, with a low (30%) open rate for body shop-collision repairs,” added Reuss. “Dealerships have been designated as an essential service from the onset of the pandemic to ensure that emergency vehicles can stay safe and that frontline workers can have servicing needs performed immediately. That being said, most Canadians have been staying home, so we anticipate an uptake of dealership services as provinces continue to loosen restrictions.”

Notable results of this month’s survey:

92% of dealerships are conducting vehicle sales on premise, and 42% are conducting sales online or remotely;
20.5% of sales operations are open by appointment only (down from 33% in May’s survey);
30% of dealers (down from 80% in May’s survey) reported new vehicle sales revenue dropping by over 50% vs. 2019.
47% reported new vehicle sales revenue dropping between 25%-50% vs. 2019, and a further 15% indicate revenues are down 5%-25%. A large bulk of these dealers (below 30% revenue drop) do not currently qualify for CEWS.

“The federal government’s financial support in response to COVID-19 has helped to mitigate the impact on businesses and workers – but now we need to ensure that dealers are supported through this reopening phase,” said Oumar Dicko, CADA’s Chief Economist. “A strong economic recovery plan for the auto sector needs to have consumer-incentives like HST/GST waivers on new sales or a scrappage program, but it also needs to have business support measures in place. That’s why an expanded and scalable CEWS program is critical during this time of transition- most businesses are already using it, and adapting it on a sliding scale basis will help transition businesses off the program in tandem with increasing revenues.”

About the Canadian Automobile Dealers Association

The Canadian Automobile Dealers Association (CADA) is the national association representing new car and truck dealers. Our 3,200 members are represented in nearly every community and collectively employ 160,000 people across the country.

Media Inquiries:

Alla Drigola
adrigola@cada.ca
778-834-5517

SOURCE: Canadian Automobile Dealers Association

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