Ontario’s Minister of Public and Business Services Delivery, Todd McCarthy just passed up the opportunity to adopt a popular consumer protection measure. In an impressive show of their lobbying muscle, the auto dealer association cowed the government into dropping a mandatory 2-day cooling off period for car sales contracts. A cooling off period was one of several consumer protection measures recommended in a report from Office of the Auditor General of Ontario.
The Motor Vehicle Retailers of Ontario, the industry’s association of new car dealers, conducted a blistering and very successful campaign to convince the government to back down on the cooling off period. Rather than staying inside the Ministry’s consultation channel, the car dealers were instructed by their association to communicate directly with the Premier’s office, the Minister, and MLAs to support their association’s lobbying. The APA was told the dealers sent hundreds of letters. Ultimately their end-run worked brilliantly, and the Minister announced his decision to drop the cooling off period in a tweet last Friday afternoon. The way the decision was communicated, in a tweet outside of the review by the Ministry, has the marks of a capitulation. Had the Minister checked, he would have learned that 99% of 510 consumers responding to a recent poll conducted by CarHelpCanada are in favour of the cooling-off period for new vehicle sales agreements. (British Columbia and Quebec both offer cooling-off periods for auto sales contracts under certain conditions.)
In recent years, auto dealer meddling sometimes caused OMVIC plenty of mischief, which contributed partly to the government changing the composition of the board to reduce the dominance of industry members. After their recent success, the APA is concerned that that the dealer groups will get back into their habit of doing end runs around the regulator. OMVIC has a very strong Chair in the person of Virginia West; a former Deputy Minister in the provincial government, she presided over a sometimes fraught re-organization at OMVIC with a steady hand, and seemed impervious to being muscled around. Ms. West’s appointment ends in 2024, and the APA is concerned that OMVIC may once again get kneecapped.
There are still important consumer measures for the Ministry to consider, some of which are also recommended in the report from the Office of the Auditor General. Among other initiatives being considered are a ban on tied selling (where the dealer requires the customer to purchase mandatory add-ons like etching and tire protection on the vehicle), tighter rules on advertising to ensure true “all-in” pricing, and better protection for internet selling and other offsite retailing activity by dealers.
This article in Canadian Auto Dealer provides a window into the jubilation in the new car dealer lobby. Going forward, the industry would much prefer that OMVIC concentrate on public awareness, dealer education and catching curbsiders. (Curbsiders are unlicensed sellers who usually pose as private parties in classified advertising, and compete unfairly with registered auto dealers). In the absence of some regulatory changes and robust enforcement, there is zero chance that these initiatives will improve retailing standards. They took a beating due to Covid-related vehicle shortages and have not fully recovered.