Tim Reuss, President of the Canadian Automobile Dealers Association, shares insights on the evolving landscape of the Canadian automotive market, particularly regarding the influx of Chinese EVs and the government's new EV incentives. The discussion highlights the anticipated impact of these developments on sales and dealer operations. Reuss also addresses the challenges dealers face with technology integration and labor acquisition, emphasizing the need for effective AI solutions and workforce strategies. The episode provides a comprehensive overview of the current state and future direction of the automotive industry in Canada.
Trump’s latest threat; Chinese EV demand; More EV infrastructure. Plus, Canadian Automobile Dealers Association President Tim Reuss talks about Canada’s new auto strategy, 2025 sales and what’s ahead in 2026, and Chinese EVs.
"So Tim, big news out of Ottawa today. EV incentives are returning up to $5,000 to start, but will decrease to $2,000 by 2030. Is this the right approach from the government?"
EV incentives are money given by the government to help people buy electric cars. This makes it cheaper for you to own an electric vehicle.
EV incentives are financial benefits provided by the government to encourage the purchase of electric vehicles (EVs). These incentives can help reduce the overall cost of an EV, making it more affordable for consumers.
"...the government does have a stated goal of 75% EV drops in my 2035. Do you think that's ultimately achievable as a target? It was interesting the way it is worded..."
An EV is a car that runs on electricity instead of gasoline. Some EVs use only electricity, while others can also use gas.
EV stands for electric vehicle, which is a type of vehicle that is powered entirely or partially by electricity. This includes fully electric vehicles and plug-in hybrids that use both an electric motor and an internal combustion engine.
"...by different measures by plug-in hybrids, by very efficient internal combustion engines..."
A plug-in hybrid is a car that can use both electricity and gas. You can charge it like an electric car, but it also has a regular engine.
A plug-in hybrid is a vehicle that combines a traditional internal combustion engine with an electric motor and a rechargeable battery. It can run on electricity alone for a certain distance before switching to gasoline.
"...by very efficient internal combustion engines, yes, by full battery electric vehicles, etc..."
An internal combustion engine is what most cars use to run. It burns fuel like gas to create power that moves the car.
An internal combustion engine (ICE) is a type of engine that generates power by burning fuel, typically gasoline or diesel, inside the engine's cylinders. This is the traditional engine type used in most vehicles before the rise of electric vehicles.
"...or other vehicles, hydrogen, fuel cell, whatever it might be..."
A hydrogen fuel cell is a way to power a car using hydrogen gas. It creates electricity and only produces water, so it's very clean for the environment.
A hydrogen fuel cell is a device that converts hydrogen gas into electricity, which can then be used to power an electric motor. This technology produces only water as a byproduct, making it a clean energy source.
"Now, interestingly enough, the immediate beneficiary of the quotas of the 49,000 quotas with China would be Tesla. That was importing most of the vehicles from China into Canada before this whole thing came up."
Tesla is a car company that makes electric cars, which are powered by batteries instead of gasoline. They are known for being very advanced and popular.
Tesla is an American electric vehicle manufacturer known for its innovative technology and high-performance electric cars. It has gained significant market share and recognition for its contributions to the automotive industry, particularly in electric vehicle development.
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This podcast is brought to you by Reynolds and Reynolds, the industry leader in automotive
technology. Learn how Spark AI, Reynolds Unified AI Data Layer, can help you unlock your full
potential by visiting rayray.ca slash spark-ai. Hi everyone and welcome to the February 13th,
2026 episode of the Automotive News Canada podcast. I'm your host Greg Lason, the digital and
mobile editor at Automotive News Canada. Coming to you from just outside Windsor, Ontario,
the automotive capital of Canada. Today on the show we hear from Canadian Automobile
Dealers Association President Tim Royce. He recently spoke with Automotive News Canada
publisher Tim DeMopoulos. The two spoke at the National Automobile Dealers Association
Convention in Las Vegas last week and we'll hear that conversation soon. But first,
to look at some of the top Canadian automotive stories of the week.
U.S. President Donald Trump says he will not allow a planned international bridge between Windsor
and Ontario and Detroit to open. The nearly complete Gordy Howe International Bridge is a
key link in the North American auto supply chain. For example, Ford Motor Company builds engines in
Windsor that are then shipped to the company's U.S. truck plants. The $6.4 billion bridge is
co-owned by Canada and the state of Michigan. Canada paid for construction of the bridge.
Trump claims it was built with, quote, virtually no U.S. content and that it gets the U.S., quote,
absolutely nothing. The auto industry, provincial and state governments,
and former politicians who helped orchestrate the original deal for the span have rallied
around the importance of the bridge. Prime Minister Mark Carney says he's had positive
conversations about the span with Trump. In EV retail news, Canadian dealers are aiming to get
their hands on the influx of new EV entrants from China. Canada recently approved the importation
of 49,000 EVs made in China at a tariff rate of just 6.1%. Canadian automobile dealers Association
President Tim Royce says 70 Canadian dealers have signed up for the association's latest tour of
China. It will give dealers a crash course in the market's key players and the dynamics.
Michael McGilvery, CEO of Nova Scotia based Century Auto Group, says he is keen to represent
Chinese brands when they inevitably arrive. He anticipates the brands to arrive with robust
competitive lineup spanning gasoline, hybrid and electric models. Says McGilvery, I think they'll
have a full suite to serve the market when they arrive. Finally, in EV infrastructure news,
Canada is getting an additional 8,000 EV charging ports. Energy Minister Tim Hodgson says the
government is planning to spend more than $84.4 million to add them to Canada's existing stock
of more than 30,000 chargers. Prime Minister Mark Carney said last week that Ottawa would spend $1.5
billion on EV infrastructure as part of a suite of changes to the federal auto strategy.
Hodgson's announcement did not cite a timeline for getting the new 8,000 charging ports in place.
It's also not clear whether Ottawa will be footing the entire cost of the 122 projects to
build more chargers or just a portion of it. And that's a look at some of the top Canadian automotive
stories of the week. Coming up, we hear from the Canadian automobile dealers Association President
Tim Royce.
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reach its full potential, visit rayray.ca slash spark-ai today. That's r-e-y r-e-y dot ca slash
spark-ai to learn more. Welcome back to the Automotive News Canada podcast. I'm your host,
Greg Lason. We'll now hear a conversation between Automotive News Canada publisher Tim
Demopolis and Canadian Automobile Dealers Association President Tim Royce.
So Tim, big news out of Ottawa today. EV incentives are returning up to $5,000 to start,
but will decrease to $2,000 by 2030. Is this the right approach from the government?
Well, first of all, what was announced today is much, much larger than that. It's a very
comprehensive autostrategy that we applaud the Canadian government on taking, especially during
this difficult time as we get into the critical phase of kuzma renegotiation with the U.S.
And having announced the important supports for the Canadian manufacturing base, which are
essential and critical, was front and center, so we applaud the government on that. We also
obviously applaud them on getting rid of or stopping the EV mandate, which was just layered on top
regulation that was unnecessary because we have greenhouse gas emissions reductions
place. And the government listened to us and the manufacturers through the intensive work
done the last couple of months ended the EV mandate and is working with the manufacturers
on an adjusted sort of GHG flight path, let's call it. And then as part of that, then yes,
there was also an announcement that EV incentives are coming back. There's a couple of sort of
details around that that are important to consider. The first one being the EV, those EV incentives
will only be offered for vehicles being produced by countries or jurisdictions with which Canada
has a free trade agreement. There's a limit of 50,000 on the price for those vehicles in order
to receive the incentives and they will decrease over time, as we mentioned. So that is as well
welcome news, but I think that is the much, much smaller piece. And by the way, there's not that
many vehicles that will qualify under the 50,000 threshold. So do you think this will make a dent
in EV adoption over the length of the program? The EV incentives are always welcome news,
don't get me wrong, but we don't expect it to have an immediate impact on EV penetration. What
we'll have now direct impact overall on sales and certainty is now that we have certainty in the
marketplace of what can what can happen. And manufacturers have now different pathways to
fulfill their emission requirements. So it's no longer just it has to be EV, which was leading to
the unfortunate situation, especially in two provinces that have layered on top
their own EV mandates that manufacturers were restricting the supply of internal combustion
engines into those provinces. And by the way, very modern good internal combustion engines that
over time actually do reduce emissions versus what's out there in the car park. So overall, we
fully expect this to have a positive effect on overall sales because it will provide certainty
for the market. Last point I will mention here is that now obviously the focus now shifts to the
two provinces that have still an EV mandate in place, Quebec and BC. And both of the provinces
were clear that once the federal government were to announce the new direction, they would have
another close and hard look at where they are. So that's where the focus is now going to shift
in the next couple of weeks. Now, so the government does have a stated goal of 75% EV
drops in my 2035. Do you think that's ultimately achievable as a target? It was interesting the
way it is worded and also how Prime Minister worded it. It is comparable to a 75% electric
vehicle penetration. But what it means is if you can achieve that by different measures by
plug-in hybrids, by very efficient internal combustion engines, yes, by full battery electric
vehicles, etc, that is up to you or other vehicles, hydrogen, fuel cell, whatever it might be. So
there's no longer a push for one technology only. So the 75% that you mentioned wasn't,
it has to be 75% EV penetration, but the emission reductions that will be calculated
are in such a way that they would represent the 75% penetration of zero emission vehicles.
Let's move on. Now, let's talk about 2025 sales. They showed that the industry is very resilient
overall. What does Kata anticipate for 2026 in terms of industry sales?
Yeah, let's talk about 25 for a second here, even though it's already a couple of weeks
in the rearview mirror. As you said, surprisingly, the Brazilian market came in
right on the nose almost 1.9 million that we had predicted for the year. We had seen that the
initial part of the year was strong. We fully predicted that that second half of the year
was going to slow down, especially year-to-year comparison when in 2024 you had a huge effect
in Quebec with a lot of people buying EVs before their provincial EV incentives went away. So the
market was remarkably resilient in 2025. For 2026, currently we are cautious and we are predicting
a flat market. Not a receiving market, but not a necessarily growing market either. This is based
off of the fact that we are going into the very disputed phase of the Kusma renegotiation.
We fully expect over the next six to eight months that the noise and rhetoric
will be cranked up to 11. Shout out to Spinal Tap fans here over the next weeks and months.
That will again create a bit of uncertainty in the marketplace. We're not pessimistic,
but we're not necessarily too optimistic about the overall impact. We're calling for
market around the 1.91 million again.
Beyond political and economic challenges, your dealers are facing other issues when it comes to
their operations, particularly around technology and integrating it into their operations.
AI is fueling massive change. Are dealers prepared overall to integrate AI into their
operations? I think we are at the phase now where dealers are asking the relevant questions around
AI and the initial hype of pretty much every supplier that you see around us here at the
NADA show, all of a sudden slapping something that says, now AI powered on it to generate some
excitement. That has started to die down and now reality is starting to set in and the dealers
are asking the right questions of their suppliers. That's where the good is separated from the bad
from the supplier side as well. Are they able to answer those questions? Are they able to demonstrate
to the dealer how AI will create benefits to them, how it integrates into their existing
landscape? We did a tech stack study last year in Canada that we recently published
where we asked both decision makers and users at dealerships their impression of their IT solutions
that they have, what their expectations and what they want. The findings were quite surprising.
The dealers don't care so much about the bells and whistles and the latest shiny thing. They care
about how the solution that they're being sold will integrate into their existing landscape,
how easy will it be to integrate with all the other systems that a dealer might be running,
and support and training that is provided by the IT suppliers. We've made the study available to
all of the suppliers in that relevant space so that they understand also better what they will
be seeing from from dealers and the questions that they're asking. Another challenge dealers
faced in the past was labor. The labor market overall was salt and new. Tell me about how
that's kind of playing out over the last year and the year ahead. Do you think they're winning the
game from a talent acquisition standpoint and what challenges do they make? This is the perennial
issue in the automotive dealership landscape. Just to brief parentheses, a couple of months ago
for a project that we were working on, I had to take a bit of a deep dive into history and ran
into the minute books of CADA back in the 50s. No, actually, this was before the Second World War
in the 30s. This was 1937. And also there, there was a clear mention of the dire shortage of
qualified technicians. So the world hasn't changed that much. That's why I call it the perennial
issue. Having said that, the issue just got worse in Canada due to the adjusted immigration policy
of the government. We are working very closely with both the provincial governments and the
federal government in seeing how we can get some relief for our sector on this. There's been quite
an influx over the last years from the Philippines, Northern Africa, especially for Quebec and Mexico
where our provincial associations have done a great job of recruiting locally and qualifying
people. So we're talking about highly qualified technicians that speak good English or French
coming to Canada. They were able to then start at dealerships, but now they're facing the slowdown
and delay in the renewals of their permits to remain in Canada. That's a big, big problem right
there. And beyond that, obviously, we are continuously trying to find ways to train more technicians
and source more technicians obviously in Canada as well. The recent adjustments by the policies
the Canadian government were not helpful in that sense, as well as some conversations we've had
where they said, well, there's been some layoffs at auto factories, so can't those people just be
retrained? Well, yes, but no, it's not exactly the same thing. So it's not as easy as all of that.
So I think the solution has to be a combination of both of us generating more talent in Canada
and finding a way to bring in talent as well. That part of that, you know, change in immigration
policy means there's potentially less newcomers to Canada and less new consumers coming into
Canada, which is also having an effect on profitability or at least revenue for dealers to
a degree. Right. Overall, when you look at profits at the dealership level, how do you sustain and
grow profitability and create new revenue streams for the year ahead when, you know,
that population is contracting it? Yeah, that's a good question. And hence also,
our somewhat more tenuous approach to what we foresee in the marketplace this year. When it
comes to new revenue streams, there's not that many revenue streams to be had. There will,
however, start to be efficiencies, hopefully to be gained by a thoughtful and good integration of
AI in certain aspects of the business. So we fully expect that to start happening. And then, yes,
we are telling dealers very clearly and have been doing so since last year. We are in turbulent times.
Times will remain turbulent for a bit or longer than a bit. Dealers, and you better figure out
how to operate successfully in this environment and keep your inventories under control, keep your
cosplays under control and keep a close eye on your use card valuations, because that tends to be
where things start to show up. So I like to switch gears a bit. Last year, Canada began advocating
for Canada recognized overseas vehicle standards. What traction have you found on this file?
Any concrete steps forward to help? Yes, we've seen a lot of traction on this
and a lot of interest, especially from our new government in Canada. You saw Prime Minister
Carney just this morning referencing Europe on a number of topics and referencing others. You saw
his phenomenal speech in Davos of what needs to happen. And then this is precisely one of those
things that fits that spot and hence the very positive reception and interest from
certain officials in the Canadian government to our proposal to expand Canada's regulatory
framework to also accept emissions and safety regulations, standards and certificates from
those countries with whom Canada does have a free trade agreement. And it's interesting to see that
wording that we used found its way into the announcement this morning. So we're making
a headway, but we knew going in that this wasn't a silver bullet that we expected to see something
happen over a short period of time. This is a multi-year initiative and we're starting to make
a headway. Now, we don't have an overarching trade deal with China, but yet there's been a
lot of discussion over the last week and a half about Chinese vehicles coming into the country
will allowing China to build EVs into Canada change the industry and the dealerships and
how will that play out? So the immediate deal that was made with China seemed to be about EVs
was truly about Canola and it was necessary to do. And I think the Canadian government
threaded the needle quite successfully in finding an agreement on this that doesn't blow up what we
have on the automotive side, doesn't also blow up the great relationship that we have and will
continue to have and need to have with the US as part of the integrated change that we have in
North America. Now, interestingly enough, the immediate beneficiary of the quotas of the 49,000
quotas with China would be Tesla. That was importing most of the vehicles from China into Canada
before this whole thing came up. And if the Canadian government doesn't change anything,
it would Tesla would actually be the main beneficiary. So in effect, you would have no
change in the marketplace, no additional vehicles being brought in or prices being more affordable
by this agreement. So now, without a mind, we have proposed a different way of approaching the
management of said quota with the Canadian government. They listened intently, not certain
whether they will accept our proposal or not. But the proposal was basically that the quota
should be managed in such a way that only companies that have a presence in Canada,
meaning production and or sales and marketing headquarters, plus that work with a Canadian
franchise dealer model are allowed access to the quota. We will see where that goes. There's a
couple of things that are being clarified as more details come out of this and as the actual
negotiations on the nitty-gritty details of this with China proceed is that the first of all,
the quota is a hard quota on 49,000. So it's not like 49,000 can be imported at the 6.1% rate
and then another 50,000 at the 100% rate. No, it's 49,000 full stop, nothing after that.
That's the first thing. And the second thing is there's going to be an increase of the 49,000
by 6.5% every year. However, Cata has arranged dealer visits to China for several years. What
sort of sales models are Chinese brands potentially exploring when it comes to coming to Canada
and other overseas markets? What have you seen? Yeah, we're organizing what's called a CADA study
toward to China for the second year. We piloted it last year for the first time with 1718 dealers
and this year we're already sold out with 70 Canadian dealers going to China. It's a packed
program of four to five days of visiting and seeing the products on the roads, going to the
respective auto show, be it Shanghai or Beijing, depending on what year, looking at showrooms at
the mobility solutions that are in the market, talking to people, experts of their industry,
because we feel it is important for our members to be fully informed of what the Chinese market
looks like in the manufacturers. And quite frankly, if you've never been there and experienced
yourself, you don't fully understand it on exactly what is coming. Will it come and when it will come
is a different topic, but we need to be ready. We need to be prepared. And that is what we're
trying to accomplish with the study tour. Brief shout out here to our Australian colleagues
there who are the ones that actually pioneered this have been doing that study tours for years
to China and actually here to NADA in the US as well. There's a group contingent of Australian
dealers here as well. We always have fun interchanges with them and actually have a joint dinner
with them this evening here. So again, there are still is a lot of interest from Canadian
dealers. We're hearing it as well in terms of getting franchises. So how should a Canadian
dealer go about landing a franchise or a distribution deal? And what other things
is Canada doing in the Australian Association on study? Yeah, so what we have done is we have
engaged and are continuing to engage with Chinese brands that are thinking about coming to Canada.
And we have made sure that they understand the benefits of working with dealers in a franchise
model, what that entails, and what that looks like, and what are our Canadian business practices
that might be somewhat different than they could be in other areas of the world where
they might be doing business. Chinese clients might be doing business. We just want to ensure
that they understand what our regulations and our business practices, common business practices are.
In those engagements, I'm happy to say that pretty much all of the manufacturers that we've
talked to, they are intent on working with dealers in a franchise model. And it is actually their
preferred model as well when you look at how they have rolled out their sales in different parts of
the world. But again, it is sometimes the business practices around it that would need some adjusting
to say that way for Canada. As to how should a Canadian dealer go about it, if he would want
one of his franchise, well, first of all, those brands first need to come to Canada, they have
the intent to do so, but they need to jump through some regulatory hoops as well, they need to get
their vehicle certified and everything else. Hence why I said immediately if nothing changes,
the only beneficiary of the quotas would be Tesla, because the other Chinese vehicles are not
certified for Canada yet that will have to take place can take anywhere from a year to 18 months,
even if accelerated. So we'll see where that ends up. So I fully expect that we fully expect that by
next year in the auto show seasons in January, February and March in Canada. So Montreal, Toronto
and Vancouver, we might see for the first time Chinese brands that have now been certified for
Canada have their product ready, have their plans and their go to market strategy ready
for those vehicles to be on the showroom floor and they will be actively recruiting for
four dealers in Canada. Now you mentioned an accelerated certification process, we all know
that it takes a while to certify vehicles, like anywhere between 12 and 18 months. What are you
hearing just in terms of how that might condense just from a certification standpoint? Have you
don't have any more insights on that? Okay, anything like that? It's going to be an interesting ride
2026. We will try to be as careful as possible and as mindful as possible and as helpful as
possible with our dealer members, especially with the with the noise cranked up to 11 on USMCA to try
to differentiate between noise reality. So we'll be having a very robust program of communications
and webinars with our members over the next months. Always be on the lookout, I would say to
dealers for any communication that comes from CADA, remain engaged, remain engaged with your
provincial association, remain engaged with us on the national level and most importantly with
your dealer councils. Those are a key piece of the very good interactions and framework that we
have in Canada with with the OEMs. Tim, thank you so much for joining us today, really appreciate it.
Thank you very much. Thanks for having me. I'd like to thank Tim Royce for his time and Tim
DeMopoulos for conducting the interview. If you'd like to be a guest on the show, have a suggestion
or simply want to comment, email me at glason at AutoNews.com and remember you can listen to all
our previous podcasts on Spotify, iTunes and Google Play or on our website, automotivenews.ca.
Just scroll to the podcast hub in the middle of our homepage and don't forget you can follow
Automotive News Canada on X where we're at Auto News Canada and you can find me there too under
at G-Lacin ANC. Finally, look for us on LinkedIn, just search Automotive News Canada. That does it
for this episode of the Automotive News Canada podcast. We hope you'll join us next time. So long,
everybody.
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