Sept. 12, 2025 | The week’s top stories and CADA’s Tim Reuss on ZEV mandates, sales and tariffs

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Hi everyone, and welcome to the September 12th,

2025 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'll hear

from Canadian Automobile Dealers Association CEO, Tim Royce.

He talks with Automotive News Canada,

Toronto Bureau Chief David Kennedy.

The two discuss the government's pause and review

of the zero emissions vehicle sales mandate.

They talk tariffs and sales and more.

But first, a look at some of the top Canadian

automotive stories of the week.

General Motors will continue

to operate its Oshawa assembly plant on three shifts.

Workers there will continue

to build the Chevrolet Silverado pickup

on three shifts until January 30th, 2026.

The automaker said in May

that it would cancel the shift

during this year's third quarter.

Back then, it cited lower forecasted demand

and the evolving trade environment for its decision.

However, this week, GM said the extension

of the midnight shift was in response

to short-term production needs for light duty pickups.

In sticking with manufacturing,

Stellantis made similar news

a day after its competitor, General Motors.

Stellantis says that its Windsor assembly plant

in Windsor, Ontario

will return to a three shift operation.

The midnight shift will be added

during the first quarter of 2026.

The automaker says it made the decision, quote,

in anticipation of increased demand

for products built at the Windsor assembly plant.

Workers there build the Chrysler Pacifica minivan,

Chrysler Pacifica hybrid, Chrysler Grand Caravan

for the Canadian market,

and the Chrysler Voyager for US fleet sales.

They also build electric

and ice versions of the Dodge Charger.

We end with a retail note.

Canada's oldest Toyota dealership has been sold.

Northern Roads Auto Group recently acquired

Fort Erie's Bill's Toyota.

It was previously owned by the Pesinki family.

Bill Pesinki came to Canada from Hungary in 1957,

following the 1956 Hungarian Revolution.

Bill opened up Bill's Sonoco in December, 1958.

He then opened Bill's Texaco Toyota

and his Zuzu in 1965.

The store had been in the family ever since.

And that's a look at some of the top Canadian

automotive stories of the week.

Coming up, a conversation between our Toronto bureau chief,

David Kennedy, and Canadian automobile dealers

association CEO, Tim Royce.

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For JD Power 2025 award information,

visit jdpower.com slash awards.

Welcome back to the Automotive News Canada podcast.

And our host Greg Lason will now hear that conversation

between our Toronto Bureau Chief David Kennedy

and Canadian Automobile Dealers Association CEO Tim Royce.

So Tim, let's start with the big news.

The federal government has shelved the 2026 target

and put the EV mandate up for review.

You know, what's your reaction

and what do you want to see happen next?

This is actually welcome news

and a very good first positive step by the government

to realize that ambition and reality

where we're just not matching up at this point in time.

So we're very happy with this

because it gives all of industry a certainty now

at least for the next year of exactly where we stand.

And it gives all of us now a renewed avenue

with the government to engage with them

on what that revised plan should look like

if they want to adjust the plan or if it remains okay.

Let's go back to the drawing board completely.

And is that your hope?

Do you want things to go back to the drawing board here

or do you think there's a way to salvage

the legislation as it says?

Well, from our perspective,

any sort of adjusted plan needs to consider

just the vast differences that we have across Canada

when it comes to consumer demand.

One size does not fit all in our country.

The demand is not the same in downtown Vancouver

or Quebec City or Toronto than it is in rural Manitoba

or Alberta or even rural BC for that matter.

So whatever adjust the plan needs

to take that into consideration.

And also as well as just what is possible

and reasonable under what we currently have

in terms of charging infrastructure and energy grid,

both what we have and what is coming in also there,

the ambition and reality figures are staggering

when you look at what charging infrastructure

should have been built up by now

and where we currently actually are.

So this is, I think the main sort of input factors

that the government needs to consider

for any sort of adjustments

or any different plan that it wants to come up with.

So it's going to be our jobs, so to speak,

to provide it from our perspective

the maximum input that we can from the consumer side

and what consumers are seeing across this country.

And to also look at the pillar again

of what is required for consumer demand.

The mandate, the way it was conceived from the get-go

I think was flawed in saying,

well, we have to mandate what is available

in order for consumers to then buy them.

Well, I think jurisdictions that have been successful

with EVs and other parts of the world

have proven that it's actually the other way around.

What sort of incentives do you need on the consumer side?

Be it, yes, price incentives,

but also soft incentives

when it comes to charging availability infrastructure

infrastructure usage, like for example,

HOV lanes to be used by EVs

and things of that nature

that for example, No Way has been very successful.

And No Way didn't have

and has never had an EV mandate at all.

And yet they are very successful in EV.

So this is what we again,

we'll be trying to convey now to the government.

It's been an eventful year, I know.

So far sales have kind of managed to hold up

a little bit better than we probably thought initially

when the tariffs were first mentioned.

Has the resilience surprised you?

Quite frankly, it has.

The market has been surprisingly

resilient of first half of the year.

And through July, it was up by 5.8%

which if you were to extrapolate for the whole year

would put the total market at around 1.95

come into the year.

Now we do expect that the second half of the year

is gonna, the growth is gonna slow down somewhat.

And the August figures that actually just came out

this morning seem to indicate

that that's going to be the case.

So we don't necessarily see a market downturn

but we do see a slow in the growth.

So our current forecast is for a market of about 1.9,

1.92 for the total year.

What is interesting as well is that the growth

has come pretty much across the country in all provinces.

So even in the last couple of months

you've seen a growth in Quebec again

after the, let's call it the EV hangover

from last year after that was digested.

So we see strong growth across the country

in all provinces with the exception obviously

of the EV segment.

So to your question, yes, it's the market

has been surprisingly resilient.

Dealers have basically buckled down

and together with their manufacturers

and are finding the best way to deal

with the current uncertainties in the marketplace

when it comes to supplies

and what will now be supplied from where

and how and what a tariff rates

and that changes almost daily.

Some brands have already started adjusting

their supply into Canada from their various factories.

Others have had to hit the pause button for a bit

and are resuming supplies into Canada

especially those that were coming

from the US recently.

And there's going to be, let's just say

that the pricing impact of all of those changes

is only now starting to come

and hence are somewhat more cautious

a forecast for the second half of the year.

Yeah, and when it comes to some of those models

that we saw disappear but temporarily, hopefully

has that had an impact on sales for those brands?

Absolutely, it has and it has been

let's call it a tilting of the playing field

because not every brand was affected in the same way.

So if you recall back to let's say chip shortages

or the pandemic, pretty much everybody was affected

and everybody found ways to adjust to it

but regardless of what brand you had

if you did the right moves,

you were actually able to then adapt to the marketplace

and you weren't in a competitive disadvantage

to your dealer colleague down the street

and that is unfortunately now not the case.

So those brands that have been affected

have seen a let's say competitive disadvantage

versus other brands in the marketplace.

But again, even within that,

I must commend all OEMs working together

with their dealers, their dealer council

to find solutions, find and especially keep

their dealers appraised of what is going on

and keeping them informed so that they know

what is coming, what is not coming,

what to expect, what not.

And also being very open with dealers to say

this is what we don't know at this point in time

and that helps a lot for dealers then

to be able to adjust their planning.

So for example, if you were about to embark

on an expansion of your dealership or service workshop

do you put that off?

And yes, by how long, things of that nature

that dealers need to decide on a daily basis

that they're now able to do on a much good basis.

So I have to extend a kudos here to the OEMs

and what they have accomplished

in keeping dealers informed over the last months.

So when it comes to profitability,

automakers are obviously looking to find

some savings somewhere as they absorb these tariff costs.

You mentioned potential price hikes for consumers

kind of finding their way in,

probably some reduction in incentives

we're looking at as well.

Are automakers looking at cutting back dealer margin at all

to make up for some of those profits?

There was not a widespread discussion of that topic.

There are individual discussions around that

with certain brands,

but interestingly enough those discussions

were being had before any tariff issues.

So I'll just leave it at that.

The main focus I think is together the manufacturers

together with the dealers trying to figure out,

okay, what of this?

Can the market absorb or not?

How do we deal with it?

And it ends up being a combination

of things that need to happen.

You just mentioned one is, for example,

a cutback maybe an incentive spending into the marketplace.

A change in just straight up supply of vehicles

from one factor to another

somewhere else in the world,

those adjustments have already been made

over the last six months.

So I think it's in a different brand by brand

of what needs to be done or not be done.

And again, not every brand is affected.

There are certain brands that

due to the fact that they have production in Canada

are not affected with the remission scheme

that the Canadian government put in place.

Those that have production in Canada

as long as they maintain that production

are able to continue importing vehicles

without a Canadian tariff on it right now.

So those brands are not faced with those issues.

Yeah.

And when it comes to the tariffs

heading into the back half of the year,

I know you said you're a little bit worried

about where sales might go from here,

though they've been strong so far.

Is there anything else top of mind of concern

when it comes to tariffs?

If the concern is that things will not continue

in its current state of complete uncertainty.

Something will be,

some sort of agreement will be reached

perhaps a new USMCA or ACUSMA,

depending on which side of the border you talk about it,

will be reached or not reached

or is it going to be a trade agreement?

What are the details of those?

And we're starting to find out

there's lots of movement around those too.

There's now a bit of legal uncertainty

as to exactly how those tariffs are applied.

But I would caution everyone around,

even if there's certain legalities involved,

the political will is very clear.

And if it is not one path,

another one will be found for those things.

So just because there's a legal finding right now

for us doesn't signal that there's gonna be a change

in the approach of things,

meaning tariffs are here to stay

in one shape, way, or another.

And it's up to the different countries

to find our agreements with this new approach

of the US government.

But it does influence the timelines

and the mechanisms used for this for the tariffs.

So those will remain in place.

So that is what we do expect in the next,

let's call it month to two months,

something will have to be announced

between the US and Canada.

If it is a wholesale new renegotiation

and opening up of Kuzma now

or some sort of high level agreement

as has been found with other countries,

that is a bit uncertain at this moment,

but the current status quo will not continue.

Yeah, excellent.

And obviously I know you and your colleagues

spend quite a bit of time in Ottawa,

fighting for your members.

So tell me a little bit about what you're pushing for,

what sort of resolution to all of this

are you looking for from Ottawa?

Sure, so obviously on the tariff issue

we are as much involved as we can with the government

and we just finished a trade mission

down to Washington about a month ago

with our executive committee

where we met with US lawmakers, senators,

trade officials, Canadian embassy officials,

trade officials, et cetera,

in conveying our point of view for Canada.

So we are involved very much in that file

trying to influence things.

But however, we have been clear since quite a while ago

that regardless of that,

there's things that the Canadian government

should do and can do on their own

regardless of the current tariff discussions

to help the industry in its competitiveness.

And one of the other things I know

you've been arguing for in Ottawa this year

is sort of an expansion of the regulatory requirements

to bring in some more vehicles from Europe

and Japan and South Korea

that have never met North American standards.

But I think of station wagons for instance

have always been popular in Canada,

but not in the US.

So tell me a little bit about that push you've been having

and whether or not you found any receptive audience in Ottawa.

Yeah, that was the second point of our five-point framework

for automotive competitiveness

was to expand Canada's regulatory emissions

and standards and safety regulations.

We have the situation where

if the US doesn't want a vehicle,

we also don't get it in Canada.

And there's a number of vehicles

that Canadian consumers would love to buy.

Our members, the dealers would love to sell and service.

And the manufacturers would actually

also like to bring in and sell in Canada.

But the Canadian volume alone is too small

to warrant the adjustment investments

that need to be made for the standards.

And by the way, we're not talking about

the standards being better, which standard is better.

I mean, you've seen my quote and I continue to use that one.

If a vehicle is deemed safe enough environmentally

okay to driven on a German Autobahn,

why shouldn't it be driven on a Canadian highway?

So those things can be considered.

But again, we've put also very clear

from our perspective and our proposal

GART rails around the saying this should be applied

to those jurisdictions that have

a free trade agreement with Canada,

meaning South Korea, Japan, and European Union only.

And for those entities that are doing business in Canada

already, meaning they have either manufacturing

or production or a substantial sales

and marketing footprint in Canada

with a national therefore organization, right?

And the interesting part is we initially

received a lot of interest from the political side

in Ottawa, but again then some of the let's say transition

bureaucrats from the previous administration

and then quite frankly for years

they've been doing their job in trying

to only align with the US.

And by the way, we're not saying

we shouldn't align with the US, right?

What we're saying is there's a potential

for an additional add-on here.

They have sort of said, well,

but this is the way we've always done it.

Interestingly enough, in the US and European trade agreement,

the framework for the trade agreement,

there was a passage included as well

that both will look at reciprocal acceptance

of each other's standards.

So that's created a lot of interest as well.

And we'll be making sure that that is catches

the attention of all of our Canadian trade officials

as well in this discussion.

So it sounds like it may be turned into

of something a little bit more than just an idea.

Correct, correct.

And just over the last few days,

I've had conversations with those manufacturers

most interested in being able to do that

and they fully support this as well.

Again, not every single manufacturer, I have to say,

but there's quite a few that are behind this

and again our members would love to sell

and Canadian consumers would like to have those vehicles.

But we're not talking about changing

the complete makeup of the market to be clear.

95% of the market will still be fairly similar to the US,

pickups, SUVs, et cetera, but there are certain segments

in the market that are currently

not being served in Canada.

Now, some of the other points that we brought

to the forefront in our five point framework plan

are also still front and center for us.

The other one was the bank act which is up for review

and the Canadian banks wanna get into leasing in Canada,

which they're currently not able to do.

Our members do not support that expansion quite frankly

because then you would have big financial institutions

competing with them.

And those same financial institutions are the ones

that dictate the floor planning and the conditions

and have all of the information from the dealer.

So it would be unfair competition from our perspective.

So we're fighting against that.

The other one is the luxury tax,

the inefficient luxury tax.

It's time for that one to go.

And plus we're now faced with the fact that CRA,

which has been dealing with some issues on their own

was just the general Canadian population that you saw

and just this morning a Senator came out with saying,

you know, if the CRAs left the trust of the Canadian public

there's something to be said there

and an emergency plan of 100 days

is being put in place to correct that.

And now CRA is auditing dealers on the luxury tax

and we're heavily involved because they're unevenly applying

and they sometimes don't even know exactly the rules for that.

Like for example, our winter tires

to be included in the price yes or no

or a discount or a sales incentive from a manufacturer

and all of the things there's absolute chaos out there

which has led us to have to engage

with our great partners from MMP

to start providing support to dealers

as they have CRA auditors coming in

and what gets applied in one jurisdiction

is very different than another.

So that's something that we're also focused on.

And then the last one is, this might surprise you,

I'd like to thank the government

for finally doing what was the right thing

which is pay the dealers the money that were owed

for the emission vehicles, zero emission vehicle incentives

when the federal program wound down in February

dealers were left holding the bag

to the tune of almost an 11 million dollars in Canada.

That's something that we had to fight for months

but finally they relented, they saw that that was not right

and corrected the situation.

And we now know that the dealers

that were left holding the bag

they've been able to submit their claims

and are actually now receiving the money.

So thank you very much to the Canadian government

for doing that, I'll be a few months late

but better late than ever.

Yeah, and just on that ZEV incentive,

any word on when we might see something returned

I know the federal government has kind of been saying

that it will, but it's been months now

and really no word from Ottawa.

So this is an interesting one as well

where you have ministers that are not in charge

of the file saying something that it's gonna come back

and quite frankly making an announcement

this was months ago and basically any consumer

that was in the market saying,

oh, I'll hold off on buying a vehicle

because the incentives might be coming back.

It's been two months now and nothing's come back

but those were from ministers

that are not in charge of the files.

We do know that the government is

ruminating about potentially bringing back

EV incentives and they want to make certain adjustments

to it, which we would agree to

but we're also just concerned that in doing so

they might tilt the playing field

too much in one direction or another

like for example, you only get access to an EV incentive

if you're producing Canada

or for vehicles produced in Canada.

That would be a tilting of the playing field

too far in one direction

and that would not be something that we would agree to.

Now, if you wanna find a way to keep certain companies

out of those incentives that have been the ones

that have been unproportionately benefiting from that

and sometimes in dubious ways

as was the fact in February

when the incentive was wound down.

Okay, but then engage with industry on this

and that has so far not happened.

So both, all the manufacturers and us

we have told the government

if you're thinking of doing something

and tweaking it or changing it, consult with us

before you do so and before announcing something

that then might have certain areas of concern

especially if you still want the dealers

to continue fronting the money on your behalf

as was the case before.

Because again, the system in place

is that the dealer is giving that money to the consumer

in the assumption that he's gonna be paid back

by the government and that for a while there was not the case.

So if you want our members to continue on that

you better consult with us

on how that system is gonna look going forward.

So that is something that we hope that now

the government's back in session

we'll be able to get a bit of movement on.

I'd like to thank Tim for his time

and David for conducting the interview.

If you'd like to be a guest

or have a suggestion or simply want to comment,

email me at glasenatautonews.com

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That does it for this episode

of the Automotive News Canada podcast.

We hope you'll join us next time.

So long everybody.

Chevrolet Silverado

Chrysler Pacifica

Chrysler Grand

Dodge Charger

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