OTTAWA — Canada's auto dealers and manufacturers have called on the federal government to introduce an aggressive "scrappage" program aimed at stimulating new vehicle sales while removing higher-emitting vehicles from the road.
Similar programs have already been successfully implemented in other countries, including Germany, France and the United Kingdom.
"Canada would see immediate economic, environmental and safety benefits from a program that encourages drivers to replace older vehicles with new ones," said Canadian Automobile Dealers Association President and CEO Richard Gauthier.
"Germany is a good example where, after implementing a meaningful and simple scrappage program worth $3,800 (CDN), new vehicle sales increased by 20 percent in April and 40 percent in May. Prior to the introduction of their program, sales had declined by 14 percent in January"
The industry's proposal mirrors the successful German program, including:
• A meaningful consumer incentive towards the purchase of any new light-duty vehicle in the amount of $3,500, provided a used vehicle of at least 10 years or older is traded-in and scrapped;
• Operate for a specific duration (e.g. one year), or until program funding is spent;
• Immediately implemented by enhancing the existing 'Retire Your Ride' program.
"A robust scrappage program could increase sales by as much as 100,000 units, which would be a significant benefit to consumers, dealers and their local economies," said Canadian Vehicle Manufacturers' Association President Mark Nantais.
"Additionally, today's new more fuel efficient vehicles, are 12 times cleaner than a 1993 model year vehicle and contain the most advanced vehicle safety systems. Removing these vehicles is a triple-win."
Canadian new vehicle sales have fallen by 20% or over 141,000 units in 2009 compared to the previous year. This drop in sales has impacted sales revenues by more than $3.5 billion and federal GST collection by at least $175 million.