Calgary

Canadian car dealers call for free trade amid U.S. auto tariff threats

As U.S. President Donald Trump continues to threaten Canada with auto tariffs, Canadian car dealers are lending their voice to the fight for free trade.

U.S. and Mexico are at the table to talk NAFTA, but it's unclear when Canada will get a seat

Vehicles sit outside Jack Carter Chevrolet dealership in Calgary. (Lucie Edwardson/CBC)

As U.S. President Donald Trump continues to threaten Canada with auto tariffs, Canadian car dealers are lending their voice to the fight for free trade.

On Thursday, the Canadian Automobile Dealers Association joined the Coalition to Keep Trade Free — an initiative pushing for a modern North American Free Trade Agreement, driven by the Canadian Chamber of Commerce and other business groups from across the country.

"If the United States was to put a tariff on Canadian autos, Canadian-manufactured autos, it would pretty much decimate the auto manufacturing in Ontario," said Jared Williams, the general sales manager at Jack Carter Chevrolet in Calgary.

[NAFTA's renegotiation is] of vital importance for our prosperity as a country.-Michael Hatch, CADA chief economist

The dealership is one of 3,200 dealerships in CADA and employs about 110 Calgarians full-time.

"If the Liberal government was to react to that and put a tariff on U.S.-imported vehicles, for us as a General Motors dealership it would be pretty devastating, as probably about 75 per cent of the models we sell are U.S. manufactured … we would probably have to lose a third of our staff to weather the storm."

Trump and his administration have repeatedly threatened to impose a 25 per cent tariff on cars imported from Canada and a 10 per cent tariff on auto parts.

Currently, NAFTA allows auto parts and vehicles made anywhere in North America to be sold freely between the U.S., Canada and Mexico. 

Prime Minister Justin Trudeau's government has said they would respond with countermeasures to any auto tariffs imposed by the U.S.

Williams said his dealership would likely survive any tariffs, but smaller stores might not.

Jared Williams of Jack Carter Chevrolet in Calgary said U.S. auto tariffs would likely mean his dealership would be forced to lay off one third of its staff. (Mike Symington/CBC)

"I think it would be ridiculous if it did happen, but if it does it's going to be a major blow to the retail automotive industry across this country," he said.

He compared the impact of tariffs to what happened in the 2008 recession, saying in a normal year about 2 million vehicles are sold in Canada, but during the global financial crisis those numbers dropped to about 1.4 million, and many dealerships went out of business.

A recent report from CIBC found that the number of cars made in Canada could fall by about 900,000 units per year if the U.S. enacted a 25 per cent auto tariff.

'A period of unique uncertainty'

"Right now we're facing a period of unique uncertainty with regards to our trade relationship with the United States and elsewhere," said Michael Hatch, CADA's chief economist, adding that tariffs could be "absolutely cataclysmic."

He said it's absolutely vital for his industry that free trade is preserved, and he hopes by joining together as a coalition, that message is amplified.

"It demonstrates to the government and to the public that there's a very broad consensus … it's an issue that touches everybody in Canada," he said. "It's of vital importance for our prosperity as a country."

There have been reports that progress is being made between the U.S. and Mexico on NAFTA renegotiations, but it still remains unclear as to when Canada will rejoin the talks.

With files from Lucie Edwardson

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