Saskatoon

New SGI rules for autobody shops will kill smaller rural businesses, owners say

Rural autobody shop owners fear new Saskatchewan government rules will put them out of business.

Small business owners say they can't afford new training, equipment requirements

Rural auto body shop owners fear new Saskatchewan government rules will put them out of business. (Brittany Spencer/CBC)

Sunny's Auto Body has been a fixture in the town of Maple Creek for more than 50 years. That could soon end.

"In a year from now we won't be here. We're going to plan on shutting our doors," owner Barb Genert said.

Genert isn't the only autobody shop owner in the province who feels like their back is against the wall.

Saskatchewan Government Insurance (SGI) is giving the province's 260 autobody shops until next April to meet new training and equipment requirements or lose SGI accreditation. Most shops rely on a share of SGI's 80,000 claims per year for the bulk of their income.

The new equipment includes tools and computer software used to work on newer vehicles.

Genert said the required changes would cost more than $100,000 and her business can't afford it. Other rural, family-owned shop owners told CBC News they fear the same fate.

"They don't want the little shops to exist. It's just drying up the rural areas even more," said Bob Boire, who started Blaine Lake Auto Body 40 years ago.

Osler shop owner Mike Dobmeier agrees. His father opened Tony's Auto Body there in 1986.

"I can't afford this. I'm just a real small shop. It'll put me out of the SGI game," Dobmeier said.

In a video taken at an industry conference last month, SGI officials appeared to confirm their fears.

"Frankly, we're not going to enable an inefficient industry. Consolidation needs to occur," SGI vice-president Ryan Smith told the audience.

Kelly Genert works on a door at her parents' Maple Creek shop, Sunny's Auto Body. (Submitted by Sunny's Auto Body)

In the conference video, Smith is introduced but no one applauds.

"Clap for him. It's OK," the MC says, as some applause can be heard off camera.

Smith begins by saying SGI has "done a pretty good job of maintaining good communication through a pretty disruptive time."

Smith and another official explain the new rules and the magnitude of the change.

A woman in the crowd tells Smith it's going to be hard on small rural shops. She asked Smith if they could have more time to make the transition, or could at least get a low-interest government loan. Smith said no.

"I mean, 260 shops. It's not going to be viable for everyone.… Have we considered that? Yes," Smith said in the video.

In an interview, Smith said the changes are necessary.

He said vehicles are becoming more complex and higher standards are necessary for motorists' safety.

"We need to have that level of tooling and training to make the repairs," Smith said.

He disputed the $100,000 figure cited by owners, saying it will only cost $40,000 for the most basic equipment.

He said there's a lot of misunderstanding about the new rules. SGI officials will be hosting town hall information meetings in several communities starting next month to explain the changes.

Genert, Boire and others agreed shops in Saskatoon and Regina are seeing more of these newer computerized models.

But most vehicles taken to small town shops are simpler, they say. Even if they could afford to buy the tools, there'd be no way to recoup their investment.

Genert said they've had only one customer in the past month whose truck required equipment they didn't already have. She referred them to a shop in a bigger centre.

Wes Wambold (pictured) and Barb Genert own Sunny's Auto Body in Maple Creek. Genert says SGI rules taking effect next year could destroy their family business. (Submitted by Sunny's Auto Body)

The head of the group representing autobody shop owners says the changes are necessary.

"We've got lots of these ma and pa places — me and my brother, me and my dad — and they're doing OK," Saskatchewan Association of Automotive Repairers executive director Tom Bissonette.

"So instead of having [260] body shops in the province, we maybe need 30 or 40 per cent less, is what SGI's thinking is. They could all have enough work to be able to afford this equipment and fix the cars properly."

Bisonette, former owner of longtime Saskatoon shop Parr Auto Body, said the industry is changing rapidly. One model of Chevrolet Cruze, for example, requires three types of specialized welding with unique rivets to fix the body.

"If you just did it the regular way, you'd ruin the car," he said.

Penner, Genert, Boire, Dobmeier and others say the large urban shops stand to gain at the expense of rural businesses, jobs and customers.

Some are already trying to survive without SGI. Joe Penner, owner of Wild West Auto in Langham, said he couldn't afford the $800 monthly fee to use SGI computer software and his accreditation was taken away in 2017. He and his son are still in business doing private repairs, but he said that might not last long.

"They're pushing all the small shops out of business," Penner said.

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