Key highlights from the 2024 Federal Budget: what they mean for the auto care sector

April 17, 2024

On April 16, 2024, the Honourable Chrystia Freeland, Deputy Prime Minister and Minister of Finance tabled the federal budget. The Automotive Industries Association of Canada (AIA Canada) was invited to receive an advance briefing as part of the stakeholders’ lock-up.

There were little surprises, due to the government’s departure from the traditional embargo until budget day, and instead embarking on a cross country tour teasing out budget line items over the past two weeks – a rollout effectively being run as a series of Liberal campaign promises leading up to the next federal election. Key themes included housing and affordability, economic growth, and fiscal responsibility.

Budget 2024 comes at a time of rising costs for Canadians, including Canadian drivers. It also comes when many Canadians are concerned about the safety and security of their cars, and what they can do to protect their vehicle from theft.

While there is more work to be done, Canada’s auto care industry, and the nearly 500,000 Canadians who work in the repair, service and maintenance of vehicles, welcome budget commitments that move the dial forward on competition and the right to repair, skills and labour, and tackling the issue of auto theft.

On competition and the right to repair

Specifically, we are pleased to see budget language amplify ongoing legislative action, building on progress made via Bill C-244 and Bill C-59 that would address consumer choice, fair competition and abuse of dominance by manufacturers. We remain hopeful that legislators will adopt recommendations we have put forward to strengthen the Competition Act and consumer protection as a part of the legislative process.

We have also noted the continued promise of right to repair action, which was a feature of the 2023 Budget, as well as the Fall Economic Statement, and a commitment to explore whether there is a need for further federal legislative changes to support right to repair. While the federal government has called on provinces and territories to target their own complementary legislative measures, following in the footsteps of Quebec, a national solution will be needed in order to avoid a patchwork system across the country.

AIA Canada has long advocated for measures to target fairness, consumer choice and data sharing avoidance when it comes to the service and repair of vehicles, and the need to modernize legislation to reflect the reality of rapidly evolving technologies. We are pleased to see another positive step in the right direction and look forward to continuing to work with government on these important initiatives.

While any action on the right to repair is welcome, it is imperative that parliamentarians include vehicles as a part of this work. A narrow focus exclusively on consumer electronics or home appliances does not acknowledge how challenging it remains for Canadians to have their cars repaired at the shop of their choice. Left unaddressed, this will increase costs and decrease choice for consumers, particularly for those who do not have ready access to a dealership.

AIA Canada continues to advocate for right to repair legislation concerning the auto care sector and encourages everyone to join our movement by sending our pre-populated letter to the Senate Committee on Banking, Commerce and the Economy urging them to pass Bill C-244.

On skills and labour

Canada’s independent automotive shops continue to face both a labour shortage and a skills shortage. Addressing skills gaps, particularly with the increased adoption of electric vehicles, is key to ensuring these vehicles can be adequately serviced at service and repair shops across the country.

We are pleased to see continued focus on addressing labour and skills shortages in Budget 2024, including creating more youth job opportunities, as well as apprenticeship opportunities to train and recruit the next generation of skilled trades workers.

On auto theft

Automotive repair and service shops interface regularly with drivers and provide retail aftermarket devices that are helpful in deterring car theft. Educating consumers about steps they can take to prevent auto theft is one of several actions needed to tackle this growing challenge. We believe there is a role for our stores and shops to play in helping educate car drivers, with an eye to reducing auto theft.

We were pleased to participate in the government’s auto theft summit in February, and support additional measures in Budget 2024 focused on addressing this growing problem. We welcome continued collaboration with the government, to serve as a connection point with drivers about actions they may want to take to try and protect their vehicles from theft.

Over the coming days, AIA Canada will continue its analysis of the measures outlined in Budget 2024, as well as its engagement with policy makers to discuss any further impacts for the auto care industry. We will also be commencing our work to identify immediate next steps following the budget announcements as part of our ongoing advocacy strategy.

Details on specific measures of interest to the auto care industry

Right to repair

To ensure Canadians can keep their devices working longer, and reduce harmful electronic waste in the process, the federal government is advancing a right to repair to increase product durability and repairability.

Budget 2024 highlights important progress that is already being made to secure these rights for Canadians, including:

Amending the Copyright Act to allow the circumvention of digital locks to diagnose, maintain, or repair a product. This will enable consumers to repair their devices where they choose.
Amending the Competition Act, as announced in the 2023 Fall Economic Statement, to prevent manufacturers from refusing, in an anti-competitive manner, to provide the parts, tools, or software needed to fix devices and products.

Building on this progress, Budget 2024 announces:

The government will launch consultations this June to develop a right to repair framework, which will focus on durability, repairability, and interoperability.
The federal government is also calling on provinces and territories to amend their contract laws to support a right to repair and interoperability. Quebec’s Bill 29 is an example of how provinces can protect consumers by promoting right to repair.

Further details on the right to repair framework on home appliances and electronic devices, as announced in Budget 2023, will be announced in the coming months. The federal government is exploring how to address:

Planned obsolescence, which is when manufacturers intentionally create products that break quickly;
The merits of a durability index, which could help Canadians better understand how long their device is expected to last; and
If there is the need for further federal legislative changes to support right to repair.

Skills and labour

To encourage more people to pursue a career in the skilled trades, the federal government is creating apprenticeship opportunities to train and recruit the next generation of skilled trades workers. Budget 2024 proposes to provide $100 million over two years, starting in 2024-25, to Employment and Social Development Canada for the following:

$90 million over two years, starting in 2024-25, for the Apprenticeship Service to help create placements with small and medium-sized enterprises for apprentices. Of this amount, $10 million in 2025-26 would be sourced from existing departmental resources.
$10 million over two years, starting in 2024-25, for the Skilled Trades Awareness and Readiness Program to encourage Canadians to explore and prepare for careers in the skilled trades. This funding would be sourced from existing departmental resources.

To make it easier for young people who hope to start a career in the skilled trades, in addition to interest-free Canada Apprentice Loan and Employment Insurance Regular Benefits for apprentices on full-time technical training, the government will continue explore options to make apprenticeships more affordable.

To create more work-integrated learning opportunities for postsecondary students, Budget 2024 proposes to provide $207.6 million in 2025-26, to Employment and Social Development Canada for the Student Work Placement Program, which supports practical, hands-on learning and connections with employers.

To help younger Canadians pursue and achieve their dreams, the government is investing to create more youth job opportunities and ensure hard work pays off for the next generation. To create 90,000 youth job placements and employment support opportunities, Budget 2024 proposes to provide $351.2 million in 2025-26, for the Youth Employment and Skills Strategy. These investments in youth job opportunities include:

$200.5 million in 2025-26, for Canada Summer Jobs to provide well-paying summer job opportunities, including in sectors facing critical labour shortages, such as housing construction; and,
$150.7 million in 2025-26, for the Youth Employment and Skills Strategy Program to provide job placements and employment supports to youth.

Auto theft

The government is cracking down on auto theft with a robust plan to make it harder to steal vehicles and to export stolen vehicles. Budget 2024 announces the government’s intent to amend the Criminal Code to provide additional tools for law enforcement and prosecutors to address auto theft. These include:

New criminal offences related to auto theft involving the use of violence or links to organized crime; possession or distribution of an electronic or digital device for the purposes of committing auto theft; and laundering proceeds of crime for the benefit of a criminal organization; and,
A new aggravating factor at sentencing if an offender involved a young person in committing an offence under the Criminal Code.

Budget 2024 also announces the government’s intention to amend the Radiocommunication Act to regulate the sale, possession, distribution, and import of devices used to steal cars. This will enable law enforcement agencies to remove devices believed to be used to steal cars from the Canadian marketplace.

Electric vehicles

Budget 2024 announces the government’s intention to introduce a new 10 per cent Electric Vehicle Supply Chain investment tax credit on the cost of buildings used in key segments of the electric vehicle supply chain, for businesses that invest in Canada across three supply chain segments: electric vehicle assembly; electric vehicle battery production; and, cathode active material production.

Budget 2024 also proposes to provide $607.9 million over two years, starting in 2024-25, to Transport Canada to top-up the Incentives for Zero-Emission Vehicles program.