Auto Service World
Feature   March 1, 2000   by CARS Magazine

Fighting Unfair Tax Rules

Urgent changes needed to help auto service technicians.

Technicians are inclined to turn wrenches rather than partake in political arm twisting, with the result that the tool tax issue is not an issue familiar to the public.

Shortly before the release of the federal government’s latest budget, the auto service industry tried to dramatize the importance of tool tax deductibility for technicians.

The perennial issue, which has remained unresolved for years, was given a little extra attention in the hope of changing tax laws in favour of technicians.

Two industry associations joined forces to produce a ‘media event’ aimed at grabbing headlines and making the public aware of the importance of the issue.

A flashy red Pontiac with its hood up was parked in a ballroom in the Ottawa Congress Centre, a short distance from Parliament Hill, to make it easy for government types to drop by.

Service tools were laid out atop its engine and other components. Visitors were invited to guess the cost of those tools and those on display elsewhere throughout the room. The point being, that these items easily add up to costing technicians many thousands of dollars in after tax dollars, and are mandatory for employment in the trade.

The Automotive Industries Association and the Canadian Automotive Repair and Service Council called for “urgent changes” to tax rules that prevent technicians from deducting the cost of expensive work tools from income.

In order to gain entry to the trade, technicians must spend several thousand dollars on tools, which cannot be deducted from their income tax.

“We are deeply concerned we will not be able to meet future workforce requirements because this tax situation is thwarting our efforts to interest young people in these high quality jobs. “If this trend continues, it will be disastrous for our industry and could translate into higher prices for consumers,” according to Raymond Datt, the president of the AIA.

As the demand for technicians grows, the supply is expected to shrink according to industry estimates. “Over 70 per cent of automotive service technicians are baby boomers and many will be retiring over the next 10 years,” said Dan Bell, the president of CARS.

“The situation is growing more serious each year as the demand for automotive technicians increases because, on average, improved durability and other factors are leading Canadians to keep their vehicles for longer periods.”SSGM