Small tax steps in the right direction, big challenges on the horizon

Like all budgets, it pays to read the fine print. The minority Conservative federal budget is no different, especially for independent service providers across the country. On the apprentice side of things, the government has made it easier for apprentices to enter their chosen professions with the financial breaks offered for writing-off part of the cost of tools; and for helping prospective employers, off-setting the cost of hiring a new apprentice. The GST reduction might even get some people into the bays, as the savings provided by the cut might be enough of an incentive to finally bring a vehicle in for a much delayed maintenance check, or repair of a persistent problem. The only downside is shops will have take time to upgrade accounting and front-office registers and systems to take account of the GST reduction; and probably have to spend some extra dollars with the accountant at the end of the year to make sure that change is reflected correctly in the taxes paid.

But things could have been better on the tool side of the equation. While individual technicians will get a break on the tools they have to get to stay employed, it does not extend to the shop itself which must have a ready supply of the latest tools on hand, especially electronic-based tools.

Today’s vehicles are complex machines with numerous electronic management systems requiring electronic and computer-based diagnostic equipment. But it would seem, on a first reading, that the budget does not allow for a tax break on this kind of electronic equipment, either on the shop level or on the technician level. Now, I could be wrong and things could get clearer in the next few weeks. But right now there are some parts of the budget that technicians and shop owners may only come to grips with over the next several months once the feel-good nature of things pass and the fine print is reviewed.

But what should also concern shop owners is not what the budget has or does not have, but what is likely coming to North American shores in the next little while. Bob Telford, publisher of SSGM, was recently in Asia for an auto show and came back stunned by what he saw. Not by the new vehicles, but by the parts and solutions ready to make their way into the North American aftermarket. These parts and solutions are not cheap knock-offs. These are high-quality solutions that could very well shake things up in the North American aftermarket industry in the next little while. This is going to be something everyone will have to watch, shops that need to stay on top of new parts and solutions, and companies who make parts could soon be facing some stiff competition for shop’s dollars.