Auto Service World
Feature   March 1, 2002   by CARS Magazine

SSGM Readers Speak

Tool Tax, tuition fees and oil company collusion


AIA President Ray Datt disagreed strongly with the January ’02 Jim’s Rant entitled “Martin aims down, and misses the Earth”:

Dear Jim,

On behalf of all of the members of AIA, I would like to express our profound disappointment at your January editor’s column “Jim’s Rant”. While we recognize that you are expressing your opinion, and that it makes a great headline, we felt it failed to recognize a major accomplishment.

The Federal Government has finally recognized a problem, an inequity between automotive service technicians and other skilled trades people. Of course, we would all like to see a larger tax rebate amount, and expanded to all technicians, but it is a good start. A realistic start.

Five years ago the problem was not even on the government’s agenda. Three years ago the problem was vague in their mind. When the budget was announced in the House of Commons in December 2001 this was one of only a very few issues where all five of the recognized parties agreed on the need and applauded. None of the five parties knew of the issue five years ago.

We would also like to point out a few contradictions in your column. You begin by stating that the median annual tool purchase by Canadian apprentice technicians is $2,600, not $5,000. Yet in your second point, you state that “an apprentice will need $3,000 – $4,000 worth of tools just to get started”. Which is it, $2,600 or $3,000 – $4,000? (For information purposes, the $4,000 to $5,000 being used by the federal government was provided by the industry coalition that included AIA, CARS, CAMPE, NATA, CADA, HDDC, AIAMC, CVMC, and others.) You also forgot to mention that the GST rebate will now include tools.

Your third point about “unaddressed factors” such as poor professional image is being addressed by the additional sector council funding announced in the budget. CARS and other organizations expect to receive additional funding and resources to address these very issues. Contrary to what you wrote, the sector council funding will help to solve the shortages in this way.

Finally, the Canadian constitution dictates that education and training issues are provincial matters, the federal government cannot simply “take control of both trade school curriculum and day-to-day operations.” AIA, and the tool tax coalition’s strategy is to be realistic and steady in our approach. We do not believe that we can change the Canadian constitution overnight, but we do believe that we can lobby the government to make a number of common sense changes in areas over which it has jurisdiction.

The tool tax rebate was the first step in that approach. Our efforts on behalf of technicians are on going.

Sincerely,

Ray Datt

Editor Anderton replies:

Dear Ray:

Thank you for your response to my editor’s letter in the January issue of SSGM. I’m disappointed that you’re disappointed, given the intent of my message, which was that the Martin budget will not improve the many barriers to entry facing young Canadians interested in pursuing a career in the automotive service sector. My “wish list” of ways to improve the system is naturally impossible with the structure and political dynamics of our governments at all levels, and I believe that that’s part of the problem. As far as the mathematics are concerned, you are correct that my numbers are, at best, crude guesses. The problem, as often expressed to me by the trainees, is more than the amount of the relief. A minimal set of starter tools costs on the order of $2700, and while every bit helps, the apprentice has to earn the money, then spend it to realize the tax break. Few master technicians I’ve talked to recently report less than $25,000 in overall tool investment, so the spending keeps going long after apprenticeship. The feedback I’m receiving from technicians and shop owners alike is that this measure isn’t enough, and that it won’t solve the problem…. The AIA has clearly made a Herculean effort to get skilled trades on the Federal agenda. “Not enough” is not the same sentiment as “we shouldn’t try”; part of the tragedy of this situation is that it’s taken this long, with this much effort, to get this issue recognized in the first place. An effective and responsive government would have addressed the skilled trades problem without the need for intensive efforts of the AIA and other stakeholders. I suppose that we should be thankful for what we have, but I still believe that the measures currently proposed are nowhere near enough, and I suspect that the majority of SSGM readers agree.

Editor: Hamilton, Ontario apprentice Dave Colacci wrote SSGM to comment on how downloading by the provincial government has resulted in tuition fees that more than negate the benefits of the new Federal tool tax provision:

Good day sir:

I am just writing to tip my hat to someone who advocates fair tax laws on behalf of working technicians and their apprentices. Thank you.

As a third year apprentice working in general repair, so much of the editorial in Jan ’02 SSGM hit home, not only with myself, but with the techs and our shop owner. When will our federal Liberals throw us a bone? As I sat chewing my lunch this afternoon, the owner of the shop came down to inform me that he had received notification from the Ministry that apprentices attending school after the summer of 2002, would now be responsible for paying a $400 tuition fee for each 8 week term. Seems to me, at least, they put a few bucks in, then take even more out. Not to mention the fact I have been unable thus far to actually locate our tool-tax relief. After talking with other guys in the trade, it seems the idea of national standards would be a step in the right direction, although I do believe that technicians should develop local communities beforehand.

Local support and solidarity must come first.

To close, thank-you again, from the guy you’re lobbying on behalf of…

Dave Colacci,

Hamilton, Ontario

Editor Anderton replies: Dave Colacci correctly refers to the single issue that governments can’t seem to understand: If training costs increase, the victims are those that can least afford to pay. Perhaps the idea of local communities could lead to a little effective grass roots lobbying.

Russell Drummond, manager of Drummond’s Gas, a division of Drummond Fuels (Ottawa) Ltd., sent SSGM a corresponding copy of a letter sent to Industry Canada’s Competition Bureau about predatory pricing in gasoline retailing:

Dear Sir,

We wish to formally notify your office of the effects of recent pricing trends of ht major oil companies are having on our company.

Major suppliers are selling gasoline at the retail level in direct competition to us for less than our quoted cost from them. On the morning of January 14th, 2002, the major suppliers were selling gas at their retail outlets for between 49.9 and 50.9 cents per litre. Our cost from the major suppliers was 48.50 cents per litre plus GST, for a total cost of 51.80 cents per litre. The major suppliers restored their prices to 61.9 approximately 1:00 PM the same day…While we agree that lower gas prices are good for the consumer and the economy, they need to be tempered by healthy competition to ensure that a monopoly situation does not arise. The independent gas retailers should not have to endanger their resources to sustain this type of “behind the scenes” price war in order to maintain healthy competition. This type of pricing activity by the major oil companies can only be viewed as a way to force the independent competition from the marketplace and should not be allowed to continue unchecked.

Sincerely Yours,

Russell Drummond,

Manager

Editor Anderton comments: Russell Drummond enclosed photographs of competing retailers and wholesale invoices to illustrate his point. Are market forces at play here? I suspect that this isn’t the last we’ll hear about this issue.

SSGM Garage of the Year owner Bruce Eccles recounts an incredible tale of customer stupidity:

Dear Jim:

Although our business is quite established and most of our clients are long ter
m, obviously we need a few new ones to replace the group that move away, stop driving or sadly, pass away. Well first thing Monday morning, an older Cavalier came rolling in.

Although it makes to use the parking lot, some people prefer “the block the bay door method” to announce their arrival. (I had no idea how endangered my doors were at the time.) A man and his son came in, I’ll call them D.M Witt and his son Les. D.M Witt asked if we could replace the disc pads on the left front wheel.

Over the weekend, D.M and son had tackled their own brakes in the driveway and couldn’t get the left caliper off. They also attempted to replace the belt tensioner and gave up. As he warned me it had no belt therefore it was hard to steer. Although not exactly my kind of client, we agreed to finish their weekend adventure.

When we removed the wheel to inspect the brakes, we could not believe our eyes. The disc caliper was seized and the outboard pad had gone steel on steel probably before Thanksgiving (Canadian, that is.) The disc rotor was worn into the fins which I have seen before, however, the fins were almost entirely gone and the rotor-to-hub thickness was less than 1/32 inch.

After accessing the damage, we put together an estimate which included a rotor, caliper and flex hose. Despite the fact the customer had that wheel off just the day prior and would not let Les drive the car (he drove it instead) he still questioned us on the extra parts over and above the pads which he was supplying.

Reluctantly, he gave us the go-ahead, which included installing the belt tensioner and correct belt as the one he supplied was incorrect.

Here’s what really hurts, D.M Witt was breaking no laws and if he could have got the caliper bolts out, he probably would have slapped a new set of pads in, and been happy about the money he saved by doing it himself. It didn’t likely sink in but we showed D.M Witts son the old parts and tried to explain our concerns for his safety and everyone else on the road for that matter.

Once again, this is a good argument for mandatory annual safety inspections.

Bruce Eccles,

Bruce Eccles Auto Service Inc.

Editor Anderton replies: It never ceases to amaze me what people will do. Mandatory annual safeties would stop some of the crazies, but would be a tough political sell, especially in Conservative provinces.

Do you have something to say about our industry? We’d love to hear from you. Address correspondence to: SSGM, 1450 Don Mills Rd., Toronto, Ontario, Canada, M3B 2X7 or janderton@corporate.southam.ca

SSGM reserves the right to edit for length and/or content.


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