Mercedes Benz SLK 55 AMG - starting at $84,800 - Bill Tieleman's 24 hours/The Tyee column
Tuesday March 9, 2010
Why Car Dealers Love the Latest BC Budget
Arts, disabled groups got run over, but not auto dealers, who got tax policies they wanted after giving BC Liberals $500,000.
By Bill Tieleman
"Oh lord, won't you buy me a Mercedes Benz? / My friends all drive Porsches, I must make amends."
- Janis Joplin
While people with disabilities, arts and community organizations have all been run over by the B.C. Liberal government's budget and severe cuts, one group is away to the races -- the New Car Dealers Association of B.C.
With one stroke of Finance Minister Colin Hansen's pen, the price of buying a used car in a private sale went up by five per cent -- that's an extra $1,000 on a $20,000 vehicle -- as part of the government's Harmonized Sales Tax gouge.
It means there are no savings to be had buying or selling your car privately instead of through a car dealer.
And the government will take $296 million in new taxes from those buying used cars privately over the next two years -- if buyers even bother to do so.
But it doesn't stop there. The B.C. Liberals also eliminated the up-to-3 per cent luxury vehicle surtax on cars over $55,000.
It means ordinary taxpayers will subsidize those buying an expensive new Mercedes Benz or Porsche.
In 2001 the B.C. Liberals raised it from $32,000 to $47,000 at an annual cost of $27 million in lost tax revenue for public services, then raised it to $55,000 in 2006 with an estimated annual cost to the government of $45 million.
More luxury wheels for small business?
"Less tax on the new Beamer, more tax on the used Chev -- is there any clearer illustration that the HST is gouging ordinary British Columbians?" NDP MLA Bruce Ralston asked in the Legislature last week.
Hansen's rebuttal? "Clearly, this member does not recognize that small business owners who need to get vehicles valued over $55,000 to undertake their businesses... He calls that a luxury. I call that the backbone of the economy -- small business owners in the province."
I call it a joke.
A Mercedes SLK class hardtop convertible starts at $57,500, about the same starting price for a Porsche Cayenne SUV, while almost every Ford car, van, SUV or truck starts well below the old luxury vehicle tax threshhold! What the hell does Hansen think small business people are driving in Prince George?
Meanwhile, arts groups have been cut off from any provincial gaming funding except for children's programs; many people with disabilities are losing their Monthly Nutritional Supplement for healthy food, glucometers for diabetics and orthotics for those with difficulty walking.
New Car Dealers are big Liberal donors
So why are artists, dancers and the poor eating car dealers' dust?
It may be rather simple.
A Tyee/24 Hours investigation shows that the New Car Dealers Association of B.C. and individual dealerships have contributed over $554,000 to the B.C. Liberal Party between 2005 and 2009 -- including a whopping $282,000 last year alone.
And the New Car Dealers Association isn't shy talking to the government about its needs -- it hired prominent lobbyist Mark Jiles to represent its interests to Victoria since January 2008, according the provincial Lobbyist Registry.
Jiles shouldn't have any trouble getting meetings -- he is Premier Gordon Campbell's past constituency campaign manager.
Jiles is also president of The Progressive Group -- the company owned by Patrick Kinsella -- B.C. Liberals' campaign co-chair in 2001 and 2005 and the ultimate party insider.
24 Hours newspaper and Public Eye Online reported in 2008 that Kinsella and Jiles boasted of their close ties to the B.C. Liberal government and work for B.C. corporations in documents obtained from Washington State, where they were seeking new business.
Kinsella has never registered as a lobbyist; Jiles has registered for some clients since December 2007. A Progressive Group statement stated the company registers when its work meets the lobbying definition.
Power and money
Having high powered lobbyists is a tradition for the dealers, as is their close connection to the B.C. Liberals.
Their former lobbyist prior to Jiles was Jamie Elmhirst -- business partner in the now defunct Pilothouse Public Affairs with key Crown witnesses Erik Bornmann and Brian Kieran -- who is expected to testify against David Basi, Bob Virk and Aneal Basi in the B.C. Legislature Raid corruption charges case related to the $1 billion privatization of B.C. Rail.
And the New Car Dealers Association was the friendly landing pad for Paul Taylor, the former B.C. Liberal government deputy minister of finance and later CEO of the Insurance Corporation of B.C. Taylor arrived from Alberta before the 2001 provincial election to become CEO for the dealers until Campbell took power.
The New Car Dealers also certainly don't skimp when it comes to supporting the political party that best represents the interests of over 360 dealers. On Jan. 13, 2009 they sent a cool $100,000 to the B.C. Liberals, followed by another $75,000 on May 1.
And their $282,000 in 2009 followed a massive $107,200 in 2008, making them one of the largest contributors to the B.C. Liberal Party.
They also know how to grease the government when they get what they want.
In their news release about Hansen's 2010-11 budget this month, the New Car Dealers wax eloquent:
"In this budget, the government has continued to strike a good balance between supporting important services while working to reduce deficits and return to balanced budgets as quickly soon as possible," said Blair Qualey, president and CEO, New Car Dealers Association of B.C. in a March 2 news release.
"The Minister has presented a sound and credible plan which also provides a well-timed boost to capital spending. The move to implement a Harmonized Sales Tax will save B.C. businesses billions in extra costs generating new investment and ultimately creating jobs for British Columbians," Qualey said before getting on to the main event -- jacking the tax for private car sales to the level dealers have to charge.
Kicking the 'curbers'
And the dealers attempt to raise consumers' fears that an army of "curbers" or "curbsiders" -- unscrupulous, under the table competition to dealers -- is the only target of the new tax.
"Since the inception of the GST, the retail automobile industry has been at a significant disadvantage in the sale of used vehicles when compared to private sales," the dealers' release states.
"Currently, sales tax is collected in an inequitable manner depending on where a vehicle is sold (12 per cent combined PST/GST if purchased at registered businesses like new car dealerships but only 7 per cent PST if sold privately, including sales by unregistered dealer’s referred to as 'Curbsiders' or 'Curbers')."
"These Curbers are individuals selling vehicles to consumers pretending they are private citizens when in fact they are unregulated dealers," the release concludes.
Imagine, a business group calling for more government regulation! Errr, no, actually they are simply quite happy to force the higher sales tax on private transactions instead.
And, amazingly, Finance Minister Colin Hansen uses exactly the same language in defending his tax grab and effort to help the car dealers.
"That inequity has been flagged for us and the problems that it caused around curbers and the inappropriate sale of used cars by purportedly private individuals," Hansen said in Question Period in the B.C. Legislature last Thursday.
Shadowy scourge
Hundreds of millions of dollars in sales of used automobiles every year -- and all of it conducted by these shady "curbers" without fear -- until the long taxation arm of the law came down at last to save us all!
Sadly, the government and dealers offer no evidence as to how many "curbers" are in business in B.C. -- presumably proving how shadowy they were!
But the New Car Dealers Association appears to offer a valuable lesson to impoverished artists, dancers, people with disabilities and others on the best way to be well treated by this government.
Drive quietly and carry a big cheque.
UPDATE - March 19
Two things - I have included below all the individual donations by businesses I could identify from Election BC records as car dealers below, FYI.
Secondly - I should have noted that the 2009 donations are from the General Election Financing Report - not the full year 2009 donations, which have not yet been published. That means there are possibly more contributions in 2009 that we are not yet aware of, though obviously most would have been made by the time of the May provincial election.
* * * * *
BC Liberal Party - Car Dealer donations 2009
New Car Dealers Association of BC $229,700.00
Anthony's Auto Sales $500.00
Auto Canada Lakeview Motors $500.00
BC Automobile Dealers Association $800.00
Brown’s Chevrolet Oldsmobile $2,000.00
Budget Rent-A-Car of BC - $12,000.00
Chilliwack Ford $1,000.00
Cranbrook Dodge $1,000.00
Flag Chevrolet Oldsmobile $700
Fraser River Chevrolet Oldsmobile $500.00
Harmony Auto Sales $1,500.00
Kelowna Auto Mall Leasing Centre $1,000.00
Kelowna Ford Lincoln Sales $5,000.00
Kelowna Motors $1,000.00
Kelowna Toyota $3,000.00
Martin Pontiac Buick GMC $1,000.00
Nanaimo Honda Cars $500.00
Northstar Motors $600.00
Oceanside Chevrolet $414.67
Open Road Toyota $7,500.00
Orchard Ford Sales $5,000.00
Prince George Motors $1,000.00
Rainbow Chryler Dodge Jeep $905.00
Courtenay Toyota $1,000.00
Schultz Pontiac Buick GMC $1,000.00
Timberline Pontiac Buick GMC $1,000.00
Valley Toyota $1,000.00
Woodgrove Chrysler Dodge $1,250.00
TOTAL 2009 ----- $282,369.67
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28 comments:
Anybody want to buy a used 1996 Mazda 626, one owner, BEFORE July 2010?
Gosh, I'm tempted to flog my 1982 Volvo wagon and buy something really expensive to get on the team. Really that's not at all likely tax or no tax.
If your car is paid for run it till there is nothing left .Then buy another used vehicle.We will look into buying our next used car in the US. We should let them know that because BC is run by a very corrupt gov we would prefer to buy our autos in the US. I'm sure the auto industry down there would take on this retard,called Campbell.
Bill, why is the font so small? I need reading glasses. Is it because your column is long?
Thanks Bill for bringing this to our attention.
First real estate developers, now car dealers...
Yup, this is a real green government.
So let’s see…if there is more tax on a car you can afford that is a bad thing but if there is less tax on a car you cannot afford that is also a bad thing. So really whether a tax is going up or down really doesn’t matter…when you have to may more it is bad and when someone else get’s to pay less that is also a crime. You are a piece of work Tielemen.
Fighthst.com!
For Anon 4:25. I had the same problem. If your mousehas a wheel, just push ctrl and scroll your wheel. That should solve your problem.
Sorry all - as someone who wears glasses I should have noticed the column was accidentally posted at a smaller type size! As you can see, it's now fixed and back to normal type.
Bill, what's your take on the proposed digital tax that the Federal NDP is pushing?
See http://www.theglobeandmail.com/news/politics/tories-fight-back-against-digital-music-tax/article1503675/
That one would tax my MP3 player, even though I mostly use it to download BBC podcasts and shovel the money to Canadian Singer-songwriters who, gee, mainly support the NDP. Isn't that also corrupt?
Over the last couple of weeks people have been weighing in on the BC Liberals taking $800 million from ICBC coffers, Vaughn Palmer has gone so far to call it a hidden tax.
While researching Hansard today I came across this February 11, 2004: Source: http://www.leg.bc.ca/hansard/37th5th/h40211p.htm
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*Point of Privilege*
* J. MacPhail: *Mr. Speaker, you will recall that yesterday I rose and reserved the right to raise three matters of privilege. I would like to address the first one now.
* Mr. Speaker: *Please proceed.
* J. MacPhail:* I would like to present to you what I believe to be a prima facie case for the argument that the Minister of Finance has acted in contempt of this Legislature and its primacy by violating the fundamental principle that a tax cannot be increased or implemented before it has been presented to the House.
I would like to first refer you to a press release dated December 19, 2003, that was issued by the Minister of Finance. It is titled /Province Increases Tobacco Tax/. Within this news release the Minister of Finance announced that the tax would increase by 1.9 cents per cigarette. The increase went into effect at midnight that evening, and to date this government has collected about $6 million in that tax — that new tax.
I want to make it clear that I am not raising issue with the merit of the tax or the increase, so the heckling of other members can stop on that issue. Instead, I would argue that the minister…
Interjections.
* Mr. Speaker: *Order, please. Order.
* J. MacPhail:* …violated the primacy of this House by unilaterally enacting such a change without legislative authority. The tax increase was simply announced. There was no legislation, no cabinet order, no motion to the Public Accounts Committee. The minister acted without any authority.
For your consideration, I would refer you to the Tobacco Tax Act itself, an act that establishes that this is a tax. Section 2 of the statute clearly sets out the tax rate for cigarettes and tobacco. The rate of tax is not set by regulation. It exists as law in the Tobacco Tax Act.
To date, the Minister of Finance has not brought this change before the House. Indeed, yesterday he didn't do it. Today he didn't do it, and he's collecting millions of dollars. He has changed a statute without support from the Legislature.
SNIP
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It seems to me that what the BC Liberals did, so many years ago, was to instruct ICBC via an OIC to collect a tax without first having put it before the Legislature.
Peter in Edmonton...
Why bother to bring up something that the federal NDP is proposing? They are not in a position to pass anything. You should be commenting on the new car dealers and their just rewards for big Liberal party donations. Try, just once, to look outside of your rose colored glasses.
Thanks for the list of where not to buy a car Lib party donaters. This will help me decide where to purchase a car in the future.
Bill, you only listed donations from dealers to the BC Liberal PARTY - what about dealer donations to individual candidates and MLAs? and what about dealer owners and their employee's donations to the BC Liberals and their candidates and MLAs? - the pool seems much deeper than what we are seeing.
Drilling down to the contribution level reveals the Insurance companies are also getting a boost from the ICBC transfer of funds.
$800m over paid by us drivers to protect and increase the market share for private insurers on optional insurance.
Following the money we see my dollars going to ICBC and causing private insurance companies more profit and then the money ends up in Liberal coffers from their political donations.
I should get a tax deduction for the extra I pay unfairly because it is really a forced political contribution. lol
typical tieleman. you don't list the donations to NDP by car dealers. nice try skewer. By the way, I hate both parties and refuse to vote. blah blah blah.
Hun gFar Low - The NDP are not in power, did not remove the luxury vehicle surtax - they actually introduced it when in power - and didn't introduce an HST with changes to make private sales more expensive!
I'm happy to post car dealer donations to the NDP if you want to do the research.
I did check now and see that the New Car Dealers gave $10,000 to the NDP - that would be 4.3% of the amount they gave the BC Liberals.
Other dealers may have made donations but here's the kicker - the New Car Dealers and individual dealerships alone gave more money to the BC Liberals in 2009 - $282,000 - than the total amount given by all corporations to the BC NDP - $238,000!
Nice try though.
Thanks for this important work, Bill.
I don't why it is but someone has taken it upon themselves to show just how AWESOME one BC Liberal MLA is, and he's doing it by using the photographs that the BC Liberals have captured on film to promote their government good deeds. The blog site is called:
Barry Penner is AWESOME!
Chronicling the adventures of BC's most awesome MLA!
".......enough about last week! It’s time for another week! A theme week! A theme week based on cars! And Barry Penner!
Now that I’ve abused the humble exclamation point, let me explain. Barry Penner is the master of all things automotive. That is clear to everybody. Also, all things red scooter, red truck, and red dune buggy thingy. In fact, you could say he is the master of wheeled transportation in all its forms........"
************************************
At this page:
http://www.barrypennerisawesome.com/
The author of the blog has, who has chosen to remain Anonymous, has a calendar and all you have to do is click on a date to see what "happened" on that particular day, as far as the author is concerned, and if so inclined you can leave a comment.
This week should be a doozy considering what Bill T. has written for us here.
Bill:
Great article. It moved me to e-mail all on the list on Sayurday. Please all of your followeres, e-mail them also. We now have the power. Lets put gordo into jail, along with his associates. In government and out!
I feel that my small contribution to democracy in BC is to nag you to get back to work after I have read the same story a few times.
Please get back to work. (And thank you!)
I'm making a point of boycotting any and all that donate to the Liberals. I've had more than enough.
obviously most of you have never driven a nice car and will never be able to afford to. Enjoy taking the bus suckers. Love my Benzo.
Benzo: Is that one of those old John Deere vehicles from between the two wars that ran on Condensate?
Or are you just high on BENZOdiazepine?
Nice work Bill -
Benzo said: "...Enjoy taking the bus suckers. Love my Benzo."
I do enjoy taking a bus, a trolly, or a train whenever I go to a big polluted, concrete jungle like Vancouver. You seem to have little or no respect for the others who may be trying to live responsibly on this planet - but really, life is just all about you and your toys, isn't it? Aren't you the big boy now - getting to drive shiny cars and everything!
SIG
it would be dead scary to think that you complainers are in business. Do you not know that these car dealers are not making money, yet you have this warped sense that they are getting a sweet deal since they now get to operate on a level playing field with individuals. Wow, simply shows how ignorant most of you are. By the way, I don't vote either because politics is a joke. I take care of myself and my family before anything else. Maybe you should try to do the same instead of imposing your views on others and at the same time, can't even take care of yourself. Pathetic. No wonder the majority don't care and it shows at election time. I don't drive a benzo, but do have a beamer, corvette and a smart car.
Don Taylor said:
"Do you not know that these car dealers are not making money, yet you have this warped sense that they are getting a sweet deal since they now get to operate on a level playing field with individuals. Wow, simply shows how ignorant most of you are. By the way, I don't vote either because politics is a joke. I take care of myself and my family before anything else. Maybe you should try to do the same instead of imposing your views on others and at the same time, can't even take care of yourself. Pathetic. No wonder the majority don't care and it shows at election time."
I submit that you have no clear idea who most commentors at this site truly are; further, your comment sounds like you are trying to impose your views on others.
A question for you: When car dealers were making great gobs of money, did they save their money for a rainy day, or did they over-reach? Farmers and ranchers are among the hardest working business people I know, yet they would be fools if they spent money in good times on extravagant houses and vacations like most of the car dealers I have met. Yes, times may be tough for people in the new car business, but I never hear them saying that they want to pay more taxes when they are rolling in dough. Your argument that it is now a level playing field is a straw dog,: as most individuals are otherwise employed, those folks do not have the time nor the resources to purchase cars in bulk rates, at auction nor from other car dealers at wholesale prices.
Good luck with not voting.
A couple of questions:
Why have privately-sold vehicles been exempt from GST (while dealer-sold new and used vehicles have always been subject to this tax) in the first place?
Why is it fair for individuals buying higher-priced vehicles to be charged higher rates of tax on that purchase?
Look, I understand the "watch-dog" position you have, Bill. The whole idea of lobbyists is anti-democratic. The power of special interests over the decisions of governments is infuriating.
However, the tax changes are fair and are streamlined with the incoming HST, a tax policy that should benefit all, long-term. Simply because these policies benefit a particular special interest, does it make them bad policies? I don't think so.
Incidently, car dealers are, in most communities, some of the largest contributors to the causes you say the Liberals have run over.
Why is there ANY tax on something that has already been taxed once?
This is just egregious double taxation plain and simple.
How a pro capitalism government like the Liberals can justify this as fitting into their core values of less government is unbelievable and why many BC Liberal voters are becoming former BC Liberal voters.
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