The salesperson walks the customer down the hallway, hands off the deal jacket, and heads back to the floor. What happens in the next twenty minutes often decides more of that deal’s gross profit than anything that happened at the desk. That’s the F&I office. For a department that generates this much money, it runs on surprisingly little process at most Canadian stores.
F&I makes money three ways. The lender pays the dealership a small percentage of the customer’s loan as reserve. Commissions come from optional products like extended warranties and GAP insurance. And the margin carries almost no direct cost, because there’s no vehicle inventory sitting behind it.
Haig Partners tracks this closely across the large publicly traded U.S. dealer groups. Its report on the third quarter of 2025 put average F&I gross profit per vehicle retailed at $2,534, up 5.2 percent from a year earlier and near the highest levels the firm’s report has tracked. That figure comes from American public-group data. Canada doesn’t have an equivalent quarterly benchmark. But the underlying economics apply the same way everywhere: financing reserve plus product commission, against near-zero direct cost. A single-rooftop store in Moncton runs the same math as a twenty-store group in Ontario.
What’s striking is how few Canadian dealers name F&I as their top profit driver, even though the math favours it. CADA’s Road Ahead survey collected responses from 422 dealer principals and other equity-participating retail leaders in December 2024. It found 80 percent of dealers expect fixed operations to be their most significant contributor to overall profitability. Used-vehicle sales came in at 61 percent, new-vehicle sales at 60 percent. F&I didn’t top that list. That’s not because F&I is unprofitable. Service and used-vehicle sales simply get more daily management attention, while F&I gets treated as a paperwork stop between the sale and delivery, rather than a selling process in its own right.
Menu presentation means showing optional products in tiered packages rather than pitching them one at a time. The tiers are commonly labelled something like Basic, Plus, and Premium, each with a different combination of extended warranty, GAP insurance, tire and rim protection, and prepaid maintenance. The customer sees the monthly payment impact of each tier and picks one, customizes it, or declines everything. It’s been the standard format for years. It simplifies a complicated decision and performs better than pitching products individually.
The presentation’s quality determines penetration more than the products themselves. F&I provider JM&A Group, which benchmarks dealer performance across North America, puts extended-warranty penetration at roughly 46 percent of deals and GAP insurance at roughly 45 percent, with the average deal carrying 1.3 to 1.7 products. Those numbers move a lot between stores selling the same products, which points to process, not product, as the real variable. An F&I manager rushing to clear the desk for the next customer explains products in generic terms, and acceptance falls. A specific explanation sells better than a generic one. Telling a customer what their loan balance would look like after a total loss sells GAP insurance more effectively than reciting a monthly price, because it’s concrete instead of abstract.
The handoff from sales matters just as much as the presentation itself. An F&I manager who doesn’t know what the customer discussed on the desking software works blind. Customers notice when they have to re-explain things they already said once. A short, structured handoff fixes this: what the customer cares about, and any conditions the salesperson already agreed to. That alone closes the gap before the customer even sits down.
F&I is also the most regulated stage of the sale, and provincial regulators treat it that way. Ontario’s OMVIC has issued dealer bulletins specifically on extended warranty obligations. Dealers must confirm that a third-party warranty provider and its products are actually insured before offering that warranty. They also need to obtain a schedule from the insurer listing every product presently covered. Every optional product, not just extended warranties, requires written disclosure under Ontario’s consumer protection framework. That disclosure has to be clear, comprehensible, and prominent, not buried in fine print. A verbal explanation doesn’t satisfy the requirement.
Alberta’s AMVIC applies a parallel logic from a different angle. When an Alberta dealer arranges financing for a customer, provincial rules require a disclosure statement covering the credit agreement, provided on or attached to the bill of sale under the Cost of Credit Disclosure Regulation, separate from what’s required for the vehicle sale itself. Every province with a dealer regulator builds F&I disclosure into its licensing framework, not just Ontario and Alberta, because this is the stage of the transaction where a customer signs the most paper in the shortest time. See the Canadian dealership compliance pillar for the province-by-province breakdown.
The common thread across every provincial framework is simple: F&I products must be presented as optional. A dealership cannot make the vehicle sale contingent on a customer accepting them. An F&I manager who lets a customer walk away believing a product was mandatory has created a compliance problem that outlasts the deal, no matter how the numbers worked out that day.
F&I managers don’t just sell products. They also place financing with lenders, and how well that relationship works shapes how many deals actually close. J.D. Power’s 2026 Canada Dealer Financing Satisfaction Study is now in its 28th year. It fielded 6,953 evaluations from Canadian new-vehicle dealerships between January and March 2026. The study found dealers increasingly value lenders who act as collaborative partners in structuring and closing deals. Speed of approval alone isn’t enough anymore. In the results, TD Auto Finance Canada ranked first among non-captive non-prime lenders for a ninth consecutive year. It also ranked first among non-captive prime lenders for a third straight year. Ford Credit ranked first among mass-market captive lenders, also for a third straight year.
The practical implication for an F&I office is that lender selection isn’t just about approval rate or rate sheets. A lender’s willingness to work a marginal file, extend a stipulation deadline, or get someone on the phone when a deal is stuck matters just as much. That responsiveness determines how many deals an F&I manager can actually close in a day, which affects both penetration and unit count.
Closing the F&I paperwork isn’t the end of the transaction for the products sold in that room. An extended warranty contract still needs to reach the provider for activation. A GAP policy still needs to be issued. Paint sealant, fabric protection, and appearance packages sold at the desk don’t apply themselves. Each of those is something the customer already paid for and hasn’t received yet. That makes it a we-owe in every sense but the name.
Our earlier look at we-owe forms found that F&I typically finishes its paperwork before Parts sources an item or Service installs it. The deal jacket ends up as the only record of what F&I actually sold. If that record doesn’t reach whoever handles delivery preparation, a customer can drive away without a product they paid for. The gap tends to surface months later, as a warranty claim nobody can locate or a protection package that was never applied. Delivery prep already treats financing and insurance verification as a standard step before hand-off. F&I-sold installs belong on that same checklist, not a separate one only the F&I manager tracks.
The fix doesn’t require a new process. It requires putting F&I-sold items into the same we-owe discipline as anything promised at the sales desk: logged the moment they’re sold, assigned an owner outside F&I, given a target date, and confirmed closed rather than assumed closed. A menu presentation that closes cleanly but hands off nothing to delivery has moved the leak. It hasn’t fixed it.
Start with the handoff. Build a short, consistent process for what sales tells F&I before the customer walks over, and track how often it actually happens. Then look at your menu presentation itself. Sit in on a few live presentations. Check whether products are being explained in the customer’s own terms, or just recited as a price list. If your F&I managers are consistently under ten minutes per customer, rushing is probably costing you penetration.
On compliance, don’t wait for a complaint to find a gap. Pull a sample of recent deal files. Confirm every optional product has written disclosure with proper prominence, and that your extended warranty provider’s insurance status has been verified and documented per your provincial regulator’s bulletins. This is a fifteen-minute review that catches problems before a regulator does.
Add one more line item to that review: every extended warranty, GAP policy, and installed product sold in F&I this month, checked against whether it actually reached the customer. Assign that check to whoever owns delivery prep, not to F&I itself. A department shouldn’t grade its own homework on whether what it sold got delivered.
Finally, track products per deal and F&I gross alongside your CSI scores, not separately from them. A department that sells more by rushing customers tends to show up in declining satisfaction scores within a quarter or two. That usually costs more in lost referrals than the extra penetration was worth. The dealerships that treat F&I as a structured process, rather than a paperwork stop, are the ones capturing the margin that’s already sitting in every deal.
For more on where that margin comes from across the store, see our guide to maximizing dealership revenue.
That handoff gets harder to coordinate as volume grows. Sales, F&I, and delivery all need the same picture of what’s been promised and what’s still outstanding. READY HUB keeps that information visible across departments instead of trapped in one manager’s notes. Get in touch to see how it fits your F&I process specifically.
]]>A carpeted floor mat. A second key fob still at the OEM warehouse. A running board on back order. Somewhere in your deal jacket right now, a promise like that is sitting open. Nobody owns getting it closed, and nobody will notice until the customer calls asking where it is.
That promise has a name: a we-owe. It’s one of the oldest forms in the deal jacket, and one of the most consistently mismanaged pieces of the sold-vehicle process.
A we-owe is a written commitment from the dealership to deliver a specific good or service after the sale has already closed. It exists because a verbal promise made across the desk, in the middle of negotiating a deal, is nearly impossible to enforce or even remember accurately a month later. Putting it on paper, with a description, a date, and signatures from both sides, protects the customer from a forgotten promise. It also protects the dealer from a customer who remembers the conversation differently.
Historically these were multi-part carbonless forms. One copy went to the customer, one to the deal file, one to whichever department had to fulfil it. That distribution model still matters even when the form is digital. A we-owe that lives only in a salesperson’s notebook or a sticky note on a manager’s monitor isn’t a we-owe. It’s a promise with no paper trail, which is exactly the situation the form was invented to prevent.
Common examples include a missing accessory, a repair identified during final inspection, a second set of keys, a paint touch-up scheduled for after delivery, or an add-on the customer negotiated into the deal at the last minute. None of these are large individually. Collectively, across a month of deliveries, they add up to a running list of open obligations that someone has to track.
A single we-owe can pass through four departments before it closes. Sales makes the commitment at the desk. Parts has to source the item, which might mean a dealer trade or a factory order with its own lead time. Service or Detail installs it. F&I has already filed the paperwork by the time any of that happens, which means the only record of the promise is whatever Sales wrote down.
Every one of those handoffs is a place the commitment can get lost. Nobody in Parts knows a we-owe exists until someone tells them. Nobody in Service prioritizes an install that isn’t on their work order. And Sales, having already closed the deal and moved on to the next customer, has little day-to-day reason to chase a form they wrote three weeks ago.
Accessory installs deserve their own mention here because they behave exactly like a we-owe without being tracked as one. Programs like GM’s LPO model let a dealership preload vehicles with appearance packages and accessories to protect front-end gross, but the same gaps that strand a we-owe strand an uninstalled option: a delay with no clear audit trail, and a vehicle that goes out the door without something the customer paid for. We covered the operational side of that program in more detail in our piece on GM’s LPO program.
The cost of getting this wrong isn’t abstract. J.D. Power’s U.S. Sales Satisfaction Index study measures buyer satisfaction across six factors and ranks the delivery process as the most heavily weighted of them, ahead of price negotiation, paperwork, and the dealership facility itself. A vehicle that arrives without something the customer was promised undermines the single factor that matters most to how they rate the entire purchase. It also compounds a problem we’ve written about before: the same queue time that stalls a vehicle in reconditioning between departments is what leaves a we-owe waiting on nobody’s desk in particular.
Canadian dealers don’t have the option of treating we-owes as a courtesy. OMVIC’s Financial Responsibilities and Obligations Guideline requires Ontario-registered dealers to settle outstanding bills tied to a vehicle and deliver it free of encumbrances before the sale is complete. That standard puts the dealer’s paperwork discipline directly under regulatory scrutiny, not just customer goodwill.
The picture is less consistent outside Ontario. AMVIC, Alberta’s regulator, requires licensed dealers to disclose known material defects in writing before a sale. But it has explicitly stated that it cannot force a dealer to complete a repair, replace a part, or issue a refund. Those are contract disputes that fall to the courts or civil mediation, not to AMVIC’s enforcement powers. That gap means the paper trail a we-owe creates is often the only leverage a customer has, and the only defence a dealer has, when a promise gets disputed months later.
See our guides to the OMVIC dealer licence and the AMVIC Alberta dealer licence for the fuller compliance picture in each province, and our Canadian dealership compliance pillar for how provincial regulators generally approach disclosure and dealer obligations.
A we-owe that describes the promise but not who owns closing it is a we-owe that stays open indefinitely. Our we-owe forms and outstanding items guide walks through each field and the you-owe side of the same deal. At minimum, the form needs:
That last field is the one dealerships skip most often, and it’s the one that matters most for reporting. A we-owe log without closure dates can’t tell you how many items are actually outstanding right now versus how many were resolved and forgotten on the form.
Run an open we-owe report weekly, not monthly. Treat anything past 30 days the way you’d treat aged inventory: something a specific person is accountable for, reviewed out loud in a management meeting rather than left to surface itself. Assign closure ownership to a department other than Sales. Parts or a dedicated delivery coordinator is a more natural fit, since Sales has already moved on to the next deal by the time most we-owes come due.
Track accessory and LPO installs in the same system and the same review, rather than as a separate list Parts manages informally. The failure mode is identical to a missed we-owe: an item promised at the point of sale that nobody chases until the customer asks where it is.
A sold-vehicle workflow platform that keeps we-owes, accessory installs, and delivery tasks visible to Sales, Parts, Service, and F&I at once closes the gap that lets these promises sit open. When the same tool that manages the sold vehicle preparation process also tracks what’s still owed after delivery, a promise made at the desk stops being something only one person remembers.
A we-owe form is a written record of a commitment the dealership makes to a customer to deliver a specific good or service after the sale is signed, such as a missing accessory, a repair, or a second set of keys. It protects both the customer and the dealer by documenting the promise instead of relying on memory.
It functions as a contractual commitment, and provincial regulators treat it that way to varying degrees. Ontario’s OMVIC requires dealers to settle outstanding obligations tied to a vehicle sale. Alberta’s AMVIC can enforce disclosure requirements but cannot compel a dealer to complete a promised repair or issue a refund, so that dispute falls to the courts or civil mediation.
There’s no universal regulatory deadline, but a we-owe with a target completion date that has passed, or one that’s been open more than 30 days without an update, should be flagged for management review rather than left on a list. The longer an item stays open, the more likely it is to be forgotten entirely rather than resolved.
]]>A dealer who signed a letter of intent with a Chinese EV brand in April expected inventory on the lot by the winter selling season. Today, that dealer is more likely working from a 2027 delivery estimate instead. That slip is playing out across Canada’s Chinese EV retail buildout heading into late July. BYD, Chery, and Geely all entered the spring with confident late-2026 launch targets. Automotive News reported in mid-May that certification timelines, quota uncertainty, and dealership economics were already pushing several of those targets out a full year. By mid-July, Automotive News and other trade outlets were reporting something further: dealer interest itself had started to cool alongside the delays.
BYD announced in April that it planned more than 20 branded Canadian dealerships. The rollout was set to start in the Greater Toronto Area and expand to Vancouver, Montreal, and Calgary, with an entry price around C$25,000. The company retained Markham-based Dealer Solutions Mergers & Acquisitions to identify sites nationally. Three months later, those GTA locations remain in negotiation. None are under construction or open. An official launch is still expected by year-end, but no vehicles have reached Canadian customers yet.
Chery has taken a similar approach. It brought close to two dozen Canadian dealer representatives to an April auto show as it works toward sales before the end of 2026, with certification and network development underway in parallel. Geely’s Lotus brand is furthest along in retail terms. It had six authorized Canadian dealerships operating in the first quarter and is targeting 12 by year-end. The first shipment of Eletre SUVs left port for Canada in early summer and arrived in July. Even that comparatively advanced rollout is a fraction of the volume the brand originally signalled.
Automotive News’ May 13 reporting attributed the broader slowdown to three compounding factors: the import quota system, a multi-month federal vehicle certification process, and dealership economics that look weaker once the quota’s ceiling is applied to realistic per-brand volumes. Several automakers that had hoped for late-2026 Canadian deliveries are now reportedly targeting 2027.
Canada’s January 2026 trade arrangement with China replaced a 100% surtax on Chinese-built EVs with a 6.1% tariff inside an annual import quota of 49,000 vehicles, rising toward roughly 67,000 by 2031. That quota is a national ceiling. It is shared across every Chinese-manufactured EV entering under the deal, not allotted brand by brand.
Run the arithmetic against the retail networks now being built and the constraint gets concrete fast. BYD alone is targeting more than 20 stores. Add Chery’s dealer network, Lotus’s 12 planned locations, and whatever volume other entrants like GWM or MG eventually claim. The 49,000-unit ceiling then has to stretch across dozens of stores from multiple brands, before a single unit reaches a customer without a waitlist. Government trade data tracked by outlets including Drive Tesla Canada show a meaningful share of the year’s import allocation already claimed within months of the quota taking effect. A dealership built to a manufacturer’s national sales projection is underwriting a business case the quota itself cannot support. One built to the store’s realistic share of that ceiling is underwriting something the market can actually deliver.
Samir Akhavan, managing director of buy-sell brokerage Templeton Marsh, has been tracking dealer sentiment on Chinese EV franchises since the trade deal opened the market. Speaking to Automotive News, Akhavan said he rates the vehicles themselves well. But he questions whether the surrounding business model is ready for Canadian retailers. OEM relations, warranty payment, service support, and basic business planning all remain undefined, he said, even as dealers are asked to commit capital now.
Those gaps track closely with what CADA flagged in the special bulletin it issued to members in April, before the current wave of hesitation set in. That guidance told dealers to require the National Automobile Dealer Arbitration Program as the dispute-resolution mechanism in any new-entrant franchise agreement. It told them to insist on contract parity with every other dealer signing the same brand. It told them to secure the right to form a dealer council before committing facility investment, staff, and signage to a new OEM relationship. Where those terms remain unresolved months into a franchise discussion, that absence is itself a signal worth weighing.
CADA’s own posture has stayed measured rather than promotional. CADA president and CEO Tim Reuss has said the association’s role is to equip dealers with information and insight so they can decide for themselves, not to steer them toward or away from any particular brand. That neutral framing leaves individual dealers to work through OEM relations, warranty, and service questions largely on their own. Each one is negotiating deal by deal, without the built-in guardrails an established manufacturer’s franchise agreement would typically carry.
Re-underwrite the volume assumption before signing anything. Any Chinese EV franchise pitch built around a manufacturer’s national sales target should be tested against that brand’s realistic share of the 49,000-unit annual quota, divided by the number of stores the manufacturer is opening. A pitch that assumed vehicles on the lot by the 2026 winter season should now be modelled against a 2027 delivery window, with financing and staffing plans adjusted accordingly.
Get the CADA-recommended protections in writing before capital moves. The April CADA bulletin set out specific, checkable terms: NADAP arbitration named in the agreement, contract parity with other dealers signing the same brand, and an unrestricted right to form a dealer council. If a prospective OEM partner cannot commit to those terms on paper, that is information, not an obstacle to negotiate away.
Watch the path to volume beyond the quota. Ottawa’s four conditions for Chinese EV manufacturing investment in Canada, a majority Canadian-owned joint venture, Canadian labour standards, Canadian-sourced parts, and secure vehicle software, are the only route to volumes that escape the quota ceiling. Until a manufacturer clears that bar, per-store allocations stay capped regardless of consumer demand or how many dealerships a brand opens.
Confirm provincial franchise disclosure obligations apply the same way to a new entrant. Ontario’s Arthur Wishart Act and similar provincial frameworks don’t distinguish between an established OEM and a first-year market entrant. Dealers evaluating a Chinese brand franchise should review disclosure and registration requirements with the same rigour they’d apply to any new franchise, a topic covered in the Canadian dealership compliance guide.
Manage the rebate gap with customers now, not at delivery. Chinese-made EVs remain ineligible for Canada’s federal EVAP rebate because China has no free-trade agreement with Canada. That won’t change until a qualifying joint venture produces vehicles domestically. Sales staff should be briefed to set that expectation early in the deal, not discover it at the F&I desk.
]]>Somewhere in your dealership’s customer records right now is a list of phone numbers your BDC or service department has texted in the last 24 months. Almost none of those contacts have a documented consent date, source, or type attached to them, because dealership texting is generally treated as an operational habit, not as an activity governed by Canada’s Anti-Spam Legislation. That gap is not a theoretical risk. In 2024 the CRTC settled with Hudson’s Bay Company for $120,000 over commercial messages sent without a functioning unsubscribe mechanism – the kind of gap that shows up the moment a regulator or a disgruntled customer asks how consent was obtained.
CASL treats SMS the same way it treats email: both are “commercial electronic messages” (CEMs) if their purpose is to encourage a commercial transaction – a service reminder tied to an upsell offer, a sales follow-up, an event invitation, a “we miss you” campaign. Every CEM needs three things: consent to send it, clear identification of who’s sending it, and a working way to unsubscribe that the dealership honours within 10 business days.
Where dealers get tripped up is assuming that because a message is short, or sent from a personal-feeling number, or “just a reminder,” it falls outside the law. It doesn’t. The Canadian dealership compliance guide covered CASL’s basic shape alongside PIPEDA and Quebec’s Law 25 – this piece goes deeper into the part that trips up texting specifically: what actually needs consent, what doesn’t, and what it costs a dealership to get wrong.
Not every text is a CEM. Guidance on business texting distinguishes between messages that promote something and messages that only relay information about an existing transaction or relationship – a password reset code, a shipping notification, an appointment reminder, a recall or warranty notice. A text that says “your vehicle is ready for pickup” is transactional. A text that says “your vehicle is ready for pickup – and by the way, we have a service special this month” is not. The moment a promotional element enters the message, it becomes a CEM subject to the full consent regime, even if 90% of the text is legitimate status information. Dealerships that bundle upsell language into status texts to save a second message are the ones most likely to convert an exempt message into a compliance problem.
CASL recognizes two paths to sending a CEM: express consent (the customer affirmatively opted in) and implied consent, which applies automatically under specific conditions. For dealerships, implied consent runs on two clocks:
Once either window closes, sending a CEM requires express consent obtained beforehand. And critically, consent is channel-specific: a customer who checked a box to receive service reminder emails has not thereby consented to receive text messages. Text and email require separate consent records – a dealership that only tracks a single “opted in” flag per customer, rather than per channel with a timestamp and source, cannot actually demonstrate which channel that consent covers if asked.
The CRTC’s Hudson’s Bay Company undertaking, effective June 10, 2024, is instructive because it wasn’t about consent at all – it was about messages sent between January 2022 and November 2023 without a functional, easy-to-use unsubscribe mechanism, violating CASL’s identification and unsubscribe provisions. HBC agreed to pay $120,000 and to overhaul its CASL compliance program, including staff training, complaint tracking, and ongoing auditing. No allegation of malicious intent was required – an unsubscribe link that didn’t work reliably was enough to trigger a six-figure settlement with a major national retailer.
The statutory ceiling is far higher than what HBC paid: administrative monetary penalties can reach $10 million per violation for an organization and $1 million for an individual, and CASL’s director and officer liability provisions mean penalties aren’t limited to the corporate entity. A dealer principal or general manager whose name is on the compliance program can be named personally in an investigation. The CRTC calibrates actual penalties to the scale and nature of the violation – a single-rooftop dealer sending a few thousand texts a year is not going to draw an HBC-sized settlement – but “we didn’t know our unsubscribe link was broken” is not a defence, and the investigation itself, regardless of outcome, costs time, legal fees, and reputational standing with customers.
Vendor contracts matter here too. If a third-party texting platform sends the message on the dealership’s behalf, the dealership is still on the hook – CASL’s liability follows who benefited from the message, not just who clicked send. A vague answer from a texting vendor about how it handles consent or unsubscribes becomes the dealership’s problem during an investigation, not the vendor’s.
The instinct after reading all of this might be to text less. That would be the wrong lesson. Dealerships that use text messaging for service status updates see 50 to 80 points higher CSI scores, and automatic status notifications more broadly increase customer satisfaction by up to 30% and make customers 80% more likely to return for future service and purchases. Texting works. The fix is being able to prove compliance when asked, not sending fewer messages.
Start with an audit, not a policy document. Pull your current SMS-eligible customer list and check what consent actually exists behind it – if the honest answer is “we just text whoever gave us a number,” that’s the gap to close first, and it should happen before the next marketing text campaign goes out, not after a complaint arrives.
Concretely:
None of this requires texting less. It requires being able to show, if asked, exactly when and how a customer agreed to hear from you – which is a lower bar than most dealerships assume, and a far cheaper one to clear now than after a complaint reaches the CRTC’s desk.
]]>Unifor and Ford Motor Company of Canada reached a tentative three-year collective agreement on July 11, after bargaining continued through the night past the union’s self-imposed July 10 deadline. The deal covers 5,150 Unifor members at Ford’s Canadian facilities and received the unanimous endorsement of the Unifor Ford Master Bargaining Committee. Members will vote on ratification at meetings scheduled to begin Friday, July 17, and continue through July 19.
The talks, which opened June 22 in Toronto, ran roughly three weeks before producing a tentative deal. Detroit News reported that negotiators kept working past the July 10 deadline into Saturday morning based on what both sides described as productive overnight discussions, rather than declaring an impasse.
Unifor National President Lana Payne characterized the outcome as consequential for the sector: “Securing this tentative agreement comes at a vital time for Canada’s auto workers and our domestic industry,” Payne said in a statement announcing the deal. “Every member of our bargaining committee came to the table resolved to reach a fair deal that protects good union jobs in the most challenging of economic times.”
On the Ford side, Meredith Keenan, vice-president of human resources for Ford Motor Co. of Canada, confirmed the talks had concluded with a tentative agreement and indicated the company would continue working collaboratively with Unifor through ratification. Ford declined to discuss specific contract terms publicly.
That is a deliberate and standard feature of Detroit Three bargaining: wage schedules, pension changes, job-security language, and any product or investment commitments negotiated into the deal are presented to members first, at the ratification meetings, before being made public. Dealers and industry observers will not have confirmed figures on wages, pensions, or job-security provisions until after the July 17-19 vote.
The agreement covers members of Unifor Locals 707, 200, 584, 1087, 240 and 1324, working across Oakville Assembly, the Windsor Annex and Essex Engine Plants, and parts-distribution centres in Paris and Casselman, Ontario, and Leduc, Alberta — the same 5,150-worker footprint this publication detailed when bargaining opened on June 22.
Unifor uses pattern bargaining for its Detroit Three negotiations: the first company to settle sets the template — on wages, pensions, and job-security language — that the union then carries into talks with the remaining two automakers, typically on a take-it-or-leave-it basis. Ford was selected as the lead company for 2026 because it had maintained its Canadian investment commitments more fully than GM or Stellantis through the period of tariff disruption, a rationale covered in detail when negotiations began.
If Ford members ratify the deal at this week’s meetings, Unifor moves directly into negotiations with GM Canada and Stellantis Canada, using the Ford terms as its opening reference point for those talks. All three companies’ collective agreements — Ford, GM, and Stellantis — expire simultaneously on September 20, which is also the start of Canada’s strongest truck-selling quarter. A ratified Ford deal in mid-July leaves roughly nine weeks to complete pattern negotiations at the other two automakers before that expiry. A rejected deal — a live possibility any ratification vote carries, though not the outcome either side is signalling — would compress that runway sharply and reopen the supply-chain uncertainty this publication flagged when bargaining opened.
The agreement was reached against unresolved trade conditions that shaped the entire cycle. The 25 per cent U.S. tariff on non-U.S.-built vehicles and parts remains in force, and the first mandatory CUSMA review concluded July 1 without a renewal deal, leaving the existing tariff regime — and the uncertainty around automotive rules of origin — in place for the life of any contract signed this summer. Ford’s continued investment in Oakville Assembly’s F-Series Super Duty retooling and the expansion of Windsor-area engine operations, part of a $5-billion Canadian investment programme, is widely read as the reason Unifor prioritized Ford as its lead bargaining partner this cycle rather than GM or Stellantis, both of which have scaled back Canadian production commitments over the past 18 months.
The July 17-19 ratification vote is the next fact dealers should track, not the tentative agreement itself. A “yes” vote removes the near-term risk of a work stoppage at Oakville Assembly and the Windsor-area engine plants, and it starts the clock on GM Canada and Stellantis Canada pattern talks with roughly nine weeks of runway before the September 20 contract expiry across all three automakers. Ford dealers carrying Super Duty allocation should confirm current order-bank positions and expected delivery timing with their OEM sales representatives once ratification results are confirmed, since light trucks represent approximately 88 per cent of Canadian new-vehicle sales, according to DesRosiers Automotive Consultants — making any disruption at Oakville consequential well beyond Ford’s own network.
If the vote fails — which would send negotiators back to the table with a compressed calendar before September 20 — dealers carrying Ford, GM, or Stellantis franchises should treat it as an early signal to reassess light-truck inventory positions and floor-plan exposure heading into Q4. GM and Stellantis dealers specifically should watch for the terms that emerge from ratification, since those figures — not the vague framing available today — will determine the wage, pension, and job-security floor Unifor carries into CAMI and Brampton talks, both of which carry unresolved product-mandate questions of their own. Once wage and job-security terms are public, dealers should also revisit labour-cost assumptions built into any pro forma for service department staffing, since Detroit Three pattern agreements typically influence non-union compensation benchmarks across the broader Canadian dealer workforce within the following year.
]]>READY HUB’s companion mobile app is now available for download on the Apple App Store and Google Play. It brings the same inventory, trade, and delivery visibility that teams already use in the browser to a phone, so nobody has to be at a workstation to know where a vehicle stands.
For single-rooftop stores this mostly means fewer walks across the lot. For multi-rooftop groups running a shared inventory or trade process across locations, it means a manager or reconditioning lead can check status at whichever location they happen to be standing in that day, instead of relying on a phone call back to a desk at another store.
The companion app is organized around READY HUB’s three existing modules, and it carries over the same status information each module already tracks in the browser:
The app is explicitly a companion to the browser platform, not a replacement for it. It is built for checking status and following workflows on the go – the kind of “is this done yet” lookup that today usually means walking to a shared terminal or interrupting whoever is sitting at one. Full data entry, configuration, and reporting still happen in the browser, where the larger screen and keyboard make sense for that work. Existing READY HUB customers can install the app immediately and sign in with their current account credentials.
Most of the people who touch a vehicle between arrival and delivery – lot attendants, technicians, detailers, delivery coordinators – do not sit at a desk for most of their shift. The software they rely on for status information has often assumed otherwise, which means updates lag behind reality until someone gets back to a terminal to log what already happened.
That gap shows up clearly in dealership performance research. Cox Automotive’s 2026 Fixed Operations and Ownership Study found that “Thriver” dealerships – the study’s designation for its highest-performing group – use an average of 11 digital tools in service operations, compared with nine among lower-performing stores. The same study found that 64% of Thrivers send customers photos or videos of recommended repairs by text or email, compared with 48% of non-Thrivers, a 16-point adoption gap. Among consumers who found those photo and video updates helpful, 49% said they were more likely to approve the recommended service, 45% said they were more likely to recommend the service department to others, and 34% said they visit that service department more often.
J.D. Power’s 2026 U.S. Customer Service Index points to the customer-facing side of the same problem. The study found that 64% of service customers want photo or video documentation of multi-point inspection findings, but only 26% of mass-market customers and 44% of premium customers say they actually receive it. The same study measured average service visit times of 1.61 hours for mass-market customers and 2.46 hours for premium customers, compared with aftermarket competitors, where 62% of visits take under an hour for similar work.
None of these studies are about mobile apps specifically – they are about dealership technology adoption and service throughput generally. But the pattern they describe is one where higher-performing stores use more tools, share more visual updates, and move customers through faster, while status information at lower-performing stores tends to live wherever the last person to touch it happened to be standing. A technician who can check a repair’s status from the bay, rather than waiting until there is a free moment at a shared terminal, is one less handoff in that chain. An app does not fix a broken process by itself, but it removes a common excuse: staff who cannot get to a browser can still see where a vehicle stands, and a customer on the phone or in the waiting area gets an answer sooner.
This matters as much for trade and delivery workflows as it does for service. A desk manager waiting on an appraisal, or a delivery coordinator confirming a vehicle is detailed and fuelled, faces the same choice between walking to a terminal and guessing. The dealerships the research describes as higher performers are not necessarily using fundamentally different processes – they are simply not losing time to that walk.
If your dealership already uses READY HUB, the companion app is available today and requires no new configuration:
For more on how the underlying modules work day to day, see the earlier posts on the trade-in and appraisal process and the sold vehicle delivery process. Book a demo to see the full platform, browser and app together.
]]>Canada, the United States and Mexico completed the first mandatory joint review of the Canada-United States-Mexico Agreement on July 1, and the review ended without an agreement to extend the deal. U.S. Trade Representative Jamieson Greer’s office confirmed the United States would not renew CUSMA in its current form, according to multiple outlets tracking the review. The outcome affects every Canadian dealership carrying an import-exposed franchise, because it leaves the tariff structure that has been reshaping vehicle pricing and OEM allocation since 2025 unchanged, with no scheduled date by which it must be resolved.
CUSMA’s original text required the three governments to conduct a joint review by July 1, 2026, and decide whether to extend the agreement for a further term running to 2036. That review took place, and the United States side declined to commit to an extension in the agreement’s current form. Reporting on the review process describes rules of origin for automobiles as the central flashpoint, with the U.S. side seeking a materially higher share of North American or U.S.-specific content before a vehicle qualifies for preferential, tariff-free treatment under the deal. The precise threshold under discussion has not been officially confirmed by either government.
The practical effect is narrower than the headlines suggest. CUSMA is not being cancelled, and it does not expire this year. The agreement remains in force on its existing terms, with the next decade of scheduled life intact unless a later review produces an extension. What changes is the process: instead of a single renewal decision, Canada, the U.S. and Mexico now enter a cycle of annual reviews, each one a fresh opportunity to reach a deal — and a fresh opportunity for talks to stall again. Prime Minister Mark Carney has said publicly that Canada will not accept an agreement it considers unfavourable simply to meet a deadline, and that the government is prepared to take the time needed to reach terms that work for all three countries.
None of the tariffs already affecting Canadian dealers changed as a result of the July 1 review. The 25 per cent U.S. Section 232 tariff on vehicles and parts not built in the U.S. remains in effect, as it has since 2025 — a figure covered in this outlet’s reporting on Q1 2026 auto sales and referenced again in coverage of Unifor’s 2026 Ford bargaining. CUSMA-compliant parts are exempt from that specific tariff, which is part of why Stellantis and Volkswagen posted first-quarter volume gains built on Canadian-assembled, CUSMA-compliant inventory while the broader market contracted.
A second, separate U.S. tariff of up to 50 per cent applies to steel and aluminum content in vehicles and parts, and this one carries no CUSMA exemption regardless of where the finished part is assembled. Canada’s own retaliatory tariffs on U.S.-origin motor vehicles, steel and aluminum also remain in place, even as most retaliatory tariffs on consumer goods were unwound in 2025. Combined, the layered tariff structure is why new-vehicle transaction prices, which had softened through the first quarter of 2026, were never expected to stay soft. Dealer executives cited by CNBC earlier this year flagged $3,000-to-$12,000 price increases on U.S.-assembled vehicles arriving between May and August — the window Canadian dealers are in now, as documented in this outlet’s coverage of April’s sales figures. The July 1 outcome removes any near-term prospect that those increases reverse.
The Bank of Canada’s most recent Monetary Policy Report estimates the tariff dispute will leave Canadian GDP approximately 1.5 per cent below its pre-tariff trajectory by the end of 2026, with roughly half of that gap attributed to a permanent reduction in the economy’s potential output rather than a temporary demand shock. That distinction matters for dealers: a temporary shock recovers when tariffs lift, while a reduction in potential output does not reverse quickly even after a trade resolution.
On the American side, the shift to annual reviews has been described by trade lawyers and economists as moving CUSMA into a more fragile phase than the fixed-term arrangement dealers and OEMs have operated under for years. General Motors has publicly characterized a renewed CUSMA as important to the auto industry’s investment planning, reflecting a broader OEM preference for the predictability of a multi-year agreement over a rolling annual review process that could reopen contentious issues, including automotive rules of origin, every twelve months.
Treat the current tariff structure as the durable baseline for planning purposes, not a temporary condition awaiting a fix. With CUSMA moving to annual reviews rather than a single resolution date, there is no fixed point on the calendar by which dealers can expect clarity — the next review could bring a deal, no change, or a new escalation, and planning cycles should not assume any particular outcome.
Reconfirm with each OEM partner which specific trims and models qualify as CUSMA-compliant for tariff purposes, since that status determines whether a given unit carries the 25 per cent finished-vehicle tariff, the separate steel/aluminum exposure, or both. Franchises with strong Canadian-assembled or CUSMA-compliant volume, following the pattern Stellantis and Volkswagen set in Q1, have a real allocation and pricing advantage worth raising directly with your OEM allocation contact.
Build the arriving $3,000-to-$12,000 price increases into customer-facing conversations now rather than at the point of sale. Dealers who proactively explain which vehicles carry tariff-driven increases, and why, build trust with buyers who are already primed by months of tariff coverage to expect higher prices — a defensive posture beats a reactive one when the sticker shock lands on the lot.
Finally, watch for the next scheduled review point rather than treating July 1 as closed business. Trade counsel and economists tracking the file expect rules of origin, along with the sectoral steel, aluminum and lumber tariffs, to remain live issues at each annual review; a dealership that tracks that calendar will have more lead time on allocation and pricing decisions than one that waits for a press release.
]]>Quebec Environment Minister Pascale Déry announced on June 11 that the province is revising its Zero-Emission Vehicle (ZEV) sales mandate targets downward for the second time in less than twelve months, citing supply chain disruptions and the economic uncertainty driven by Canada-United States trade tensions. The proposed amendments — covering model years through 2035 — were published in the Gazette officielle on June 23, opening a formal public consultation that runs until July 23 before the regulations take effect. Quebec’s ZEV mandate is a provincial regulatory instrument operating independently from the federal ZEV standard, which Ottawa paused in September 2025 while undertaking a review of its own compliance schedule.
The adjustments affect every near-term compliance milestone in Quebec’s mandate framework. The most immediate change is the 2026 model year target: OEMs must now ensure that 26 per cent of their total new passenger vehicle sales in Quebec carry ZEV compliance credits, down from the 32.5 per cent requirement that was in place when the current model year opened. The 2027 target falls from 45 per cent to 30 per cent — a reduction of 15 percentage points that resets the province’s near-term compliance trajectory.
The longer-term schedule is revised comparably. The 2030 target, which previously stood at 85 per cent, is cut to 51 per cent — a reduction of 34 points that effectively acknowledges a fundamental mismatch between the original mandate pace and current market conditions. The 2035 endpoint moves to 80 per cent. That figure had already been targeted once: Quebec’s original regulation, adopted in 2024, set 100 per cent ZEV sales by 2035; a September 2025 announcement signalled a reduction to 90 per cent, though that change was never formally enacted; the June 11 announcement moves the endpoint to 80 per cent. The province’s stated endpoint has been lowered by 20 percentage points in under a year.
The compliance mechanism in Quebec works at the OEM level through a credit-accumulation system. Automakers earn credits based on the mix of zero-emission vehicles they sell in Quebec in a given model year. Battery-electric vehicles (BEVs) earn one full credit per unit. Plug-in hybrid electric vehicles (PHEVs) earn half a credit. Non-plug-in hybrid vehicles — conventional hybrids like the Toyota Camry Hybrid or Hyundai Tucson Hybrid — earn one-quarter of a credit under the expanded definition that Quebec introduced in July 2025. An OEM that falls short of its annual credit quota pays $20,000 per credit deficit. The revised targets lower the quota OEMs must meet, reducing their penalty exposure across all near-term model years.
Minister Déry cited three factors: “disruptions in supply chains, difficulties in accessing strategic materials, and international trade issues.” The trade reference is specific in context. The Canada-US tariff conflict has affected EV supply chains in two ways since early 2025. First, battery cell components and critical minerals — lithium, cobalt, nickel — flow through North American supply chains now subject to elevated cross-border costs, adding pressure at the production level. Second, US-assembled EVs, which represent a substantial share of Transport Canada’s EVAP-eligible model list, carry tariff exposure that complicates both OEM production planning and dealer pricing in Canada.
This is the second rollback in less than a year. Ottawa moved first in September 2025, pausing the national ZEV standard pending review. Quebec followed by announcing its own adjustment — a 2035 target of 90 per cent that was signalled at the time but never formally enacted. The June 11 announcement takes the reduction further and extends it to near-term model years, reflecting a provincial assessment that the compliance schedule no longer matches the market conditions that prevailed when the original regulation was written.
There is a structural dimension to the timing as well. Quebec has the highest ZEV market penetration of any Canadian province — accounting for the largest share of zero-emission vehicle registrations of any province — far above its roughly 23 per cent share of the national population. That leadership partly reflects a historically strong provincial rebate programme and a consumer base with above-average EV familiarity. But high existing adoption also means Quebec’s consumer market is past the early-adopter cohort; subsequent buyers have required more incentive to make the switch. The province’s own rebate programme has been phasing out ahead of 2027. Against that backdrop, mandating 85 per cent ZEV sales by 2030 — when the national ZEV share in March 2026 was 12.2 per cent — was always a target built on projection rather than demonstrated trend. The March figure is the highest monthly ZEV share ever recorded in Canada, and it sits 38 percentage points below where Quebec’s previous 2030 mandate required the market to be.
The Corporation des concessionnaires automobiles du Québec (CCAQ), the provincial dealer association, has been pressing for target reductions for more than a year. CCAQ President Ian Sam Yue Chi has stated publicly that the mandates must reflect market reality: “As long as the mandates remain disconnected from market realities, we will further weaken access to vehicles and Quebecers’ support for the energy transition.” The association had proposed reducing targets by half — a position more aggressive than the June 11 revisions for the 2026 and 2027 model years, though the 2030 cut (from 85 per cent to 51 per cent) approaches that threshold.
The Canadian Automobile Dealers Association (CADA) has held a consistent position across the federal and provincial mandate reviews: consumer support programmes — purchase rebates, charging infrastructure investment — must match the compliance schedule if targets are to be commercially achievable. CADA President and CEO Tim Reuss has framed this as a policy alignment question: the mandate and the consumer incentive structure need to move together. The June 11 revision implicitly acknowledges the same logic, though it does not include new consumer support measures.
At the OEM level, the compliance arithmetic has carried real financial weight. The $20,000-per-credit-deficit penalty is transparent and enforceable, and OEMs selling significant volume in Quebec have faced meaningful exposure when ZEV demand fell short of mandate pace. The revised near-term targets lower that exposure and reduce the commercial pressure on manufacturers to push EV-heavy inventory into Quebec dealer networks at a rate that outpaces consumer pull. For dealers carrying OEM brands with thin BEV lineup depth — or those with strong conventional hybrid portfolios that earn partial credits under the expanded July 2025 credit system — that shift in OEM incentive has operational implications.
For Quebec franchisees, the most immediate implication is a reduction in OEM-driven pressure to carry EV-heavy inventory. When OEMs faced the original 32.5 per cent 2026 target, the commercial incentive was to move ZEV credits aggressively into the province — through allocation pushes, enhanced regional support programmes, and dealer performance metrics weighted toward ZEV volume. A lower target reduces that pressure. Dealers who spent the first half of 2026 managing OEM conversations about ZEV inventory mix should expect those discussions to shift as the revised targets move toward finalization after the consultation period closes July 23. How quickly your OEM adjusts its Quebec allocation posture will depend on how far under- or over-target it currently sits for the 2026 model year — a question worth raising directly with your OEM regional team.
For dealers with strong hybrid portfolios, it is worth understanding where your specific models sit in the credit system. The July 2025 expansion to include conventional hybrid vehicles at one-quarter credit means that OEM brands with high-volume hybrid lineups — Toyota, where electrified vehicles represented 68.8 per cent of brand volume in April 2026 per Toyota Canada’s monthly sales report, is the clearest example — now earn partial compliance credit from units they are already selling in quantity. That changes the competitive compliance position between OEM brands: a manufacturer with a broad hybrid roster has a smaller incremental ZEV credit gap to close than one relying primarily on ICE volume. Dealers for those brands should know whether their OEM’s Quebec credit position is easing and whether that affects the programme support and inventory allocation they receive.
For all Quebec and national dealers, the EVAP consumer demand signal is independent of the mandate calendar. The federal Electric Vehicle Affordability Program — which offers $5,000 for BEVs and $2,500 for PHEVs on vehicles priced at or below $50,000 — continues to operate on its own schedule regardless of what happens to provincial mandate targets. The record ZEV demand recorded in March 2026, documented in the March ZEV sales analysis, was driven by EVAP uptake during its first full month of operation. The EVAP dealer guide covers the portal process and eligible model list. A mandate rollback does not mean consumer interest in ZEVs is reversing — it means the regulatory pressure on OEM product mix is easing. Those are separate dynamics and should not be conflated in inventory strategy.
Three concrete steps are worth taking now:
Engage with the open consultation before July 23. The June 11 announcement is a proposed regulatory change, not a final one. The draft regulations were published in the Gazette officielle on June 23, and the 30-day public consultation — the formal mechanism through which stakeholders, including dealers, can submit comment on the proposed targets — remains open until July 23. CCAQ is the appropriate channel for Quebec dealer input; members should monitor CCAQ communications for submission guidance. The final regulation may differ from the June 11 proposal based on consultation responses.
Ask your OEM where it stands on 2026 Quebec credits. Your OEM’s regional sales or fleet affairs team can tell you whether the brand is currently over- or under-target on Quebec ZEV credits for the 2026 model year. That position shapes the level of push — and the associated dealer support — you can expect from your OEM for ZEV volume in the back half of 2026. If the revised 26 per cent target means your OEM is now comfortably on-track rather than credit-deficient, the commercial incentive to push EV allocation into Quebec softens. Understanding your OEM’s credit position is more useful than estimating it.
Factor both the 2030 target and the review cycle into longer-range planning. The revised 2030 target of 51 per cent ZEV sales remains a substantial commitment — the majority of all new vehicle volume. Dealers with multi-year facility upgrade cycles or franchise investment plans should incorporate a realistic ZEV sales assumption into their financial models, while acknowledging that Quebec’s mandate has now been revised twice in under a year and the federal government’s own review is still in progress. Dealers managing compliance obligations across multiple provinces should review the Canadian dealership compliance guide for a full picture of how Quebec’s requirements interact with federal and other provincial frameworks.
The direction of Quebec’s ZEV policy has not reversed — 80 per cent electric vehicle sales by 2035 remains an ambitious regulatory commitment. What has changed is the pace and the degree of near-term OEM penalty exposure that underpinned the original compliance pressure. For dealers in Canada’s largest EV market, that is a meaningful operational variable heading into Q3 and Q4.
]]>Contract negotiations between Unifor and Ford Motor Company formally opened June 22 in Toronto, launching the bargaining cycle that will govern employment terms for approximately 18,000 Canadian autoworkers at the three Detroit automakers — and carrying direct supply-chain implications for the dealers who move their products. Talks opened with a ceremonial handshake between Unifor National President Lana Payne and Meredith Keenan, Vice-President of Human Resources at Ford of Canada, at the Sheraton Centre Toronto. Unifor has set July 10 as its deadline to reach a tentative agreement with Ford — a timeline that, if met, would permit ratification to be completed and leave adequate runway for pattern negotiations at GM Canada and Stellantis Canada before all three collective agreements expire simultaneously on September 20.
Unifor’s stated priorities for the 2026 cycle are wages, pensions, benefits, and income-security provisions, with job security emerging as the defining concern heading into talks. The union reports that the Canadian auto-manufacturing sector has lost nearly 6,500 jobs since February 2025 — a figure that reflects a series of compounding disruptions across the industry.
At General Motors, CAMI Assembly in Ingersoll lost approximately 1,150 positions after GM cancelled the BrightDrop electric delivery van programme, and the plant’s long-term product mandate has remained unresolved. At Stellantis, Brampton Assembly has been operating with roughly 3,000 workers on extended layoff following the company’s decision to shift Jeep Compass production to a facility in Belvidere, Illinois. The cumulative effect is a manufacturing base substantially smaller than it was 18 months ago, and Unifor has made clear that contract language protecting Canadian jobs is as important as the economics of any wage package.
“This will be one of the most consequential rounds of Detroit Three bargaining in decades,” said Unifor National President Lana Payne at the opening of negotiations. “Workers are living with the effects of Trump’s trade and investment war at work, in their homes and in their communities.”
The union is seeking a three-year agreement with Ford — a term consistent with recent collective agreements — extending to 2029 and carrying through the most turbulent phase of North American EV adoption and ongoing reconfiguration of Canadian assembly capacity.
Unifor uses pattern bargaining for Detroit Three negotiations: one company’s agreement becomes the compensation and job-security template the union carries into talks with the remaining two. The decision to open with Ford in 2026 reflects a deliberate assessment of which automaker has demonstrated the strongest commitment to Canadian production under adverse conditions.
Ford is the only one of the three Detroit automakers to have maintained its Canadian investment commitments in full during the period of tariff disruption. Its $5-billion Canadian investment programme — centred on the retooling of Oakville Assembly to build the F-Series Super Duty and on the expansion of the Essex Engine Plant and other Windsor-area facilities — has remained on schedule. The Super Duty launch at Oakville represents the plant’s most significant product investment in decades and positions the facility as a core North American truck production site.
In communications accompanying the bargaining announcement, Unifor attributed the choice to Ford’s continued commitment to its Canadian operations and a long-established constructive working relationship. The 5,150 workers covered by the Ford collective agreement are distributed across Oakville Assembly, the Essex Engine Plant, other Windsor-area engine operations, parts-distribution centres, and office units.
GM Canada and Stellantis Canada will enter pattern negotiations after the Ford deal is set. Their respective situations — CAMI’s unresolved product mandate and Brampton’s extended idle period — make the job-security provisions established in the Ford pattern especially consequential for workers at those facilities, and the terms reached at Ford will set the floor for what Unifor pursues at both companies.
The 2026 bargaining cycle is unfolding against trade conditions with no close precedent in recent Canadian auto negotiations. The 25 per cent U.S. tariff on non-U.S.-built vehicles and parts, imposed by the Trump administration in 2025 and still in force, adds direct cost pressure to the economics of Canadian manufacturing and to the export margin on vehicles assembled at Oakville and Oshawa. While vehicles meeting CUSMA rules of origin benefit from a reduced effective rate — the tariff applies only to the non-Canadian, non-Mexican value content in qualifying vehicles — the overall environment has compressed margins across the supply chain and introduced uncertainty into OEM production planning.
The second layer of uncertainty is the scheduled CUSMA review. The agreement governing preferential treatment for North American-built vehicles is due for formal assessment, and its outcome could materially reset the competitive position of Canadian assembly operations well within the three-year life of any deal reached this summer. Unifor has framed investment commitments, production mandates, and restrictions on cross-border production transfers as essential contract language — not merely aspirational — given that trade policy alone could render conventional wage gains secondary to whether the jobs exist at all.
As this publication reported in May when Unifor announced its bargaining structure, the September 20 contract expiry coincides with the start of Q4 — historically the strongest truck-selling quarter in the Canadian market. The full plant-by-plant context and the strategic stakes heading into September 20 were covered at that time; the July 10 deadline is the principal new development.
Three facts define the supply-chain risk window for dealers: the July 10 target Unifor has set to reach a tentative agreement with Ford, the September 20 universal expiry across all three Detroit Three contracts, and the reality that light trucks — primarily assembled at the Canadian plants in play — represent approximately 88 per cent of Canadian new-vehicle sales, according to DesRosiers Automotive Consultants.
If Unifor and Ford reach a tentative agreement by July 10 and members ratify it, subsequent negotiations at GM Canada and Stellantis Canada are likely to proceed at pace, with all three deals settled before the September 20 deadline. That outcome eliminates the immediate supply-chain risk and delivers clarity on the labour-cost environment underlying Detroit Three production for the following three years.
If the July 10 target is missed and talks extend into August, the margin compresses sharply. Ratification votes require time; prolonged Ford negotiations would leave GM Canada and Stellantis Canada very little runway to complete their own pattern negotiations before September 20. In that scenario, the probability of production disruption — or at minimum, sustained inventory uncertainty — rises in proportion to remaining calendar.
For Ford dealers, the Oakville-built F-Series Super Duty is the product most directly at risk. Full-size pickups remain the highest-margin, highest-velocity unit in most Ford dealer portfolios, and disruption to Oakville supply in Q4 would arrive at the worst point in the selling calendar. For GM and Stellantis dealers, the pattern negotiations that follow the Ford settlement will determine the terms under which CAMI and Brampton operations continue — and whether those plants receive the product commitments that would underpin stable long-term supply.
Practical steps to consider over the coming weeks: confirm current order-bank positions and expected delivery timing with your OEM sales representatives for all three Detroit Three franchises you carry; review light-truck inventory levels in the context of a possible Q4 disruption; and assess whether pre-ordering additional allocation while Canadian assembly plants are operating is viable given current floor-plan costs. Dealers who carried Ford, GM, or Stellantis franchises during the 2021–2022 production shortage will recall how quickly used-truck prices escalated when new-truck supply contracted — a dynamic that can materialise within weeks if Oakville production is interrupted heading into peak truck season.
The round concluded shortly afterwards: Unifor and Ford reached a tentative agreement, with ratification set for July 17.
]]>Industry Minister Mélanie Joly travelled to China in June to meet with four Chinese electric vehicle manufacturers — BYD, Chery, Geely, and Shanghai Launch Automotive Technology — carrying Ottawa’s terms for expanded Canadian market access. The message was direct: any Chinese EV volumes beyond Canada’s 49,000-unit annual import quota require manufacturing investment on Canadian soil, structured on terms that protect Canadian workers, suppliers, and consumers. The discussions took place as the first Chinese-made EVs began arriving under the tariff framework Canada and China established in January, and as several Chinese brands were already in early talks with Canadian dealers about franchise agreements.
Joly outlined four specific requirements that any Chinese EV manufacturing venture in Canada must satisfy. The investment must take the form of a joint venture structured with majority Canadian ownership. The venture must comply with Canadian labour standards — a condition with direct relevance to Unifor, which is in the middle of Detroit Three pattern bargaining on behalf of approximately 18,000 Canadian autoworkers, with all three contracts expiring September 20. The vehicles assembled in Canada must use Canadian-sourced parts. And vehicle software must be secure and must protect the personal data of Canadian consumers.
The conditions are aimed at ensuring Chinese OEM investment translates into industrial value for Canada rather than a final-assembly arrangement that captures market share without integrating into the domestic supply chain. The Canadian parts requirement is the operative test: if manufacturers bring nearly-complete vehicles with only minor finishing steps done in Canada, the domestic supplier network captures little of the value — the precise concern Ottawa cited in rejecting kit assembly at Brampton. The government is keen to protect the roughly 500,000 Canadians employed directly and indirectly across the automotive sector — an industry that, according to Unifor, has lost close to 6,500 manufacturing jobs since February 2025 amid tariff-driven disruption.
All four manufacturers Joly met reportedly expressed willingness to explore joint ventures under the conditions Ottawa has set, though Joly’s own characterisation was measured. “There can be positive conversations leading potentially to decisions in future months,” she said following the China meetings.
Under Canada’s January 2026 trade arrangement with China, Chinese-built EVs enter Canada at a 6.1% most-favoured-nation tariff rate within an annual quota of 49,000 vehicles — a significant reduction from the 100% surtax that had applied previously. The quota is structured to expand at approximately 6.5% per year, reaching roughly 67,000 units annually by 2031.
Chinese OEMs that invest in Canadian manufacturing and meet the four conditions Ottawa has set would be able to sell vehicles assembled domestically without being constrained by the import quota ceiling. Vehicles manufactured in Canada are not subject to the import quota framework, placing a qualifying Chinese-Canadian joint venture on the same footing as any other Canadian automotive producer for purposes of market access and volume.
The clearest test of how strictly Ottawa will apply these conditions has already played out at Brampton Assembly. Stellantis NV proposed assembling knock-down kit vehicles from Leapmotor, its Chinese EV partner, at the idle plant — where approximately 3,000 workers have been on layoff since Jeep Compass production was moved to an Illinois facility. Joly rejected that proposal in April, saying the plant needs to support the local supply chain, and talks between Ottawa and Stellantis over Brampton’s future have since grown contentious. The rejection illustrates the Canadian-parts condition in practice: final assembly of nearly complete imported kits does not clear the bar. A venture that did meet all four conditions would represent the first Chinese-designed electric vehicle manufactured in Canada at scale, producing vehicles that are unambiguously Canadian-built for purposes of rebate eligibility and quota exemption.
The fourth condition — secure vehicle software and consumer data protection — reflects a debate running in parallel to the market access negotiations. An internal federal government document, reported by Canada’s National Observer in early June, warned that data from connected vehicles “can have intelligence value” to foreign adversaries. Experts have noted that modern connected vehicles collect camera, microphone, GPS, and communications data, and that China’s national intelligence laws can compel companies to transmit data to Chinese authorities.
Public Safety Minister Gary Anandasangaree has committed to ensuring Chinese EVs cannot transmit data back to China, though Canada has not yet adopted a formal regulatory framework comparable to what the United States has implemented. Ontario Premier Doug Ford has labelled Chinese EVs “spy vehicles,” and opposition parties have criticised the federal government’s pace on the data protection file.
For dealers, the data security condition has a practical implication: if Ottawa eventually establishes mandatory connected vehicle data security standards as a condition of sale in Canada — a regulatory direction the U.S. is actively pursuing — dealers operating Chinese-branded vehicles would likely bear verification responsibility at the franchise level before retail delivery. A franchise agreement that leaves software security compliance undefined would put the dealer in an ambiguous compliance position if such rules materialise.
The volume of Chinese OEM interest in Canada has been driven partly by strategic considerations that extend well beyond the Canadian market. Robert Kerwal, director of automotive solutions at J.D. Power Canada, described the dynamic plainly: “Canada is the practice run for the U.S.” Canada’s automotive market closely mirrors the United States in consumer preferences and regulatory structure, and both the Biden and Trump administrations have effectively barred Chinese-built EVs from U.S. consumers through prohibitive tariff walls. Canada, by opening a limited pathway through the January 2026 trade arrangement, has become the proving ground Chinese OEMs need to develop North American sales, service, regulatory, and consumer experience.
BYD, the world’s largest EV manufacturer by volume, is planning more than 20 branded Canadian dealerships beginning in the Greater Toronto Area and expanding to Vancouver, Montréal, and Calgary, with a starting price of C$25,000 for models including the Atto 3 compact SUV, Seal sedan, Dolphin hatchback, and Seagull city car. Geely’s Lotus brand is planning approximately six Canadian dealerships. Chery was reported to have held its first meetings with Canadian dealers within weeks of the January trade deal’s announcement.
The quota framework means that even with BYD’s 20-plus dealership rollout and multiple brands entering the market, total industry volumes from Chinese-made EVs in 2026 will be constrained by the 49,000-unit national ceiling — roughly 136 imported Chinese EVs per day across all brands and models. That constraint is the central commercial argument for Chinese OEMs to pursue manufacturing investment in Canada: without a domestic assembly footprint, their Canadian volumes are permanently capped regardless of consumer demand or dealer network development.
For dealer principals evaluating franchise opportunities with Chinese OEM entrants, Ottawa’s four conditions represent an important piece of the commercial picture that CADA’s April 2026 bulletin on contract protections did not fully address. The CADA bulletin covered what dealers should require in franchise agreements — dispute resolution mechanisms, contract parity, dealer council rights, and volume realism given quota constraints. Ottawa’s conditions now clarify the pathway and timeline under which volume realism could eventually improve: it runs through Canadian manufacturing investment, and Joly’s “future months” language suggests no commitments are imminent.
Assess volume projections against the quota ceiling. Any Chinese OEM franchise opportunity that projects sales volumes implying a significant market share across all Chinese brands depends on that OEM meeting Ottawa’s four manufacturing conditions and establishing domestic Canadian production. The 49,000-unit national quota, distributed across multiple OEMs, models, and provinces, means per-brand volumes are sharply constrained. Factor a realistic manufacturing investment timeline — likely two to three years at minimum from any commitment to production-ready operations — into any business case for a Chinese OEM franchise. That quota math has since caught up with launch plans: several Chinese brands have pushed their Canadian retail timelines into 2027 as the per-store arithmetic became clearer.
Monitor the Brampton Assembly standoff. Ottawa’s April rejection of Stellantis’ Leapmotor kit-assembly proposal is the first practical application of the four conditions, and the plant’s future remains unresolved. If Stellantis returns with a proposal that meets Ottawa’s bar — genuine Canadian parts content rather than kit assembly — it would directly affect Stellantis franchise dealers in Ontario, potentially bringing a Chinese-designed EV product into the existing Stellantis dealer network. Stellantis franchise holders should follow the file closely and raise the product and allocation implications with their OEM field representatives.
Anticipate connected vehicle compliance requirements. The data security condition in Ottawa’s framework signals that mandatory connected vehicle data protection rules for Chinese-branded vehicles are likely coming, even if the timeline is uncertain. Dealers who take on Chinese OEM franchises should ensure their franchise agreement clearly places software security compliance responsibility on the OEM, and includes provisions for what happens if a vehicle fails to meet future regulatory standards after delivery.
Understand the rebate gap. Chinese-made EVs are currently ineligible for Canada’s federal EVAP rebate because China has no free-trade agreement with Canada. Domestically assembled vehicles from a qualifying Chinese-Canadian joint venture would change that. Until manufacturing investment materialises, dealers selling Chinese-branded EVs will need to manage customer expectations around federal rebate ineligibility — and ensure their F&I process is accurate on provincial programme eligibility in British Columbia and Quebec, where rebates may still apply depending on the model.
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