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Ottawa sued over car import rules

GREG KEENAN

From Thursday's Globe and Mail

Latest comment posted at 11:58 PM EST 01/03/08

Lawsuit alleges Transport Canada and Canada Border Services Agency participants in conspiracy to keep vehicle prices high ...Read the full article

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  1. W. Mayne from Canada writes: Eventually all manufacturers are going to "see the light" and realize that a significant number of Canadians are not going to tolerate the price differential between Canada and the US. I recently read a Canadian ad by a Japanese auto company that claimed they had lowered the price on a certain Canadian model. I checked the price in the US, the price in Canada was $40,000 and in the US it was $30,000! The difference is too great!
  2. Paul F. from AB, Canada writes: "Luxury vehicles are believed to represent the bulk of the record 189,738 vehicles imported into Canada last year."

    It's not just luxury vehicles. I'm looking at saving $12-14K on a new Toyota Sienna van. Just have to wade through the mountain of RIV paperwork and buy through a U.S. address because Toyota dealers in the U.S. aren't permitted to sell new vehicles to Canadians with only a Canadian address (their franchise agreement).

    It's all about protectionism and keeping prices sky high in Canada. I actually had a local Toyota dealer tell me part of the price difference is due to "better weather stripping on Canadian models". $12-14 G's for weather stripping? Who knew rubber costs so much?
  3. Rudy Krueger from High River, Canada writes: We have to stop buying NEW cars altogether until the pressure on the auto industry forces change.

    It is possible to acquire a near-new car in almost any state for a fraction of the cost of a similar vehicle in Canada. Just now there is an unusually large inventory of them in states around Florida - though there are always lots of them.

    I recently priced a fully loaded one ton truck that qualifies as "used" but just barely. It was for sale from a dealership in Florida for just over $40k. The lowest I cold get a similar one in Canada for was just under $80k and the miles were about 15k different.

    That is a heck of a price to pay per mile/km just to have a new vehicle.
  4. Aumharan G from Canada writes: Last summer I was in talks with a Mercedes Dealership in Jacksonville Florida looking into getting a (pre-owned) 2006 Mercedes E-Class at almost $16,000 savings. I understood that I would be paying duties because it was not manufactured in North America but imagine my surprise when I found out Mercedes Canada/Transport Canada/CBSA had introduced new regulations when it came to importing a Mercedes. I was informed by Mercedes Canada that I would be able to import the car into Canada but registration would be conditional upon Mercedes Canadas assessment of the car and would most likely result in required modifications ranging from $4000-$7000 to be in compliance with RIV requirements. I said no thank you, apologized to the dealer for wasting his time and decided to stick with my current Camry.
  5. Aloha Eric from Toronto, Canada writes: I've done a fair bit of research on the importation process and here's what I see: BMW and other manufacturers mandate that you perform various modifications costing up to thousands of dollars, only at their dealerships, otherwise they will withhold the necessary “recall clearance letter” which is required for registering your imported automobile. [http://www.bmw.ca/content/pressReleases/can_us_faq_fs.asp?] The modifications as mandated by Transport Canada and the RIV for importation are very minor modifications, with the only applicable modifications for the vast majority of cars being enabling day time running lights and having appropriate speedometer and odometer labels [http://www.riv.ca/english/html/mod_inspect_requirements.html]. These modifications for all other brands and all other vehicles simply consist of a relay switch for the daytime running lights and stickers to indicate the speedometer and odometer are in miles. Canadian Tire can enable day time running lights at a cost of approximately $200, and they provide stickers to indicate that the units are in miles for free. In fact, Canadian Tire sells a $35 daytime running light kit that can self installed. On the other hand, BMW, in a perverse interpretation of the rules for their own benefit requires you to pay $1000 to $2000 to change your instrument cluster to meet the same requirements that could be met for much less cost if BMW were not able to dictate that the modifications be performed only at BMW dealerships. The rules as set by the RIV clearly state that “you may have the modifications done by the mechanic or garage of your choice” [http://www.riv.ca/english/html/how_to_import.html].
  6. Aloha Eric from Toronto, Canada writes: The final step of the importation process is obtaining a “recall clearance letter”, which is a letter that indicates that all safety recalls have been performed on the vehicle. This can be obtained for free from any other manufacturer but in BMW’s case you have to pay them $500 and wait 15-20 business days for a letter stating whether your car has had all recall work performed [http://www.bmw.ca/content/pressReleases/can_us_faq_fs.asp?]. BMW’s charging of fees for a recall clearance letter would appear to me to be illegal according to the rules of Transport Canada’s Motor Vehicle Safety Act, subsection 10.(1), Notice of Safety Defect. The “Obligation to give notice” under the Act, states that the vehicle manufacturer is legally required to cause notice of the defect to be given in the prescribed manner to each current owner of such a vehicle [http://www.tc.gc.ca/acts-regulations/GENERAL/m/mvsa/act/mvsa.html#VEHICLE%20AND%20EQUIPMENT%20STANDARDS]. In my opinion BMW would be deemed to be violating the Act by effectively withholding this information due to their charging $500 for this requirement. Is it not the vehicle owner’s right to know if a potentially life-threatening safety recall is outstanding on the car that BMW is required by law to fix for free?
  7. Greg Stewart from Ottawa, writes: I imported a 2004 BMW 330i in September 2007, and my documentation consisted of a print-out from a US dealer (obtained at no charge) stating the car had no open recalls. The only modification I was required to make for RIV compliance was to add bilingual airbag warning stickers ($1.75 for 2, from my local Dodge dealer). Since then, no legislative changes have been enacted that impact the admissibility of that car to Canada, yet if I were to import the same car today, I'd be looking at nearly $1000 in "fees", plus whatever arbitrary modifications the BMW dealer decides is "required" to make the car compliant (the RIV has decided that only BMW Canada can decide what is and isn't compliant, and any required modifications MUST be done by a BMW dealer).

    In my opinion, Transport Canada completely dropped the ball on this issue. By handing over control of the admissibility requirements to manufacturers, they gave them open license to screw Canadian consumers.
  8. f c from Canada writes: This is also a way to aid Cnd Automakers - in effect - taking Canadians to ensure that the automakers here can still sell there higher priced cars. We take it one way or the other from the federal government. I can't wait until this case wins and rules are dropped. Then watch the slew of lawsuits against Honda, Toyota etc....the companies that will not provide warranties or required documentation and those as well that demand their US dealerships not sell to Canadians...... This is just starting to get good!!!!
  9. Jack Tang from Richmond, Canada writes: Well, it is about time that BMW and Mercedes-Benz start paying the price. They shouldn't be the ones who sets the rule for this country. Worst of all, this government should have not cooperate with these auto companies who don't try to adapt the market change, but opt to manipulate the system and abuse the privileges. I won't be surprised that more lawsuits and class actions will follow... Well, they have sucked enough unjustifiable profits to keep their lawyers happy. The lawyers representing the plaintiff are encouraged to contact us, we are more than happy to join the fight...

    GMC Vintage Service is the next in court.
  10. Doug Morrison from Edmonton, Canada writes: FINALLY! This is good news on two fronts. First, auto manufacturers like BMW and MB (and others) are going to be held accountable for their unethical business practices. BUT MORE IMPORTANTLY, this very strange relationship between Transport Canada, the RIV and Canadian auto manufacturers is going to be fully exposed. We presently have a situation where TC leaves it up to each auto manufactures to determine what they will and will not allow into the country. Every manufacturer has a different set of rules, which can and do change on a frequent basis. And these rules are NOT based on anything other than profit motive. That is very very easy to demonstrate; from the immobilizer issue, to admissibility letters, to odometer modifications, etc, etc. I've been trying for months now to get TC (both the Minister and his staff) to explain the logic behind this, and can't even get a response to my inquiriers. If an investigative journalist was willing to spend the time required to peel this whole thing back a bit and have a look, they would have quite a story!
  11. Aloha Eric from Toronto, Canada writes: Doug, I see the strange relationship as well!

    The RIV just made an amendment on Feb 22, 2008 to their admissable vehicle listing to include the following disclaimer:
    "Manufacturers of U.S. vehicles are not legally obligated to respond to Transport Canada’s requests for information on admissibility status. For those vehicles they deem not admissible, they are not legally required to explain the reasons for inadmissibility but some do. Transport Canada is not legally responsible for the accuracy and safety implications or cost implications of the information provided by the manufacturers (OEMs). "
    http://www.tc.gc.ca/roadsafety/importation/VAFUS/list/Explanations.htm
  12. Doug Morrison from Edmonton, Canada writes: Eric it is actually even worse than that. CANADIAN auto manufacturers (the Canadian division of the manufacturer) don't have to provide Transport Canada with any explanation for some of their ridiculous rules. Believe me, I have tried on numerous occasions to get explanations, and Transport Canada staff refer me back to the manufacturer. And as I mentioned previously, my attempts to escalate within TC have not been successful.
  13. Aloha Eric from Toronto, Canada writes: Doug, the rules in the motor Vehicle Safety Act are clear: Vehicles purchased in United States (2) Except as otherwise provided by the regulations, a vehicle that has been sold at the retail level in the United States and that fails to satisfy an applicable requirement of section 5 or 6 may be imported into Canada notwithstanding that section if the person importing the vehicle makes a declaration in the prescribed form and manner that, before the vehicle is presented for registration under the laws of a province, the vehicle (a) will be made to conform to that requirement, and (b) will be certified in the prescribed form and manner to so conform by such person as may be designated by the regulations. Compliance by all persons importing vehicles Section 6. No person shall import into Canada a vehicle of a prescribed class unless the requirements of paragraphs 5(1)(a), (b), (d) and (e) are satisfied in respect of the vehicle. VEHICLE AND EQUIPMENT STANDARDS Section 5. (a) the vehicle or equipment conforms to the standards prescribed for vehicles or equipment of its class at the time the main assembly of the vehicle was completed or the equipment was manufactured; (b) evidence of such conformity has been obtained and produced in the prescribed form and manner or, where the regulations so provide, in a form and manner satisfactory to the Minister; (d) prescribed information is marked on the vehicle or equipment in the prescribed form and manner and on the prescribed place; (e) where required by the regulations, prescribed documentation or prescribed accessories accompany the vehicle or equipment; http://www.tc.gc.ca/acts-regulations/GENERAL/m/mvsa/act/mvsa.html#VEHICLE%20AND%20EQUIPMENT%20STANDARDS
  14. Aloha Eric from Toronto, Canada writes: Only Section 5(b) of the Act would apply; "evidence of such conformity has been obtained and produced in the prescribed form and manner or, where the regulations so provide, in a form and manner satisfactory to the Minister."

    RIV states: "Manufacturers of U.S. vehicles are not legally obligated to respond to Transport Canada’s requests for information on admissibility status. For those vehicles they deem not admissible, they are not legally required to explain the reasons for inadmissibility "

    So the prescribed form and manner satisfactory to Transport Canada is obviously whatever the auto manufacturers deem it to be.
  15. D O from AB, Canada writes: It's about time someone tried to get some answers out of TC on this issue as everything I have read says that there is a lot of finger pointing, but no accountability (although do you really think we are going to get a resolution in the end??) Pre 2007 I have imported two used 911's without any problems - the RIV list was fairly static - then suddenly we have 8 changes in the list since Nov'07?? (see carswithoutborders site). A family friend was mid-import of 5 series BMW in late Nov when BMW suddenly pulled the list (which had been there for years) and switched to the pay us/call us to figure out if you can import the car.....he called the dealer as the car was enroute under to premise that it was admissable (as it was on the list at the time it was published), the dealer couldn't tell him what needed to be done, but could give him an estimate of $3-$4K (even though he didn't know what needed to be done)...prior to the BMW switching up the game plan, all that was needed was DRL's and ensure the Speedo had KM/hr.......since all of these US vehicles are suddenly inadmissable, perhaps our American friends should be forced to leave them at the border when the come to Canada, as we might be endangering the lives of us poor Canadians whom can't drive those same vehicles by just sharing the road with something that has a slightly more stringent bumper standard (this is even debateable), speedo in MPH or DRL's (which I believe are now standard in the US anyhow), or that special US only immobilizer (does the Cdn version come wrapped in a blanket to stay warm for and extra $10K).....it is time to harmonize the rules and do away with the list altogether.......and to keep hearing that our vehicles get special treatment for the cold climate is a joke too - I don't recall the Northern states being Florida like year round.
  16. b c from Calgary, Canada writes: Congrats to the Globe and Mail for having the balls to do this story. It is quite clear that most newspapers in Canada are too worried about losing the considerable advertising revenue they receive from auto manufacturers to even touch this one. Everyone has been talking about it for months now, great to see the media finally jumping on it.
  17. jay wood from Edmonton, Canada writes: I have read that about 60 - 70% of car sales go to brand loyal customers. Thus, much less advertising $$$ has to be spent on these buyers to attract them to the dealerships. I am sure at least half of the people who are importing BMW's and MB's from the U.S. are most likely unable to afford buying them in Canada, with the other half being those who actually value their hard earned $$$ enough that they can't justify spending the extra thousands of dollars for the pleasure of buying in Canada. So, instead of embracing these "new to the brand" customers who may, some day, buy a new BMW or MB here in Canada (due to "brand loyalty"); BMW and MB choose to confuse, frustrate, alienate and, quite frankly, rip them off with unnecessary charges for simple paper work and non-required vehicle modifications.

    If the intent is to protect their Canadian dealerships sales territory, I have to ask: How much money are the dealerships not getting from lost maintenance/service revenue?
  18. Serge Bergeron from Cornwall, writes: It's about time - great to see this lawsuit - www.carswithoutborders.com has been raising this issues on behalf of thousands of Canadians for the last 3 months. It's time for TC to fix this mess.
  19. Robert Lamb from Kirkland, Canada writes: Hope they didn't forget Volvo in the suit, they are starting to do the same as BMW. Carswithoutborders.com has been raising these issues for months. Nice to see this going forward...
  20. Claus Dieners from Oakville, Canada writes: It's about time. I for one am sick and tired of our Government cheating us the taxpayers. I would suggest that the Prime Minister get personally involved and spend a couple of quality hours on the website www.carswithoutborders.com. End this quickly, and inexpensively by allowing the Canadian Taxpayer to decide if they want to purchase a USA car or not. Transport Canada is doing a huge disservice to Canadians, and RIV needs to be replaced since they are not doing their job. Who in our country actually believes that the cars built in the USA are not safe on our streets.

    Congratulations to the Globe and Mail for doing this story!!!
  21. Rob Leong from Calgary, Canada writes: I completely support the comments noted here. I recently imported a brand new BMW from the states in Oct 07. Fortunately for me BMW waived all the admissability and recall letter fees since my car was imported before the new rules were put in place. However, I had to fight BMW for this treatment as they still wanted to charge me fees. What annoys me most is that after 3 months negotiating with BMW and getting my recall letter, I took my car in for the required safety inspection at Cdn Tire, it took Cdn Tire 30 mins to tell me my vehicle passed Canada safety and car standards. Thanks to BMW, they added 3 months of wait time (legally you have 30 days to register your vehicle after purchase) before I registered my vehicle in Alberta. Isn't that 3 months of loss car registration revenue for the government? The government needs to weigh in on this issue because they too are losing revenue from the car manufacturers imposing these ridiculous new car import rules.
  22. D J Dyck from Canada writes: I just imported a 2004 BMW 325 xi. The price difference was is the 10-15 thousand range. I'm with Jay Wood on this one in that I felt I was made to feel unwelcome into the BMW family and I've vowed to boycott them for their crappy attitude and complete lack of respect.
    You had a chance to make a friend but chose to make an enemy instead. Your loss, I promise you.

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