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Drive Clean Reforms are Good News For All
In last week?s Throne Speech, the Liberal government made an announcement that didn?t receive a lot of publicity. But if you drive a vehicle in Ontario, or if you?re a new car dealer in this province, one particular item probably caught your attention.
The Liberals stated that the Ontario Drive Clean program ?will be reformed to end this waste of Ontarian?s time and money.? This is good news for dealers and car owners in this province. I can?t tell you how many repair centres have lost on this program since it was introduced by the Conservative government in 1999.
This decision to reform the Drive Clean program was not unexpected. A year ago, the Provincial Auditor released a report that condemned the program as inefficient. The report said that the Liberal government lacked much of the information it needed to efficiently oversee Drive Clean operations.
At my dealership, I scrapped the Drive Clean program about a year ago, because I was fed up over the constant breakdown of the testing equipment, the ongoing expense in maintaining the equipment, and the huge revenue losses incurred over the years. Other dealerships have shut down their programs as well.
The Ontario Drive Clean program ? for those who aren?t familiar with it ? requires all vehicles to be tested every two years for exhaust emissions in accordance with provincial standards. The testing begins in the third calendar year after the model year of the vehicle, and continues up to and including the 19th calendar year after the model year.
A recent evaluation of the Drive Clean program concluded that the program for light duty vehicles has reduced smog causing pollutants and that those reductions are consistent with other emission programs across North America. The evaluation also recommended some key changes to the Light Duty Vehicle program in order to increase its effectiveness. Some of these recommendations include:
- Exempt two additional new vehicle model years ( four and five year-old vehicle) as opposed to three year-old and newer);
- End the 20 year exception for older vehicles (test 1981 and newer vehicles);
- Retain the Drive Clean test for all vehicles that are for resale;
- Require annual testing for vehicles that failed the initial emissions test of their previous Drive Clean inspection;
- Increase the repair cost limit to $600 (currently it?s $450);
- Provide repair subsidies for, and incentives for early retirement of, vehicles that fail the Drive Clean test;
I applaud the Liberal government for commissioning this report and for its desire to reform the Drive Clean program. The aim of the program, from the beginning, has been to reduce harmful exhaust emissions into the environment. In theory, that?s great. But in reality, today?s cars already meet provincial emission control standards. Testing newer vehicles every two years is a complete waste of time and money for everyone involved.
Car owners detest the Drive Clean program because it costs them money, because it?s a nuisance, and because most cars pass the test. In fact, 99 per cent of all newer vehicles pass the emissions test with flying colours; that figure was confirmed in the Throne Speech.
There has always been a misconception that dealerships reap huge profits from Drive Clean. Let me set the record straight ? Drive Clean is many things to new car dealers, but profitable isn?t one of them. Admittedly, a few dealers are satisfied with their investment in Drive Clean. But, the majority of dealers who bought into the program have huge reservations and regrets about the program.
Consider the facts:
- Accredited repair centres charge customers a flat rate of $35 for an emissions test. This fee is set by the government, not by independent businesses;
- The government agency that runs Drive Clean receives $11.67 of that $35;
- The remaining $23.33 goes to the dealership;
- Of that $23.33, $10 goes to the technician, while the remaining $13.33 is left to cover all of the operating expenses, including insurance, software, spare parts, depreciation and fixed overhead;
- Drive Clean testing equipment costs $55,000 - $80,000. Most dealerships that bought into the program have not come close to earning back their initial investment, let alone turn a modest profit.
In the five years that Drive Clean was installed at our dealership, roughly 100 vehicles failed out of thousands that were tested. The vehicles that failed were usually given a conditional pass and allowed to drive away.
Many critics and government observers have referred to this Liberal Throne Speech as a ho-hum affair ? lacking in substance, short on surprises and new promises. Well, the reformation of Drive Clean is important news for the retail new car industry. The Liberal government should be congratulated for finally recognizing Drive Clean needs to be reformed.
If the Liberal government were to ever pull the plug on Drive Clean altogether, there would be a collective sigh of relief from car owners who would be relieved of this unnecessary tax burden at last. Most new car dealers would concur.
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Paul Stern is President of the Toronto Automobile Dealers Association and is a new-car dealer in Toronto. E-mail comments to president@tada.ca
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