A new report, released by the Motor Vehicle Retailers of Ontario (MVRO) with support from the Canadian Automobile Dealers Association (CADA), highlights the “crisis” facing car and truck retailers in Ontario: the shortage of skilled trades and technicians available to work in dealerships.
“We knew we had a problem, because our members were telling us about it, but we didn’t know to what extent,” said Todd Bourgon, MVRO’s Executive Director in an interview with Canadian auto dealer. “With 3,000 skilled trades vacancies, that’s a major problem — that’s crisis mode.”
The report, researched and written by MNP, found that as of the first quarter of the year there were more than 3,000 vacancies in the automotive trades in the province. Before COVID, there were around 1,500.
Between 2016 and 2021, the number of technicians and mechanics aged 15-24 years old dropped by 2 per cent, while the 25-54 age group was down 8 per cent. The 55-plus group increased by nearly 13 per cent.
“Just about every new car and truck retailer I speak to can’t hire an automotive technician today. We know there is a massive shortage of automotive technicians, and the problem won’t be solved overnight,” said Bourgon in a press release to introduce the report.
MVRO said that depending on their labour rate, the estimated annual revenue loss of one technician vacancy is $429,600-$644,440 per year.
But the problem isn’t just impacting dealer revenues. The report says that, with the average wage of automotive service trades being between $60,000-$80,000 annually, each skilled worker vacancy is costing Ottawa about $7,000-$10,000 in federal income tax and $3,500-$5,000 in provincial tax each year.
To help fix the problem, MVRO has been actively recruiting skilled technicians from the Philippines. The challenge is the system of getting techs approved and relocated to Canada goes too slowly, and there are needless hurdles and red tape. “To fix the problem we need to recruit overseas,” Bourgon told Canadian auto dealer. “The school system takes three to four years to train someone, and immigration will continue to be a factor to help us solve this.”
To bring employees from overseas as part of the Temporary Foreign Worker (TFW) program, dealerships have to first undertake what is called a Labour Market Impact Assessment — or LMIA, to prove there aren’t workers available locally. “This takes a lot of time and money,” said Bourgon, adding a minimum of two-three months of delays to getting foreign workers into dealership service bays.
Bourgon said he hopes the data in the report, showing the extent of the problem, will help convince the federal government to temporarily waive the LMIA requirements for the auto sector. MVRO estimates that 20-30 per cent (up to $9,000) of the TFW costs are associated with the LMIA process.
Bourgon said the search for talent is a global one, and countries like New Zealand and Australia, for example, are winning the talent war because candidates can get approval to work there in a matter of months — not a year or 16 months of waiting to get approved to work in Canada.
Tim Reuss, President and CEO of CADA, said the problem is not Ontario specific. “CADA was pleased to support this report and establish a baseline for what needs to be done in order to solve the ongoing automotive skilled trades labour shortage,” he said. “Retailers in every province tell me they can create jobs if they could find technicians to fulfill them.”
Another key reason MVRO conducted the study was to provide a valuable service for their dealer members. “It’s the first time we’ve ever done a labour market study in our history. It gives our dealers a data-driven crystal ball so they can plan their talent acquisition.”
Bourgon said the data will also be useful in showing students and other potential skilled workers about the job opportunities in automotive in Canada.
The report will soon be available for MVRO members.
