Mon, December 8, 2008

Bud Polhill has been fixing cars for 40 years. Now, he has an idea that could help fix Canada's sputtering auto industry.

Polhill, a controller on London city council, is calling on the federal and provincial governments to eliminate the GST and provincial sales taxes on new vehicles.
He said eliminating the two taxes, totalling 13 per cent, would be a strong incentive to get sales moving again.

"The car dealers can give all the discounts they want, but people would rather beat the government on the tax."

Polhill said the Ontario government used the same tactic during a recession in the early 1980s, giving consumers a break on the sales tax paid on vehicles.

"It's something that has been done before and it has worked before," he said.

Last year, the Saskatchewan government eliminated provincial sales tax on used cars.

Polhill, who owns an auto repair shop, said his contacts in the industry have grave concerns about the future of the industry in North America.

Polhill's suggestion comes as the Detroit Three automakers seek $6.8 billion in loans and credit from the federal and provincial governments.

In the U.S. yesterday, President-elect Barack Obama expressed support for short-term aid to carmakers there.