Is this the best use of car sales levy?

We are a highly regulated world and things are not getting any better. I recently had a conversation with a sales manager in a local automotive dealership about an organization known as AMVIC (Alberta Motor Vehicle Industry Council).

We are a highly regulated world and things are not getting any better.

I recently had a conversation with a sales manager in a local automotive dealership about an organization known as AMVIC (Alberta Motor Vehicle Industry Council).

I had to be honest — I had never heard of them.

It turns out that AMVIC is a regulatory body designed to provide a licensing program for several elements of the automotive industry that range from sales to repair.

On the surface, it sounds like a pretty good plan, but it appears to be another money pit that likely duplicates services from government branches that handle consumer issues and complaints.

The intentions are fairly honourable because AMVIC wants to protect consumers.

But the devil is in the details.

AMVIC has been around for 13 years, according to its website. The organization derives its operating capital from licence fees that are applied to every licensed employee and business currently registered with AMVIC. It operates with 15 employees, most of whom are active complaint investigators who average about 135 investigations each per year.

The website states that they have mediated restitution settlements for Alberta consumers to the tune of $19 million since 2000. That is a pretty amazing figure, but one still has to ask whether some layer of existing government bureaucracy could have answered the bell on the complaints and got similar restitution.

The financial statements found on the AMVIC website raise questions.

The program appeared to survive on licence fees paid by individuals and businesses until they began to take on water in fiscal year 2008-09, when it lost $289,494. It lost $ 332,000 in the next fiscal year. (Labour costs rose from $854,090 in 2003-04 to $1,943,333 in 2009-10, more than double in six years.)

However, AMVIC had a plan: throw a $6.25 tax on every vehicle sold by every licensed dealer. The projections indicate that the organization will add $1,705,000 in extra revenue in the first year from levy/alternative fees and rise to $2,537,000 by fiscal year 2013-14.

The organization also predicts labour costs of $3,053,000 by fiscal year 2013-14. From $854,090 in 2003-04, labour costs will have nearly quadrupled within 10 years.

The website is only current to 2010, when there were 15 employees. It talks of plans to add two more investigators in the immediate future while adding fund administration duties to one employee because of the anticipated $1.5 million surplus by Dec.31, 2011, derived from the car tax.

The labour costs seem very high to me and fewer than 20 people employed as investigators cannot constitute the entire labour force for AMVIC. Education trainers were billed out separately to the tune of $109,200 in 2009-10, and the labour budget has skyrocketed since the inception of AMVIC.

The program has added extra paperwork, expense and headaches to the automotive sales and repair industry while delivering an extra tax to car purchasers because of AMVIC’s revenue shortfall.

But has the program has actually stemmed the tide of unscrupulous car curbers who simply avoid AMVIC and change business names and addresses when discovered by the investigators?

That is the multimillion-dollar question behind AMVIC: are they breaking new ground or were consumers already covered by existing regulatory bodies?

Jim Sutherland is a local freelance writer. He can be reached at jim@mystarcollectorcar.com.

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