COVID-19 was the ultimate disruptor for a wide variety of markets in industries across the world, one of the most notable being the luxury car market.
Delayed production, material and product shortages, decreased supply and an eventual high demand all had a significant impact on the luxury car market. But as the industry and luxury car enthusiasts alike shifted, the market saw a change in trends, showing us what competition, innovation and the human ability to pivot and adapt can do for any industry.
After the initial shock to the market, the accelerating evolution of tech has given those in the high-end, luxury vehicle market reason to be cautiously optimistic. These are the ups, downs and trends of the luxury vehicle market as a result of the pandemic.
The Rise of Contactless Luxury Vehicle Services
Manufacturing and sales of luxury vehicles were deeply affected by COVID-19, as were related industries, who also had to change the way they delivered their services.
Low Contact Buying, Selling & Maintenance
Virtual showrooms were well established long before COVID-19 but saw a spike in popularity. After the coronavirus forced the shutdown of in-person retail and auto sales, the luxury auto market, like many others, saw sales drop off a cliff. But we also saw the rise of buy, sell and trade forums for all types of vehicles in that time.
With the easing of restrictions, dealerships addressed social distancing requirements by using a mix of virtual tours with sales staff and by-appointment, in-store sales. Service bays and mechanic shops remained open as essential services, with increased emphasis on limited numbers and social distancing.
Contactless Valet Parking
While parties, events, shopping malls and indoor dining were put on hold at first, luxury vehicle services like valet parking also had to adjust to address safety concerns. Valet companies had to pivot or cease to exist. For example, Gatsby Valet parking in Toronto, who only service high-end events and luxury vehicles, now provide safer experiences and peace of mind with contactless valet parking, social distancing and sanitizing of each vehicle.
Effects on the Present and Future Luxury Vehicle Market
The worldwide luxury car market reached 449.7 billion (USD) in 2019 and, after a noticeable drop in 2020 and 2021, is forecasted to experience a CAGR of 9.3% until it hits 665 billion (USD) by 2027.
The decrease in sales is understandable given the uncertainty in the early days of COVID-19 and the emphasis on financial stability. But remote work, increased importing fees and evolving technology also created higher expectations of a luxury vehicle’s ability to improve quality of life.
What this means for standard luxury brands like Mercedes, BMW, Volvo, etc., is increased competition to raise brand image by integrating AI-powered features such as personal voice assistants, retina recognition and the expansion of autonomous driving capabilities.
That competition to innovate combined with more disposable income thanks to less transportation, entertainment and vacation spending are two of the key factors driving the resurgence of the luxury vehicle market moving forward.
The Rise of Eco-Friendly Transportation
Internal-combustion-propelled vehicles still dominate demand and sales of the luxury vehicle market, but the race to provide reduced- and zero-emission vehicles that deliver the performance expected of luxury vehicles also caused a rapid increase in market share for the electric car segment. Mainstream adoption of high-end electric vehicles is expected to continue accelerating that growth.
Unfortunately, in Canada, government incentives for purchasing electric vehicles are limited to vehicles with an MSRP under $55,000 for six seaters (or smaller) and $60,000 for vehicles with seven seats or more. The list for eligible vehicles currently includes BMW’s i3 and 330e.
Increased Demand for Used Luxury Vehicles
Just as they did with high-value real estate, increased wealth, historically low interest rates and convenient and accessible financing options created an instant increase in demand for used luxury vehicles, especially those coming off one- and two-leases, which shows no signs of slowing.
Also contributing to this trend is the increased competition for higher-quality standards by luxury brands and incentives like extended warranties that elevate consumer confidence in used luxury vehicles.
Potential Inhibitors of Market Growth in the Luxury Car Industry
Under pre-COVID market conditions, the cost of purchase and maintenance were inhibitors to market growth of high-end vehicles. Those concerns have been slightly amplified due to the unpredictability of the pandemic and its impact on global supply chains and may hamper sales depending on how these issues play out.
Here’s a list of some things that will or will not be operating in Hamilton, Burlington and Niagara Region.
Administrative offices: Offices are closed on Friday and Monday.
Licensing and bylaw services: Licensing and bylaw phone queue line will be closed on Friday and Monday. Service will resume on Tuesday.
Green bin, garbage and recycling: No collection on Good Friday. Friday’s pickup will occur on Saturday (March 31). Monday will be a regular collection day (April 1). The city says all materials must be at the curb by 7 a.m. Community recycling centres and transfer stations will be closed Friday and Monday.
HSR bus: Buses will operate on a Sunday/holiday schedule Friday and a regular schedule on Monday.
GO Transit: Trains and buses are operating on a Sunday schedule Friday.
ATS DARTS: Service will be operating with holiday service hours on Friday and Monday. Subscription trips on DARTS, with the exception of dialysis, are cancelled for Friday and Monday. ATS customer service will also be closed on Friday and Monday.
Ontario Works: The program, including the special supports, will be closed Friday and Monday. Phone service will resume on Tuesday.
Recreation centres: Closed on Friday and Monday.
Hamilton civic museums: Dundurn National Historic Site, the Hamilton Military Museum and the Hamilton Museum of Steam and Technology will be closed on Friday and Monday.
Tourism Hamilton visitor information centre: Closed Friday to Monday.
Hamilton Public Library: All HPL branches are closed on Good Friday, Easter Sunday and Easter Monday. Branches are open on Saturday and regular hours resume Tuesday, April 2
Social services: All Ontario Works offices, special supports and the housing services office will be closed on Friday and Monday.
Senior centres: Closed Friday and Sunday. Senior clubs will be running modified program schedules from Friday to Monday.
Arenas: Closed to public programming Friday, Sunday and Monday.
Animal services: Closed Good Friday, Sunday and Easter Monday.
Canadian Warplane Heritage Museum in Mount Hope: Open Good Friday, Saturday and Easter Sunday. Closed Easter Monday.
Burlington
Government offices: Local government such as city hall, municipal offices and facilities will be closed on Good Friday and Easter Monday.
Administrative services: Services including parks, roads and forestry will be closed on Friday and Monday. Only snow removal and urgent services will be provided.
Animal Shelter and Control: Closed all weekend, Friday through Monday. Emergencies can be called in to 905-335-7777.
Recreation centres: Some city pools, arenas and community centres will be operational on a limited schedule. Visit burlington.ca/dropinandplay for details. Some outdoor recreation facilities will also be open, weather permitting. Visit burlington.ca/outdoorplay for more information. Tyandaga Golf Course will be closed. The tentative season opener is set for April 6.
Halton Provincial Offences Court: Closed on Friday and Monday.
Free parking: Available Friday and Monday in the downtown core in municipal lots, on-street and in the parking garage, however, the Waterfront parking lots (east and west) do not provide free parking on statutory holidays. Parking exemptions are required to park overnight on city streets and for longer than five hours. Visit burlington.ca/parkingexemptions for more.
Burlington Transit: Transit will operate a holiday schedule Sunday. The downtown transit terminal, specialized dispatch and the administration office will be closed on March 29. Monday is a regular schedule.
Niagara Region
Government offices: City halls, the Enterprise Centre and administration offices are all closed on Good Friday. Some offices, like St. Catharines, will reopen on Easter Monday.
Parks, recreation and culture services: All City recreation centres are closed on Good Friday and Easter Sunday. Administration offices are all closed on Friday. Some will be closed on Monday. St. Catharines Kiwanis Aquatics Centre is closed Friday, but open on Saturday. Seymour-Hannah Sports and Entertainment Centre is closed Friday, but open regular hours through the weekend and Monday.
Community centres: All older adult centres and arenas will either be closed or have reduced hours on Friday, Sunday and Monday.
St. Catharines Museum; Welland Canals Centre: Both facilities will be closed on Good Friday but open the rest of the long weekend between 9 a.m. to 5 p.m.
Niagara Regional Transit: Both St. Catharines and Niagara Falls buses will operate on a holiday schedule for Good Friday. Regional, Fort Erie and Welland service will not be running Friday. The agency will have regular hours on Easter Sunday and Monday.
Canada Post: No collection or mail delivery on Monday. Most post offices operated by the private sector will also be closed during business hours.
Grocery stores: Major grocery stores like Fortinos, Metro, FreshCo and No Frills will be closed on Good Friday and Easter Sunday.
Shoppers Drug Mart: Some locations in the city will be open on Good Friday and Easter Sunday, but not all. Holiday hours can be seen on the Shoppers store locator map.
Rexall: Some outlets are open on a holiday schedule, but not all. Visit the Rexall website for store hours.
Malls: All major shopping centres in Hamilton, Burlington, St. Catharines and Niagara Falls will be closed on Good Friday. Exceptions include:
Outlet Collection at Niagara Falls: Open from 10 a.m. to 6 p.m.
CF Toronto Eaton Centre: Open noon to 7 p.m.
Toronto Premium Outlets in Halton Hills: Open Friday from 9:30 a.m. to 7 p.m. and Sunday from 11 a.m. to 7 p.m.
Pacific Mall in Toronto: Open between 11 a.m. and 7 p.m.
Vaughan Mills will be open from 11 a.m. to 7 p.m.
In Toronto, retailers in designated tourist areas such as Yorkville, downtown Yonge, Queen’s Quay West and the Distillery District can stay open Good Friday, according to City of Toronto bylaws.
Walmart: All Walmarts in the GTHA will be closed Good Friday and Easter Sunday except the Niagara Falls Supercentre on Oakwood Drive, which is open between 7 a.m. and 11 p.m. on those days.
Alcohol
The Beer Store: All stores will be closed Good Friday and Easter Sunday.
LCBO: All stores will be closed Good Friday and Easter Sunday.
More on Canada
Wine Rack: Most Hamilton locations will be closed on Good Friday and Easter Monday except for the Wilson Street West location in Ancaster and the Guelph Line outlet in Burlington.
Wilson Street will be open Noon to 5 p.m. on Good Friday and 11 a.m. to 6 p.m. on Easter Sunday. Guelph Line will open 10 a.m. to 6 p.m. on Friday and Sunday.
Tourist destinations
Niagara Falls: Some Niagara Falls attractions are closed during the early spring, including the Whirlpool Aero Car and Wildplay Whirlpool Adventure Course, and the White Water Walk.
However, some, like the Niagara City Cruises, Journey Behind the Falls, Niagara Falls History Museum and The Exchange, and the Niagara Power Station are open and will be operating on Good Friday and Easter Sunday. Hours of operation can be seen on the Niagara Parks website.
The Butterfly Conservatory will be open on Good Friday and Easter Sunday between 10 a.m. and 6 p.m.
Toronto: Most Toronto attractions are either closed or have adjusted hours on Good Friday and Easter Sunday.
The Hockey Hall of Fame will be open from 10 a.m. to 5 p.m.
The Toronto Zoo will be open from 9:30 a.m. to 6 p.m.
The Ontario Science Centre will be open from 10 a.m. to 5 p.m.
Ripley’s Aquarium will be open from 9 a.m. to 11 p.m.
The Art Gallery of Ontario will be open from 10:30 a.m. to 4:30 p.m.
The Royal Ontario Museum will be open from 10 a.m. to 5:30 p.m.
The Aga Khan Museum will be open from 10 a.m. to 5:30 p.m.
The Canada Revenue Agency (CRA) is hitting pause on a new “bare trust” reporting requirement with just a few days remaining before the deadline.
New reporting requirements for such trust arrangements were introduced for the 2024 tax season. Anyone with a bare trust was required to file a T3 tax return form naming the trustees, beneficiaries and settlors of each trust by April 2.
But on Thursday — with four days before the deadline to file — the CRA announced that it would be pausing the reporting measures.
“In recognition that the new reporting requirements for bare trusts have had an unintended impact on Canadians, the Canada Revenue Agency will not require bare trusts to file a T3 … for the 2023 tax year, unless the CRA makes a direct request for these filings,” a statement released by the tax agency said.
John Oakey, a vice president with the Chartered Professional Accountants of Canada, said the government hasn’t done a great job of communicating the changes.
“There’s no advertising from the government saying these are coming. You don’t see an ad on the television. You don’t see ads in magazines,” he said.
“The only way that individuals are really finding out is from advisers, financial institutions … people that are already aware of these rules.”
No definition of ‘bare trust’ in Income Tax Act
There is no definition of a bare trust in the Income Tax Act. The CRA defines a bare trust as “arrangement under which the trustee can reasonably be considered to act as agent for all the beneficiaries under the trust with respect to all dealings with all of the trust’s property.”
Unlike express trusts, where people seek out a lawyer to create a trust, bare trusts can happen almost accidentally — when a parent cosigns a mortgage for a child and becomes partial owner, or when an aging parent puts their kids down as partial owners of their house in anticipation of an impending death.
Oakey said a bare trust could also be something as simple as a shared bank account.
“If I put my name on [my parents’] bank account in order to help them pay their bills, that creates a trust relationship,” he said.
“I have no real control over the asset. I still have to adhere to their wishes. All I’m doing is acting as an agent on their behalf to do whatever they want me to do.”
In those cases, the bare trust does not earn any money for the trustee to report in a given tax year.
Even though Canadians wouldn’t have been taxed on a trust’s value, failure to report being a member of a bare trust could have resulted in a fine of $2,500, or five per cent of the value of all property in the trust, whichever is higher.
The requirement was meant as a way to crack down on tax avoidance. Corporations and wealthy individuals sometimes hold properties in bare trusts so they can avoid paying property transfer taxes. Oakey said the move was also likely an effort to crack down on money laundering.
The CRA said it would be working to “to further clarify its guidance on this filing requirement” over the coming months.
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Published Mar 28, 2024 • Last updated 6 hours ago • 3 minute read
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The Canadian economy surprised to the upside in January, posting its strongest monthly growth in a year, which could keep the Bank of Canada “on its toes,” say economists.
Real gross domestic product (GDP), which measures the value of goods and services produced during a specific time frame, edged up by 0.6 per cent in January, according to Statistics Canada, beating analysts’ expectations of 0.4 per cent. The agency also expects a 0.4 per cent rise in GDP during February.
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“To put that two-month flurry of growth into perspective, the combined one per cent gain is as much as the economy grew in the entire 12 months of 2023,” Bank of Montreal chief economist Douglas Porter said in a note. “After a prolonged lull through much of last year … the economy looks to have caught some strong tailwinds early this year.”
The rise in GDP was due to broad-based growth in 18 of the 20 sectors measured by Statistics Canada.
The public sector, which includes education, health care and social assistance and public administration, increased 1.9 per cent in January, following two consecutive monthly declines. Education, which grew by six per cent, was the largest contributor to the country’s growth as activity rebounded from strikes by public sector workers in Quebec late last year.
Manufacturing fully recouped December’s decline in growth with a 0.9 per cent rise in January. A sudden drop in temperature in mid-January in parts of Canada contributed to increased activity in the utilities sector, which rose by 3.2 per cent, its highest growth rate since January 2022.
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The real estate and rental sector grew for a third consecutive month — by 0.4 per cent — on higher resale activity. The Greater Toronto Area, Hamilton-Burlington and most markets in Ontario’s Greater Golden Horseshoe contributed to the growth.
The information and cultural services sector, which includes the motion picture and sound recording industry, also grew for the third consecutive month, as activity continued to ramp up following the end of a strike by the Screen Actors Guild – American Federation of Television and Radio Artists in November.
These “robust” figures could pose a difficult challenge for the Bank of Canada, Toronto-Dominion Bank economist Marc Ercolao said in a note.
While the central bank has received “solid evidence” in the past two months that inflation is cooperating, “strong GDP data prints” such as today’s will “keep them on their toes,” said Ercolao, who expects the first interest rate cut to take place in July.
On the labour front, Statistics Canada said there were 632,100 job vacancies in January, down 34,800, or 5.2 per cent, from November. Vacancies in the manufacturing sector declined by 10.2 per cent to 37,500, the lowest level since September 2017.
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Monthly payroll increases were recorded in 13 of 20 sectors, led by retail trade, manufacturing and finance. But these gains were offset by a 0.3 per cent decline in construction.
The number of employees receiving pay and benefits from their employers, as measured by payroll employment, rose for the first time in the retail trade after four consecutive monthly declines.
Despite the strong start to the year, some economists expressed caution, especially regarding February’s GDP estimate.
Claire Fan, an economist at the Royal Bank of Canada, said the “substantially stronger-than-expected” numbers are partially driven by one-off factors such as the ending of the Quebec teachers’ strike, so growth isn’t likely to be sustained in the coming months.
“We’ve learned to take the advance estimates (February) with a grain of salt as they have been highly revision prone,” she said, while retaining RBC’s assessment of a weak economic backdrop.
BMO’s Porter said Canada experienced something similar last year when GDP stalled after a strong start to the year.
“There could be a serious issue with seasonality here, especially in light of much milder winters recently,” he said.
Despite the increase in GDP, most economists have stuck to their previous predictions that June will be when the Bank of Canada issues its initial interest rate cut.
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