Au revoir, ecoAUTO...

March 10, 2008 - By John LeBlanc

The federal government’s ill-fated, ill-conceived and ill-managed ecoAuto program was finally put to sleep like the lame horse it was.

If you don’t remember, ecoAuto was announced in last March's federal budget. The program provided $1,000 to $2,000 in rebates for new cars purchased with a combined fuel consumption of 6.5 L/100 km or less; new sport-utility vehicles and other light duty vehicles with a combined fuel consumption of 8.3 L/100 km or less; and new flexible-fuel vehicles with a combined E85 fuel consumption rating of 13.0 L/100 km or less. The program will formally end this New Year’s Eve.

The ecoAuto program, as fine an example of last-minute cocktail-napkin legislation as we Canadians are likely to see, was an unmitigated disaster from the get-go. It raised confusion, anger and a dangerously high use of Tylenol with Canadian automakers, retailers and customers alike. About the only folks in the industry spared from "ecoAuto-itis" were car wash attendants and valet jockeys.

Of course, as an 11th-hour attempt to mollify the green movement, ecoAuto reeked more of political pandering than conviction. It takes years to develop new technologies and vehicles in the automotive world. Unlike the new U.S. fuel rules in force in 2011 or EU carbon emission regulations in 2012, ecoAuto gave no time for Canadian automakers to adjust their products accordingly.

When you’ve lived you whole life in Ottawa as I have, you learn to understand that the road from theory to practice with politicians is like driving across the GTA from Mississauga to Oshawa — slow and long.

So I was not the least bit surprised that the program was announced without a confirmed list of eligible vehicles. Or that it took Canada’s new government six months to work out the details of getting rebates to customers. Or that the other half of the ecoAuto equation, the up-to-$4,000 so-called “green levy” gas-guzzler taxes, were being taken directly from source from day one.

Take Honda Canada as an example.

After its Fit subcompact — with a higher safety rating — missed the rebate by 0.1 L/100 km while the competing Toyota Yaris was approved, Honda Canada spent an estimated $21 million on special rebates for buyers of its Fit and Civic as a one-fingered response to the federal program.

Then, as Chrysler did with its Commander SUV, Honda spent additional engineering funds to make its cars ecoAuto friendly for 2008. Now the feds have pulled the plug. Nice.

At least ecoAuto achieved one goal: it did help put environmental sustainability into the price range of working Canadians.

Most car salespeople I know would rather cut off their right arm with a rusty butter knife than discount a low-margin subcompact $1,000.

At a grassroots level, ecoAuto did have some positive impact in getting buyers to consider something considerably smaller. Combined with repeated rises in fuel prices, by mid-summer last year subcompact and compact cars that qualified for the rebates were hard to find on dealer lots. Dodge Caliber sales were up 20 per cent, the Compass ended up as the best-selling Jeep in Canada, and Nissan Versa sales were up 17 fold.

So Canadian retailers, customers and automakers were just getting used to an ecoAuto world, when BOOM! as quick as it came, it's gone.

Sort of. Don’t think Canada’s government is willing to part with its newfound millions of tax revenue from the “green levy” on gas guzzlers. They’ll definitely carry on after Dec. 31.

In the end, how much of an impact did ecoAuto have on the environment? My guesstimate is about as much as a gnat on the windshield of a speeding Ford F450.

But in the sprit of its “freebate” program, I’m willing to give the feds some free marketing advice. Let’s re-brand the ecoAuto spade for the cash-scraping back-hoe it really was meant to be.

How do you like the new title: taxGrab?

- John LeBlanc, Publisher