Ontario car dealers call for tax rebates to spur sales

New car dealers in Ontario are calling for the governments of Canada and Ontario to give tax rebates for three or six months to help get more people into showrooms and stimulate vehicle sales.

Geoff Wilkinson, the executive director of the Ontario Automobile Dealer Association, said Sunday night his members have a mixed outlook for 2009 because of the current weak economic conditions.

"But if we could see tax rebates for consumers and affordable credit programs, they'll better cope within this economic climate," he said.

Wilkinson said the Ontario government brought in a tax rebate in the 1980 Ontario budget in order to move 1979 vehicles.

"Showroom traffic improved immediately and more than 17,500 rebates resulted." Wilkinson said. "And there were no serious repercussions on 1980 model car sales."

The call from the car dealers comes just days after the U.S. government unveiled a $17.4-billion US bailout plan for the Detroit Big Three automakers. The governments of Canada and Ontario pledged $4 billion in emergency loans Saturday to support the Canadian subsidiaries of U.S. automakers Chrysler and General Motors.

On Monday, federal Industry Minister Tony Clement was asked about the dealers' request for short-term tax rebates

"We've got a budget coming up and there will other things that can be contemplated," Clement told CBC.

"I can tell you what we have announced, which is we understand that people need credit to buy cars, and auto dealers need to continue to sell cars," he said.