1. CIAG The Collision Industry Action Group The Provincial Trade Association for Ontario The State Of the Industry In Ontario CCIF Mississauga January 21, 2006

2. Contents  Organizational Chart  Objective  Mission  Priorities  Mandates  Small Business Climate  Current Industry Climate  Industry Issues  CIAG Today  Making A Difference

3. Organizational Chart NorthernSouthernWesternEastern Provincial Board of Directors Executive Board of Directors Central I ndustry Stakeholder Advisory Council CIAG Head Office Support Executive V.P.

4. Objective The NEW CIAG is committed to a provincial trade association built by the people, for the people. “Your Industry, Your Future, Your Voice!” An all-encompassing organizational model ensures every region within the province is given an opportunity to address regional issues and concerns, working collaboratively with experienced and knowledgeable industry leaders from across the province.

5. Mission CIAG exists to further advance the legitimacy and positioning of the collision repair trade within the industry and amongst mainstream circles.

6. Priorities PROVINCIAL TRADE UNIFICATION ON STANDARDS FOR REPAIR COLLISION REPAIRER WELL-BEING CONSUMER PROTECTION

7. Mandates Unification of the industry Dedicated to working with those that have a vested interest in the automotive collision repair industry Dedicated to the proliferation of progressive initiatives that will serve to strengthen and legitimize the collision repair trade and industry

8. Small Business Climate  Overall profitability decreasing dramatically FACT: The Automotive Repair and Maintenance industry has seen a steady decline in net operating profit margins since the turn of this century. 1999: 11.9%2000: 12.8% 2001: 10.5%2002: 6.0% 2003: 5.2% Source: Stats Canada

9. Small Business Climate  Operational costs rising Major Business Factors Affecting Performance in the Past 12 months :  Access to bank financing  Market wages  Labour availability  Insurance premiums  Energy prices (Source: CFIB, Quarterly Business Barometer, December 2005)

10. Current Industry Climate  Operational costs rising FACT: 2006 WSIB premium increase of 3.9% and insurable earnings rising to $69,400. FACT: Minimum Wage has increased from $7.15 in 2004 to $7.75 in 2006; going to $8.00 in February 1, 2007. FACT: Insurance premiums for property and liability coverage increased up to 30%. FACT: Increased property taxes. FACT: In 2004 - 2005: The average hourly wage for trades (in general) increased by 2.4%. ** no benefits or pension ** Source: Stats Canada

11. Current Industry Climate FACT: In 2005: The average hourly wage for an auto manufacturer assembly linesman was $28 per hour (excluding benefits and shift work premiums)  Consumer Price Index: (Cost of Living) 1995: 104.22000 :113.5 (+ 9.3%) 2004: 124.6 (+ 11.1%) 2005:127.5 (+ 2.9%)  Ontario Collision Repair Facilities must increase journeymen wages by 4% - 6% to stay competitive and not lose skilled workers to other industries. Source: Stats Canada

12. Current Industry Climate  Service profit margins decreasing FACT: Negotiation trends between collision repairers & insurers include: A. Discounts on parts B. Volume discounts C. Guaranteed severity D. Rental concessions E. Free storage F.ALL OF THE ABOVE!

13. Current Industry Climate  Collision repair volumes decreasing FACT: Auto Insurance Claims Frequency compared to 2001:2003: 40% 2004: 30% 2005: 25% FACT: In 2005 some insurers downsized DRP lists FACT: # of Total Losses FACT: In 2005 towing chasers increased across the province

14. Current Industry Climate  Traditional collision work sources are changing  Volumes are not improving by much, therefore shops must look for alternative markets. Retail Charging Retail Door Rate, (instead of Wholesale Rate) Menu Pricing Online Services, i.e. Appointment Scheduling, production updates Creative marketing

15. Current Industry Climate  Formula For Success A)Overhead Costs Labour Rate B)Labour Rate Profit Margins drive drives

16. Industry Issues Industry issues which may adversely affect business  Consolidation of reporting regulations to provincial government  More stringent guidelines to controlling VOC’s  No standardization of claims and repair processing  New regulations introduced without industry sector input

17. CIAG Today  Currently working with Provincial Government on 3 program initiatives that aim to: –Centralize ministerial regulatory requirements –Streamline new environmental emissions requirement in an effort to minimize cost factor to repair facilities –Educate consumers on their rights; and moderate conflict resolutions, as they relate to the collision repair industry

18. CIAG Today  Currently Government lobbying for: Provincial legislation to mandate towing tenders across Ontario and criminalize chasing Provincial legislation mandating business license at provincial level with effective enforcement Provincial legislation to rescind the PST Remittance for material costs and double taxation

19. CIAG Today  Currently Industry lobbying for: Standardization of claims and repair processing by insurers and collision repairers Inclusion of “Not Included” items as part of blueprint Validation by estimating data system providers of numbers and application methodology

20. CIAG Today  Currently Consumer lobbying to: Restore consumer confidence in the industry Educate consumers on the repair process and their rights as part of the service contract

21. Making A Difference What is integral to securing a future for the collision repair industry in Ontario is not short-term solutions and concessions; Instead it is the establishment of a solid and stable infrastructure for the industry-at- large; one that will promote positive change, support standardization, and will lead to the longevity of the trade, and the opportunity of prosperity for ALL… CIAG Thank YOU Your Industry, Your Future, Your Voice