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Tories consider cash program to get clunkers off Canada's roads

By: Staff Writer

Posted: 07/5/2009 1:00 AM | Comments: 0 (including replies)

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CALGARY -- Environment Minister Jim Prentice said Saturday he's reviewing whether Canada should follow the U.S. and several European countries in offering consumers a financial incentive to scrap their clunkers and buy new vehicles.

Prentice said he's met with a number of auto manufacturers over the past few months to discuss the prospect of giving Canadians $3,500 to trade in their older, polluting vehicles.

Makers and sellers of cars have been aggressively lobbying Ottawa to adopt the measure, contending it will significantly boost sales in the sagging auto sector while reducing greenhouse gas emissions.

Pressure has mounted since U.S. President Barack Obama signed a cash-for-clunkers program worth up to US$4,500 into law last month.

However, Prentice said before making a decision on whether the federal government would adopt a similar incentive, he wants to evaluate the effectiveness of an existing program, which offers modest rewards that vary across the country.

In Alberta, drivers who scrap vehicles made in 1995 or earlier can get up to $490 for a bicycle, up to a year's worth of monthly transit passes, or $300 cash.

"We have a limited program that's in place now that was frankly put in place before the recession began. It was directed at getting clunkers off the road. It wasn't really designed as an economic-stimulus package," said Prentice, who was in Calgary for the stampede.

Prentice suggested a decision on whether to offer clunker-driving Canadians more lucrative rewards to buy new cars will be made within 60 days. He said the cost of upping Ottawa's enticement will play a significant factor.

The Harper government is forecasting a $50-billion deficit in its 2009-10 budget, which is rich with spending on infrastructure in a bid to stem job losses during the recession.

The U.S. government has authorized US$1 billion for its cash-for-clunkers program, which ends Nov. 1, while Germany has budgeted five billion euros, or $8.1 billion Cdn, and recently extended its deadline to Dec. 31.

"It's an enormous public subsidy for the purchase of new cars," Prentice said.

Liberal Leader Michael Ignatieff expressed support Saturday for the program, as long as it was offered at the right price -- but he wasn't specific: "Getting clunkers off the road might stimulate the auto market, but it has to be sensible."

-- Canwest News Service

Republished from the Winnipeg Free Press print edition July 5, 2009 A7

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