Learn more about the fee consultations proposed by OMVIC.
Why did OMVIC not choose to stagger the fee increases over a period of years?
Financial forecast models show that increasing registration and transaction fees on April 1, 2024, is essential to achieving a financial break-even point by 2025. Second, increasing all fees on an expected date (April 1,2024) is most efficient, logistically, for systems, forms, policies and processes, and stakeholder communications.
Can fee increases be avoided by a change to OMVIC’s human resources?
A change to OMVIC’s human resources is an unlikely option as the current levels are a direct response to the Auditor General’s recommendations. The Auditor General of Ontario’s Value-for-Money Audit Report highlighted that OMVIC had not expanded resources for enforcement efforts, and staffing levels in critical areas like complaints, inspections, and registration had remained largely unchanged over the years. The audit suggested that OMVIC should conduct workload assessments to ensure it had adequate staffing to fulfill its mission effectively. Personnel investments made after the audit were essential to address the Auditor General’s recommendations; however, these investments have contributed to OMVIC facing current and anticipated operating deficits.
Would it be possible for OMVIC to implement fee increases so that all registrants, regardless of when their fiscal year begins and ends, receive notice of one full fiscal year (as opposed to the fees taking effect on the same start date for all registrants regardless of their fiscal year)? If not, why not?
It is possible; however, doing so would present significant logistical and administrative challenges and require additional human resources to re-program and re-configure OMVIC’s registration systems and tracking mechanisms for each individual registrant, given that we have around 8,000 dealers and around 30,000 salespeople, each with their own unique fiscal year start and end dates. Aligning the transaction fee increase from $10 to $12.50 with a common date facilitates effective communication with consumers.
OMVIC has been reported to have large, accumulated surpluses over the years. Why is an increase necessary?
While OMVIC had seen growth in its accumulated surpluses, OMVIC experienced a deficit in 2022 and is set to end the 2023 year in a deficit position, as well. Without a fee increase, OMVIC will fully deplete its reserves in only a few years. An organization should ideally have reserves of approximately six months of operating expenses. For OMVIC, this would be approximately $10 million dollars. However, unless fees are increased, OMVIC’s reserves will decrease to around $3 million dollars by 2025 and will be depleted by 2026.