What changes inside the store?
Affected-product gross, total F&I PVR, pretax profit, payroll, compliance cost and product availability.
RIA 2027 / ECONOMIC IMPACT · AUDIT CUT-OFF September 16, 2026 · OPERATIONAL SOURCE REFRESH September 19, 2026
Follow the dollar. Then measure what actually changes.
The study tracks the same transaction through the customer, dealer, lender, provider, labour and tax ledgers. Scenario arithmetic stays separate from observed outcomes.
01
THE STUDY
One transaction. Three ledgers.
The page is deliberately simple: establish where value can move, model the arithmetic, then wait for observed evidence observed after implementation before making causal claims.
What changes for the buyer?
Price, financed balance, monthly payment, contractual interest, protection, claims, cancellations and refunds.
Where does the dollar move?
Lenders, insurers, administrators, employees and governments are measured separately so transfer is not mistaken for destruction.
The proposed >30% amount-disclosure threshold is not treated as a mandatory compensation cap. GAP is modelled as an authorized motor-dealer insurance class under the licensed path, not as an automatic permanent loss.
02
WHOLE-TRANSACTION MODEL
Change one input. See who actually moves.
This is the primary interactive surface. It shows dealer gross, customer financing, contractual interest, provider economics, premium-tax proxy and the unexplained residual in one place.
WHOLE-TRANSACTION ECONOMIC INCIDENCE ENGINE
Change the product economics and watch every ledger move.
The model starts with the recovered nine-product dealer sample. It separates dealer compensation, provider cost, customer price, financed principal, contractual interest and insurer-premium tax. The 30% control is a scenario only, not the law.
LENDER / CREDIT SENSITIVITYTest entered programme thresholds without inventing lender outcomes.Progressive disclosure · lender-specific inputs required
A lower amount financed is not categorized as beneficial or harmful. Approval, pricing and fallout direction can vary by lender programme, collateral, deal structure and credit tier.
Amount financed before / afterARITHMETICCalculate from transaction-level vehicle and financed-product inputs.
Lender principal originatedARITHMETICKeep vehicle principal and financed add-ons visible rather than reporting only dealer gross.
Contractual interest differenceARITHMETICCalculate at the entered APR and amortization; do not treat scheduled interest as realized lender profit.
Payment differenceARITHMETICCalculate the contractual payment change at the entered rate and term.
Advance / LTV effectsPROGRAMME-EVIDENCERequires the lender-specific advance base, collateral treatment and LTV rules.
Minimum / maximum finance bandsPROGRAMME-EVIDENCERequires the applicable lender programme matrix for the customer and vehicle.
Back-end allowancePROGRAMME-EVIDENCERequires lender rules defining eligible financed products and any dollar or percentage allowance.
Rate / programme-tier crossingsPROGRAMME-EVIDENCEDo not infer a rate change from an amount-financed or LTV change without the lender tier matrix.
Reserve / participationPROGRAMME-EVIDENCEModel only where the participation formula and applicable programme are documented.
Approval / decline / exception / falloutOBSERVED-OUTCOMEMeasure from lender or transaction-level outcomes; arithmetic alone cannot establish causality or direction.
Guaranteed asset protection insurance is expressly an authorized insurance class for motor vehicle dealers under the enacted RIA regulation, subject to the dealer holding the applicable restricted licence and the product remaining otherwise available. The continuity control restores the recovered sample's current GAP price,penetration and dealer gross-benefit proxy rather than assuming the product disappears.
Current GAP dealer gross-benefit proxy is $240,000per year at the recovered 100-unit-per-month sample. Current scenario GAP change is -$96,720.
Authorization is not a promise that current compensation, penetration or provider terms remain unchanged. Proposed amount-disclosure economics and provider participation still require separate evidence.
INCIDENCE WATERFALL
Where did the changed customer dollars go?
| Product | Current economics | Scenario economics | Volume | Annual dealer change | Finance effect |
|---|---|---|---|---|---|
| Paint / appearance protectionCLASSIFICATION-REVIEW | $899 customer price $500 dealer comp 55.6% of price premium-tax class unassigned No insurance-premium class is assigned until the product structure is classified as insurance. | 30% of scenario price | 540 scenario contracts | -$124,362$270,000 current → $145,638 scenario | $0financed principal $0 scheduled interest |
| Tire & rimCLASSIFICATION-REVIEW | $699 customer price $400 dealer comp 57.2% of price premium-tax class unassigned No insurance-premium class is assigned until the product structure is classified as insurance. | 30% of scenario price | 360 scenario contracts | -$68,508$144,000 current → $75,492 scenario | $0financed principal $0 scheduled interest |
| Windshield / glassCLASSIFICATION-REVIEW | $399 customer price $250 dealer comp 62.7% of price premium-tax class unassigned No insurance-premium class is assigned until the product structure is classified as insurance. | 30% of scenario price | 300 scenario contracts | -$39,090$75,000 current → $35,910 scenario | $0financed principal $0 scheduled interest |
| Key / key fobCLASSIFICATION-REVIEW | $299 customer price $200 dealer comp 66.9% of price premium-tax class unassigned No insurance-premium class is assigned until the product structure is classified as insurance. | 30% of scenario price | 240 scenario contracts | -$26,472$48,000 current → $21,528 scenario | $0financed principal $0 scheduled interest |
| Third-party vehicle warrantyRIA-LISTED | $2,500 customer price $700 dealer comp 28% of price 4.4% premium-tax rate · VERIFIED Vehicle Warranty is listed at 4.4% on the B.C. licensed-insurer premium-tax table. | 28% of scenario price | 660 scenario contracts | $0$462,000 current → $462,000 scenario | $0financed principal $0 scheduled interest |
| Credit lifeRIA-LISTED | $350 customer price $200 dealer comp 57.1% of price 2% premium-tax rate · CONDITIONAL 2% applies when the actual creditor-life contract is reported in the Life class; the RIA licensing label alone does not establish the premium-tax class. | 30% of scenario price | 240 scenario contracts | -$22,800$48,000 current → $25,200 scenario | $0financed principal $0 scheduled interest |
| Credit disabilityRIA-LISTED | $450 customer price $250 dealer comp 55.6% of price 2% premium-tax rate · CONDITIONAL 2% applies when the actual creditor-disability contract is reported in the Accident and Sickness class; the RIA licensing label alone does not establish the premium-tax class. | 30% of scenario price | 180 scenario contracts | -$20,700$45,000 current → $24,300 scenario | $0financed principal $0 scheduled interest |
| GAPRIA-LISTED | $995 customer price $500 dealer comp 50.3% of price 4.4% premium-tax rate · VERIFIED B.C. Reg. 245/2025 defines GAP within property or automobile insurance; both classes are listed at 4.4% for licensed insurers. | 30% of scenario price | 480 scenario contracts | -$96,720$240,000 current → $143,280 scenario | $0financed principal $0 scheduled interest |
| OEM extended warrantyOEM-CONFIRMATION | $1,800 customer price $400 dealer comp 22.2% of price premium-tax class unassigned An OEM/manufacturer warranty is not assumed to be Vehicle Warranty insurance; contract and insurer classification must be confirmed first. | 22.2% of scenario price | 420 scenario contracts | $0$168,000 current → $168,000 scenario | $0financed principal $0 scheduled interest |
Dealer gross-benefit scenarios, financed principal, amortized payment/interest arithmetic, provider-cost lane, premium-tax proxy arithmetic and pretax materiality from entered assumptions.
Lender approval thresholds, advance caps, minimum financed amounts, actual consumer response, product substitution, labour response, insurer profit, GST/PST treatment of unresolved bundles and causal policy effects.
A national point estimate remains disabled until a representative dealer cohort and verified rooftop/volume distribution are selected. Scenario scaling may be shown only as an explicit user-selected multiplier.
03
MEASUREMENT
Baseline first. Outcome claims afterward.
The observatory freezes what will be measured before the post-2027 result is known.
PUBLIC MONITORING PROGRAM · 2026-2029
January 2027 is not the end of the story. It is the beginning of the measurement period.
The questions, definitions and tests are published before the post-implementation result is known. The same framework is then used to report consumer benefit, economic cost, market substitution and uncertainty.
01
2024-26Baseline
Backfill comparable dealer, product, labour, consumer and compliance measures before treatment.
02
2027Transition
Track actual training, application, licensing, workflow, disclosure and product-change dates store by store.
03
2028First read
Publish the first controlled post-implementation analysis with limitations, counterfactuals and null results.
04
2029Stabilized
Test persistence, substitution, market structure and whether early effects survived implementation noise.
Did consumers benefit?
Price / premiumUptakeCancellationsRefundsComplaintsClaimsRefusalsIndemnitiesAlternative coverage
What did it cost?
Affected-product PVRTotal F&I PVRDealer remunerationF&I payrollHeadcountPretax profitROSDirect compliance cost
Where did the market move?
Provider participationProduct availabilityLender mixChannel substitutionEntry / exitConsolidationOEM / independent share
Who finances it and who taxes it?
Amount financedMonthly paymentContractual interestApproval / exceptionAdvance ratioPSTInsurance premium taxLuxury-tax classification
What did compliance require?
TrainingE&ODesignated representativeDMS / menu changesAudit timeRecordkeepingMonitoringVendor cost
BASELINE PROTOCOLBUILDING
RECORDS REQUESTSREADY TO FILE
DEALER PANELRECRUITMENT NEXT
POST-2027 RESULTSNOT YET OBSERVED
04
PROFIT DENOMINATOR
Exposure only matters against the business underneath it.
Sector profitability and one public dealer-group stress test provide context. They are not combined into a national dealership forecast.
INDUSTRY FRAGILITY
Small revenue shares can be large profit shares.
Two different lenses are shown deliberately: published small-business sector margins and a stress test on one public Canadian dealer group. Neither is a national dealership forecast.
CANADA · 2024 SMALL-BUSINESS BASELINES
Profitability is already uneven across dealer classes.
All-business-type ISED / Statistics Canada reports, $30,000-$5,000,000 annual revenue band.
44121612 businesses
Recreational vehicle dealers
-1%
whole-industry net profit / revenue
57.7% profitable42.3% non-profitable
441111,019 businesses
New car dealers
7.6%
whole-industry net profit / revenue
67.7% profitable32.3% non-profitable
441125,387 businesses
Used car dealers
2.8%
whole-industry net profit / revenue
63.5% profitable36.5% non-profitable
44122,013 businesses
Other motor vehicle dealers
0.5%
whole-industry net profit / revenue
60.3% profitable39.7% non-profitable
AUTOCANADA · FIXED-COST SENSITIVITY
What if a selected share of reported F&I gross disappeared?
This holds every other pretax income and cost line constant. It is a stress test, not a forecast of RIA.
Interpretation boundary.
AutoCanada is a public dealer group, not a national average. Finance, insurance and other includes income outside the proposed RIA compensation-disclosure lane. Store count is not used as a matched annual denominator. The small-business ISED rows use a different population and cannot be combined with AutoCanada to manufacture a national loss estimate.
05
DEEPER MODELS
Keep the advanced work one click away.
The supporting models are still available, but they no longer compete for attention with the main story.
National scenario scalingScenario only · verified denominator
SCENARIO-ONLY NATIONAL SCALER
Scale a hypothesis without disguising it as a forecast.
The only automatic national denominator here is CADA's 2025 franchisednew light-vehicle lane. Used-only, RV, marine, powersports and other affected sectors remain outside this total until equally clean denominators are selected.
Canada franchised new light-vehicle dealerships only. This does not count the full used-only, RV, marine, powersports or other RIA-affected business populations.
Open CADA source ↗The per-unit exposure is not a Canadian average. It comes from the recovered nine-product scenario, with the historical GAP haircut removed from the default because GAP is an authorized motor-dealer class under the licensed path. The user can still change the input to test other scenarios.
The result answers "what if these assumptions applied to this share of franchised-new-vehicle sales?" It does not estimate what RIA will actually cause nationally.
Tax incidence by productPST · premium tax · federal luxury tax
TAX INCIDENCE
Not every F&I dollar sits in the same tax base.
The table separates federal luxury tax, the B.C. vehicle PST rate-value question, PST on the agreement itself, and B.C. insurance-premium tax. A product can be excluded from one tax base and still affect another.
| Product / structure | Federal luxury tax | B.C. vehicle PST rate-value | B.C. agreement PST | B.C. insurance-premium tax | Status |
|---|---|---|---|---|---|
| Extended warranty / vehicle warranty insurance | Excluded from luxury-tax consideration. | Optional warranty is not added to the vehicle tax-rate value; mandatory warranty treatment differs. | Separate PST treatment depends on the agreement structure; do not infer from the vehicle-rate rule. | Vehicle Warranty class: 4.4% on licensed-insurer taxable premium. | VERIFIED |
| GAP coverage | Excluded from luxury-tax consideration. | B.C. PST interpretation guidance explicitly excludes GAP insurance from vehicle purchase price. | GAP insurance is excluded from the vehicle purchase price for PST. | 4.4% when written as the GAP insurance defined by B.C. Reg. 245/2025: that definition places GAP within property or automobile insurance, and both classes are taxed at 4.4% for licensed insurers. | VERIFIED |
| Creditor life insurance | Insurance and payment-protection products are excluded from luxury-tax consideration. | B.C. PST interpretation guidance explicitly excludes life insurance from vehicle purchase price. | Life insurance is excluded from the vehicle purchase price for PST. | 2% when the underlying contract is Life insurance. Do not infer the premium-tax class only from the RIA distribution label. | VERIFIED |
| Creditor disability insurance | Insurance and payment-protection products are excluded from luxury-tax consideration. | B.C. PST interpretation guidance explicitly excludes disability insurance from vehicle purchase price. | Disability insurance is excluded from the vehicle purchase price for PST. | 2% when the underlying contract is Accident and Sickness insurance. Do not infer the premium-tax class only from the RIA distribution label. | VERIFIED |
| Other credit / credit-protection insurance | Insurance and payment-protection products are excluded from luxury-tax consideration. | Vehicle purchase-price treatment must be established from the actual contract; do not generalize the explicit life/disability exclusions. | Classification-specific; verify the actual insurance contract and taxable base. | Credit and Credit Protection are listed at 4% for licensed insurers. This does not reclassify creditor life or disability contracts. | MIXED |
| Road-hazard / tire protection plan | Road-hazard protection plans are excluded from luxury-tax consideration. | Optional agreement does not automatically change the vehicle tax-rate value. | PST depends on what the agreement supplies and how it is structured. | Unknown until insurance classification and premium basis are established. | MIXED |
| Repair / maintenance / service plan | Excluded from luxury-tax consideration. | Optional agreement is separate from vehicle tax-rate value. | Scheduled services or a specified number of taxable services are generally subject to 7% PST under PST 303. | Not an insurance-premium-tax lane unless the contract is insurance. | VERIFIED |
| Installed coating, film, tint, rustproofing or anti-theft improvement | Can be included as an improvement when supplied in connection with the sale of a subject luxury item. | PST treatment must be determined from the vehicle sale and agreement facts. | Example: an optional scheduled undercoating/rustproofing agreement is taxable at 7% under PST 303. | Not an insurance-premium-tax lane unless a separate insurance contract exists. | VERIFIED |
CRA luxury-tax consideration ↗B.C. PST 116 ↗B.C. vehicle PST interpretation ↗B.C. PST 303 ↗B.C. insurance-premium tax ↗B.C. RIA regulation ↗
Model rule:
A lower dealer compensation number is not itself a tax loss. The tax model changes only when the actual taxable base changes: taxable vehicle consideration, taxable agreement price, insurer premium, taxable profit, payroll or another defined tax base. Vehicle-sale PST, agreement PST, insurance-premium tax and federal luxury tax are separate tax bases. The RIA licensing class does not by itself establish the premium-tax class of every underlying contract.
Regulatory fundingFee receipts · programme allocation unknowns
RIA FEE ARCHITECTURE · PROPOSED / NOT FINAL
Every published fee, without pretending the proposal is the invoice.
The Insurance Council consultation publishes an application ceiling, six annual-renewal tiers and a late-fee ceiling. Actual charged fees require Council motion. The designated-representative course fee is still unpublished.
RIA-specific fee ceilings
Application $1,000; annual renewal $750 to $8,500depending on representative count; late annual fee up to $500.
Designated representative course
The course is mandatory under the proposed program. The Council says the fee is still being determined, so it is not included in receipt totals.
Training accreditation
Council Rule 5(1)(p) sets a maximum course-accreditation fee of $20,000, revised down from the $25,000 first proposed. Approved by the Minister of Finance, published September 14, 2026, effective October 15, 2026. That approval covers this ceiling in the general Council Rules only. The RIA licence fee amounts remain proposed. This is a ceiling, not a charged fee; actual amounts are set by Council. The RIA fee page still says the accreditation fee is under review and that final amounts will be published once approved. Council revision notice (checked 2026-09-21).
E&O and accredited representative training
Both are proposed licence requirements, but the public record does not establish one universal dealer cost. They remain outside this fee total.
Other Council fee ceilings in the same draft Rule 5
Licence amendmentup to $50
Corporate ownership information amendmentup to $800
Copying / printing / scanningup to $1 per page
Licence information listup to $300 per list
Council courseup to $100 per credit
Trainee registrationup to $100
Licence upgrade within same classup to $300
Current official-source read · 2026-09-19
The current Get Licensed page says the RIA licence will have an annual fee, that Council is evaluating different options, and that other one-time initial fees are anticipated.
The separate 2026 Rule 5 consultation publishes proposed RIA application, annual-tier and late-fee ceilings while the current Get Licensed page still describes the annual fee model as under development. These sources are preserved as different publication stages; neither is treated as a final charged-fee schedule.
The calculator uses proposed maximums only to expose scale. It is not a forecast of Council collections. A factual revenue total needs the final Council motion, actual applicant counts by fee tier, observed renewals and any published DR-course or accreditation charges.
06
PUBLICATION RULE
If the evidence does not move, neither does the conclusion.
The study publishes outcomes that support, weaken or fail to resolve the starting hypotheses.
A record not located in the reviewed public sources is not proof that no record exists. Absence claims stay bounded to the search actually performed.
Primary law, official data and disclosed arithmetic.
These can be shown as facts when the source and calculation chain are complete.
National losses, lender approvals and job effects without the required data.
These remain unknown until the cohort, lender rules or observed post-period data exist.
Open the record.
- S01Québec Act respecting the distribution of financial products and services, s.431↗
- S02AMF, Analysis of disclosures by insurers, 2020-2022↗
- S04FCNB Rule INS-001, Insurance Intermediaries Licensing and Obligations↗
- S05FCNB Notice of Adoption - Rule INS-001 and Rule INS-002↗
- S06FCNB - Restricted Insurance Representative licensing period extended↗
- S08FCNB Annual Report 2025-2026↗
- S12B.C. Reg. 245/2025 - Restricted Insurance Agent Licence Regulation↗
- S13Insurance Council of B.C. - Restricted Insurance Agency Licence↗
- S15Insurance Council of B.C. - proposed RIA Rules consultation↗
- S16Insurance Council of B.C. - Get licensed as an RIA↗
- S18Financial Consumer Agency of Canada - Shopping around for auto financing↗
- S19Canada Revenue Agency - Luxury tax consideration and retail value↗
- S20B.C. Ministry of Finance - PST Bulletin 116: Motor Vehicle Dealers and Leasing Companies↗
- S21B.C. Ministry of Finance - PST Bulletin 303: Warranties, Service Contracts and Maintenance Agreements↗
- S22B.C. Ministry of Finance - Licensed insurance taxes↗
- S23Insurance Council of B.C. - RIA fee consultation↗
- S24Bank of Canada - interest rates on funds advanced for auto loans by chartered banks↗
- S25B.C. Ministry of Finance - PST Tax Interpretation Manual, vehicle purchase-price inclusions and exclusions↗