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Fed ban threatens special imports

Mar 24, 2007 04:30 AM
Mark Toljagic
Special to the Star

To the casual observer, Michael Bayley's car looks like an old Volkswagen Golf with a monstrous scoop tacked onto the hood.

While it may resemble a shop-class pimp job, the scoop feeds a 2.0-litre turbocharged engine that's good for 230 hp ? enough to grind the tires into eraser dust.

Onlookers are more likely to notice that Bayley has to roll down the passenger window to order in a drive-through lane. That's because the steering wheel is on the right-hand side of the car.

Bayley imported his used 1991 Nissan Pulsar GTi-R directly from Japan, eschewing conventional left-hand drive for the cachet of driving an automobile unknown in these parts.

"I was looking for something a little different," says Bayley. "And I had a personal connection to the car. It appealed to me when I was living in Japan."

A mechanical engineer who works in the auto parts industry, Bayley has joined a small but growing contingent of auto enthusiasts who have taken advantage of a loophole in Canada's importation laws to bring in distinctive, older Japanese and European models that are exempt from federal safety rules.

While Canada's Registrar of Imported Vehicles ( carefully screens late-model domestic and imported vehicles brought in privately from the U.S., it leaves 15-year-old-plus vehicles unscrutinized.

Now comes word the federal government is contemplating changing the threshold to 25 years, a move that will effectively quash the burgeoning importation industry and restore the law to its original intent: serving the small collector market.

The proposed change has sent shudders through the enthusiast community.

Mitchell Rajmoolie, who operates, is one of many who fear their cars have been demonized, and who are out to prove their vehicles are no less safe than any other.

"A lot of these vehicles coming from Japan are identical in construction to North American-spec products. They come off the same assembly lines," says Rajmoolie. Japanese-market cars benefit from a strict maintenance regimen, as well. Shaken is a compulsory MOT safety inspection done every two years in Japan (except new cars, for which the first check doesn't take place until three years after purchase).

Add to this the virtually rust-free environment and low mileage totals, and used Japanese-market vehicles look especially appealing to Canadians. "Due to congestion and the cost of operation in Japan, people tend to drive on weekends only, so the mileage is typically low," says Rajmoolie. "The 15-year-old cars I import usually have around 60,000 km on them."

The enthusiasts formed a lobby group, the Imported Vehicle Owners Association of Canada (, to help educate the public and advocate on behalf of the import community.

In a submission to Transport Canada, the IVOAC argues that while vehicles built for foreign markets may meet a different set of safety standards than those intended for Canada, privately imported vehicles are often subject to modifications and upgrades before they're plated for use in the provinces.

Typical changes may include new headlights, daytime running lights, a third brake light, and brake repairs to pass an Out of Province inspection. Where applicable, the vehicle is subject to an emissions test, too.

The IVOAC also says that right-hand-drive (RHD) vehicles driven in a left-hand-drive jurisdiction pose no risks, statistically. Countries such as Great Britain and Japan have large numbers of RHD and LHD vehicles co-mingling in traffic with no ill effects, the IVOAC argues.

Rajmoolie suggests the net effect of extending the exemption to 25 years ? identical to U.S. law ? means enthusiasts will be forced into older vehicles that likely will be more unsafe.

"Why not change the rule to 10 years if you're concerned with safety?" he asks.

Gary Moriarty, RIV's deputy registrar, says the motivation for the proposed rule change came about when the Canadian Council of Motor Transport Administrators, a group of federal and provincial transportation regulators, became concerned with the growing number of older vehicles being imported under the 15-year exemption.

"While the safety inspection is a provincial matter, they weren't sure if vehicles imported from Japan and Europe complied with federal standards," says Moriarty. "Are these vehicles designed for Canadian roads and Canadian conditions?

"A compliance inspection is easy on a U.S.-sourced import because they're familiar with the American rules."

The provincial regulators felt they're assuming a liability ? and for those "self-insured" jurisdictions of British Columbia, Saskatchewan, Manitoba and Quebec (which run public auto insurance plans), it's a doubly unwelcome feeling.

Matt *****, senior regulatory department engineer at Transport Canada ? the department ultimately responsible for vehicle safety ? says the issue of federal compliance has been a long-standing concern at the transport administrators' table.

"The exemption was established in 1995 to serve collectors," says *****.

"Import businesses have set up to take advantage of the 15-year loophole. Today, Canada is a destination for Japan's used vehicles."

Rajmoolie says while the number of vehicles 15 years or older imported into Canada has risen significantly ? from 1,155 in 2000 to 17,390 in 2005 ? he believes a good number of them continue to be purchased by collectors, thereby upholding the intent of the regulation.

"Many of these vehicles are not daily drivers, and the majority are stored in winter," he says. "Customers buy them to display them at car meets and track events. They spend a lot of money on their vehicles and maintain them."

A case in point is Bayley's Nissan, which is stored over the winter and is classified as a "special-interest car," which keeps his insurance costs down. As part of the deal, he must provide proof of ownership of a second vehicle, a daily driver, to his insurer.

Despite their advanced age, the cars are not cheap, typically costing between $10,000 and $25,000.

Rajmoolie says it's not just the performance-oriented Nissan Skyline GT-R and Pulsar that are in demand, but also eco-friendly Kei minicars ? restricted to a maximum displacement of 660 cc ? and 4x4s like the Pathfinder, Toyota 4Runner and Mitsubishi Pajero equipped with turbodiesel engines, which were never specified for North America.

"People who drive RHD are unique ? it's not a very big market," says Rajmoolie. "For one thing, people have to pay cash for these cars. The bank will not give you a loan for a 15-year-old vehicle."

He points to Australia as an example of another country reining in the import market. With a similar 15-year importation rule, Oz was flooded with vehicles from Japan, a short boat ride away. Now Australia is phasing in a 30-year rule, which will effectively stem the tide.

"The manufacturers got concerned with the volume of vehicles coming in and they pressured the government to change the rules," Rajmoolie says.

George Iny, president of the Automobile Protection Association, believes a similar agenda may exist here ? at least in British Columbia, where the largest number of right-hand-drive cars are registered.

"Right-hand drive is a danger to B.C. car dealers, who are a powerful lobby group, as are the auto manufacturers," he says. "The way the dealers and automakers see it, every $15,000 RHD Toyota Land Cruiser is potentially one less Canadian market $40,000-or-higher SUV sold."

Iny also believes the insurance industry has a say in the matter.

"The government insurer in B.C. is not too happy about putting $15,000 Nissan Skyline GT-R Turbos into the hands of teenagers. But that's really the sideshow that gives the issue a veneer of respectability, since nobody is seriously arguing that used Canadian market equivalents like the Subaru WRX and Nissan 350Z be kept out of the hands of the same teenagers."

Iny is not optimistic the 25-year rule can be avoided. "I've been told increasing the ban to 25 years is a done deal," he says.

Transport Canada's ***** says the proposal still has to be subject to public consultation. If approved, implementation of the rule change is likely 18 months away, if not longer.

Iny thinks the change might not bring about the desired outcome ? if highway safety is indeed the goal.

"As a consumer advocate, I can tell you that the importers who already have their pipelines in place will switch to used Japanese parts, which do not fall under the ban," he says.

"This may actually be worse, as the parts will be installed in any manner of old Subaru Imprezas, Nissan 240s and 350Zs to deliver approximately the same performance without the assurance of a factory designed and built car
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