The Rise of Light-Duty Trucks in Canada: Reversing the Trend

While Canada has committed to the Paris Agreement and presents itself as an international climate leader, the country remains one of the largest polluters per capita in the world and is not on track to meet its various greenhouse gas (GHG) emission reduction targets.

In 2020, the transportation sector accounted for one quarter of Canada's emissions, making it a key sector in the collective effort to meet the 2030 and 2050 targets. When it comes to Canadian preferences for personal vehicles, the numbers speak for themselves. Between 1990 and 2018, the number of sport utility vehicles (SUVs), pickup trucks and vans in the Canadian fleet rose by 280%. This light-duty truck segment reached a historic high of 79,9% of the new vehicle sales in 2020.

FACTS

The rising popularity of light-duty trucks is incompatible with Canadian government’s GHG reduction targets. Significant problems caused by light-duty trucks include:

• Between 1990 and 2018, GHG emissions from light-duty trucks rose by 156%, adding to the overall increase in emissions in the country (+20.9%).
• In 2018, light-duty trucks produced an average of 31% more GHGs per kilometre than standard automobiles, and this was the only area in which emissions did not decline in 2020, despite the COVID-19 pandemic.
• They exert greater pressure on road infrastructure and exacerbate traffic congestion issues.
• They increase the danger in collisions with other vehicles: accidents involving pickup trucks and SUVs are 158% and 28% more likely to result in the death of the driver of another vehicle than accidents involving smaller cars.
• Because of their height, the injuries caused by SUVs to adult pedestrians in the event of collisions are more severe and are nearly twice as likely to produce hip or leg injuries, when compared to collisions with smaller cars.
• On average, SUVs are much more expensive than smaller cars, adding to the overall Canadian household debt. They can cost up to 40% more to purchase and 15% more to fuel.
   

A SERIES OF STUDIES TO SHED LIGHT ON THE PHENOMENON

It is in this context that Équiterre, in collaboration with Polytechnique Montréal and CIRANO, has launched a wide-ranging study consisting of a series of reports on the increase in the number of light-duty trucks in Canada. The objective of this research is to understand the growing preference on the part of the Canadian public for energy-inefficient, oversized light-duty trucks, and to propose solutions to reverse this trend.

1. Limitless: Automotive Advertising in Canada

The first report explores the advertising strategies and practices used by the automobile industry to promote light-duty trucks. 

• Read the report 
• Read the illustrated summary

It answers the following questions:

1. What are the main findings relating to the themes and messages found in Canadian automotive ads?

● Domination of the environment is often displayed by depicting off-road vehicles in natural settings;
● The vast majority of ads use nature or its properties to sell light-duty trucks;
● SUVs are shown in a variety of locations, which may suggest that they are versatile through the public’s high exposure to ads;
● Discounts and product scarcity are often promoted through specific holidays or seasons of the year;
● The vehicle's safety aspect, especially for crossovers and SUVs, is frequently promoted in more than one way in the same ad;
● Highly attractive financing terms (special offers for regular payment amounts, down payments, low or no-interest rates, deferred payments, etc.) are very often featured;
● The technological aspect of the vehicle is often highlighted;
● A few ads highlight the vehicle's fuel efficiency without providing information on its fuel consumption;
● Vans are barely seen in ads, indicating that SUVs have replaced them on the market;
● None of the ads mention the vehicle's fuel consumption and/or CO2 emissions and less than half of them display its retail price

These messages do not help consumers make informed and sustainable vehicle choices.

2. How are investments in automotive advertising quantified?

Automotive advertising, including advertising for light-duty trucks, is widespread in Canada. The report analyzes the extent of the phenomenon and its pervasiveness in the public space. 47% of new-car buyers say they are influenced by some form of media throughout the purchasing process. In 2019, the automotive sector was the second-largest investor in digital advertising in Canada with a share of 19% or $1.6 billion, just behind retail, which had a 21% share.

3. What are the laws, regulations and standards that govern automotive advertising in Canada?

The analysis shows that Canadian advertising legislation is inconsistent with the government's climate targets and should be reformed to reflect the environmental emergency.

Canada has no federal legislation in place to regulate automobile advertising before it is released.

The existing legislation simply reacts to complaints. The automotive industry is subject to few legal constraints and therefore enjoys an enormous amount of freedom to promote oversized vehicles.

• There is no pre-screening of ads prior to publication;
• The automotive industry has no specific advertising codes that they must adhere to, as do some other industries;
• Advertising standards and laws, both federal and provincial, evolve in response to emerging public health issues and societal debates, but the environment has not yet been incorporated into the legal framework.

4. What are some best practices relating to the regulation of automotive advertising from other countries?

In terms of legislation, it is interesting to compare Canada with other countries.

Belgium
Advertising must not mislead the public regarding the product's effect on the environment. There are restrictions on the use of locations that are not part of the public road system.

United Kingdom
Automobile advertising must include statistics relating to the vehicle's fuel consumption rate and CO2 emissions.

New Zealand
Automobile advertising must not encourage or depict environmental damage in areas of significant conservation value (riverbeds, wetlands, peat bogs, lakeshores or estuaries).

Sweden
Terms such as "environmentally friendly" can be used only if, throughout its entire life cycle, the product does not harm the environment or if it improves it.

5. What are Équiterre's recommendations?

“We have a collective addiction to light-duty trucks. We now need a shock treatment to get us off them. While most sectors are reducing their GHG emissions, Canada is still behind on its climate targets and emissions from the transportation sector are increasing. Advertising practices are exacerbating this trend." – Andréanne Brazeau, Mobility Analyst

In order for Canada to move effectively to carbon neutrality by 2050, it is imperative that governments take an active role in aligning the regulatory framework for automobile-industry advertising with the country's climate goals, as well as in shifting consumer transportation choices.

Here are Équiterre’s key recommendations:

1. Acknowledge that the increase in light-duty trucks is a public health and safety issue.
2. Establish an independent, multi-sectoral panel of experts to advise and accompany governments.
3. Draw on existing advertising restrictions (tobacco, speeding, advertising to children) as a model.
4. Gradually increase regulations on automotive advertising and spending.

• Create a Canadian automotive code of advertising that includes a requirement to display CO2 emissions or fuel consumption as well as the full retail price, and restricts the depiction of nature.
  
• Establish a mechanism to validate the content of automotive advertising prior to release.

 5. Undertake campaigns to promote sustainable mobility.

 

PURCHASES OF LIGHT-DUTY TRUCKS IN CANADA: AN ANALYSIS OF MOTIVATIONS

Conducted by the Centre interuniversitaire de recherche en analyse des organisations (CIRANO) and HEC Montréal, this component of the study highlighted the motivations guiding the purchase of SUVs and other light-duty trucks, in addition to offering a fresh look at the influence of the automotive industry's marketing strategies on SUV purchase decisions. It included: (1) a pan-Canadian survey, (2) a series of one-on-one interviews and (3) focus groups.

• Read the report (only available in French)
• Read the illustrated summary

The report answers the following questions:

1. What are the factors that influence the likelihood of choosing an SUV?

The growing interest in SUVs on the part of Canadians is confirmed: it is the most popular type of vehicle. The main internal factors identified are as follows:

• Socio-demographic and contextual factors (location, lifestyle, age, household income);
• Personal psychological factors (values and attitudes);
• Vehicle and driving-related factors (vehicle functionality, symbolic aspects and affective aspects.)

The external environment (social norms, media and advertising) also plays a role in the development of individual preferences.

2. What are the main findings relating to internal factors?

First of all, Canadians consider vehicles, regardless of type, to be indispensable (5.73 out of 7). The more people consider their vehicle to be indispensable, the more likely they are to purchase an SUV.

In 2020, a typical Canadian SUV owner is a middle-aged woman, in a relationship, with children, and living in the suburbs.

On the socio-demographic side, it was observed that:

• Women and people between 25 and 34 years are more likely to purchase an SUV;
• People living in rural areas are significantly more likely to purchase a pickup truck than those living in urban areas;
• The provinces where the intention to purchase an SUV is greatest are Newfoundland and Labrador, New Brunswick, Alberta and Saskatchewan;
• The provinces where the intention to purchase a pickup truck is greatest are Saskatchewan, Alberta and New Brunswick;
• There is a strong relationship between household income and the intention to purchase an SUV: the latter increases with income level;
• The more individuals there are in a household, the greater the likelihood that any vehicle purchased will be an SUV.

When it comes to psychological factors, individuals who are most likely to purchase an SUV:

• Place a high priority on values such as ambition, power, influence and authority; and
• Like to drive.

It was also shown that people who have strong environmental values or who view vehicles simply as a means of getting from point A to point B are less likely to purchase an SUV.

Finally, when it comes to choosing a vehicle:

• The three most important criteria are safety in terms of impact, safety in terms of weather conditions and price;
• Available financing options have a major influence: SUV owners are more likely to use dealer financing, and purchasers of regular automobiles are more likely to use personal savings.

3. What are the main findings relating to external factors?

The study found that:

• The various available sources of information have a major influence when it comes to choosing a vehicle;
• Dealerships are the most recurring source of information when it comes to choosing a vehicle, followed by friends and family and third party websites;
• Descriptive social norms represent the single most important factor that leads to the greatest likelihood of purchasing an SUV, which means that the approval of others has a strong influence on our decisions;
• Media influence, when it comes to selecting an SUV as our next vehicle, is significant.

4. What are the key insights from the interviews?

SUV owners...

• Are absolutely convinced of the SUV’s superiority, especially when it comes to comfort and safety, in the event of a collision or changing weather conditions;
• Believe that the vehicle's larger size, height and weight create a feeling of ruggedness and stability;
• Love their vehicle because it gives them a sense of control;
• Have very limited concerns regarding the danger that their vehicle poses to others.
• Find it "normal" to own an SUV, either because of the ever-increasing average size of vehicles or the heavy influence of family, a concept strongly associated with this type of vehicle

5. What are the key insights from the focus groups on advertising?

Content
Focus group participants…

• Claim that they are aware of marketing practices designed to make large vehicles seem more appealing;
• Nevertheless appear to be influenced by advertising, based on the ease with which they are able to recall scenes of the outdoors and of adventure;
• Associate the dominance of a harsh and hostile environment by an SUV with safety; and
• Mentioned the emotional attachment promoted by the ads, which even go so far as to portray the SUV as a member of the family.

Price and financing options
Focus group participants...

• Pointed to the central importance of price and financing information shown in the ads and feel that they are aware that these are tactics intended to make SUVs appear more affordable than they actually are;
• Are often able to relate the experiences of people they know who have had difficulty making the required payments; and
• Feel that it is important and useful to have information about the all-in vehicle cost included in the advertising.

Information regarding environmental impacts
Focus group participants…

• Feel that it is not necessary for a vehicle ad to include information regarding the vehicle’s environmental footprint or fuel consumption numbers;
• Do not trust vehicle manufacturers to make truthful claims about fuel efficiency or are unable to make sense of this information when it is presented in raw form;
• Believe that consumption data (fuel cost and use, GHG emissions) are primarily a function of driving style and are therefore not objectively comparable.

6. What are Équiterre's recommendations?

"There are a number of emerging response areas. The narrative around what is considered normal or desirable in the eyes of society will have to change. The SUV should no longer be seen as something to be desired. Now that it has become the symbol of the family, we need to ask ourselves what legacy we want to leave to our children. Do we really want larger and larger vehicles that threaten our environment?” – Andréanne Brazeau, Mobility Analyst, Équiterre

Aimed at "denormalizing" the use of SUVs and reducing their social acceptability, Équiterre's recommendations for reversing this trend fall into two categories: (1) communication strategies for governments and civil society to explore, and (2) actions that can be taken to regulate advertising.

1. Develop communication strategies that are tailored to the various audiences by focusing on:

• Reflections around needs and display of alternatives, such as borrowing, leasing or sharing a car when our job does not require an SUV or our family is small;
• The legacy angle, to raise questions about the damage being done to the quality of the environment and what people will pass on to their children;
• Reality in advertising, for example by juxtaposing manufacturers' images with reality (a mountain goat stuck onto the image of a car in traffic);
• Changing social norms by encouraging people to shift toward more environmentally friendly vehicles.

2. Regulate automobile advertising (see Limitless report above) so as to ensure transparency and clarity of information:

• Mandate the display of the full price of the vehicle, something that was identified in the focus groups as important and useful information;
• Restrict marketing tactics that make a vehicle appear to be more affordable than it actually is in the eyes of vulnerable audiences. Such tactics include:
  • Using base models as price reference points;
  • Using fine print when listing additional costs;
  • Showing the amount of the payment on a weekly basis in order to make it appear smaller;
  • Showing 0% interest financing options in large print to attract attention.
• Spell out the environmental impact that vehicles can have, using images and comparisons that the public can relate to and which are not objectifiable (e.g., the number of trees that need to be planted in order to offset a vehicle's GHG emissions, comparison of vehicles based on a colour code showing their environmental impact, etc.).

LIGHT-DUTY TRUCKS: DEFINITIONS AND how the supply has evolved

By Polytechnique Montréal

Prepared by the Mobility Chair of Polytechnique Montréal, this report explores the various definitions and classifications of light-duty trucks, and the changes in supply of light-duty vehicles over the decades. It also proposes possible typologies for political institutions to adopt.

• View the report (only available in French)
• View the executive summary
• View the illustrated summary

The report answers the following questions :

1. How have vehicle characteristics evolved over time?

Over the last century, vehicle characteristics have changed a great deal, and the supply of vehicles has undergone a major transformation.

A. Canadian vehicles have been getting larger, longer, higher and heavier

There is no denying this observation. Between 1994 and 2019, the size of vehicles’ primary characteristics has increased significantly:

• Mass is up 25%;
• Floor surface is up 11%;
• Wheelbase size is up 7.4%;
• Width is up 5.5%;
• Length is up 5%.

The result? A 1-km section of roadway can accommodate 10 fewer vehicles than before!

It should therefore come as no surprise that the size of sedans is now inching closer to that of intermediate SUVs, while moving further away from that of hatchbacks. This trend is exacerbating the already significant phenomenon of ‘road obesity’ in Canada.

B. Vehicle models and versions are proliferating.

Between 1994 and 2019, on the market, we saw:

• a 42% increase in the number of vehicle models;
• a 60% increase in the number of model versions.

Automakers are relying on a very personalized approach to marketing their vehicle models. The differences – some of them subtle – that distinguish models and versions enable automakers to position themselves throughout the market, much to the benefit of their bottom line.

It is crucial to reach a consensus so that we can distinguish the various categories from one another and better document the impacts of this transformation on the safety of others and traffic congestion.

2. How does the automobile industry define and classify light-duty vehicles?

A. The terms used to describe and classify vehicles are determined mainly by the automobile industry, which offers no clear definition for SUVs and other light-duty trucks.

The automobile industry classifies vehicles by body type, vehicle line (weight, interior volume, etc.) or transmission. There are variations even within a single classification system. Classification criteria used to inform consumers about their buying options are relatively variable and subjective depending on the source consulted. In fact, Car and Driver identifies three distinct lines of SUVs, while Edmunds identifies 14.

3. How do governments define and classify light-duty vehicles?

Each public body defines vehicles in line with its own objectives, creating inconsistencies. They categorize vehicles on the basis of weight, other physical characteristics, mechanical components, use or number of passengers.

Thus, the various levels of government differ in how they define, say, light-duty trucks and SUVs. Quebec is the only province to have set a 3,000-kg threshold for “light-duty” vehicles. At the federal level, the threshold is 10,000 lb (4,536 kg).

The United States’ Environmental Protection Agency classifies cars by interior volume and light-duty trucks by weight. This classification, which is the basis for Canada’s regulations on GHG emissions from light-duty vehicles, is outdated, as it no longer reflects current market trends.

4. What are the issues posed by vehicle definition and classification?

The transformation of Canada’s vehicle fleet has created inconsistencies among the classification systems. Inconsistencies have been observed:

• Among the definitions and classifications used by the automobile industry and by governments;
• In the terminology and nomenclature used by the automobile industry;
• In the definitions and classifications used by the federal and provincial governments;
• In the English and French legislative wording for light-duty vehicles.

Examples of inconsistencies

• Very different vehicles are lumped into the same category: today the term SUV denotes vehicles as small as the Hyundai Kona and as large as the Lincoln Navigator.
• Identically-sized vehicles end up in different categories: there are vehicles with practically the same size but that belong to four body type classifications (sedan, hatchback, station wagon and SUV) and two vehicle types (cars and light-duty trucks).

5. How are CUVs distinguished from SUVs?

The line between the various categories of light-duty vehicles is increasingly blurred: these vehicles now form a continuum. Often smaller, more energy efficient and more economical than “traditional” SUVs, crossover utility vehicles (CUV) deserve much of the credit for light-duty trucks’ growing popularity. Ubiquitous on today’s market, they are sized similarly to cars. The proliferation of CUVs with highly variable characteristics is making light-duty vehicle definitions even vaguer.

6. What are Équiterre’s recommendations?

“At a time when vehicle size has become increasingly imposing, a clear definition and a classification system in line with market realities are necessary if we are to regulate vehicles in such a way as to rapidly curb the GHG emissions from Canada’s automobile fleet. It is essential that we adapt our regulations in order to better grasp the impacts of large vehicles on society and the environment.” - Andréanne Brazeau, Mobility Policy Analyst

Here are Équiterre’s chief recommendations:

• Establish an intergovernmental consensus on the official definitions for the various types of vehicles;
• Adopt a universal, automatic classification system for light-duty vehicles that:
• takes into account the transformation of the vehicle fleet;
• can be used by the automobile industry, Canada’s federal and provincial governments and, ideally, the United States.
• brings a halt to the binary categorization of light-duty vehicles as part of the regulations on GHG emission standards (cars or light-duty trucks);
• defines a typology based on the government’s regulatory objectives: road safety for others, reduction of GHG emissions and reduction of traffic congestion.

Light-Duty Trucks: Factors Contributing to the Transformation of the Light-Duty Vehicle Fleet

Conducted by Polytechnique Montréal’s Chaire Mobilité, this report explores the growing demand for light-duty trucks. The various aspects examined include household income and expenditures, vehicle ownership costs and the public interest. The study also looks at the various historic, economic, social and political factors that explain the popularity of light-duty trucks in Canada.

• Read the report (only available in French)
• Read the executive summary
• Read the illustrated summary

The report answers the following questions :

1. How to explain the growing demand for large vehicles?

There are numerous factors that could explain the growing demand for large vehicles, including:

• Economic conditions that are conducive to an increase in vehicle-related expenditures at both the macroeconomic and at the household level like easier access to credit and car loans;
• The advent of large vehicle models for every budget (crossover utility vehicles);
• A less stringent regulatory framework governing energy efficiency for SUVs and other light-duty trucks, leading to increased manufacturing of these vehicles;
• Land use planning that encourages urban sprawl and, by extension, dependence on solo driving;
• Road safety perceptions;
• Social norms.

An increasingly diverse range of consumers claim to be seduced by the multifunctionality of SUVs. This perception, driven by advertising and our collective psyche, leads consumers to choose this type of vehicle over other models, which are perceived as more limiting. But aren’t all cars multifunctional? The fact that there is confusion over how vehicle models and features are defined helps to boost SUV sales.

2. History can help us understand the popularity of SUVs

1904-1918: The advent of the automobile

1918-1945: The democratization of the automobile

1946-1972: The development of the automobile culture

1973-1979: Oil price shocks and the introduction of GHG emissions standards for light-duty vehicles in North America

1980-2000: The appearance of light-duty trucks as a passenger transport niche

2001-2007: The diversification of the light-duty truck market and the advent of crossover utility vehicles (CUV)

2008 to today: The increasing popularity of SUVs and CUVs

For a detailed timeline »

3. What are the economic factors that increase the tendency to purchase oversized vehicles?

A combination of factors involving households, governments and financial services have encouraged the purchase of light-duty trucks.

Households

Increased income and access to credit have a significant impact on the number of household vehicles. Between 1981 and 2019, average expenses related to vehicle ownership per Canadian household went from $6,730 to $10,476. Of this increase, 65% can be attributed to the purchase of new light-duty trucks.

Governments

In Canada, gas prices have been kept at reasonable levels to limit the impact on the demand for vehicles, which are currently recognized as the world’s dirtiest by the International Energy Agency.

Financial Services

The consumer credit rate helps with automobile financing. In Quebec, 88.3% of new vehicles are financed. Accordingly, growth in household debt from automobile loans now surpasses any other form of credit, including mortgages.

Long-term financing of SUVs, which cost on average $10,000 more than a car, typically has higher interest rates than financing for cars. It has become very profitable for financial institutions.

4. How have industry practices affected the demand for light-duty trucks?

Manufacturers

To keep light-duty trucks competitive, they were subject to laxer emissions standards, as they were widely considered to be business vehicles. This in turn encouraged manufacturers to make these types of vehicles because it was easier for them to meet their emission targets.

Dealerships

In collaboration with financial institutions, dealerships use a variety of sales tactics:

• Interest rate promotions;
• Bimonthly or even daily installments;
• Payments spread over long periods.

5. How have the characteristics of light-duty truck owners evolved?

The growth of Canada’s vehicle fleet follows the same pace as that of the driving-age population. The number of SUVs and CUVs is increasing rapidly among all sociodemographic groups and in every province of Canada.

Households

All types of households purchase light-duty trucks (renters, single people, families, etc.).
Homeowners and households made up of a couple (with or without children) spend on average 1.5 to 2 times more to purchase light-duty trucks than cars.
The highest expenses are seen in households where there is a couple with children and in households where the occupants own their home.

Age and gender

• From 1999 to 2019, the percentage of light-duty truck owners in the 55-64 and the 65 and up age categories rose significantly, from 14% to 21% and from 12% to 20%, respectively. This phenomenon speaks to the persistence of driving habits over time: someone who owns an SUV at age 18 is likely to own one at age 55 as well.
• SUV and CUV ownership numbers are showing strong growth across all sociodemographic groups, but even more so among men aged 45 and up.
• SUV features that appeal to consumers vary by age:
  • Those under 30 like the off-road capabilities;
  • Those aged 30 to 44 like that they are spacious enough for a family; and
  • Those 45 and older like the overall usefulness of the vehicle.
• Traditionally bought by men, SUVs are appealing more and more to women.
• Among female drivers in 2019, the largest share of the SUV market (35%) was made up of women aged 35 to 44.

6. What are Équiterre’s recommendations?

“To reverse this dangerous trend, stringent regulations are needed to curb the multiplication of these massive vehicles.” - Andréanne Brazeau, Mobility Analyst, Équiterre

To reduce the demand for light-duty trucks, measures must be deployed at various levels of government.

Équiterre’s principal recommendations:

• Limit financing tactics used by the automotive industry and financial institutions that contribute to household over-indebtedness;
• Reform the regulations on GHG emissions for light-duty vehicles:
• Require manufacturers to meet an overall target for average GHG emissions from light-duty vehicles, and eliminate the two categories of vehicles (trucks and cars);
• Increase the requirements for obtaining compliance credits;
• Encourage land use planning that values sustainable mobility;
• Deploy awareness campaigns on vehicle size and on their environmental and social impacts.

MORE INFORMATION

WEBINAR

The Rise of Light-Duty Trucks in Canada : Reversing the Trend 

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Financial SUPPORT

Équiterre received funding from the Contributions Program for Non-profit Consumer and Voluntary Organizations. The views expressed in the report are not necessarily those of Innovation, Science, and Economic Development Canada or the Government of Canada.

READ THE REPORT