AED recently surveyed its Canadian members to develop baseline information about the impact heavy equipment distributors have on the Canadian economy and to find out what keeps them up at night. Having this information is vital to conducting effective advocacy engagement with politicians and bureaucrats on behalf of the members – changing policy where necessary and creating an environment in which to conduct business. About 30 percent of the Canadian membership responded to our survey. Those responses have provided a good basis for prioritizing our advocacy goals in Canada. We will discuss the results in greater detail at the Canadian Breakfast during the AED Summit in Las Vegas, on Thursday, January 18, 2018, and with a number of roundtables and presentations at the Ottawa Briefing, February 28 to March 1, 2018.

1. CEDConstruction Equipment Distribution
Published by AED: Business Fuel for a More Profitable Dealership
January2018
n Good Company
Hvidtved Larsen's
Sewer Cleaning Tankers
Are Sold Worldwide
AED Gears Up
To Celebrate 100 Years
n A Closer Look
Learn More About
AED Member
e-Emphasys Technologies
n Canadian Concerns
The Top Five Factors
Impacting AED's
Canadian Members
Blast
From
the Past

2. contentsCED Magazine | January 2018 vol. 84 no. 1 www.cedmag.com
>> FEATURES
22
Associated Equipment Distributors will dive into the past to relive and
bring to light major milestones in the Association’s history leading up to
AED’s centennial celebration in January 2019.
Blast From The Past
40
Hvidtved
Larsen
Hvidtved Larsen has
been in business for
more than a century,
remaining so in large
part because those
at its helm have
looked forward.
Today the Danish
company develops
and produces sewer
cleaning tankers that
are sold worldwide.
42
Canadian
Concerns
AED recently surveyed its Canadian
members to develop baseline
information about the impact heavy
equipment distributors have on the
Canadian economy and to find out
what keeps them up at night.
52
A Closer Look
e-Emphasys
Technologies
provides cutting-
edge enterprise
resource planning (ERP)
software solutions to dealers
and rental companies.
January 2018 | Construction Equipment Distribution | www.cedmag.com | 3

3. By Stuart McCarthy and Raphael Brass
AED recently surveyed its Canadian members to develop baseline
information about the impact heavy equipment distributors have on
the Canadian economy and to find out what keeps them up at night. Having
this information is vital to conducting effective advocacy engagement with
politicians and bureaucrats on behalf of the members – changing policy
where necessary and creating an environment in which to conduct business.
About 30 percent of the Canadian membership responded to our survey.
Those responses have provided a good basis for prioritizing our advocacy
goals in Canada. We will discuss the results in greater detail at the Canadian
Breakfast during the AED Summit in Las Vegas, on Thursday, January 18,
Top 5 Canadian Concerns
1. Availability of skilled laborers, trained
and ready to work
2. The uncertainty and instability of
NAFTA negotiations
3. Currency fluctuation
4. Tax changes
5. General economic instability
CANADIAN CONCERNS:
Y O U R T O P F I V E
42 | www.cedmag.com | Construction Equipment Distribution | January 2018

4. 2018, and with a number of roundtables and presentations at
the Ottawa Briefing, February 28 to March 1, 2018.
So, what did Canadian members identify as their top
priorities? Aggregating the responses, the top five concerns are
as follows:
▶ Availability of skilled laborers, trained and ready to work
▶ The uncertainty and instability of NAFTA negotiations
▶ Currency fluctuation
▶ Tax changes
▶ General economic instability
Let’s take a further look at some of those concerns.
Skills Shortage
Virtually everyone who responded to the survey made it clear
to us that they are increasingly concerned about the double
threat of an aging workforce and a shortage of skilled laborers.
With the continuous technology upshift of increased complexity
of systems, onboard computers, autonomous/remote controls
and sensors, and more, it is vital that we maintain an accredited
and knowledgeable workforce. Simply put, members are not
able to fill the many positions available across our sector.
To its credit, the Canadian government recognized in the
2017 federal budget that as technology advances there may be
many people left behind without the skills needed for modern
job requirements.
Canada does not want to undergo the same experience as
other Western countries, where increased automation has seen
people let go from their manufacturing jobs with nowhere
to turn. There will be more money going to postsecondary
workforce training programs. There will also be reforms to the
policy that caused people to lose their unemployment insurance
and welfare payments if they enrolled in a postsecondary
institution.
This is being done to further incentivize people of all ages to
gain skills needed to work in skilled labor jobs. AED’s goal is to
make sure that the heavy equipment industry is well-positioned
with the federal government so that the funding and skills
training programs align with our needs.
Free Trade
The second-most-cited concern among members was the
uncertainty of trade and tariffs with the North American Free
Trade Agreement (NAFTA) negotiations underway. Of concern
to Canadian members, especially with the magnitude of what’s
at stake, is the bellicose language coming out of the White House
to “tear up” and “cancel” NAFTA if the U.S. doesn’t get its way.
When NAFTA replaced the Canada–U.S. Free Trade Agreement
20 years ago, it led to an industry that was inextricably linked
across the border, with thousands of jobs and billions of dollars
in trade dependent on the free flow of goods and services.
Following are some of the relevant numbers (provided by U.S.
and Canadian government officials):
▶ Canada is the largest trade and investment partner with
the U.S. In 2016, cross-border goods and services totaled USD
$627.8 billion. Exports from the U.S. to Canada were USD
$320.1 billion; imports were USD $307.6 billion.
▶ U.S. foreign direct investment (FDI) in Canada (stock) was
$352.9 billion in 2015 and Canada’s FDI in the United States was
$269.0 billion.
▶ Top export categories for goods from the U.S. to Canada in
2016: vehicles ($48 billion), machinery ($40 billion), electrical
machinery ($24 billion), mineral fuels ($16 billion), and plastics
($12 billion).
▶ Top imports from Canada to the U.S.: vehicles ($58 billion),
mineral fuels ($54 billion), machinery ($19 billion), special
other (returns) ($15 billion), and plastics ($10 billion).
▶ Canada is the biggest export market for 35 states, with
nine million U.S. jobs dependent on trade and investment from
Canada.
▶ 600,000 Americans work for Canadian-owned businesses
in the U.S.
As with the automobile industry, as much as 80 percent of
the content of heavy equipment sold in Canada crosses the
Canada–U.S. border at least once. “Buy America” provisions and
minimum content requirements have the potential to drive up
the cost of products and harm sales on both sides of the border.
NAFTA does need updating. The internet didn’t exist when
NAFTA was enacted. Fixes to e-commerce and labor mobility
would benefit members on both sides of the border. As a North
American association representing member interests in Canada
and the U.S., AED is an important voice in both Ottawa and
Washington on ensuring that a robust, fair trade is maintained
and improved for mutual benefit.
Tax Changes
AED members also expressed concern about proposed
federal government taxation reforms and the impact on their
businesses, especially family-owned operations. This was
compounded during the summer when Finance Minister Bill
Morneau introduced a number of measures which were seen as
an attack on small business, as they sought to reduce benefits
from family trusts, income sprinkling and passive income.
Facing a huge backlash from many quarters, the government
scaled back a number of the measures. At the same time, the
Liberal government followed through on its 2015 election
commitment to lower the small business tax rate from 10.5
percent to 9 percent. However, with the remaining tax changes
set to come into force, this was now billed as ensuring that those
changes would have a neutral impact on business.
AED will remain vigilant for any new measures that might
impact the transfer of family businesses; protection of income to
offset the cyclical nature and external impacts on our members’
businesses; and fair compensation to family members down the
road to compensate for unpaid work, “bootstrapping,” and self-
funding of businesses during the startup and growth years.
Other Priorities
NAFTA negotiations and tax measures here and in the U.S. –
particularly where the approaches are philosophically opposite
– will unfortunately continue to impact currency rates and
economic prosperity. On the trade front, Canada’s embracing of
other regional free trade agreements, such as the Trans-Pacific
Partnership (TPP), the Canada-European Union Comprehensive
Economic and Trade Agreement (CETA), and even, cautiously,
the prospect of a free trade agreement in China, may provide
some of the strength and economic stability AED members are
seeking as a balance to the NAFTA turbulence.
January 2018 | Construction Equipment Distribution | www.cedmag.com | 43

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