Luxury tax changes mulled as critics point to job losses

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Changes to the luxury tax may be on the way.

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Finance Minister Chrystia Freeland said Thursday she will make changes to the luxury tax that critics have called a job killer, according to Blacklock’s Reporter.

The 10% tax on private aircraft over $100,000 was set to go in effect on Sept. 1.

“The government intends to release draft regulations in the near term that effective September 1 would relieve the luxury tax on sales of certain aircraft for export at the time the sale is completed,” Finance Minister Chrystia Freeland said in a statement.

On June 13, Parliament passed Bill C-19 which put a luxury tax on aircraft and cars over $100,000 and on boats over $250,000.

The tax would be worth $663 million over five years, according to a Legislative Costing Note by the Parliamentary Budget Office.

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“If you have been lucky enough or smart enough or hardworking enough to afford to spend $100,000 on a car or $250,000 on a boat, congratulations,” Freeland wrote in an April 19, 2021 budget document, Recovery Plan For Jobs.

“And thank you for contributing a little bit of that good fortune to help heal the wounds of COVID and invest in our future collective prosperity.”

Business and union representatives have said the tax would cost at least 900 jobs in Canada.

“This tax will destroy the industry and have job losses across the country,” testified Sara Anghel, president of the National Marine Manufacturers Association.

Matt Poirier, trade policy director with Canadian Manufacturers and Exporters, testified the tax would devastate small companies.

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“It’s a bad idea just full stop,” said Poirier.

Michael Wilton, president of Flight Simple Aircraft Sales of Calgary, testified at May 20, 2021 committee hearings.

He said this is an unfair tax.

“I’ve got an airplane and I’m called the rich guy. We don’t think that’s fair. I am by no means rich. My clients are pretty normal people. They’re farmers, they’re ranchers, they’re businesspeople, they own a small shop,” Wilton said.

“Most general aviation pilots and owners are not the ultra-rich, not even close. They are the regular folks, your neighbours, my neighbours, the people who enjoy a hobby that happens to be incredibly expensive.”