A new tax on yachts, luxury cars and private aircraft designed to hit the super-rich could also cover vehicles meant to help the environment, a tax expert warns.
The luxury goods tax, which will come into force on Sept. 1, will cover cars and SUVs, as well as private planes and helicopters, worth more than $100,000.
The federal tax will also cover yachts and boats B次元官网网址� including motorboats B次元官网网址� worth more than $250,000.
But senior tax lawyer H茅l茅na Gagn茅 says the new tax could also hit some electric and hybrid vehicles, including Tesla and BMW models, which cost more than $100,000.
The federal government has been encouraging Canadians to invest in clean technology and zero-emission vehicles, which can carry a higher price tag than cars that run on fossil fuels.
Gagn茅 said when the luxury tax was introduced the Department of Finance said B次元官网网址渢hat those who can afford to buy luxury goods can afford to pay a bit more.B次元官网网址�
B次元官网网址淚t seems to be assumed that it is only the wealthiest who will be impacted by the luxury tax but it is not necessarily the case,B次元官网网址� said Gagn茅, a partner at Osler, Hoskin & Harcourt LLP. B次元官网网址淚t can also impact indirectly taxpayers who may not consider themselves as being among the wealthiest but who may decide to purchase an electric vehicle with a retail sales price that happens to be over the $100,000 threshold.B次元官网网址�
Adrienne Vaupshas, a spokeswoman for Finance Minister Chrystia Freeland, said the measures, originally proposed in the 2021 budget, are not designed to hit the middle class.
She said the threshold for the tax for boats was deliberately set at $250,000 so it would cover superyachts and not middle-class families buying boats.
Vaupshas said it was B次元官网网址渙nly right and fair that the very wealthiest are asked to pay their fair share.B次元官网网址�
B次元官网网址淭he government was re-elected on a platform that included a commitment to bring forward a luxury tax on yachts, private jets, and luxury cars and implementing this measure is a priority,B次元官网网址� she said.
The tax was originally proposed in the 2021 budget. It will cover luxury cars, planes, and boats bought for personal use and leisure. Commercial vehicles, including small planes selling seats, and emergency vehicles are among the classes of vehicle exempt from the new tax.
The tax amounts to either 10 per cent of the taxable amount of the item or 20 per cent of the amount over the price threshold B次元官网网址� whichever is less.
Conservative finance critic Dan Albas accused the government of introducing a B次元官网网址渏ob-killingB次元官网网址� tax B次元官网网址渢hat will devastate CanadaB次元官网网址檚 car manufacturing sector, boating sector and aerospace sector.B次元官网网址�
B次元官网网址淎s the Canadian economy emerges from the pandemic and businesses struggle to recover from the downturn, only the Liberals would think imposing new taxes on businesses that create and maintain good manufacturing jobs is the right path forward,B次元官网网址� he said.
The NDP has been putting pressure on the federal government to do more to tax the super-rich. Measures to increase taxes on the wealthiest people in Canada, however, were not included in the Liberal-NDP confidence and supply pact.
NDP critic for tax fairness and inequality, Niki Ashton, said at a news conference last month that she wants the federal government to close loopholes she says are being used by the super-rich and corporations to avoid paying billions in taxes.
B次元官网网址� Marie Woolf, The Canadian Press
