Canada’s Luxury Tax Adoption Criticized As ‘Reckless’

The Canadian Business Aviation Association (CBAA) has again blasted the Canadian government's 10 percent luxury tax, which took effect September 1 on the sale of boats, cars, and aircraft worth $100,000 or more. According to the CBAA, the tax’s adoption “without understanding its full impact on [aviation] jobs and the economy is, in our view, reckless.”

In a September 13 letter to the country's finance minister, CBAA president and CEO Anthony Norejko said, “Without having done any economic impact analysis ahead of imposing the tax, you are flying blind.” While the association appreciates that the government will make some changes to the tax via regulations, CBAA said “these changes do not go nearly far enough to remedy the significant and negative impacts the tax will impose on [the aviation] industry.”

Norejko suggested “that there is still opportunity to mitigate the negative impacts the tax is sure to inflict, and that the government can do so first by pausing the luxury tax on aircraft until a full economic impact assessment has been completed by the Department of Finance.”

The CBAA also reiterated several recommendations, including raising the sales price threshold from $100,000 to $5 million for aircraft purchases and exempting aircraft intended for charter flights.