As expected, the federal government is moving ahead with assessing a “luxury” tax on new aircraft that sell for more than $100,000, which is virtually all of them except for some gliders and ultralights. The tax is also believed to apply to used aircraft that are imported and thus are “new” to the Canadian registry. The idea was first floated in 2020 and Canadian industry groups were quick to respond. They appeared to be caught flat footed by the official announcement, which came in the latest budget put forth by the Liberal government. The Canadian Owners and Pilots Association has since sent the government a letter and plans to continue lobbying against the tax.
The tax proposal has changed a little since it was first proposed. The $100,000 threshold was supposed to apply to aircraft, boats and cars intended for recreational use. In the intervening months, the boat industry gained some relief with the threshold being increased to $250,000 for recreational vessels.