Canadian luxury vehicle dealers will have to add and explain to their customers a new 10-per-cent sales tax on new vehicles priced above $100,000 if the newly elected minority Liberal government sticks to its platform and implements the fee.
That’s “very concerning” to dealers in British Columbia, where a similar provincial tax already exists.
In a single line in the party platform, the Liberals promise to “introduce a new 10-per-cent tax on luxury cars, boats and personal aircraft over $100,000.”
But, because the party holds fewer than half the seats — 177 — in the House of Commons, implementing any budgetary measures would require support from opposing parties. However, the tax aligns with the economic philosophy of the NDP, which holds 39 seats and arguably the balance of power.
The NDP had promised to “ask the very richest multi-million millionaires to pay a bit more towards our shared services with a new one-per-cent wealth tax on wealth over $20 million.”
At a provincial level, the B.C. NDP on April 2018 raised the provincial sales tax to 15 per cent from 10 per cent on new and used vehicles priced between $125,000 and $149,999. On vehicles priced at $150,000 or more, the tax increased to 20 per cent from 10.
Blair Qualey, head of the New Car Dealers Association of B.C., says another tax is going to hurt business — and government coffers.
“In a province where we already have a luxury tax and luxury supertax, up in those high levels, it’s very concerning,” he said of the proposal. “We’re seeing this layering of tax burdens by jurisdictions that don’t seem to be talking to one another. The burden is getting pretty difficult.”
One year after the B.C. NDP instituted the new taxes, dealers noticed fewer sales.