Canadian news outlets are reporting that a proposed federal budget set to go into effect Jan. 1, 2022, includes a tax on luxury items, such as boats that retail for more than CAD250,000 ($200,000).
If approved, the budget document cited by CTV News projects a CAD604 million ($482 million) increase in federal revenues during a five-year period.
The tax, which also applies to automobiles and aircraft, is calculated as the lesser of:
• 20 percent of retail above the threshold ($100,000 for cars and personal aircraft, $250,000 for boats)
• 10 percent of the full value of the car, boat or personal aircraft
“Even as Canadians have sacrificed to keep our economy going through the pandemic, some of the wealthiest have done well,” the budget document stated. “Those who can afford to buy luxury goods can afford to pay a bit more. To that end, the government is following through on its commitment to introduce a tax on select luxury goods.”
Last year, NMMA Canada addressed a 10 percent proposed luxury tax as a significant detriment to the industry.
“We are ready to work with the government to find new ways to generate revenue,” said NMMA Canada president Sara Anghel at the time. “But we simply can’t support a new tax that would severely damage the boating industry, put thousands of good jobs at risk, and potentially put government finances further into the red.”