OTTAWA — Canada’s new luxury tax on luxury cars, boats and private planes brought in $137 million in its first year, but it cost $19 million to bring in those taxes. Conservative MP Scot Davidson tabled an order paper question demanding information about the new tax in the spring and received answers from the government when Parliament returned this month. According to that those answers, the tax was levied against 72,000 cars sold in Canada, 398 boats and 71 planes.
The tax applies to cars and planes with a purchase price of more than $100,000 and leisure boats with a price tag over $250,000. The tax was calculated as either 10 per cent of the total purchase price or 20 per cent of the amount above the $100,000 and $250,000 thresholds, whichever is less. At the time it was introduced, Finance Minister Chrystia Freeland told reporters she thought it was entirely reasonable to ask someone who has $100,000 to spend on a car to pay more taxes.
“It’s also fair to ask those who have prospered in this bleak year to do a little more to help those who still need help. That is why we are introducing a luxury tax on new cars and private aircraft,” she said in her budget speech. Although the tax was mentioned in the 2021 budget it was not implemented until September 2022.
The $137 million collected fell just short of the government’s estimates, which projected $140 million per year, slowly rising to $145 million. The Parliamentary budget officer reviewing the tax believed th.