Canada’s House of Commons Standing Committee on Finance is recommending that the new federal budget excludes aircraft from the Luxury Items Tax Act.
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Canada’s House of Commons Standing Committee on Finance (FINA) has recommended for the second time that the country’s new budget proposal “exclude aircraft from the Luxury Items Tax Act and place a moratorium on the luxury tax on aircraft pending further industry consultation.” This latest opinion is presented in FINA’s recent report submitted to the government summarizing recommended priorities in advance of the 2024 federal budget release in mid-April.
The recommendation follows a period in which FINA requested comments on various aspects of the upcoming budget. The Canadian Business Aviation Association (CBAA) and other general aviation associations have been fighting the tax since it was initially proposed in 2019 and continued their battle after it was adopted in 2022. In addition to the exemption recommendation, the report also adopted three other CBAA motions.
“We remain committed to educating and advocating on behalf of our industry regarding the true cost of the luxury tax on aircraft,” CBAA president and CEO Anthony Norejko told AIN. “In the end, it hurts Canadian jobs and our economic productivity. We appreciate the Standing Committee's willingness to support our efforts.” Meanwhile, the Canadian Aircraft Owners and Pilots Association said it “will be monitoring the government of Canada's 2024 budget to confirm the change comes into effect.”
In July, the government did incorporate a concession to business aviation by adding the use of aircraft for business to the list of “qualifying flights” that are exempted from the tax. Specifically, an aircraft is qualified if it is conducted at least 90 percent of the time “in the course of a business of an owner or lessee with a reasonable expectation of profit and it is not conducted for the leisure, recreation, sport, or other enjoyment of an owner or lessee” and is not operated under a time-share or charter or for a guest of the owner or lessee.
Canada’s House of Commons Standing Committee on Finance (FINA) has recommended for the second time that the country’s new budget proposal “exclude aircraft from the Luxury Items Tax Act and place a moratorium on the luxury tax on aircraft pending further industry consultation.”
The recommendation follows a period in which FINA requested comments on various aspects of the upcoming budget. The Canadian Business Aviation Association (CBAA) and other general aviation associations have been fighting the tax since it was initially proposed in 2019 and continued their battle after it was adopted in 2022. In addition to the exemption recommendation, the report also adopted three other CBAA motions.
“We remain committed to educating and advocating on behalf of our industry regarding the true cost of the luxury tax on aircraft,” CBAA president and CEO Anthony Norejko told AIN. “In the end, it hurts Canadian jobs and our economic productivity. We appreciate the Standing Committee's willingness to support our efforts.” Meanwhile, the Canadian Aircraft Owners and Pilots Association said it “will be monitoring the government of Canada's 2024 budget to confirm the change comes into effect.”
In July, the government did incorporate a concession to business aviation by adding the use of aircraft for business to the list of “qualifying flights” that are exempted from the tax.