Story ID: 
Canada Keeps Aircraft under Luxury Tax Umbrella
By: Gordon Gilbert
Caption: Tax is estimated to have caused the loss of 3,800 jobs and $1.1 billion in revenues
Word Count: 221
Canada’s 10% luxury tax on certain aircraft remained unchanged in the federal budget released last month, despite a second recommendation from Canada’s House of Commons Standing Committee on Finance (FINA) 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.”
Reaction by the Canadian Business Aviation Association was immediate and firm. “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.”
After the tax took effect in September 2022, the government incorporated a concession to business aviation by adding the use of aircraft for business to the list of “qualifying flights” that are exempt from the tax. Specifically, an aircraft is qualified if it is conducted at least 90% of the time “in the course of a business of an owner or lessee with a reasonable expectation of profit.”
Bombardier v-p of government and industry affairs Pierre Pyun told attendees at a recent CBAA meeting that the luxury tax appears to have caused the loss of 3,800 Canadian jobs and $1.1 billion in revenues through March.