Canada's new tax targeting wealthy who buy luxury vehicles comes into effect today

Canada’s new tax targeting the wealthy who buy private jets, luxury cars, and yachts comes into effect today.

Under the Select Luxury Items Tax Act anyone buying luxury cars or aircraft exceeding $100,000 and boats exceeding $250,000 will have to pay a tax that is equal to 10% of the item’s full value.

With this “luxury tax,” the federal government aims to discourage the ultra-rich from buying heavy CO2 emitting vehicles, while also tackling inequality.

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While the law comes into force today, any written sale agreement dated after January 1, 2022, will also be subject to the tax.

In an August 2021 news release, the government cited the “COVID-19 recession” and Canadians who have lost their jobs and small businesses as reasons for implementing this tax.

“That’s why it is fair today to ask those Canadians who can afford to buy luxury goods to contribute a little bit more,” reads the statement.

The new tax arrives after a summer where celebrities were slammed for their environmentally unfriendly private jet usage.

The automated Twitter account Celebrity Jets has been exposing the likes of Drake, Kylie Jenner, and Taylor Swift for taking under 30-minute flights on their private jets.

Digital marketing firm Yard even ranked the 10 celebs with the worst carbon dioxide emissions based on how often they use their private planes.

 

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The data reveals that overall, these celebs have emitted an average of 3,376 tons of CO2 for their private plane usage in 2022 so far.

That’s 482 times more than a regular person’s yearly emissions.

For context, it takes one person about a year to create two tons of C02 emissions and a typical passenger vehicle emits about 4.6 tons of CO2 per year.

The aviation industry has criticized the luxury tax, warning of the economic impact that it could have, and could even result in the loss of at least 900 jobs.

Luckily for Drake, he doesn’t have to pay the tax since he acquired Air Drake in 2019.