Canada Planning ‘Luxury Tax’ On Some Aircraft

The Canadian Owners and Pilots Association (COPA) is calling on aircraft operators to oppose a 10 percent “luxury tax” on personal aircraft (also boats and cars) worth more than $100,000 CAD (about $75,000 USD), proposed as part of the newly elected government’s financial plan. The proposal was announced as a campaign promise in October and became government policy in Prime Minister Justin Trudeau’s “mandate letter” to Finance Minister Bill Morneau outlining the financial initiatives expected over the next four years. It occupies a single line in the document and specifies that the tax targets items for personal use. Details on its implementation timeline and how the tax will be collected have not been released. 

COPA President Bernard Gervais said in a recent announcement that while details of the proposed tax are sketchy, opposition has already begun. “Rest assured that we will be working against this in coordination with the other aviation associations,” he wrote. In the meantime, Gervais said members should write Morneau to protest the mandated tax. All aircraft sales in Canada are already subject to a 5 percent goods and services tax along with sales taxes levied by individual provinces and the additional tax “would seriously hinder aviation’s future in Canada and cause potentially devastating harm to the airports and jobs that this sector of Canada’s aviation industry sustains,” a template letter supplied to COPA members says.