Order Fixing September 1, 2022 as the Day on Which Certain Provisions of the Select Luxury Items Tax Act Come into Force: SI/2022-36

Canada Gazette, Part II, Volume 156, Number 16

Registration
SI/2022-36 August 3, 2022

BUDGET IMPLEMENTATION ACT, 2022, NO. 1

Order Fixing September 1, 2022 as the Day on Which Certain Provisions of the Select Luxury Items Tax Act Come into Force

P.C. 2022-895 July 14, 2022

Her Excellency the Governor General in Council, on the recommendation of the Minister of Finance, under subsection 135(2.1) of the Budget Implementation Act, 2022, No. 1, (the “Act”), chapter 10 of the Statutes of Canada, 2022, fixes September 1, 2022 as the day on which the provisions of the Select Luxury Items Tax Act, as enacted by subsection 135(1) of the Act, that set out the tax on subject aircraft come into force.

EXPLANATORY NOTE

(This note is not part of the Order.)

Proposal

To bring the provisions of the Select Luxury Items Tax Act (the “Act”) that set out the tax on subject aircraft into force. This Order is made pursuant to a provision of the Budget Implementation Act, 2022, No. 1.

Objective

Follow through on the government’s commitment to introduce a tax on the sale and importation of luxury vehicles, vessels and aircraft, by bringing into force the provisions of the Act that set out the tax on subject aircraft.

Background

In Budget 2021, the government proposed to enact a tax on certain luxury vehicles, aircraft and vessels aimed at helping to ensure that those Canadians who can afford to buy luxury goods are contributing a little more. The Act, which was enacted by Parliament as part of the Budget Implementation Act, 2022, No. 1, sets out a tax on the sale and importation of certain luxury vehicles and aircraft with a value over $100,000 and vessels with a value over $250,000. This tax is calculated at the lesser of 20% of the value above these price thresholds and 10% of the full value of the luxury vehicle, aircraft or vessel.

The Budget Implementation Act, 2022, No. 1 provided that all provisions of the Act, except the provisions of the Act that set out the tax on subject aircraft, come into force on September 1, 2022. The Budget Implementation Act, 2022, No. 1, also provided that the provisions of the Act that set out the tax on subject aircraft come into force on a day or days to be fixed by order of the Governor in Council.

Implications

This Order fixes September 1, 2022, as the day on which the provisions of the Act that set out the tax on subject aircraft come into force. Together with the other provisions of the Act, which come into force on September 1, 2022, this Order will result in the application of a tax on the sale and importation of certain luxury vehicles and aircraft with a value over $100,000 and vessels with a value over $250,000.

This Order provides legal certainty to affected stakeholders on the timing of implementation so that all affected stakeholders can be prepared for the day on which the luxury tax comes into force. Vendors (such as manufacturers, wholesalers and retailers) and purchasers (such as wealthy individuals) of subject vehicles, subject aircraft and subject vessels will be affected by the provisions of the Act, including those that are brought into force by this Order.

This Order brings into force certain provisions of the Act and any requirements relating to the administration and enforcement of the Act are derived from the Act itself. This Order does not increase or decrease the legislative or regulatory requirements of the Act and, therefore, the Order does not increase or decrease the level of costs imposed on Canadians, businesses, governments or other stakeholders, any such administrative costs or compliance obligations are attributable to the Act itself.

Consultations

The Department of Finance conducted a public consultation on the luxury tax based on a technical paper from August 10, 2021, to September 30, 2021. Additionally, the Department of Finance conducted a public consultation on the basis of draft legislation from March 11, 2022, to April 11, 2022.

Contact

Gervais Coulombe
Senior Director
Excise
Department of Finance
Sales Tax Division
Email: Gervais.Coulombe@fin.gc.ca