Business leaders have urged senators to address concerns that a new luxury tax on cars, boats and airplanes could lead to the loss of thousands of jobs in Canadian manufacturing. The House of Commons is scheduled to give its final approval Thursday to Finance Minister Chrystia Freeland’s C-19 budget bill, which includes the tax. The vote in the third reading will send the bill to the Senate, where several committees are already conducting preliminary studies of the legislation. The luxury tax has emerged as the most controversial element of the 440-page budget bill. Some proponents of tax justice have hailed the measure as a way to force wealthy Canadians to contribute more to government services. However, business and employee leaders have warned that it will hurt workers and the middle class based on high-quality tax-targeted products in manufacturing and tourism. The Liberals warn that the federal budget luxury tax will hurt manufacturing and cost jobs, aerospace and boats Canadian yacht and private jet makers prepare for canceled orders as part of liberal luxury tax The luxury tax will apply to new cars and aircraft that cost more than $ 100,000 and to ships that sell for $ 250,000 or more. The tax rate will be less than 10 percent of the full value of the vehicle or 20 percent of the value above the limit. A report released last month by Parliament’s Budget Officer said the tax would reduce sales by more than $ 600 million a year. Late Tuesday, lawmakers voted unanimously in favor of an NDP amendment to the budget bill that gives the government the flexibility to delay the scheduled September 1st implementation date for the new tax, but only in relation to aircraft. Several business leaders told senators in the National Finance Committee on Wednesday that while the amendment was welcome, the Senate should further mitigate the impact of the tax. The luxury tax has emerged as the most controversial item in Finance Minister Chrystia Freeland’s 440-page budget.Justin Tang / The Canadian Press Sara Anghel, president of the National Marine Manufacturers Association, warned senators that the tax could cost hundreds, and possibly thousands, of jobs in Canada in the shipping industry, according to research by economist Jack Mintz of the University of Calgary. . “This is a complete attack on the boat industry,” he said. He also wondered why this week’s amendment only applied to the aviation sector, not to cars or boats. “The tax will hurt the middle-class families the government is trying to help.” The committee heard similar concerns from Mark Agnew, Senior Vice President for Policy and Government Relations at the Canadian Chamber of Commerce, and Mike Mueller, President and CEO of the Aerospace Industries Association of Canada. The amendments proposed by the Conservatives and the Kebua Bloc to address business concerns about the luxury tax were voted down by Liberal and NDP MPs. The majority of senators sit as independents, so it is not clear how the chamber can vote. The Conservatives are the only national party represented in the Senate, with 16 members in the 105-seat House. There are currently only 88 senators due to 17 vacancies. The boats are launched at Kawartha Lakes Marina in Bobcaygeon, OD on May 16, 2020. Industry teams have called on Ottawa to abandon luxury tax plans or reduce its impact. Fred Thornhill / The Canadian Press On Wednesday, several senators from the National Economic Commission made comments that appeared to be sympathetic to the issues raised by business groups. “I’m concerned about what I’m hearing,” said Sen. Clément Gignac, a former Quebec minister and chief economist at the National Bank. He asked the speakers to propose specific amendments to the budget bill. He told The Globe and Mail after the meeting that it was too early to discuss possible amendments until the Senate receives the final version of the bill from Parliament. Although it is rare for the Senate to amend the budget bill, the Parliamentary Library notes that it did so in 2016 and 2017. Adrienne Vaupshas, a spokeswoman for Ms Freeland, said in a statement on Wednesday that the implementation of the luxury tax “remains a priority”. He did not say whether the government intends to delay the implementation date for the aviation sector. NDP finance critic Daniel Blake, who pushed for the amendment, giving the government the option, said he hoped it would give Treasury officials extra time to address the concerns. But he said he and his party continue to support the luxury tax principle. “It is not meant to be a panacea,” he said. “It’s one of many ways we can use it to try to ensure that the people with the highest incomes and the richest people in Canada pay their fair share.” For subscribers: Receive exclusive political news and analysis by subscribing to Political information.
