Prime Minister Justin Trudeau ended up right where he started about six weeks ago: with a minority government.
For better or worse, that means automotive retailers, and specifically the Canadian Automobile Dealers Association (CADA), are aware of the battles to come—or to be continued—including the Liberals’ soon-to-be implemented luxury tax (early 2022).
The association’s Ottawa team once called it “a Robin Hood-theme policy” that puts a new tax on the sale of new luxury cars and aircrafts with a retail sale price of over $100,000, and new boats over $250,000.
In its CADA Newsline update, it also said the tax is “an ineffective and arbitrary way of raising money for the government,” at least from an economic standpoint, and that historically it has never achieved its main goal of raising revenue.
However, advocacy efforts allowed CADA to win a major concession from the government that ensures the tax only begins at the marginal tax rate of $100,000, according to Huw Williams, CADA Director of Public Affairs Huw Williams.
“CADA is really going to be working closely with our provincial associations and our grassroots dealer principals and membership, to make sure that we have the most coordinated advocacy approach to these significant challenges,” said Williams in an interview with Canadian auto dealer. “It’s important that every dealer is all in on educating all parties to the challenges the industry and consumers face.”
Consultation on the luxury tax is open until September 30, 2021. The goal will also be to ensure the tax is not imposed on provinces that already have their version of a luxury tax, such as Quebec and British Columbia.
Luxury tax aside, the association and dealers across the country still have their work cut out for them, from pushing for a national scrappage program to extending the Zero-Emission Vehicles Program (i-ZEV) program, and pushing for more electric vehicle charging infrastructure, along with everything else that goes with EV adoption—from public charging and building code changes, to harmonization between Canada and the United States on multiple levels, to name a few.
It may be a new Parliament, but the challenges remain the same—for now, anyway.
