No Luxury Auto Tax relief in BC’s Budget 2023

March 8, 2023
Editor, Canadian auto dealer magazine

Though the 2023 BC Budget is ostensibly focused on “affordability”, it leaves a lot to be desired when it comes to increasing affordability for workers and families that rely on automobiles for their work and daily life, according to NCDA President and CEO Blair Qualey. It does even less for small business owners selling those vehicles. Qualey spoke with Canadian auto dealer on Monday about how he thinks this budget stacks up, and what it could have done better.

To start off with the positives, Budget 2023 contains a $44 million investment over three years to continue to support British Columbia’s transition to a zero-emission economy, $40 million of which is dedicated to the CleanBC Go Electric Commercial Vehicle Pilots Program (CVP). There is also an ongoing commitment to the CleanBC Go Electric Passenger Vehicle Rebate Program which is administered by the NCDA. “More than 85,000 ZEVs travel highways in this province today and the rebate program has been a contributing factor, along with increased support for charging stations,” said Qualey in an association press release on Friday.

But the rest of the 2023 Budget did nothing for British Columbians who need to drive, and less for BC auto dealers grappling with low inventories, high interest rates, and most importantly, a luxury vehicle tax that currently includes many new vehicles. Qualey said that he’s been hearing a lot of frustration from dealers all over the province. “Our members are very frustrated at the moment around the current status of the tax and other tax and regulatory burdens on them. And we recognize the luxury tax is just one of many frustrations for them, but a pretty big one because they hear it from their customers all the time.”

“I think the focus of the budget was pretty clear… there weren’t a lot of things in there to make life better for a business in the province,” said Qualey. “For, dealers, many of whom were especially waiting to hear what was going to happen with the British Columbia Luxury tax, it was pretty disappointing to see that yet again, the government hadn’t adjusted the threshold of $55,000, particularly when the average price of a vehicle in Canada now is, you know, $54,000-plus just for an average vehicle.”

This affects regular British Columbians, not just auto dealers. “There’s a lot of ‘soccer mom vehicles’, like family hauler vehicles, that get caught in luxury tax, which is crazy. I don’t think it’s really what the government intends.”

Qualey has experience working with governments from both sides of the aisle, and readily looks beyond politics to the big picture. “We just want to be one of the calm, steady voices saying, ‘look, if you’re concerned about affordability, you really need to look at some of these other things, including businesses who employ so many people in this province. For small businesses in particular, there was no relief in this budget. So we’ve got a lot of work to do to convince this government.”

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