The Canadian Taxpayers Federation (CTF) is raising concerns the Canadian government’s luxury tax will lead to people losing their jobs. .“The Trudeau government’s luxury tax will raise revenue on the backs of working Canadians who lose their jobs,” said CTF federal director Franco Terrazzano in a Thursday press release. .“It’s the workers who may lose their jobs making cars, boats and planes that can’t afford this tax.”.Despite promising not to raise taxes, the Canadian government is imposing a luxury tax on cars and planes costing more than $100,000 and boats valued at more than $250,000. The luxury tax takes effect on Thursday. .Finance Minister Chrystia Freeland proposed increasing taxes on tobacco by 16% and putting a 10% luxury tax on expensive cars and yachts in 2021. .READ MORE: Freeland taxes smokes, boats and rich rides.“If you have been lucky enough or smart enough or hardworking enough to afford to spend $100,000 on a car or $250,000 on a boat, congratulations!” said Freeland. .“And thank you for contributing a little bit of that good fortune to help heal the wounds of COVID and invest in our future collective prosperity.”.Former US president George HW Bush imposed a luxury tax on boats, expensive cars, planes, jewelry, and furs in 1991. The tax led to 25,000 job losses in the boat building industry. .Former US president Bill Clinton repealed the luxury car tax in 1993 because of how it harmed the auto manufacturing industry. This tax was fully phased out by 2003. .The Aerospace Industries Association of Canada said a luxury tax “will not achieve the desired purpose of taxing the wealthiest, but will instead have a dramatic, negative impact on Canadian manufacturing and on Canadian jobs.”.According to the National Marine Manufacturers Association Canada, it would bring about “potential job losses of at least 900 full-time equivalent employees.” .The Parliamentary Budget Officer estimates the tax will increase the Canadian government’s revenue by $87 million this year. Canada’s deficit is expected to reach $53 billion this year. .“At worse the luxury tax will cost many Canadians their job and at best it’s silly political posturing,” said Terrazzano. .“Trudeau’s deficit spending would burn through this cash in less than a day.”
