CARNEY'S LUXURY TAX SHUFFLE

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Jets Get a Break, Trucks Get the Bill: Carney’s Luxury Tax Shuffle

If you’re standing in the grocery aisle counting pennies, or staring at your property tax bill wondering what else you can cut this month, you might be interested to know who just got a tax break in Ottawa.

Spoiler: it wasn’t you.

In Budget 2025, Prime Minister Mark Carney’s government moved to scrap the federal luxury tax on private aircraft and yachts, while keeping it in place on high-priced vehicles – including pickup trucks over $100,000. 

In plain language:

  • Buy a $5 million private jet or pleasure yacht? The luxury tax is on its way out. (Boat International)
  • Buy a $120,000 work truck for your farm, construction business, or heavy towing? The luxury tax still applies. 

Tell me again who this economy is working for?

What changed – and what didn’t

The original Trudeau-era luxury tax, brought in during 2022, hit: (CTF)

  • Vehicles and aircraft priced over $100,000
  • Boats/vessels priced over $250,000

The tax was the lesser of:

  • 10% of the full price, or
  • 20% of the amount above the threshold

Budget 2025 now proposes to end the luxury tax on aircraft and vessels entirely – on sales, leases, importations, and improvements – as of early November 2025.

But the same budget explicitly keeps the tax on “subject vehicles”, which includes sedans, SUVs, and light-duty pickup trucks over that $100,000 mark. 

So the machinery to administer this tax doesn’t disappear. Ottawa just chose who it still applies to.

The official story vs the street reality

Carney’s team and the tax lawyers all line up to say roughly the same thing:

  • The luxury tax was “inefficient.”
  • It scared off sales of jets and yachts.
  • It hurt Canadian industries like business aviation and boatbuilding. 

We’re told this change will:

  • “Support jobs,”
  • “Improve competitiveness,” and
  • Even save the CRA some administrative costs by scrapping both the Underused Housing Tax and the luxury tax on aircraft and vessels. 

Maybe some of that is technically true. Yes, Bombardier is delighted and says it expects to create hundreds of new jobs now that the tax is gone.uggling middle class.

Canada’s luxury tax raised about $137 million this year and cost around $19 million to collect. (Facebook)
That’s not nothing – and more importantly, it’s not the jets and yachts that Carney decided to keep taxing.

Why the optics stink

You don’t need a PhD in economics to see the problem.

  1. The symbols are brutal.
    • Jets and yachts are shorthand for the ultra-wealthy.
    • Trucks, even expensive ones, are often tools: farms, trades, small contractors, people hauling equipment or towing for work.

When Ottawa cuts the tax on jets and yachts, and keeps it on high-end trucks, the message is simple:
If your vehicle has a flight deck or a sun deck, you’re “strategic.” If it has a box and a hitch, you’re just taxable.

  1. Timing could not be worse.
    This is happening while:
    • Food banks are reporting record demand.
    • Households are struggling with mortgage renewals at higher rates.
    • Seniors and working families are doing quiet math at the kitchen table to see which bill doesn’t get paid this month.

And right in the middle of that, Ottawa’s priority is…relief for yacht and jet buyers.

  1. The ‘jobs’ argument is selective.
    The aviation and marine sectors say the tax was killing deals, and maybe it was – on the margins. But where is that same concern for the local trades, small farms, and independent haulers trying to keep decent equipment on the road?

Are those jobs less valuable than those attached to private jets?

  1. The fairness frame is upside down.
    If the luxury tax is truly a bad tax – distortionary, inefficient, not worth the trouble – then kill it for everyone. Say so, own it, and scrap the whole thing.

But that’s not what Carney did. He surgically removed the parts that bother the people who fly and float, and left the rest for those who drive.

Not envy – priorities

This shouldn’t be framed as “jet envy.” If someone has built a business and can afford a plane or a boat, fine. The issue is priorities and consistency.

Right now, the federal government is:

  • Keeping a luxury tax on vehicles – including pickup trucks used by working people –
  • While quietly removing it from aircraft and yachts, and
  • Patting itself on the back for “administrative savings” at the CRA and a small bump in corporate activity.

Meanwhile, the average Canadian is told there’s no room in the budget for:

  • Serious relief on income taxes,
  • A real plan to bring housing within reach, or
  • Meaningful cuts to the layers of fees and taxes that show up on every bill from gas to groceries.

It starts to look less like “nation-building” and more like club maintenance.

A simple, honest alternative

If Ottawa wanted to send a different message, it could have done something like:

  • Phase out the entire luxury tax over a few years, starting with items tied to real work and productivity – including certain trucks and equipment – not starting with jets and yachts; or
  • Replace the luxury tax altogether with a simpler, broad-based measure that doesn’t rely on picking winners and losers between industries.

Instead, we got the worst possible optics: a targeted tax break for the highest-end toys, while the tool-of-trade version of the same price tag stays taxable.

In Carney’s Canada, it seems, if your ride has landing gear or a sundeck, you’ve earned a break. If it just has mud on the tires and a ladder rack, you’re still on the hook.

 

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