Fewer planes sold, less revenue for companies, less taxes for the public treasury and layoffs by the hundreds… Turbulence threatens Canadian aerospace companies if Ottawa goes ahead with its tax on luxury goods , plead the representatives of the industry in a letter to the government. This one does not intend to go back.
“The tax on certain luxury goods will penalize manufacturers, operators, distributors, pilots and suppliers and will have a negative impact on jobs”, pleaded in chorus, Tuesday, seven industry representatives in a letter intended Prime Minister Justin Trudeau and Finance Minister Chrystia Freeland.
“It will also have significant repercussions within the supply chain, the maintenance, repair and overhaul industries, and the entire aviation ecosystem at a time when they are just beginning to recover from the effects. devastating effects of the COVID-19 pandemic”, they continue in the document consulted by The duty. Nearly 28,000 jobs in this sector were lost between 2019 and 2020.
This 10% to 20% tax on new aircraft over $100,000 will come into effect next September. Ottawa estimates the tax will raise $604 million in tax revenue over five years, starting in 2021-22.
On the contrary, it is rather a thousand jobs and nearly a billion in income that will be lost in the country because of this tax, estimates Mike Mueller, president of the Aerospace Industries Association of Canada, in an interview. with the To have to. “This tax will chill the industry, send an international signal that this industry is not valued. Potential buyers will look elsewhere. »
“This measure is not a new proposal,” replied in writing Adrienne Vaupshas, from the office of the Minister of Finance. This tax was among his government’s election promises in 2019. “The government was re-elected on an election platform which included a commitment to introduce a luxury tax on yachts, private jets and luxury cars. To ensure we have the resources to invest in Canadians and to help our economic recovery from the COVID-19 pandemic, we are ensuring that the wealthiest pay their fair share of taxes. »
Civil aircraft sales fell nearly 50% in 2020 in Canada, but the industry has already recovered 75% of its pre-pandemic sales this year, according to government estimates.
The aerospace industry was the largest in Canada in terms of research and development (R&D) in 2020.