The federal government tabled its 2021 budget on April 19. As Canada reckons with the financial costs of the pandemic, the presentation included several new tax measures that would give the government a fiscal boost.
Luxury cars, aircrafts & boats
The feds have proposed a retail tax on certain luxury goods sold in Canada effective January 1, 2022.
This means extra tax when you buy luxury cars and private aircrafts priced over $100,000, or boats priced over $250,000 — cause that's definitely something all of us were planning on doing next year (note the sarcasm).
The federal government intends to implement an excise duty on all vaping products in Canada in 2022.
Excise duties are paid by businesses rather than consumers, meaning you won't have to pay the tax if you're just a vape user. But it does mean that vaping products will likely get more expensive to make up for it.
The new duty on vaping would apply to all vaping liquids, regardless of whether or not they contain nicotine, but not to cannabis vaping products.
There's also a proposed increase in excise duties on tobacco products in the budget — up by $4 per carton of 200 cigarettes, along with corresponding increases for other tobacco products.
Again, you won't be paying more taxes on cigarettes but the price could go up because the tobacco industry will want to recuperate the costs.
Netflix, Prime Video & other video streaming platforms
The government wants companies from outside of Canada that sell and supply digital services to Canadians to start collecting and paying GST/HST.
This includes video streaming services like Netflix, Amazon Prime Video, Disney+ and so on.
Crave is homegrown so it won't be impacted.
The measures would come into effect on July 1, 2021.
Experts told the Canadian Press that companies will probably add a GST/HST charge to subscribers' bills or add the price of the tax to the total sale price.
The same way Netflix would be required to collect and pay GST/HST, so too would non-Canadian music streaming platforms, such as Spotify.*
Apple opted to begin charging GST/HST for Apple Music and iTunes products in 2019 — before it was legally required for them to pay federal goods and services/sales taxes.
The government's GST/HST proposal also covers "non-resident distribution platform operators" like Google Play.*
Tax lawyers Rob Kreklewetz and Stuart Clark explained in a blog entry that vendors and operators will collect the correct amount of GST/HST based on the consumer's "usual place of residence as determined by their billing address, SIM card, IP Address, and/or banking information among other indicators."
*This article has been updated. An earlier version of this article included Apple Music & the Apple App Store; however, Apple opted to start charging GST/HST voluntarily in 2019.