Thank you, Mr. Chair. Good afternoon, everyone.
I want to thank the committee for giving the IAM some time to voice our concerns on behalf of labour within this industry. We represent thousands of members, SMEs and OEMs in this important sector of the Canadian economy, across Canada in multiple provinces. Although, as labour, we do support any government's goal of addressing income inequality, we strongly believe that this tax is misdirected towards manufacturing. We do not believe this was the government's original intent nor that it reflects what was announced during campaigning. The fact is that jobs will inevitably be affected adversely by this tax.
Manufacturing has suffered greatly over the last decade, and the recovery of our sector will further be punished through this tax. The tax will put an added burden on our sector, which has already lost almost 30,000 jobs, just in 2020. We believe the negative impact on jobs and on our industry far outweighs any benefit that would come from this tax.
I, for one, do not understand why, in this sector, our country would do the opposite of all other countries. Protectionism is at an all-time high, and countries are protecting their industries while we're headed in the opposite direction. This tax will make us less competitive globally and will take some of the shine away from our country and our industry. It will tarnish our reputation as a world leader and as a great country to build and service business aircraft. We need to support this industry and limit barriers to our competitiveness.
This tax is contradictory to recent investments that government has made in this industry to strengthen, grow and make it more resilient. It is as if you are giving with one hand and taking away with the other. As Mike mentioned, we should learn a lesson from the concrete examples that exist where this type of tax has failed government, workers and their communities. We're talking about the boating and the business aircraft industries in the United States.
Finally, there's been no study or assessment done on the impact this tax would have on jobs versus the benefits it would bring. We feel this is a necessary step that has been skipped and must be done in order to determine the impact on jobs.
I appeal to this committee and to government to please consider the important impact that this will have on jobs and communities.
We believe there are four questions to ask ourselves. Are we putting Canadian companies at a disadvantage globally versus competitors? To us the answer is clear. It's yes. Will this tax generate a loss in sales? Absolutely. Would this translate into job loss? If you're selling fewer aircraft and manufacturing fewer aircraft, you have fewer jobs. Do other competitor countries have such a tax? They did. They learned from their mistakes, and they repealed these taxes and modified them, so the answer to that is no.
Again, I want to stress that this tax would apply to a limited number of manufacturers whose businesses rely heavily on the production of business jets. Not only would these businesses carry the liability of paying the tax, but if the tax rendered them less competitive, consumers of this type of good would turn to competitors. Business aircraft is a strength for Canada, providing a solid foundation for recovery and jobs, and should not be punished in a misdirected effort that will target manufacturers and workers.
If applied in its current form, the tax may be a disincentive for business to continue doing business in Canada or even to consider Canada as an option to establish operations. For decades, Canada's aerospace industry has not only had a competitive advantage due to a number of factors, but also provided incentives to business to continue operating here. Why would we go and do something different in this case?
The federal government has looked to stimulate a recovery in aerospace. This tax could unintentionally affect manufacturing jobs in this subsector across Canada. In effect, the luxury tax is somewhat contradictory to the intent of recent investments in aerospace.
For these reasons, I thank you for this opportunity. I'd be glad to answer any questions.
I would like to also let you know that we'll be sending a detailed brief to the committee. Thank you very much.