Thank you, Mr. Chair.
I am pleased to be here with you today to discuss the progress report that was tabled by the Department of Finance on December 2, 2022, which describes efforts by the department to address issues with the implementation of the Select Luxury Items Tax Act—including a summary of discussions and issues raised by impacted sectors.
In budget 2021, the government announced the introduction of a luxury tax on the sale of aircraft and cars with a sales price over $100,000, as well as on boats with a sales price over $250,000. This tax is calculated at the lesser of 20% of the value above the threshold, or 10% of the full value of the luxury car, boat or aircraft. The luxury tax came into effect on September 1, 2022.
This report addresses the following steps leading to the implementation of the luxury tax: the release of a technical backgrounder for public consultations, as of August 2021; the release of draft legislation for public consultations, as of March 2022; feedback received from stakeholders; internal consultations with CRA, CBSA and other governmental departments; linguistic, bijural and legistic review conducted by the Department of Justice; changes made in response to those public consultations; governmental news releases announcing details on the implementation, which were released in July 2022; an order in council made by the Governor in Council to fix the coming-into-force date of the luxury tax, released in August 2022; the release of draft regulations by the Department of Finance; the administration of the luxury tax by CRA and CBSA since its coming into force; additional measures since that coming into force; and, finally, a list of examples of typical stakeholders who met with finance officials over the last two years.
As detailed in this report, the Department of Finance consulted and discussed with sectors, on many different occasions, in an effort to address issues with the implementation of the luxury tax. Now that the luxury tax is in effect, administration and enforcement are ensured by CRA and CBSA. The first reporting period for the luxury tax ended on December 31, 2022. Taxpayers had until January 31 of this year to file their first return with CRA.
The department will continue to closely monitor the implementation of the tax.
Finally, as officials of the Department of Finance, we make best efforts to remain open and available to stakeholders, so that we can hear and understand any technical concerns they have with respect to the tax system, all while still ensuring that the government's tax policy goals and objectives are met.
This completes my opening remarks. I'm here with my colleagues to answer any questions that committee members may have.