Thank you.
In our view, on the decision to repeal the luxury tax on private jets and yachts, it is difficult to understand the reversal of the principles that were used to justify the measure when it was introduced at the time.
Again, in budget 2021, it was argued, “Those who can afford to buy luxury goods can afford to pay a bit more.” I'm quoting then finance minister Chrystia Freeland. This was especially at a time when ordinary Canadians were making sacrifices to keep the economy afloat. In the New Democrats' view, that logic still holds, yet we're now abandoning the luxury tax on private jets and yachts entirely.
There was some justification that argued the luxury tax costs more to administer than it brings in, but the 2025 budget I think belies that claim. By our calculations, eliminating the tax will cost the government $135 million over five years in lost revenue. The PBO goes even further in estimating that the luxury tax on private jets and boats will raise $207 million over five years.
What makes this decision a little more difficult for us is that unions in the aviation and boating sectors have proposed practical solutions to address the potential industry impacts of these measures. They offered targeted mitigation measures and not a full repeal of the luxury tax. We think it's not wise to scrap it altogether, instead of working with workers and industry to refine the policy.
The result is that this is a policy retreat that gives up hundreds of millions of dollars of revenue at a time when the government really needs it, we think. It abandons a fairness measure aimed at taxing the ultrawealthy, and it ignores constructive proposals put forward by workers and their unions—working with their employers—who are ready to help improve the system rather than dismantle it.
It's already been dealt with, but thank you for the opportunity.