Canada to Remove Luxury Tax on Yachts and Private Jets
The Government of Canada has announced plans to eliminate the controversial “luxury tax” on high-value yachts and private aircraft as part of its 2025 Federal Budget, a decision hailed as a major victory for the country’s marine and aviation sectors.
Introduced in 2022, the levy applied to boats priced above $250,000 CAD and private planes over $100,000 CAD, charging the lesser of 10% of the total value or 20% of the value exceeding the threshold. The tax on luxury cars above $100,000 CAD will remain in place.
Industry Applauds Policy Reversal
The measure drew sharp criticism from Canada’s boating industry, which warned that the policy had stifled sales, cut jobs, and reduced tax revenue. According to the National Marine Manufacturers Association (NMMA) Canada and the Canadian Marine Retailers Association (CMRA), the repeal marks a turning point for the sector, safeguarding thousands of skilled jobs and revitalizing local manufacturing.
“This is a major victory for Canadian marine businesses,” said Marie-France MacKinnon, Executive Director of NMMA Canada. “We’re grateful to our members and to MPs from all parties who acted to protect Canadian jobs and restore confidence in our boating industry.”
Rick Layzell, President of CMRA, echoed the sentiment, noting that dealers are eager to “bring sales back to Canada and reengage with families whose boating dreams were put on hold.”
Effective 5 November 2025
The repeal will officially take effect on 5 November 2025, with the government stating that the move will “provide relief to the aviation and boating industries and improve the overall efficiency of the luxury tax framework.”
Analysts expect the decision to boost domestic production, stimulate exports, and revive consumer confidence across the recreational marine sector, restoring Canadian Yachting activity to pre-tax levels.
The announcement also comes as other regions explore similar levies; notably, Washington State (U.S.) is considering a 10% surcharge on boats, planes, and RVs valued above $500,000 USD, a move already drawing industry concern.
Canada’s course reversal, by contrast, signals a renewed commitment to protecting marine jobs, supporting economic growth, and strengthening the nation’s position in the global yachting market.
