Tax & Trade Blog

On September 1, 2022, the Select Luxury Items Tax Act (“SLITA”) officially came into effect. Vendors and importers of subject goods should be registered with the Canada Revenue Agency (“CRA”), paying tax, and keeping track of the information they will need to file their first returns.

While we have written about the luxury tax previously, this blog provides further practical details on the implementation of the luxury tax in light of the CRA’s recently-released administrative guidance.

While anti-dumping and subsidy investigations are not uncommon, they do not always result in duties being imposed. As a case in point, the Canada Border Services Agency (the “CBSA”) recently closed its investigation into “Drill Pipes” originating in or exported from China because the Canadian International Trade Tribunal (the “CITT”) did not find injury or a threat of injury.

While New York City’s (in)famous soda ban was ultimately struck down, in the years since other jurisdictions have moved forward with their own schemes to regulate sweetened beverages – now including Newfoundland & Labrador (“NL”).

On September 1, 2022, NL will introduce its so-called “Sugar Sweetened Beverage Tax” (“SSBT”). Interestingly, despite ostensibly being introduced to encourage “better beverage choices”, the tax does not depend on the amount of sugar in the drink – just the amount of drink itself!

Times are changing for Canadian private corporations in terms of transparency and publicly available information. As of October 1, 2020, private companies in British Columbia have been required to maintain a registry of beneficial owners. Similarly, Québec’s transparency registry statute received Royal Assent on June 8, 2021. The Federal Government has also announced in its 2021 Budget that a publicly accessible beneficial ownership registry would be in place by 2025.

Not to be outdone, Ontario has joined the growing number of Canadian jurisdictions “pulling back the curtain” on private corporations, with plans to impose its own rules for registering beneficial ownership (the “Ontario Rules”). With the Ontario Rules set to come into force on January 1, 2023, the province will likely “leapfrog” the Federal Government.

Border searches can be nerve-wracking experiences, particularly if it involves an officer looking through your phone or laptop. Canadians and international visitors may therefore be surprised to know that thanks to a 2020 Alberta Court of Appeal (“ABCA”) decision, the CBSA does not currently have the right to search personal digital devices (“PDDs”) at ports of entry – at least in Alberta!

While this quirk looks like it will be temporary as the government has introduced Bill S-7 to address this issue, travellers should be aware of the amendments to the Customs Act (the “Act”) which are currently proposed, and might impact the state of the law going forward.

After our February blog post, the Department of Finance finally released draft legislation for its “luxury tax” on vehicles, aircraft and vessels (“items”). Assuming it is passed, the Select Luxury Items Tax Act (“SLITA”) is scheduled to come into force on September 1, 2022. Any business selling items to which SLITA applies will have to register with the federal government, pay the luxury tax, and file quarterly returns!

Despite its shaky initial rollout, the new Ontario Business Registry (“OBR”) looks like it is here to stay. Companies incorporated or doing business in Ontario (or indeed looking to potentially expand into the province) need to be aware of the substantial changes the new system brings.

This blog post will focus on changes to the process of filing annual returns in Ontario. Readers are reminded that the information provided is of a general nature and are advised to seek advice for their own particular situation, including regarding changes beyond the annual returns process.

As previously discussed in our Customs & Trade Blog, the Government of Canada (“GoC”) has been preparing a “luxury tax” on cars/trucks, personal aircraft and personal boats. The luxury tax was initially proposed in the 2019 Liberal Party of Canada platform, as a 10% tax on cars, boats and personal aircraft over $100,000.

Budget 2021 outlined that the luxury tax would be the lesser of 20% of the vehicle’s value above a threshold, or 10% of the full value of the luxury vehicle. The threshold proposed was $100,000 for cars/trucks and aircraft and $250,000 for boats. The timeline for coming-into-force was January 1, 2022.