OTTAWA (Reuters) – Canada’s first budget in two years, presented to parliament on Monday, introduces a sales tax on online platforms and e-commerce warehouses, a digital services tax for web giants and a luxury tax on items such as yachts, the government sources familiar with the document said.
It will not include a wealth tax, a levy demanded by the opposition New Democrats. Liberal Prime Minister Justin Trudeau’s budget will need the support of at least one opposition group to succeed.
“The government is not going to continue with a wealth tax,” a government source told Reuters. “We will take sensible steps to close loopholes and tackle tax evasion, and ask those who are doing well to pay just a little more.”
The budget includes a tax on online platforms and e-commerce warehouses starting from July, and a tax on digital services on large web businesses from 1 January 2022, both of which were originally promised last year.
Online platforms include providers abroad without physical presence in Canada that sell products such as mobile applications and online video games. Ecommerce warehouses are the storage of physical goods before they are sold online.
A luxury tax on new cars and private jets worth more than C $ 100,000 ($ 79,970) and boats worth more than C $ 250,000 will take effect next year if the budget is implemented. RVs and snowmobiles have been released.
While the country’s housing market is booming, the government proposes to tax vacant residential property from January 1, 2022 by non-resident, non-Canadian owners, sources said.
Attempts will also be made to curb the purchases of jurisdiction by large, profitable companies that artificially reduce their tax liabilities in Canada, sources said.
From 2023 onwards, Canada aims to limit the amount of excessive interest expenses that can be deducted from profits, although small businesses will be exempt.
In 2022 or 2023, the budget will propose that multinational corporations limit the ability to make artificial arrangements among countries that will eventually lower their tax rates in Canada.
The sources did not provide any details. Finance Minister Chrystia Freeland is due to present the budget on Monday at around 16:00 (2000 GMT).
Freeland presented her first budget since her appointment as finance minister last year, promising up to three billion years of C stimulus to begin an economic recovery in an election year.
Separately, the Toronto Star reported Sunday that Canada would set aside $ 12 billion in the budget to expand its key pandemic support measures, as much of the country is battling a virulent third-wave COVID-19 infections.
Reporting by Steve Scherer; Edited by Peter Cooney