Canada's new budget will add $4,000 tax to SUVs
The Canadian government's new proposed budget includes both a $2,000 incentive for buying fuel efficient vehicles like hybrids and a $4,000 tax for purchasing less efficient models like SUVs. Unfortunately, the Detroit News article doesn't specify how the budget determines what vehicles qualify for the fuel efficiency rebate and which get dinged with the heavy tax. What affect the Canadian government's new budget will have on car buying habits in the country is unclear, as Canadians don't buy many SUVs to begin with – only around 15,000 in 2006. At the same time, the environmentally-inspired incentive/tax combo may serve to irritate the very automakers that are deciding which plants they can afford to idle or shut down completely, many of which are located in Ontario.
The plan also has plenty of loopholes that can be used to get around the tax. For instance, it doesn't apply to used vehicles, so Canadians can freely buy year-old HUMMERs for significantly less than a new one. There's always the option of driving south to purchase a car in the States, as well, though we're not clear what mess of paperwork that would create to own and operate it back in Canada.
You can read all the details about Canada's new budget and how it affects the auto industry here.
[Source: The Detroit News]
Reader Comments (Page 1 of 4)
bean1336 5:20PM (2/05/2008)
You're response to me seems ignorant. Your concept is completely absurd regarding white babies. The Canadian Government is only adding additional taxes to vehicles that have ridiculous gas mileage, such as the Cadillac Escalade and the huge Lincoln Navigator. They don't just tax SUV's in general.
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bean1336 5:18PM (2/05/2008)
This law actually affects quite a few people, in fact, it affects everyone who is deciding to buy a new vehicle and helps them save money on fuel consumption... It then offers rebates to those who buy fuel efficient vehicles that are above the expectations.
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dtrapp 3:04PM (3/21/2007)
http://www.trappspeed.com
Go Canada! Ha...man, taxes are ridiculous in some countries. Though, it probably is for the best. Get these damn SUV's off the road.
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Toy Yoda 3:13PM (3/21/2007)
... Shortly afterwards, Bush announced plans to invade Canada on grounds that Canada has Taxes of Oil Industry Destruction.
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Mike 3:17PM (3/21/2007)
Que the ignorants to rant about the evil SUV's and how Bush is the root of all evil on the planet. Maybe if you spew enough talking points people will ignore the facts, right? Whatever it takes to justify bigger government, higher taxes, and more government interferance in the free market....right? no, wait, that's left.
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JohnC 12:10AM (3/22/2007)
Thats why the United States is a FREE country. We all have the right to buy a Hybrid Civic or a Chevy Suburban. Canada.........stick to Ginger Ale.
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Fazzster 3:27PM (3/21/2007)
Wow, talk about socialism. It is pretty unfair for the people who need an SUV to tow a trailer, boat or motorhome. I can't stand the people who buy SUV's as a commuter vehicle or a so called status symbol but it should always be a choice and the government should never punish people for that. When the Libs get wind of this I am sure they will try to push similar legislation through congress.
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synergeist 3:26PM (3/21/2007)
Canaduh, where even free speech is abridged for sake of political correctness.
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Howard Kerr 3:27PM (3/21/2007)
As much as I hate SUVs, this is one very stupid move. Of all the places in North America where there might be a legitimate need for an SUV, I would think it's Canada (or is that a stereotype?). Why don't government entities that want to "force" citizens to be more economical base the cost of a license plate renewal on the fuel efficiency of that vehicle. When I lived in Texas in the '80s the most expensive plates were on the LEAST fuel efficient vehicles...like Suburbans. Of course, that got shot down in the mid '80s as it was somehow considered unpatriotic to SAVE fuel and gas taxes so small cars like my Ford Fiesta got slapped with the most expensive plates.
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rem83 3:27PM (3/21/2007)
Dude, Mike, rofl
ps, queue
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Gary 3:29PM (3/21/2007)
Some details on the calculation for SUV penalty.
They take 55% of the city rating and 45% of highway rating. If above 13 L/100KM, then subject to $4000 tax.
There is a rebate on SUV's if the above formula yields a result of 8.3 L/100KM. They give example of $1000 rebate on purchase of Jeep Patriot.
It should also be noted that pick up trucks are exempt due to work usage.
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DriftPunch 3:29PM (3/21/2007)
First the SUVs, next will be "street race" cars with 'excessive' power...
It's always amazing how some people cheer for things like the above when it agrees with their own personal feelings. Yet typically, these very people cry 'rights' when someone else uses the power of government to tax/ban something that they hold dear.
For those who support this, how about we add a monthly surtax to every Kw of electricity that is used beyond the local average? Hmmm...?
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Rick Lyon 3:50PM (3/21/2007)
applaud applaud. Something we need HERE. This is excellent news at least it might set a precedence and possible a ripple effect in the auto industry, consumers minds or our inept government.
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djSyndrome 3:34PM (3/21/2007)
"It is pretty unfair for the people who need an SUV to tow a trailer, boat or motorhome. "
You've confused 'need' with 'want'. Last I checked, a boat wasn't a requirement for living - it's a luxury item.
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djSyndrome 3:37PM (3/21/2007)
"For those who support this, how about we add a monthly surtax to every Kw of electricity that is used beyond the local average?"
This already happens in the form of 'tiered' energy rates. You get so many Kw/h per month at one rate, and if you go over, the next 'tier' is more expensive.
Not sure about your power bill, but our local electric company has had this in place for as far back as I've been paying the bill (SMUD in California).
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Dirk Dundenburg 3:38PM (3/21/2007)
This just in, Toyota and Honda to raise Canadian MSRP on Prius and Civic Hybrid by $2000.00 .....
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Scott 3:38PM (3/21/2007)
#6 - Just to be the Devil's advocate, no one "needs" to tow a boat or motorhome or jetskis or etc. They CHOOSE to. Choosing to buy a big toy that requires a big truck to tow it is not the same as a need. I'm opposed to this tax because it's ridiculous, I just don't think the justification for these vehicles should be that they're a necessity, I think the justification is that people should be able to buy what they want to drive.
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Hamud 3:38PM (3/21/2007)
I think this is not the way to make people leave the SUVs behind. If they really wanna do that, then do it slowly, not all at once.
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DriftPunch 3:38PM (3/21/2007)
"You've confused 'need' with 'want'. Last I checked, a boat wasn't a requirement for living - it's a luxury item."
So is eating anything other than Soylent Green.
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Gardiner Westbound 3:42PM (3/21/2007)
The U.S. Energy Tax Act of 1978 imposes a Gas Guzzler Tax on manufacturers that sell cars failing to meet certain statutory fuel economy levels. Unlike the Canadian program, which also rewards purchasers of energy efficient cars, the U.S. only penalizes.
Both countries have incentives to reward hybrid and alternate fuel vehicle purchasers. Canada's are more generous than the U.S.
www.epa.gov/fueleconomy/guzzler/420f06042.htm
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