What are new truck taxes? A detailed guide

Truck Taxes

In Canada, many businesses rely on the trucking sector to keep their delivery systems running smoothly across the country. The trucking business drives the whole Canadian economy. The trucking business is a big part of Canada's economy, according to the Dolphin Ltd. delivery website. Also, with more than 63.7 million exports in 2018, the industry made close to 39.55 billion Canadian dollars.

Additionally, this figure has increased in significant years. The importance of the truck sector is well known to the Canadian government. The truck industry has changed and is now using new technology to catch up with the rest of the world. 

Trucks transport the vast majority of domestic cargo. This allows for the smooth movement of commodities and products and establishes a supply chain structure. Trucks must manage an ecosystem of supply to end-users or customers.

Without trucks, it would be impossible for items and goods to reach their destinations. The Trudeau party wants to raise taxes on trucks and other large vehicles in Canada by a lot. However, the new truck taxes announced by the government have received a very negative reaction from the truck association. 

Why does the government impose new truck taxes on trucks? 

Prime Minister Justin Trudeau's cabinet announced the new truck taxes, which came as a surprise to the nation. The reason why the government imposed new truck taxes is because of the blockade between the American and Canadian border crossings.

The truck drivers have blocked the main trading bridge between Canada and the USA due to COVID restrictions. This blockade has caused economic dislocation between both countries, but Canada is affected more. Maryscott Greenwood, the chief executive of the Canadian American Business Council, stated that the blockade “stoked nationalist tendencies and protectionist tendencies that are not productive or helpful."

Furthermore, a senior fellow at the Council on Foreign Relations who specializes in U.S. trade policy said, “That’s a mortal threat to the Canadian economy." Many senior political figures also showed anger and disappointment toward the bridge blockade. 

Taxes on types of vehicle

The government has decided that taxes will be different for different kinds of cars.

The proposed levy would cost an extra $1,000 on a Ford F-150 and $4,000 on a Ram 3500 heavy-duty pickup truck. According to the Ministry of Environment, a page study released some documents that now apply to big SUVs, including trucks such as Ford F-150s, Toyota Tacomas, Chevrolet Silverado 1500s, and Dodge Rams.

The tax on light-duty pickups would be $1,000, while the tax on super-duty vehicles that haul horse trailers and construction equipment would be $4,000. Additionally, these trucks are Canada's most popular and highest-selling trucks. The government has announced that new SUVs that use more than 13 liters of gasoline per 100 kilometers are subject to the existing tariff. The GMC Yukon Denali and the Lincoln Navigator are two vehicles that are now charged with the tax. The Nissan Armada receives a $3,000 tax charge from Ottawa.

Conclusion 

The truck sector has a lot of importance in Canada. From imports and exports to delivery of local goods, most businesses and companies are dependent on them. The blockade of the bridge by truck drivers between the USA and Canada caused a disturbance and an economic crisis in Canada. The government decided to impose taxes on trucks and SUVs to clear the blockade. The taxes depend on the type of vehicle; for instance, Ford F-150s, Toyota Tacomas, Chevrolet Silverado 1500s, and Dodge Rams.

In this blog, we have learned the importance of trucks in Canada, why the government imposes truck taxes on trucks, and lastly, we look at what types of vehicles the government is charging taxes on.

Written By:
Salman Rundhawa
Salman Rundhawa is the founder of Filing Taxes. Salman provides valuable tax planning, accounting, and income tax preparation services in Toronto, Mississauga, Oakville, and Hamilton.

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