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Canada Repeals Luxury Aircraft Tax in Major Win for Business Aviation Industry

Sat, May 23, 2026
Canada Repeals Luxury Aircraft Tax in Major Win for Business Aviation Industry
The Canadian government has officially repealed its controversial luxury tax on aircraft, a move widely welcomed across the business aviation sector after years of industry criticism.

The tax, which applied a 10 percent levy on aircraft valued above C$100,000, was viewed by many operators and industry groups as damaging to competitiveness and investment within Canada’s aviation market. Critics argued the policy pushed aircraft purchases and related business activity to other jurisdictions while creating additional pressure on manufacturers and operators.

The repeal took effect on November 5, 2025, following the release of Budget 2025, which confirmed the elimination of the Select Luxury Items Tax on aircraft and boats.

Industry stakeholders see the decision as an important step toward restoring competitiveness, supporting aviation jobs and encouraging future investment across Canada’s business aviation ecosystem.

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