7 Products That Will Probably Get More Expensive In Canada Thanks To New Taxes
Canadians will start paying more for Netflix from July 2021!💰
In April, the federal government tabled its 2021 budget. Among other things, the budget presented a number of new tax measures that intend to act as revenue streams.
This includes a tax on vacant properties and big-ticket "luxury" items, a digital services tax and excise duties on vaping products.
These new taxes are likely to impact the price of all kinds of items Canadians purchase, and in some cases, the costs have already started climbing.
With that in mind, here are some examples of the types of products you may have to pay more for in the near future.
Netflix, Prime, Disney+ & other video streaming services
From July 1, 2021, international streaming services that are available in Canada will have to start collecting and paying federal GST/HST.
This includes companies like Netflix, Amazon Prime Video, Disney+ and more, although Canadian services like Crave won't be affected.
It's not yet clear whether all of these services will hike their subscription costs to balance the new tax, but Netflix has already confirmed that its prices will increase.
Spotify & music streaming services
As part of the same "digital sales tax," non-Canadian music streaming platforms will also have to pay GST/HST.
This will impact companies like Spotify and Amazon Music Unlimited, among others.
Again, it's not yet clear whether these services will update their prices to reflect the digital sales tax, but experts believe that it's possible.
Although it's not a Canadian company, Apple has been voluntarily charging and paying GST/HST for Apple Music and iTunes since 2019, so it's unlikely its prices will be impacted by the tax change.
The 2021 budget also included a new "luxury tax," which focuses on big-ticket items that cost serious bucks.
This includes products like luxury vehicles and private aircraft valued over $100,000 and boats worth over $250,000.
This tax is set to come into place in early 2022 and will mean that these types of products will cost even more.
The digital sales tax would also cover non-Canadian distribution platform operators, like Google Play.
Again, the Apple App Store is unlikely to be impacted here as the company has been voluntarily paying this tax for several years.
From 2022, the price of vaping products could increase thanks to a proposed excise duty on almost all vaping products.
Although this does include vaping liquids (regardless of whether or not they contain nicotine), it would not include cannabis vaping products as they are already taxed.
This extra cost would be initially covered by businesses, rather than customers, but companies may hike up prices to reflect the additional tax.
Similarly, the budget also proposed a higher excise duty on tobacco products.
On April 20, 2021, a $4 increase on the tobacco excise duty for a carton of 200 cigarettes was implemented, with similar increases for other tobacco products.
Second homes & vacation properties
Homebuyers who are not Canadian citizens or permanent residents can expect to pay more annual tax for real estate if they're purchasing a property considered to be "vacant."
This Canada-wide tax on foreign-owned residential properties is set to begin in 2022 and could yield $700 million to improve housing affordability for Canadians.
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