Close to 90% Call for Raise in Allowable Auto Claim Restrictions

It was almost unanimous: 89% of responders to January’s Knowledge Bureau Report poll question agreed—the $30,000 cap on claiming luxury vehicles has long required a raise to reflect more accurately the price of cars this century. Here are the significant comments that accompanied the vote:

Alone in the negative, Ali says this: I do not believe that it should be raised. Yes, new cars do cost more, but very few people or businesses NEED a brand-new vehicle. We can justify all we want, but the $29,000 car/truck will haul us around just as well as the $70,000 one. Anything over the $30K mark is a luxury CHOICE. At the moment, we don’t need any more incentive for Canadians to spend.

From Jerome the opposite view: Absolutely, that cap is long overdue since 2001 and should be indexed according to the inflation rate. This is meant for the self-employed and small businesses. Besides, the gov’t vehicles are a lot more than $30,000 and most businesses use vans or passenger vehicles that cost more than $30,000 these days, unless you want to end up with an old vehicle that costs more in repairs and down time. Small businesses have always been marginalized.

From Marie: Should be at least $40,000. Living in a northern city you have to have a reliable, preferably larger, car because of long distances driven on highway, not just in town, and the road conditions you encounter. These kinds of cars are more expensive, especially SUVs are double in price.

Bob adds: Automobiles used for business are becoming more expensive and the taxes that the governments charge on the purchase of new automobiles are growing.

Virginia weighs in with this experiential point of view: People driving in northern/snowy areas need vehicles with four-wheel drive and other adaptations that increase the price. There is an exception for driving to locations that are at least 30 km from the nearest community with a population of 40,000. This helps people like my electrician client, but auditors denied it to a farmer because they said there was no remote work location or special work site involved in delivering farm produce.

Lise agrees: This is long overdue.

From Peter: Maybe the Finance official responsible for updating these figures retired and was never replaced.

Mitzie-Lynne reflects on Finance Department perspectives: It does seem that the people who make these decisions are a bit behind the times. They must travel everywhere by public transport or chauffeured limousine. Cars are a bit more expensive than they used to be.

Many thanks for your participation in this first poll of the year. We invite you to opine again this month when the question is:

Is it time for the government to raise the 18% limitation restricting contributions to an RRSP by lower income earners?

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