Ontario dealers applaud backtrack on proposed tax

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Ontario’s new car dealers notched a major victory with the announcement the province would backtrack on a plan to grant municipalities the authority to charge a municipal vehicle registration tax.

The retreat came after a year of public consultations on the matter with Municipal Affairs Minister Bill Mauro.

“Ontario new car dealers are pleased Minister Mauro has listened to municipal leaders and new car dealers that giving municipalities the authority to tax the family car should not move forward,” Frank Notte, director of government relations at the Trillium Automobile Dealers Association, said in a release on Monday.

“In order to promote the auto sector, governments should encourage vehicle ownership and not simply tax a household necessity like the family car to generate over $600 million every year.”

Mauro introduced an amendment to the Modernizing Ontario’s Municipal Legislation Act, 2016 last week that addressed the taxing powers. And while the legislation still makes amendments to how municipalities are governed, it does not grant any new taxing authority.

The fight against the proposal was led by the TADA and Leeds-Grenville MPP Steve Clark.

Clark said the decision is a relief to vehicle owners and dealers across Ontario that the government has finally put plans for a car tax in park.

“Motorists already send about $10 billion every year to this government in licensing fees and taxes. The last thing they can afford is to dig deeper and that’s why I’ve been proud on behalf of our Ontario PC caucus to lead the charge at Queen’s Park against this tax grab,” Clark added.

According to TADA numbers, a municipal VRT had the potential to increase taxes on Ontario vehicle owners by $660 million per year.

Toronto is the only municipality in Ontario with the authority to charge a VRT. Since being granted the taxing authority in 2006, Toronto’s VRT was only in effect for three years (2008-2011).