Poilievre, Lawton pitch plan to scrap federal sales tax on used cars

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Conservative Leader Pierre Poilievre and Elgin—St. Thomas—London South MP Andrew Lawton say they are proposing to remove the federal sales tax on used vehicles as part of a broader affordability plan.

Lawton has introduced the measure as a private member’s bill, C-285, titled the Used Car Tax Cut Act. The proposal would amend the Excise Tax Act to remove the Goods and Services Tax (GST) on the sale of used motor vehicles.

The Conservatives say the measure is intended to reduce costs for consumers amid rising prices. Data cited in the announcement indicate the average price of a used vehicle has increased in recent years, reaching about $36,700 in March, compared with roughly $18,900 in 2019.

Under the proposal, used cars would be “zero-rated,” similar to existing tax treatment for certain farm equipment and resale housing, meaning GST would not be charged on those purchases.

The party estimates the change would reduce federal revenues by about $900 million annually. It says eliminating the five per cent GST could lower the cost of an average used vehicle by approximately $1,800. Additional savings would depend on provincial governments choosing to remove their portion of sales tax.

Poilievre said the proposal is aimed at improving affordability for Canadians purchasing vehicles, while Lawton said access to a vehicle is essential for many people, particularly in rural areas.