Canadians will pay a luxury tax when purchasing a new car with a retail sales price over $100,000, and those living with Type 1 diabetes will automatically qualify for the disability tax credit (DTC), as the government’s implementation bill containing those and other measures received royal assent on Thursday.

Bill C-19, which passed as the Budget Implementation Act, 2022, implements several measures from the federal budget tabled on April 7.

The luxury tax, which also applies to aircraft with a retail sales price over $100,000 or new boats or yachts over $250,000, would be the lesser of 10% of the total price of the item and 20% of the total price of the item above the threshold. The effective date for the legislation is no earlier than Sept. 1, but the tax will not apply when a bona fide, written purchase agreement was entered into for the item prior to 2022.

Bill C-19 also expands the criteria for the mental functions impairment eligibility for the DTC, and removes the requirement that people living with Type 1 diabetes prove they spend at least 14 hours per week on activities related to administering insulin.

“This is a long awaited and important step to ensuring fair and equitable access to the DTC for both people living with Type 1 diabetes and their certifying licensed medical practitioners,” said Laura Syron, president and CEO of Diabetes Canada, in a statement lauding the measure.

The DTC is a non-refundable tax credit with a value of $1,330.50 for 2022. A valid DTC certificate also is a gateway to more than a dozen tax-related programs and benefits, including the RDSP and the child disability benefit.

Other key measures included in Bill C-19 include:

  • Doubling the maximum amount of the home accessibility tax credit to $20,000;
  • A two-year ban on foreign investment in Canadian housing, effective January 1, 2023;
  • Making all assignment sales in respect of newly constructed or substantially renovated residential housing taxable for GST/HST purposes;
  • The creation of the labour mobility deduction for tradespeople to provide tax recognition on up to $4,000 per year of eligible travel and temporary relocation expenses;
  • Allowing charities to provide resources to a broader range of organizations, in furtherance of their charitable purposes.