Tax & Trade Blog

---

AIRBNB HOMES SALES SUBJECT TO GST/HST

FCA CONFIRMS SALE OF AIRBNB PROPERTIES SUBJECT TO GST/HST

The Federal Court of Appeal (“FCA”) has recently confirmed a Tax Court of Canada (“TCC”), ruling that the sale of a property used for short term rentals on Airbnb are subject to Federal GST/HST.

In the short term, this decision will increase the cost of properties at a time when real estate prices are already deflated across Canada.  We should expect to see that depreciation hit condominiums.

With proper planning, this tax consequence (i.e., GST/HST applied to the sale of Airbnb properties) can be ameliorated, but experienced GST/HST counsel will be required.

---

TRUMP TARIFFS & CANADIAN MADE CARS

HARD TIMES REVING UP FOR CANADIAN AUTOMOTIVE SECTOR

On Wednesday March 25^th, the President signed a proclamation which invoked s. 232 of the Trade Expansion Act of 1962, s. 604 of the Trade Act of 1974 and Section 301 title 3 of the U.S. Code.  This new Executive Order has imposed a 25% tariff on imports of automobiles and certain automobile parts. 

What is a tariff?

A tariff is a duty imposed on the import of goods into a country, usually at a stated percentage, with the importer charged the corresponding amount based on the "value for duty" of the good.  A 25% tariff on a $50,000 car is $12,500.  Tariffs, if paid by a wholesaler or retainer are usually passed on down the supply chain and borne by the final consumer.  In that sense, a tariff functions like a tax; the government imposes a price on goods making those goods more expensive.  The hope is that by increasing the price of foreign goods, citizens will purchase homegrown alternatives.

---

INTERPRETATION ACT - FRIEND & FOE?

FCA RULING CONFIRMS INTERPRETATION ACT CUTS BOTH WAYS FOR TIME DEADLINES

A recent decision of the Federal Court of Appeal, Canada v. Csak, 2025 FCA 60, underscores that the federal Interpretation Act (the “Act”) rules concerning the computation of time for deadlines are complicated, and can both help and harm taxpayers depending on the circumstances.

Taxpayers will need legal advice to determine how the Act’s computation of time rules intersect with various deadlines under the Excise Tax Act (“ETA”) and other federal legislation.  How that intersection plays out may impact taxpayers’ rights.

---

NOVA SCOTIA SET TO REDUCE HST RATE

TRANSITIONAL AND PLACE OF SUPPLY RULES MAY AFFECT TAXPAYERS

On April 1, 2025, the Province of Nova Scotia is set to decrease their harmonized sales tax (“HST”) rate by 1 percentage point, resulting in a combined GST/HST rate of 14 percent in the province.  The reduction will put more money in the pockets of Nova Scotians, but individuals and businesses need to be aware of the complex Transitional Rules and Excise Tax Act (“ETA”) place of supply rules to determine to the applicable rate of HST on their transactions.

The Nova Scotia HST Reduction – Background

---

AUTOMOTIVE REPORT: TARIFF HEADING 9966

CBSA'S VERIFICATION AUDITS TARGET RESTORATION INDUSTRY

A good part of our Tax and Trade practice involves advising Clients in the Automotive Industry on matters involving the application of Canadian taxation and customs duties to motor vehicles and parts.

Recently, we have seen an increase in audits and assessment of automotive restoration businesses, which seem to be currently targeted by the Canada Border Services Agency (“CBSA”).

One focal point seems to be the application of Tariff Concessionary Item 9966.00.00 (“Concessionary Code 9966”), which allows for the duty-free importation of certain vintage vehicles and repair parts.