In advance of the 2026 Provincial Budget, BC’s New Car Dealer Association (NCDA) urged the government to address several items that are impacting affordability for consumers – one of which is the New Vehicle Luxury Tax.
Despite the significant fiscal pressures the government is facing, the NCDA cautioned against adding to the layers of taxation that are impacting affordability for businesses and consumers. However, the government has proceeded to do just that – and has proposed an expansion of the Provincial Sales Tax (PST) to a wider range of professional services – including accounting, something all 400 new car and truck dealers across the province, just like other businesses, rely on as a matter of course.
On a NCDA level, the PST expansion would impact dealers who are doing repairs, renovations, or upgrading their current dealership or building a new one – because services required would be subject to the expanded tax. The additional taxation would no doubt contribute to the ongoing issue of affordability – as increased costs are inevitably passed on to the consumer.
Budget 2026 also failed to address a long-standing irritant for New Car Dealers and consumers – British Columbia’s outdated New Vehicle Luxury Tax threshold of $55,000. The threshold hasn’t been adjusted in decades.
The average cost of a new vehicle exceeds $66,000, an increase due largely to the kind of technology consumers want – including advancements that make present day cars and trucks safer to drive than ever before – but are by no means, luxury items.
For example, a family may decide to purchase a minivan or SUV with the primary use being driving their kids to sports, going to work, grocery shopping, and they would be subject to the current luxury tax. Likewise, a family may require a pickup truck because of work requirements. This tax, in practice, has become an additional fee when purchasing a new vehicle.
In comparison, the federal government’s equivalent starts at $100,000; a price most people would agree is more likely to fall in the luxury category.
These two tax issues contribute to a double punch of affordability issues that don’t seem to be going away anytime soon. The NCDA will continue to advocate for the removal or review of the provincial New Vehicle Luxury Tax and join businesses in sharing concerns of the PST expansion and the dominoes that may fall with it.
These tax discussions, paired with the ongoing tariffs and the high cost of living, are making consumers take an extra hard look before purchasing their next vehicle.
While Budget 2026 falls short in some areas, it highlights the importance of continued collaboration between government and BC’s New Car Dealers. It also shines a light on the need to align policy ambition with the infrastructure and workforce investments required to make it work.
Blair Qualey is President and CEO of the New Car Dealers Association of BC. He can be reached at [email protected]
