Bill C-285 Used Car Tax Cut Act
C-285 An Act to Amend the Excise Tax Act (Used Motor Vehicles)
Short Title: Used Car Tax Cut Act
Bill Type: Private Member’s Bill
Bill Sponsor: Andrew Lawton (Elgin—St. Thomas—London South)
Status: Outside the Order of Precedence — Introduced June 12, 2026. This Bill has not passed yet.
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What is this Bill For?
Bill C-285 would remove the Federal Goods and Services Tax (GST) from the sale of used motor vehicles.
Under current Law, GST applies every time a used car changes hands even though GST was already collected when that vehicle was first sold new.
The Bill adds used motor vehicles to the list of "zero-rated supplies" under the Excise Tax Act, meaning no GST would be charged on private or dealer sales of used vehicles that have already been registered to at least one previous owner.
New vehicles sold by dealers for the first time are explicitly excluded — they would still be taxed.
WHO GAINS POWER
- No new regulatory or Ministerial powers are created by this Bill
- Buyers of used vehicles gain a direct financial benefit — the GST removed from every used car purchase
WHO LOSES POWER
- The Federal Government loses the authority to collect GST on used vehicle sales — a revenue stream it currently collects on every transaction
WHO GAINS MONEY
- Used car buyers save the GST on every purchase — on a $20,000 used vehicle that is $1,000 back in the buyer's pocket
- Lower-income Canadians who rely on the used car market rather than new vehicles gain proportionally — used cars are often the only affordable option for working families
- Private sellers may see increased demand and higher sale prices if buyers have more purchasing power without the GST burden
WHO LOSES MONEY
- The Federal Government loses GST revenue on every used vehicle sale in Canada — the fiscal impact is not costed in the Bill
- No revenue estimate provided — The Bill contains no fiscal note and no estimate of how much GST revenue would be eliminated. Parliament is being asked to approve a tax cut with no stated price tag.
THE CATCH
⚠️ No definition of "used motor vehicle" — The Bill defines a used vehicle as one "registered to a different owner under the Laws of a Province" but does not address vehicles that have never been Provincially registered, vehicles brought in from other countries or vehicles registered in jurisdictions with different registration rules. Edge cases are left to interpretation.
⚠️ Provincial sales tax not addressed — GST is only part of the tax on a used vehicle purchase. Provincial sales tax (PST, QST, HST components) still applies in most Provinces. The Bill removes the Federal layer only — buyers in high-tax Provinces will still pay significant tax on used vehicle purchases.
⚠️ Dealer loophole potential — The Bill excludes new vehicles "registered to a dealer for the purpose of making the first sale." A vehicle registered briefly to a dealer and then sold could potentially qualify as "used" under this definition. The line between a demo vehicle and a used vehicle is not defined.
⚠️ No inflation or price impact analysis — Removing GST from used vehicles could increase demand and push used car prices higher, partially or fully offsetting the buyer savings. The Bill does not address this risk.
⚠️ Outside the Order of Precedence — This Bill is unlikely to be debated unless drawn in the PMB lottery.