National Marine Manufacturers Association Canada members, along with dealers and yacht brokers, are meeting today with government officials for the annual Recreational Boating Day on the Hill.
“The recreational boating sector is a huge contributor to Canada’s economy, adding $5.6 billion of GDP and supporting 75,000 jobs,” Sara Anghel, NMMA Canada president, said in said in a statement. “At the same time, the industry has faced major recent challenges with the damaging countermeasure tariffs on U.S. boats imported to Canada and the threat of a new 10 percent luxury tax.”
The prime minister’s mandate letter to the minister of finance includes a proposed luxury tax of 10 percent on cars, boats and personal aircraft costing more than $100,000.
Anghel’s message to Canadian government officials is that similar financial burdens have failed in the past. “The U.S. government imposed a very similar luxury tax on boats in 1990 and projected $36 million in revenues,” Anghel said. “In the end, the tax was repealed, but not before gutting thousands of jobs in the boating industry and resulting in a net loss of $8 million due to unemployment insurance claims and lost tax revenues.
“Luxury taxes in other jurisdictions like Italy, New Zealand and Norway have led to similar outcomes and were all repealed,” she added. “There is no reason why Canada has to join the list of countries that have tried this failed experiment.”
NMMA Canada also refuted the notion that boating is a luxury activity, estimating that 12.4 million Canadians go boating each year and that nearly 60 percent of those people have an estimated annual household income of less than $100,000.