Have your customers had problems with EB29 tax exemptions?
August 10, 2021
Recently, we heard from Leigh Robertson of Gold River Marina in Nova Scotia, who informed us that the Canada Border Services Agency (CBSA) has changed their position on EB29 tax exemptions and some of his customers are facing unexpected tax bills, potentially in the tens of thousands of dollars.
If you or your customers are experiencing this, we would like to hear from you.
Leigh Robertson explained that, “In a nutshell, these EB29’s are issued by the CBSA when a vessel applies to stay over the winter in Canada for work to be performed to ensure the safety of the vessel. We get a good many of these vessels, originating from the EU and the US, who are long range cruisers.
Gold River Marina (www.goldrivermarina.com) is a prominent full-service yard located on the South Shore of Nova Scotia. Close to 35% of our revenue is earned from our service to these visitors, for haul, storage, launch, etc. And of course, during the Covid restrictions, we lost these revenues with the exception of storage. Every marina and marine service business in Canada that welcomes these visitors is in the same ‘boat’.
During the 2020 boating season, CBSA provided EB29’s to most foreign vessels who wanted/needed to winter over in Canada, and at the onset of the 2021 boating season, CBSA granted an extension of these EB29’s to the spring of 2022, because our borders were closed (due to COVID19) and these boaters could not remove their vessels. Then, about 4 weeks ago, CBSA reversed their extension and now intends to tax these vessels 5% GST on the market value of their boat. (Editor’s emphasis on this line)
Of course, there’s been significant push back and outrage from these visitors but, as yet, no change in Canada’s position. This is nothing less than a cash grab by the Federal government and it’s so short sighted, and the ramifications will be horrendous.”
Robertson also shared a copy of a letter from one of his customers to the Canadian Ambassador in Switzerland. The customer is a Swiss citizen whose boat is stored at Gold River Marina. The customer wrote, “The CBSA is now demanding to pay GST, in our case 17‘800 $ or, as you can see on the mail from Jamie Hunsley, to hire a crew to sail 12 M out of Canada and then return.”
The person referred to above is a CBSA representative who suggested that this Swiss citizen who cannot presently travel to Canada, hire a captain and crew, have their stored and winterized boat taken out of storage and be driven out into the ocean the required 12 miles, prove that with a GPS photograph or other documentation, then return the boat to Gold River Marina, winterize it again and put it back into storage and apply for a fresh EB29 to cover the boat for another year. That cost could be higher than the GST charge.
Robertson also pointed out to me that crossing the Atlantic in a small, private boat should only be attempted during a narrow weather window in the summer and that window has passed for 2021 – we are now into hurricane season.
Please let us know if you or your customers are experiencing this. We hope it’s an isolated incident that can be dealt with, but if this is a wider situation, our industry needs to take action fast.
