Boating in the revenue crosshairs

Aug 17, 2021

“Make the rich guys pay” is probably going to be the rally cry for the freshly announced Federal election. With colossal government stimulus spending over the past 20 months and the huge costs for fighting COVID19, the Liberals will have Canada’s largest-ever deficit as their vulnerable spot. We all know someone will have to pay. The Tories will attack on the grounds of mis-management and reckless spending, but the Liberals will take to the “make the rich guys pay” mantra and the NDP will back that position, making it a doubly valuable strategic move for the Liberals.

Few images that I can imagine, say “rich guy” more clearly than a handsome couple on the deck of their yacht. That’s why the lottery often shows yachting images in their advertising. 

In last week’s Boating Industry Canada News Week Digest, we ran a story that was brought to our attention by Leigh Robertson of Gold River Marina in Nova Scotia. He explained that the Canada Border Services Agency (CBSA) has changed their position on EB29 tax exemptions for foreign-owned vessels wintering over in Canada.

If you are not familiar with this, Leigh explained, “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…”

The EB29 exempts the foreign vessel from being assessed GST taxes by our federal government when it remains in Canada for more than a short visit.  This is to prevent people from buying a boat from another country, bringing it here and avoiding paying taxes on it.

When an EB29 exemption expires, our government can charge the owner 5% GST of the market value of their boat if it is still in Canada. One of the Gold River Marina customers is a Swiss couple whose boat was stranded here at the start of COVID19; they can’t get into Canada until after September 7 (and even that date could change). Yet our government has assessed them $17,800 in GST!

Word travels fast. You can bet that through social media, cruisers around the world will be planning to avoid Canada as a destination and that will really hurt our industry.

The previously proposed Luxury Tax on automobiles and private aircraft costing over $100,000 and boats costing over $250,000 has been vigorously opposed by all of Canada’s marine trade associations. I can assure you that the government has heard loud and clear, that this will have a far-ranging negative impact on businesses, revenues and employment, but my personal opinion is that the strategic value to the Liberals in this election of this “make the rich guys pay” plan virtually assures that it will be a feature of their campaign.

Is this very unreasonable EB29 issue a part of the “make the rich guys pay” plan?

Time is rapidly running out for us to defend our industry. The problem isn’t just for a few businesses that sell more expensive boats – it will impact our present and future labour force, it will be a major negative to global boat builders to pull back from Canada and a headwind for the countless businesses from coast to coast that benefit from tourism spending.

Support your marine trade association and their efforts. Speak up to your MP and any other influential sources you can reach, and remember that we welcome your emails and input. Use the national reach of Boating Industry Canada News Week Digest to help unite the industry. We need to take action fast!

Andy Adams – Editor