The new normal?
June 14, 2022
This is a particularly important edition of Boating Industry Canada News Week Digest for several reasons.
First, as an industry with nation-wide representation through the marine trade associations, we have just returned from the Recreational Boating Day on the Hill lobby effort and the government denied all our “asks” about the luxury tax, in spite of their own projections for significant business and tax revenue declines.
Plainly, it’s political – not sound business and our industry will be the victim of these government actions.
Second, we are at the start of the summer of 2022 and we continue to suffer from product shortages at many levels. Some of the sales demand may dissipate as the government’s luxury tax hits the larger boats.
In this edition of News Week, we have the NMMAs story about the US market “normalizing” yet still being very strong. Our market would be strong as well if we had the product and if the government weren’t targeting boating for political reasons.
Then, we have inflation in our economy and the Bank of Canada is pledging to continue hiking up interest rates until they slow the economy by cutting the demand back, whether that’s for housing, consumer goods, cars or boats. Throughout my career, I have been told that even the most wealthy boat buyers finance their boat purchases (one way or another) and we need to anticipate that higher interest rates will also cut into sales.
So, in Canada, what will be the new normal? Will we see continued buying pressure? Will larger new boats still sell or will we be hunting for used product as a means of avoiding the luxury tax (at least for now)?
I’m struggling with these questions. Perhaps you are too.
An important thing for our marinas and dealers to do is to work with their associations to track the impact of the luxury tax on their lost sales, staff layoffs and other impacts for the new luxury tax. The research data will be critically important to support future appeals to the government for relief from these taxes.
Weather-wise, I expect that we will have a great summer and I’m certain Canadians will want to get out, meet with friends, go places and have fun. Many families have bought into cottage country recently. I’m hoping they will appreciate their good fortune and will buy boats to help enjoy their summers. Boating will still be on the wish list. Let’s hope we will have the product to satisfy that demand.
In spite of the many headwinds, I think we are still in a good place. Cross your fingers and hope that our new normal is positive.
Andy Adams -Editor
