What are the odds?
May 4, 2021
Last week in News Week Digest, we talked about the NMMA Canada Day on the Hill where we opposed the threat of a new luxury tax on boats. We continue to actively oppose this tax and last week, the marine trade associations sent out a survey to their members to gather more data to support our opposition. However, all we can do is mount a logical, business-based argument that this new luxury tax on boats valued at over $250,000 will cost jobs, reduce tax revenues and probably drive up social welfare costs in rural communities.
The NMMA has research that explains how every cruiser, or yacht is its own microeconomy with spinoff economic benefits from service, storage, fuel sales and more. A $500,000 Canadian boat has a local economic impact of approximately $40,000 each year.
What are the odds that the wealthy buyer will simply buy that yacht where it escapes the tax? Our Canadian dealer loses the revenue from the sale, so he does not employ people to service that boat, the government of Canada loses the HST sales taxes and the income tax that all those marina people would have paid. I think the NMMA estimate of the economic impact is understated!
During one of the NMMA Canada Day on the Hill meetings that I was in, our group raised this exact point and one of the people we were presenting to was a woman from BC. She nodded and said she understood exactly – her own parents bought their cruiser in Seattle!
There is still time for this to be changed and we need to keep fighting. However, the Finance Minister’s quote from the Budget Speech is: “If you’ve been lucky enough, or smart enough to afford to spend $100,000 on a car or $250,000 on a boat – congratulations! And thank you for contributing a little bit of that good fortune to help heal the wounds of COVID and invest in our future collective prosperity.”
It sounds to me like this was really intended to help the minority-government Liberals maintain their support from the New Democrats to avoid this colossal budget from triggering an election. The strategy is also that the Liberals are doing something to attract NDP voters when the next election does come along. The Luxury Tax lets the Liberals make a big deal of how they made the “rich guys pay”.
It looks like this is just electioneering at the expense of the hard-working folks in the boat business. So, what are the odds that their strategy works and we get stuck with another four years of this?
Andy Adams – Editor
