Will 2024 ease the squeeze?
Dec 19, 2023
This will be my last Editor’s Message for 2023. As we all look forward to some well-deserved time off during the holiday season, it’s also a time to look back. The pace has slowed a bit for me and that leaves me with a bit more time for reflection on the events of 2023. I’m thinking that it’s been a real ‘squeeze year’ for boating.
Interest rates rose at a record-setting pace in 2023. I suspect that for many potential new boat buyers and also boat owners who had been contemplating significant repair and refit, plans got pulled back fast. For the main market of mid-range buyers, I suspect it was like hitting a wall. Many buyers use their HELOC to finance major purchases and the rapid rise in interest rates hit hard and fast.
Complicating life for marinas and boat dealers, at the high-end, (even though new boat buyers are very well-off these days), the Liberals luxury tax hammered the high-end. In my Editor’s Message column of November 28, I wrote about “the rich getting richer”. The statistics suggest that the top 1% of tax filers saw their incomes increase by almost 10%. But they got rich – not stupid. They are not going to throw away a big chunk of money, especially when the government broadcast loudly that this was “making the rich pay their fair share”. Many among the rich already feel they pay more than their fair share.
I know this was all political but the next election will be very political (of course) and I wonder how many major donors are fed up with policies like the luxury tax, especially when it’s strongly revenue-negative for the government that is running a huge deficit?
Luckily, the Bank of Canada’s Tiff Macklem has recently said that inflation could be “getting close to” the bank’s target by the end of next year and that interest rates don’t need to move any higher to get prices back under control. The Globe & Mail in the Saturday December 16, 2023 Report on Business quoted Macklem as saying, “The 2-percent inflation target is now in sight.”
He went on to say that 2024 will be a year of transition with the next few quarters being tough for many Canadians as economic growth stalls but things should look up as the year progresses.
Being a devout optimist, I’m thinking that by summer 2024 we will see the squeeze ease and conditions will return to a more manageable state. If you are planning to attend the Toronto International Boat Show in January, I hope you will join us at the NMMA Canada Industry breakfast event. I’ll be the opening speaker again this year and after the NMMA Canada presentations, we will again be treated to a great forecast presentation by Wells Fargo.
I’m anxious to hear what the industry experts see on the horizon!
Andy Adams – Editor
PS – Merry Christmas and Happy New Year from all of us at Boating Industry Canada and Canadian Boating. News Week will be back January 2nd, 2024.
