June 13, 2022

From the left, Josée Côté - Nautisme Québec, Ab Ghaznavi - Honda Canada, Jim Wielgosz – NMMA Canada, Alexandre Borduas – BRP, Sara Anghel – NMMA Canada, Bruce Hayne – Boating BC, Rick Layzell – Boating Ontario, Cam Heaps – Voltari Electric, Richard Brown – Sidewind Marine, Craig Ritchie – IBI, Cam Taylor – BoatSmart, Andy Adams – Boating Industry Canada

The good, the bad and the indifferent – organized by the NMMA Canada and supported by all of Canada’s regional boating associations, the Recreational Boating Day on the Hill 2022 wrapped up at the end of Tuesday June 7th and the results of our efforts to oppose the new NDP – Liberal Luxury Tax won’t be determined until the Senate gives final approval to the budget bill C-19. There could still be some faint hope for a reprieve, but it looks doubtful. 

As you undoubtedly are aware, the luxury tax would apply to new automobiles and aircraft that cost more than $100,000 and on vessels selling for $250,000 or more.

The good news is that your industry associations have fought hard and effectively for our industry. In fact, the aviation sector has reasonably complained that they are facing a $100,000 tax threshold while your boating associations and our lobbying efforts got our threshold raised to $250,000.

From the left: Ab Ghaznavi - Honda Canada, Sara Anghel – NMMA Canada, Kyle Seebach – MP Dufferin-Caledon and Shadow Minister for the Environment and Climate Change, Cam Heaps – Voltari Electric

This year, the NMMA and their public affairs company did a great job of setting up a full day of formal meetings in Ottawa with Liberal, Conservative and NDP Members of Parliament as well as with key bureaucrats and department heads. We had 25 meetings in the one day. It was also good news that many of the key people already knew about the boating industry and our plight.

The past Day on the Hill sessions have helped boating gain a large number of supporters and advocates. It’s been a major investment but a very worthwhile one.

Additional good news is that the Conservative party MPs we met with, share very strong opinions about this luxury tax and the economic and employment damage it will bring. In several meetings I attended, we received a pledge of strong future support. Opinions about the importance of safeguarding the industry and the jobs in our sector, were very encouraging.

From the left: Rick Layzell – Boating Ontario, Adam Chambers – MP for Simcoe North and member of standing committee on finance, Sara Anghel – NMMA Canada

Earlier in the week, our industry was able to give formal input to the budget details and we had four very reasonable “asks” including that the government at least delay taxation until after the September 1st implementation date and also, to have the tax applied on the net selling price after trade-in’s had been applied. All our asks were denied.

So, the bad news is that the government seems determined to bring this tax in. This is in spite of the report released last month by the Parliamentary Budget Officer, that projected sales losses of $604M in 2023-24 (with $455M coming from boats), ramping up to $678M losses with $511M from marine by 2026-27. Their cumulative five-year amount of $2.9B lost sales – with $2.2B from boats – seems to be more reflective of the actual impact.

As Finance Minister Chrystia Freeland put it, “If you’ve been lucky enough, or smart enough, or hard-working 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,” she wrote. But, their own estimates project a very significant reduction in sales. That will bring a loss of HST/GST revenues as well as job losses and therefore income tax losses, and presumably increases in unemployment costs.

Allied to boating, there are sure to be declines in domestic tourism spending and for the “rich” probably increases in tourism spending outside of Canada; a “loose – loose” situation all ‘round.

From the left: MP Kelly Block – Carlton Trail – Eagle Creek, Jim Wielgosz – NMMA Canada

Surprisingly, MPs voted in favour of an NDP amendment to the budget bill that gives the government flexibility to delay the planned Sept. 1 implementation date for the new tax, but only with respect to aircraft. The Globe & Mail reported that several business leaders told senators on the national finance committee last Wednesday that while that amendment was welcome, the Senate should further soften the impact of the tax.

For me, the most shocking thing in all this is the government’s apparent indifference to the suffering that this will bring in the form of sales declines leading to unemployment, business failures and ultimately, government revenue declines.

From the left: Andy Adams – Boating Industry Canada, MP Darrell Samson, Sackville – Preston, Jim Wielgosz – NMMA Canada

The politics of supporting the NDPs “tax the rich” position as a part of the current NDP-Liberal agreement that keeps Justin Trudeau in office to 2025, seems to be more important than the suffering of average Canadian workers in the marine industry and the economic damage that will hit in their largely rural communities all across Canada.

Andy Adams - Editor

From the left: Andy Adams – Boating Industry Canada, MP Scot Davidson – York Simcoe, Rick Layzell – Boating Ontario