Breaking News: CRA Numbers Show Luxury Tax a Failed Policy
July 23, 2024
July 23rd, 2024, Ottawa – The Canada Revenue Agency (CRA) has released detailed results of revenue collected since the implementation of the luxury tax and they are proving that marine industry projections of a collapse in the market have come to fruition.
After months of advocacy by the marine industry on pending impacts, the tax came into force September 1, 2022. On June 3, 2024, during the Standing Committee on Finance Meeting, MP Adam Chambers rose once again to ask for the collection results to be shared.
On May 26, 2022 the Office of the Parliamentary Budget Officer published their analysis of estimations of tax collections which indicated the vessels category would net $18 M in the 2022 – 2023 period and an additional $34 M in the 2023 – 2024 period – a total of $52 M in 24 months.
The CRA has shared the following data which covers the period of implementation of the tax – Sept 1/22 through June 7/24 – representing 21 months of collections. A total of 450 vessels have been assessed with the tax and most importantly, total tax collections have reached a mere $12,040,000. This is $40 M short of PBO projections and with market inventory of vessels over $250,000 near record lows, there is no chance that the shortfall can be recovered within 3 months.
“NMMA Canada manufacturers have repeatedly expressed their concerns of lost production demands for Canadian market inventory as dealers are unwilling to take the risk of holding luxury tax affected boats in their inventory,” said Marie-France McKinnon, Executive Director of NMMA Canada. “The 1991 US Luxury tax failed and was repealed and we are watching history repeat itself in Canada.”
“With consumers openly refusing to pay the tax and dealers refusing to speculate on the inventory, the government projections were sure to be missed,” added Rick Layzell, President of CMRA. “We have already witnessed the disappearance of good paying jobs as the lost opportunities of selling, hauling, detailing and servicing these boats have disappeared.”
With over 100 middle class rural Canadian jobs already lost and now evidence that the tax has failed to yield even their own PBO projected results, it is time for the Federal Government to repeal the tax and allow the recreational boating industry to return to its positive position of benefitting Canada’s economy.
About CMRA;
As the voice of all aspects of retail in Canadas recreational marine industry, CMRA members represent over 800 member companies across the country. CMRA was formed to create a cohesive and constructive national voice for advocacy issues on behalf of the recreational boating sector.
For more information about the Canadian Marine Retailers Association email
Rick Layzell, CMRA: info@canadianmarineretailers.ca
About NMMA
The National Marine Manufacturers Association (NMMA) is the nation’s leading trade association representing boat, marine engine and accessory manufacturers. Collectively, NMMA members manufacture an estimated 80 percent of marine products used in North America.
NMMA is dedicated to advocating for and promoting the strength of marine manufacturing, the sales and service networks of its members, and the boating lifestyle.
For more information about the National Marine Manufacturers Association Canada (NMMA Canada) email Marie-France MacKinnon, NMMA Canada: mmackinnon@nmma.org
