Luxury Tax

Feb 11, 2020

Our industry needs everyone to raise their voice in opposition to the ill-considered Liberal Luxury Tax proposal.

The NMMA has shared results from the American introduction of a luxury tax in the early 1990s and the data should help persuade our government that this will be ineffective and overall, damaging to the industry and negative to their tax revenues. The American example showed that:

• U.S. Government projected to collect $31 million from the boat luxury tax
• Sales dropped and only $16 million in luxury tax was collected
• Job losses cost the government $24 million in unemployment insurance and loss of tax revenue
• One boat manufacturer went from 1400 employees to 90
• A net loss of $8 million vs planned gain of $31 million
At the NMMA Canada Recreational Boating Industry Breakfast, Sara Anghel asked for a show of hands to see how many people in the audience, had mailed their MPs to oppose the Luxury Tax. Only a few people had sent letters. Yet, the boating associations had provided their members with pre-made form letters they could use. Actually sending a letter would take very little time or effort.

If we don’t even attempt to oppose this tax, we can’t hope for a positive result. And, anyone who checked out the price tags at the boat show knows that a $100,000 boat is not a big or luxurious boat.

Boating Ontario CEO Rick Layzell wrote to his members, “The Toronto International Boat Show wrapped up on Sunday, January 26th and after a challenging opening weekend snow storm, the crowds thundered back making for a strong retail sales closing weekend. Retail results were a mix of good to great with a noted emphasis on fiberglass sales in several key categories. After speaking with dozens of dealer principals and sales personnel, it is worth noting that not a single consumer spoke to any of these retailers regarding the proposed luxury tax. This supports the recommendation of all trade associations that we continue to battle this proposal from the industry and not in front of the consumer at this time.” Rick Layzell, CEO, Boating Ontario 

We urge all members to continue with their local political community communications during this critical pre- budget period regarding the proposed 10% luxury tax on boats over $100,000. We continue to demonstrate to government that luxury taxes have failed all over the world including the United States, Italy, Norway and New Zealand as consumers simply diverted their spending to other forms of recreation and the governments collected less net taxes. Our “ask” is that recreational boats, that bring families together just like other recreational vehicles, be excluded from this proposal. 

Follow-up requests have been sent out to meet with the Minister of Finance, Bill Morneau and the Minister of Innovation, Science and Industry, Navdeep Bains and we expect to meet with them in the near future. Following is a list of meetings that have taken place since January 20th:

• Ken Hardie, MP Fleetwood-Port Kells (Liberal MP who does not support the luxury tax and met with Boating BC and has provided our concerns to Minister Morneau)
• Chief of Staff to Carla Qualtrough, MP Delta
• Andy Fillmore, MP Halifax (Liberal MP meeting with Boating Atlantic and does not support tax)
• Honourable Lisa McLeod, Minister of Tourism Ontario
• Norm Miller, MPP Parry Sound—Muskoka (Member, Standing Committee on Public Accounts and Parliamentary Assistant to the Minister of Intergovernmental Affairs)
• Billy Pang, MPP Markham—Unionville (Member, Standing Committee on Public Accounts and Parliamentary Assistant to the Minister of Intergovernmental Affairs)

The industry is reminded and encouraged, to fill out the pre-budget consultation survey; go to this link and make a submission on behalf of your business. https://www.budget.gc.ca/2020/prebudget-prebudgetaire/index-en.html

The Industry will assemble in Ottawa for Recreational Boating Day on the Hill at the end of February where the industry will request to meet with over 150 MPs, Ministers and departmental staff. 

All of Canada’s boating industry associations will continue to provide updates on a weekly basis regarding our efforts on the luxury tax.

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