The Senate of Canada met last week to consider the Budget Implementation Act of 2022, or Bill C-19, which includes the “luxury tax” on new boats valued at CA $250,000 or more.
A recent study conducted by Jack Mintz, Ph.D., at the School of Public Policy at the University of Calgary, in conjunction with Fred O’Riordan at EY Canada, found the proposed luxury tax would have major economic consequences for the marine industry. The economic analysis finds the luxury tax would lead to a minimum CA $90 million decrease in revenues for boat dealers and potential job losses for 900 full-time equivalent employees (FTE). Last month, the Parliamentary Budget Officer – an independent office within the Parliament of Canada – released a new report on the tax that projects a CA $2.9-billion loss in sales with 75% of the hit (CA $2.2 billion) to be borne by the boating industry.
On Tuesday, MPs voted unanimously in favor 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.
NMMA Canada President Sara Anghel – who has recently appeared at both the House of Commons Finance and Industry and Technology committees – was present at last week’s Senate hearing, where she warned senators that the tax could cost hundreds, and possibly thousands, of Canadian jobs in the boating sector.
“This is a complete assault on the boating industry,” Anghel said.
She also questioned why this week’s amendment only applied to the aviation sector, not autos or boating. “The tax will hurt the very middle-class families that the government is trying to help.”
Ahead of the hearing, NMMA Canada members partook in the industry’s “Day on the Hill,” where members companies met with over two dozen Members of Parliament and senior government officials to discuss the impact of the proposed luxury tax, should it go into effect this September.