Canada Considers Luxury Tax on Yachts

The Canadian government’s proposed luxury tax on new boats valued at CA $250,000 – originally scheduled to take effect January 1, 2022 – is expected to be fully implemented in the weeks to come. A spokesperson for Canadian Finance Minister Chrystia Freeland confirmed recently that the government will release draft legislation to implement the tax in the coming weeks.

The proposed luxury tax would have adverse effects on Canada’s boat builders, as concluded in a recent economic analysis 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. The 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).

Sara Anghel, president, National Marine Manufacturers Association (NMMA) Canada has been strongly advocating against the tax for the past two years and recently spoke on the issue and the adverse effects the tax would have on small Canadian businesses as well as marine manufacturers.

NMMA Canada continues to proactively meet and communicate with federal officials, Members of Parliament and their staff to encourage the government to scrap or delay the proposed luxury tax, and allow for reprieve for the country’s boat builders and those who deliver boats to customers.