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Canada’s boat builders brace for federal government’s proposed ‘luxury tax’

Industry News, News | February 3, 2022 | By:

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, according to the National Marine Manufacturers Association (NMMA) website. 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.

Canada’s Globe & Mail–a major daily national newspaper–published a piece on the federal government’s tax, citing that Canadian yacht and private jet makers are expecting an increase in cancelled orders, resulting in the loss of a year’s worth of work in some instances, should the tax come into effect.

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).

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