The data released recently reveals a significant decline in recreational boat registrations in Canada following the implementation of the luxury tax in 2022.
Responding to a query from Conservative MP Adam Chambers, the Canada Revenue Agency (CRA)
shared information about the yearly registration of “pleasure crafts” from 2016 to 2024. The total registrations peaked at 874 in 2022, but then decreased by approximately 8% to 807 in 2023, and further dropped to 524 in 2024.
Out of all pleasure crafts registered in 2022, 92 were new vessels and 782 were used. In contrast, 36 new and 488 used vessels have been registered up to now this year.
The decrease in registrations corresponds with the enactment of the
Select Luxury Items Tax Act in 2022, as reported by Blacklock’s Reporter. This act imposed a minimum 10% surtax, plus GST, on vessels over $250,000, as well as automobiles and aircraft over $100,000.
Deputy Prime Minister and Finance Minister Chrystia Freeland expressed in
Budget 2021 that, “If you’ve been fortunate enough, or astute enough, or diligent enough, to afford spending $100,000 on a car, or $250,000 on a boat – congratulations! And thank you for contributing part of that good fortune to help mend the wounds of COVID and invest in our future collective prosperity.”
Former president of the National Marine Manufacturers Association, Sara Anghel,
testified during the introduction of the luxury tax, stating that it would negatively impact manufacturers without proportionately increasing tax revenue, as consumers tend to redirect their discretionary spending elsewhere.
Anghel voiced concerns saying, “Consumers can easily avoid this tax by purchasing goods or retaining their boats overseas, for instance, in Florida or Seattle.” She expressed to the Commons
industry committee on June 10, 2022, “The anticipated decrease in sales will adversely affect the financial standing of manufacturers and dealers.”
“The proposed tax will lead to a minimum decrease of $90 million in revenue for boat dealers and could potentially result in at least 900 full-time equivalent job losses. In summary, the tax will impact the very middle-class families that the government aims to assist,” she added.
The Epoch Times attempted to reach out to the finance department for a response on the CRA’s data but did not receive a reply by the time of publication.
As per
Transport Canada’s definition, a “pleasure craft” is a vessel utilized for recreation rather than commercial passenger transportation. Any pleasure craft with one or more engines totaling at least 10 horsepower (7.5 kW) must possess a Pleasure Craft Licence before being operated.
