Looking to buy a boat this summer? You may want to start shopping now.
Canadian boat inventory is expected to plummet after the federal government implements its second round of tariffs on March 25.
On March 4, the U.S. government introduced 25 per cent tariffs on all Canadian goods entering America. In retaliation, the Canadian government introduced its own 25 per cent tariffs on $30 billion worth of goods imported from the U.S. The Canadian government has given the U.S. a 21-day grace period to drop its tariffs, otherwise Canada will expand its tariffs to an additional $125 billion of U.S. imported goods, including boats.
This means any boat imported into Canada from the U.S. on or after March 25 will be subject to a 25 per cent tariff, likely reflected in a price increase. The tariff will apply to all boats, including motorboats, sailboats, kayaks, canoes, even ferries and yachts.
“It’s going to eliminate boat sales,” says Rick Layzell, the president of the Canadian Marine Retailers Association. “There isn’t a 25 per cent margin in boats. The industry does not have the ability to absorb the tariff, and the consumer is not going to pay it.”
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Layzell estimates that approximately 90 per cent of the boats sold in Canada are sourced from the U.S. Filling this inventory from another source will be nearly impossible. Importing boats from Europe is time consuming and expensive. And Canada’s boat manufacturing industry is non-existent, with the exception of companies such as Princecraft and KingFisher. Layzell says Canada doesn’t have the skilled labourers needed to build boats, not on the scale to meet demand.
Instead, he says Canadian dealerships are stockpiling boats, trying to buy as many U.S.-manufactured vessels as they can before March 25. Layzell points out that to avoid a price hike, Canadians don’t need to buy a boat by March 25, they just need to buy a boat that entered the country before March 25.
But even the U.S. factories are running out of inventory. While a pontoon only takes a couple of days to manufacture, larger fibreglass boats can take between six to 12 weeks. “There’s a huge part of the market that simply is going to go under serviced this year because there’s just not going to be any product here,” says Layzell.
As for used boats, the CMRA is clarifying their status with the federal government. They’re not specifically mentioned in the government’s wording, but Layzell says it’s likely they’ll be hit by the tariff, too.
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As part of the 21-day stretch before the second wave of tariffs, the Canadian government has opened a comment period. Canadian industries are able plead their cases to the federal government for a remission on the tariff for certain goods. To receive a remission, the organization must show that the good cannot be sourced domestically or from a non-U.S. source, or show that taxing the good could have a severe impact on the Canadian economy.
The CMRA is asking the Canadian government for a remission on all boats, citing the difficulty in sourcing them from anywhere other than the U.S. If that doesn’t work, the CMRA will also be asking for a remission on any boats that were sold before March 25 but shipped into Canada after that date.
“We are certainly hopeful this thing does not have a long life to it,” says Layzell, “and that at some point Ottawa and Washington do sit down and find a path forward.”
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