Trudeau's retaliatory tariffs may threaten recreational boating in Canada

Canada's recreational boating industry says it's bracing for big losses if proposed countermeasures against American tariffs go ahead on July 1.

On Wednesday, the National Marine Manufacturers Association Canada, which represents the recreational boating industry, wrote a two-page letter to Prime Minister Justin Trudeau. It asked that the federal government remove four tariffs that target recreational boats from its proposed scope of retaliatory tariffs against the United States.

These tariffs "will cause irreparable and disastrous damage to the industry, from which it would likely never recover," wrote association president Sara Anghel. 

The four tariffs of 10 per cent the National Marine Manufacturers Association Canada wants lifted include:

• Inflatable boats
• Sailboats, with or without auxiliary motor
• Motorboats, other than outboard motorboats
• Outboard motorboats, other vessels for pleasure or sport

Should those four tariffs come into effect, the association requests a grace period of six months to allow Canadian recreational boat dealers to adapt to the new pricing scheme.

Should the tariffs proceed and be removed in a few months, the association requests the tariff be paid back so as not to unfairly burden Canadian importers and dealers.

Dealers already cancelling orders

According to Anghel, the recreational boat industry in Canada generates $10 billion in revenues with a GDP of $5.6 billion and employs 75,000 Canadians. There are nearly 5,000 marine-related businesses across the country, many of them small and family-owned.

"[W]e must emphasize that the proposed Canadian countermeasures will have severe negative and long-term impact to the jobs, taxes and tourism that recreational boating represents — and generates — across Canada," wrote Anghel.

She stated recreational boat tariffs will be mostly felt by middle-class Canadians and will come at a particularly bad time for recreational boating as the industry is gearing up for the summer boating season.

"Canadian dealers are already cancelling orders and bracing for a sales downturn."

In the Maritimes, where there are more than 4,000 people employed in the recreational boating industry, people are already bracing for a downturn according to Patricia Nelder, executive director of the Atlantic Marine Trades Association/Boating Atlantic.  

"One of our members wrote to me and he feels that if the 10 per cent tariff goes through it will have a drastic effect on his business since all his new boats that he's selling come from the U.S," said Nelder, who's from Martins River, N.S.

Nelder said the majority of recreational boats sold in the Maritimes are imported from the U.S.

She says the recreational boating industry is already facing enough challenges thanks to a perfect storm of factors — tariffs on both side of the border, volatile aluminum prices and a weakening exchange rate with the U.S. — that stand to spark a significant spike in prices for imported American vessels.

For example, a pontoon boat that costs $50,000 now could be selling for $65,000  after July 1 if retaliatory tariffs go ahead.

Nelder said some business sectors in the recreational boating industry, including marinas, are expecting a 20 to 25 per cent decrease in business and corresponding job losses as a result.

Government reviewing retaliatory tariffs

The Office of the Minister of Foreign Affairs said on Friday it concluded a consultation period to ensure there are no unintended consequences of Canada's retaliatory tariffs. The results of the consultation will be reviewed with a final list of countermeasures to follow.

The U.S. announced the imposition of tariffs on imports of steel and aluminum products from Canada last month.

In response, Canada announced dollar-for-dollar tariffs on up to $16.6 billion worth of U.S. imports.

These retaliatory tariffs include more than just steel, aluminum and recreational boats. Ballpoint pens, beer kegs, bobbins and many other goods are included in a long list of countermeasures set to take effect on Canada Day unless the U.S. eliminates its trade restrictions.