The number of recreational boat registrations in Canada has dropped sharply since the introduction of the luxury tax in 2022, newly released data shows.
In response to an inquiry from Conservative MP Adam Chambers, the Canada Revenue Agency (CRA)
provided data on the annual registration of “pleasure crafts” from 2016 to 2024. Total registrations peaked at 874 in 2022, then declined by about 8 percent to 807 in 2023, and fell further to 524 in 2024.
Of the total pleasure crafts registered in 2022, 92 were new vessels and 782 were used. In comparison, 36 new and 488 used vessels have been registered so far this year.
The decline in registrations coincides with the passage of the
Select Luxury Items Tax Act in 2022, as reported by Blacklock’s Reporter. The act levied a minimum 10 percent surtax, plus GST, on vessels over $250,000, as well as autos and aircraft over $100,000.
“If you’ve been lucky enough, or smart enough, or hard-working enough, to afford to spend $100,000 on a car, or $250,000 on a boat – congratulations!” Deputy Prime Minister and Finance Minister Chrystia Freeland wrote in
Budget 2021, where the luxury tax was first mentioned.
“And thank you for contributing a little bit of that good fortune to help heal the wounds of COVID and invest in our future collective prosperity,” she added.
At the time of the luxury tax’s introduction, Sara Anghel, then-president of the National Marine Manufacturers Association,
testified that it would hurt manufacturers without generating a proportional increase in tax revenue, as consumers have been observed to redirect their discretionary spending elsewhere.
“The problem with this kind of tax is that it can easily be avoided by consumers by either buying goods or purchasing and keeping their boats abroad, for example, in Florida or Seattle,” Anghel told the Commons
industry committee on June 10, 2022. “The expected drop in sales will significantly impact the bottom line of manufacturers and dealers.”
“The proposed tax will result in a minimum $90-million decrease in revenues for boat dealers, and potential job losses of at least 900 full-time equivalent employees. In short, the tax will hurt the very middle-class families that the government is trying to help,” she added.
The Epoch Times reached out to the finance department for comment on the CRA’s data but did not receive a response by publication time.
Transport Canada
defines a “pleasure craft” as a vessel used for recreation, rather than for the commercial transportation of passengers. Any pleasure craft with one or more engines totalling at least 10 horsepower (7.5 kW) must have a Pleasure Craft Licence before it can be operated.
