Boat Prices Set to Rise Due To Tariffs

Year after year, Canada’s recreational boating industry has recorded steady growth. In 2018, it hit a ten-year high. However, that’s about to go south. With a strained relationship between Canada and the US and new tariffs on aluminum and steel, the price of boats is set to increase.

The tariffs, which go into place on July 1, 2018, are a concern for Canadian boat manufacturers, raising the price of the boat – much to the displeasure of customers.

Here’s a breakdown of the tariffs and how they’ll affect the boating industry.

Boat Prices Rising Soon

In recent news, the Donald Trump administration has announced they’re imposing a 25 per cent tariff on steel and 10 per cent tariff on aluminum imported into the US. In a retaliatory move, the Liberal Government of Canada countered with the same tariffs.

Both Canadian and American boat makers are going to feel the brunt of the move. A significant percentage of Canadian boat companies import their steel from America. There’s also an additional tariff on steel sheets imposed by the Department of Commerce.

In recent years, the sale of aluminum boats has surpassed the demand for fibreglass boats, with 110,000 produced annually. Each year, aluminum and pontoons boats account for 43 per cent of all powerboat sales.

Even boats imported from the US will rise because of the tariffs. According to the National Marine Manufacturers Association (NMMA), the US accounts for nearly 65 per cent of the boats imported into Canada. Plus, there will be an additional 10 per cent tariff imposed by Canada on sailboats, inflatable boats, motorboats and vessels of sport or leisure.

Boat Makers Protest

The National Marine Manufacturers Association (NMMA) has argued against the tariffs, asking the 10 per cent tariff be lifted from imported boats. They also requested for six months to adapt to the new pricing strategies.

The NMMA sent letters of protest to Premier-Designate of Ontario, Doug Ford and Canadian Prime Minister, Justin Trudeau. The letter sent to Trudeau supports the retaliatory measures taken against the American metals, but it presents a dim scenario for the boating industry. If the tariffs come into action, the effect on employment, boat sales and revenues generated from recreational boating and tourism could be devastating.

The NMMA feels job loses will be wide-spread due to the tariffs. With a GDP of $5.6 billion, the NMMA employs approximately 75,000. According to the NMMA, smaller boat manufacturers might be forced to lay their employees, creating a disastrous ripple effect in the boating industry.

Now is the Best Time to Buy a Boat

Once the tariffs are in place, to buy a boat could cost up to 25 per cent than current prices. There are reports of people cancelling orders because of the tariffs. However, rather than cancelling – an alternative is to purchase now.

You can take advantage of in-stock boats with current prices before the tariffs come into effect. While you may not like the governmental decision, you can action – and save yourself some money.