BarrieToday welcomes letters to the editor at [email protected]. Please include your daytime phone number and address (for verification of authorship, not publication). The following is in response to 'LETTER: MP says new luxury tax will 'devastate' manufacturing,' published June 9.
*************************
It's easy to perceive that a 'tax-the-rich scheme' such as the luxury tax on boats over $250,000 and cars and planes over $100,000 will readily yield millions of dollars into the governments coffers because, as has been clearly articulated by many letters to BarrieToday, the rich should pay more.
The problem is that the rich will not pay more and the problem is worsened by the fact that it is middle-class Canadians who will suffer.
I've spent over 30 years working countless hours in Canada's recreational boating industry and here is what is unfolding today in the boating industry and what will unfold as this tax takes hold after the currently published date of Sept. 1, 2022.
The rich will not pay; they will simply take their dollars elsewhere. They will buy their boats in places like Florida, a U.S. state which recognizes the many thousands of dollars that boaters put into the local tourism economy each and every year, a state where the maximum boat tax is $18,000.
The Government of Canada gain when they buy in Florida equals zero. Wealthy Canadians may decide to buy real estate or take a trip abroad, but what they will not do is buy a boat that has 13 per cent HST plus 10 per cent luxury tax plus HST on top of the luxury tax.
This has been eminently clear in thousands of businesses across our industry since the latest attack on recreational boating was announced in April 2019. More deals have been cancelled than I can count and more jobs lie in peril than most can imagine.
Are these jobs the yacht salespeople? In a handful of cases, yes they are. But on a much broader perspective these are middle-class, blue-collar, hard-working Canadian employees that wash and detail boats, drivers that haul boats, technicians that repair and service boats and so on. Their kids go to your kids schools, they shop at your local grocery and dine in your local restaurants.
So what is a $250,000 boat today? Is it a yacht as the federal government would have you believe? Absolutely not. A $250,000 boat is a 28-foot cruiser that the landscaping contractor next door decides to buy so he and his wife and kids can go and spend some summer enjoyment on the water.
Countless numbers of these middle-class families choose these boats because the cost of a cottage in Canada — which, oddly, isn't considered a luxury tax item — is way beyond their reach. But after working endless hours, planning and saving, they can now afford a boat and share those experiences with their kids. Now if they buy a cottage or an RV for $250,000, our government says 'that's OK, no luxury tax there,' but if they dare buy a boat they get smacked with this unfair tax that pits one form of recreation against another. And then they call it fair?
The governments very own Parliamentary Budget Office (PBO) recently published projections on the tax. They now expect to gain $775 million over the next five years in new tax. Sounds great. Except for the fact that the PBO also stated that $2.9 billion in sales will be lost at the same time, meaning $377 million in direct HST is gone.
Now add in the lost employment taxes (over 1,000 direct jobs are in peril in the boat business alone) and what's left? Oh wait, don't forget to deduct the millions the government is going to spend administering and monitoring the tax across three very different industries who have thousands of businesses.
The answer is that there is nothing left and not a single Canadian will gain a dime from this tax.
But there will absolutely be lots of families looking for work and lots of small businesses wondering how they can stay afloat.
Luxury taxes all over the world have failed — despite endless submissions with detailed information and options on how to mitigate the impacts, Canada's government will not listen and soon it will be too late. The jobs will be gone, the taxes will not come and the rich will still be rich.
The tax is doomed to fail and I stand in full support of MP John Brassard.
Rick Layzell
Barrie
Barrie
*************************
