Kelowna boat retailers worry about tit-for-tat tariffs by U.S. and Canada

A 10 per cent tariff on new boats coming into Canada is prompting big cuts to boat orders

The general manager of one of Kelowna’s largest recreational boat retailers says the trade war that has erupted between the United States and Canada is the “final straw” for businesses like his.

Durell Wiley, vice-president of operations and general manager of Dockside Marine, said Wednesday while the used boat business is booming, new boat sales are already struggling because of the low value of the Canadian dollar in relation to the U.S. dollar. And that is only going to get worse.

Sales of new boats will be further hurt by the implementation of a 10 per cent tariff on American boats entering Canada as of July 1. Those tariffs are a response to the U.S. slapping a 25 per cent tariff on steel from Canada and a 10 per cent tariff on aluminum.

That 10 per cent tariff has prompted Dockside to cut its order for new boats for next year from its major American supplier by 75 per cent.

He said while his company is large enough to weather the storm in the short-to-medium term, he fears other smaller boat retailers may not survive.

“I think somebody in the Okanagan marine industry is going to go down because of this,” said Wiley.

Recently, the president of Kelowna-based boat manufacturer Campion Boats said the tariff battle between Canada and the U.S. has prompted his company to put entire parts of its business on hold.

Brock Elliott described Canada’s 10 per cent counter tariff on new boats coming into Canada as shocking.

Wiley said because of the current value of the Canadian dollar in relation to the U.S. dollar—about 75 per cent—the cost of new boats here is already high. A 10 per cent tariff on top of that, one that is applicable to the entire Canadian dollar value, just makes the situation worse.

Wiley said used boats are difficult to keep in stock now because they are in high demand due to the cost of new boats. And with a lower Canadian dollar, they are also being eyed by U.S. buyers who are snapping them up, making it more expensive for Canadians looking to buy a boat.

With predictions by economists that the Canadian dollar could drop in value even further, to just 65 cents, the situation is looking worse.

The president of the Canadian Marine Association has written to Prime Minister Justin Trudeau saying the recreational boating industry is “already on its knees,” according to Wiley and the current situation just makes it worse.

But in Wiley’s view it’s not just the Canadian and U.S. federal governments that are exacerbating the situation.

He said provincial moves, such as the controversial speculation tax, the new payroll tax and B.C.’s dispute with Alberta over the Trans Mountain Pipeline are all proving problematic for business in this province.

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