Tariffs drag down Canada’s boating industry

Heavy job losses, lower sales forecast as Canada's retaliatory tariffs bite into boating imports

VIP day attendees at the Toronto International Boat Show take a tour Jack Adams/Toronto Observer

Canada’s boating industry is bracing for a 35 per cent drop in sales and 7,500 lost jobs due to the ongoing trade war over U.S. aluminum and steel tariffs, says the CEO of Boating Ontario.

Rick Layzell was in Ottawa this week to meet with senior government officials and share his concerns over the dire industry forecast at the same time as the Toronto International Boat Show, a marquee event for winter boat sales in the province.

At issue is the 25 per cent tariff on Canadian steel and 10 per cent tariff on aluminum imposed by the Donald Trump administration last June. Canada responded a month later with retaliatory tariffs on a variety of U.S. goods with a total import value of more than $16 billion, including a 10 per cent tariff on motorboats shipped to this country.

Since Canada imports more than 90 per cent of all boats sold in this country from the U.S., the Canadian industry has been hit hard while the American market is largely unaffected. The result has been higher prices for new boats this side of the border, fewer sales and declining orders.

Layzell met with parliamentarians, including the finance minister and members of the Prime Minister’s Office, to explain that a 35 per cent drop in sales could result in “job losses exceeding the recent Oshawa GM plant closing,” he said. “Sixty [more] days and we’ll be deep in it.”

Andy Blenkarn, owner of Desmasdons Boat Works north of Parry Sound, said the Canadian counter-tariffs are backfiring. “Other dealers in the United States are buying up all the production that Canadian dealers are cancelling,” said Blenkarn, while managing his display at the Toronto International Boat Show.

Blenkarn gave the example of the U.S. boat manufacturer Key West Boats, whose new 2019 model has just sold out despite the duties because domestic demand is so great, he said. Mike Marlowe of Key West confirmed in an email that all 2019 production models are sold.

Sara Anghel, president of the National Marine Manufacturers Association, said that boating exports from the U.S. have dropped by 26 per cent since the counter tariffs were put in place.

Layzell said he’s been impressed by the how manufacturers adapted to the new costs. Prices were predicted to increase by 25 per cent, but have gone up by 20 per cent. Layzell said he believes that the industry will “weather the storm.”

Despite the difficulties the tariffs are causing, the attitude at the Toronto International Boat show was positive on Friday, the opening day “VIP only” event attended by serious buyers and media.

Blenkarn said he made a good start at the show; Layzell said sales were strong for the VIP opening.

“Boating is part of the Canadian identity,” Blenkarn said.

Anghel said she remains optimistic considering 44 per cent of Canadians had been on a boat in 2018. “The passion for the sport and the pastime is what prevails and will always win,” she said.

She encourages people to write to their local politicians to raise concerns about the counter tariffs.

Correction: An earlier version of this story included an incorrect number of potential lost jobs. The CEO of Boating Ontario said the trade war could result in 7,500 lost jobs, not 75,000 jobs.

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Posted: Jan 19 2019 8:22 pm
Filed under: News