Feb 28, 2019

Buying a Boat
buying a boat from the other side of the border has implications

 

Pat Sturgeon and Drew Robertson are well known names in this country’s boat business and are viewed as consummate pros. Andrew ‘Drew’ Robertson is Sr. Vice President, Skippers’ Plan at insurance company Gallager while Pat’s bio below discusses his lengthy history as a broker. Based on a successful series of talks at the Canadian International Boat Show, we have prevailed on Pat and Drew to share their advice and knowledge on the sometimes complicated worlds of boat ownership.

This time Pat takes a look at buying a boat from across a border…

There have been a lot of changes over the past two years for importing boats out of the country. Canada recently negotiated free trade with Europe, Nafta has come under attack and the Prime Minister has implemented a 10% retaliatory Tariff on all vessel coming in from the United States. What does all this mean if I want to purchase a boat out of the country?

First lets look at Europe and CETA (Comprehensive Economic Trade Agreement) Effective September 21, 2017. Since this time all boat originating from the EU used or new can be imported into Canada with out the 9.5% duty previously imposed. In order to comply the bill of sale must show a CETA declaration and the vessel cannot have been consumed or entered into any other country other than a CETA approved country. This means that a boat built in Germany that was imported in to the USA will attract duty at 9.5% duty if imported into Canada regardless of the registry.

Buying a BoatReal case scenario is:


1- A Hanse 400 sail boat is for sale in Spain. You want to purchase and ship the boat Directly to Canada from Spain. You apply for CETA and you will pay only the HST and no duty.


2- A Hanse 400 is for sale in Annapolis and is owned by an American. You will have to Pay 9.5% duty plus the HST when the boat is imported into Canada

NAFTA still exists. Until such time that Canada and the US officially approve NAFTA 2 we are bound by the existing terms. This allows for boats to enter into Canada new or used duty free.

Retaliatory Tariff: This is the current hurdle Canadians are facing right now when considering importing a used or new boat built in the USA. The Canadian government has imposed a 10% tariff on boats used or new entering the country from the USA. The marine industry has been fighting this tariff since it was imposed.

Real case scenario:


You want to by and import a Catalina 42 sailboat from Annapolis owned by an American. You will apply for Duty free under NAFTA Certificate but be subject to 10% Tariff plus HST upon entering Canada.

Since the tariff has been imposed the purchase of a US boat for import into Canada has dropped off considerably.

What can you do?

1-Keep the boat in the US until such time that it is favorable to import.

2- Shop Canadian for now.


3- Explore purchasing a boat from Europe or one that has not been consumed into the US economy.


4- Wait and hope the political economic climate changes.

 

Happy hunting!

Pat Sturgeon,

Pat Sturgeon Yachts LTD

Pat Sturgeon has been in the boat business since graduating from Humber College in 1980. He has been a boat broker since 1984. Pat is a Certified Professional Yacht Broker and was instrumental in the formation in 2005 of Boating Ontario Dealers. Pat headed up the alliance between Boating Ontario Dealers and the CAC (Certification Advisory Committee for the CPYB) of which he is currently the chair. Pat has also been an active board member for Boating Ontario Dealers from its inception.

 

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