Bad news from BaddeckOct 1, 2014
Non-Canadian yacht owners who plan to store their boats in Canada beyond twelve months face a 5% tariff based on the value of their boat. The law, which has been on the books but not enforced until now, will affect marinas and storage facilities in the Cape Breton, Bras d’Or Lakes region of Nova Scotia, a popular destination for East Coast sailors.
Henry Fuller, Cape Breton Boat Yard
The Cape Breton Boat Yard is in danger of closing due to a new tariff being imposed on the owners of U.S. yachts who store their boats in Canada for 12 months, or who have their boats worked on for more than a 12-month period. The tariff will seriously affect sailors from the Cruising Club of America and East Coast sailors who have historically used the yard when cruising the Bras d’Or Lakes region of Nova Scotia.
The Canadian government is imposing a tariff of as much as 5 percent of a yacht’s value on boats owned by non-Canadians using Canadian boatyards for storage. A free trade tariff of 5 percent is being placed on those American owners with seasonal residences in Canada who import their craft and store them for a 12-month period.
Henry Fuller, owner of the Cape Breton Boat Yard in Baddeck, said that the future of his boatyard and others that cater to non-Canadian clients is in serious danger. Fuller’s boatyard has been in operation for more than 77 years.
“I’m fighting for the survival of my business,” Fuller said. “My American customers aren’t going to put up with this.”
According to Fuller, the tariff rule has been in effect for some time but has not been enforced. Fuller is also concerned about the process whereby Canadian officials will determine the value of a particular boat.
As per government regulations, temporary admission permits for foreign vessels entering Canada are subject to duties, but extensive repair work over the winter months can be permitted. However, yachts are not to be left in Canada between visits by the owner without permission from Canada Border Services Agency. The agency prohibits seasonal residents from keeping their vessels in Canada after they leave the country.
According to Fuller, the type of work done at the boatyard is no longer considered to be appropriate for keeping a boat in Canada over the winter. “All of that work, things I traditionally put on work orders, they said no longer qualifies for keeping the boat here,” Fuller said. Fuller’s yard focuses on routine maintenance, winterizing, rigging, etc.
Fuller said that a number of boat owners who use the boatyard are preparing to move their yachts back to the U.S. Fuller’s yard employs 56 people and is a key part of the local economy.
Fuller claims the tariff has resulted in the loss of winter repair work from almost all of Cape Breton Boat Yard’s American clients.
It is unclear just how the tariff will impact other Canadian boatyards. But, with the Maritimes being a popular cruising ground for U.S. sailors, the economic impact on boatyards may prove costly. For info and government regulations visit: http://www.cbsa-asfc.gc.ca.