Fears that Canada-U.S. trade tariffs could sink some Okanagan boat dealers

Boat dealers in the Okanagan are struggling in the wake of a 10 per cent import tariff on boatsand other select goods from the U.S. implemented last July.

The tariff was the federal government'sretaliation to U.S. President Donald Trump's decision to impose levies of 25 per cent on steel and 10 per cent on aluminum imported from Canada.

It meant that boat dealers have had to pay an added cost on inventory they bring in from the U.S.,said DurellWiley,vice-president of operations and general manager at Dockside Marine Centre in West Kelowna, B.C.

"As a consequence, we have reduced the number of boats that we have ordered for 2019, because we're deeply concerned about how many we will sell with an added price tag on them," he said.

Absorbing costs

There aren't very many domestic boat manufacturers that dealers can use to replace their U.S. inventory, said Wiley.

Last June, the National Marine Manufacturers Associationwrote a letter to the federalgovernment voicing concerns that there aren't enough Canadian boat manufacturers to sustain the market. The letter states that more than 65 per cent of boats sold in Canada in 2017were imported from the U.S.

"I think most dealers will have to absorb the costs [of the new tariff]," said Wiley.

Bigger operations like the Dockside Marine Centre may be able to withstand the added costs, but smaller operations that don't offer a diverse range of products and services might not be able to manage, he said.

"Smaller retailers are giving up. Many of them have decided not to pursue new boat sales anymore," he said.

Wileyalso cites other factors that have affectedbusinessfor most boat dealers in Western Canada, includingpipeline disputes between B.C. and Alberta, the Albertaneconomy, B.C.'s new speculation taxand smoke from wildfires.

"We've had some headwinds and as a consequence most of the industry has been lagging in sales," he said.

'Great news' for Canadian manufacturers

Boat manufacturerCampion Marine in Kelowna, B.C., is one of the few Okanaganbusinesses benefiting from the tariff.

"For us, it gives us an excellent opportunity to promote a Canadian-built product," said Brian Milligan, Campion's director of sales and marketing.

"When the majority of the market has boats that they're selling that are American-made, it gives us an opportunity to grab some market share based on a price differential."

At a Toronto boat show in January, Campion nearly doubled its sales from the previous year, said Milligan.

He believes Campion will see an increase in demand this summer as there are now fewer options for Canadian dealers to choose from if they want to avoid the tariff.

"It's great news," said Milligan.