Industry committee  This has not been discussed with us at all. I'm not aware of what it's planning to do with the revenue.

Industry committee  Absolutely. That's what we've been trying to say all along. We are less competitive. It costs more here. There is the exchange rate, because most of the boats are built in the U.S., and now on top of the 12% or 13%, we're going to add another 10% and just destroy local manufacturing, destroy coastal community businesses.

Industry committee  It's probably a mix of things. Because there was such a long pause after the tax was first brought up in budget 2021 and we weren't really sure when implementation was going to happen, I think a lot of people got cold feet. There are not necessarily deposits. They just decided not to purchase.

Industry committee  Okay.

Industry committee  I do. There are many, many dealers around this country, from B.C. to Ontario, to Quebec, where 80% of the product that they sell is above $250,000. They are all hearing from their customers, repeat or new customers, who have clearly said, “Cancel my order if the luxury tax comes in.”

Industry committee  That's according to the study that we have, yes. That's correct.

Industry committee  It's inadvertently a tariff. To be honest, as much as we're doing our best to protect Canadian manufacturing, about 80% of the boats that are sold in Canada are made in the United States. If we're going to say we have free trade between our countries, but we're imposing a luxury tax on boats that are manufactured in the U.S. it's a quasi tariff.

Industry committee  I'll have to look that up for you and provide you with an exact number. About 15% to 20% of the industry is boats, vessels, valued at above $250,000.

Industry committee  I will.

Industry committee  I'm not sure what the state tax is in Minnesota, but it's state by state. There would be whatever the sales tax—

Industry committee  It's a matter of convenience as well. Obviously, it is a little more complicated, if you choose to purchase a boat in the U.S., in Florida or anywhere, to bring it here. I think what the luxury tax will do is prompt people to deal with that inconvenience to save a significant amount of money.

Industry committee  You're absolutely right. The view is that they can afford it and that's discretionary money, but we're seeing that they're choosing to take their discretionary money elsewhere. They're simply not interested in paying any more than they already have to pay. That's their choice.

Industry committee  Yes.

Industry committee  If someone purchases a boat in the U.S. and chooses to import it into Canada, if it's newer than 2018, it will be subject to the luxury tax at the point of entry into Canada if they choose to register it. That's not necessarily what the case would be with boats. They can float the boat across.

Industry committee  That's correct.