Mr. Chairman and committee members, I'd like to thank you for giving us an opportunity to talk to you this morning as part of your pre-budget consultations.
My name is Dan Merkowsky and I'm the executive vice-president of the RDA of Alberta, and I am appearing on behalf of the Recreation Vehicle Dealers Association of Canada.
The RVDA of Canada is a national volunteer federation of provincial and regional RVD associations, and the members have united to form a professional trade association for all businesses involved in the recreation vehicle industry.
For the upcoming 2017 budget the RVDA of Canada is asking the federal government to help protect our tourism industry and prevent unnecessary obstacles to further growth in this important sector. By implementing the following recommendations we can help to provide economic growth, business expansion, and innovation to all communities, particularly rural and remote communities across Canada.
We ask you today to consider investment in RVing and camping infrastructure in Canada's national parks, and protection of Canadian businesses by not raising the de minimis level up to $200.
RVing and camping are already components of the Canadian economy. In 2011 the total economic activity associated with the Canadian RV industry reached $14.5 billion. Direct spending associated with recreational vehicles reached $11.5 billion and these expenditures generated $8 billion in net activity and 98,000 jobs.
By making a dedicated investment in camping and RVing infrastructure in Canada's national parks we can help to bring further growth to rural and remote communities. By nature, RVing and camping are found in these communities that are outside of our urban centres.
Canada is home to vast natural beauty, which is not being fully explored by our own population or external visitors. There are over 4,231 campgrounds operated across Canada, each offering a unique experience for Canadians and international visitors.
We require critical upgrades in electrical outlets and an increase in campsite size requirements to accommodate larger RVs. Many campsites do not have lower amp services of 30 or 50 amps that are required to accommodate the more amenities in RVs today. Additionally, as units can now reach up to 45 feet, compared to 25 feet, these upgrades are essential for continued use of existing sites.
RVing in Canada has a considerable economic impact. The manufacturing, purchasing, servicing, and use of recreation vehicles contributes billions to the Canadian economy each year. In total the retail sales and service associated with Canada's more than 400 recreation vehicle dealers generates about $1.5 billion in net economic activity throughout Canada, and supports nearly 19,300 jobs.
In order to protect this valuable industry, along with many other Canadian businesses, we ask that the de minimis level not be raised to $200.
The changes in the 2012 federal budget to increase the value of goods travellers can bring back into Canada free of taxes and duties has seriously worsened the ability of Canadian RV dealers to compete with U.S. dealers, who already have the advantage of lower costs. Popular after-market parts, now falling within the new exemption level, give customers a powerful reason to take their business to the U.S. Dramatically raising the limit when the Canada Border Services Agency is not actively enforcing the current threshold sends a contradictory message on behalf of the Canadian government and fails to support our businesses and the Canadian economy as a whole.
While American online merchants and couriers will argue that the raised de minimis level in Canada is only a fraction of that of the United States' current threshold of $800, the U.S. taxation process differs from that practised in Canada. Furthermore, the United States does not collect federal, local, or state taxes on interstate shipments. The tax advantage the U.S. would experience if the Canadian de minimis were raised to $200 would be huge, while tax benefits on inbound goods would be greatly reduced for Canada.
Many groups representing Canadian businesses support the position that raising de minimis levels would only result in Canadians shopping less often in Canada and as a result fewer goods would be sold nationally, leading to a significant decrease in government revenue.
The United States already holds a predominant position in the online retail space and indeed the global online space with only 22% of U.S. customers reporting having made a purchase from a non-U.S. seller. By contrast, 67% of Canadians report having made online cross-border purchases.
Implementation of RVDA of Canada's recommendations for the 2017 budget would help to protect Canadian businesses; grow our economy, particularly in rural and remote communities; and promote Canada as a tourism destination for both internal and external visitors.
Thank you for your time.