Luxury tax looms over Orillia's Sunshine Festival boat show

Orillia's Sunshine Festival gets underway at the Port of Orillia on Friday evening, and despite all the fun surrounding the boat show, a growing trend is being felt in the boating industry.

Enter the luxury tax.

Implemented back in September 2022, the luxury tax starts at 20 per cent on any new boats that sell for more than $250,000, causing significant declines in sales and jobs.

"The consumer has flat out said, 'I'm not paying the tax,' and the industry has responded and said, 'We're not bringing the boats," said Rick Layzell, Ontario Boating Association CEO.

• Download the CTV News app to get local alerts on your device
• Get the latest local updates sent to your email inbox

The slowing of sales on brand new boats in the midsized and larger categories has caused many to opt for boats in the U.S., where they are not as heavily taxed.

"In the first year of implementation of the tax, $211 million walked away from this industry," added Layzell.

The slowed sales has also resulted in more than 100 job losses nationwide.

"We've lost detailers, we've lost technicians," said Kevin Marinelli, a sales consultant for Pride Marine Group. "It's not the rich person that's getting hurt. It's the middle class that the rich are employing here."

Fewer boats in Lake Simcoe also potentially means fewer customers in Orillia's restaurants.

"Our economy is boating-based," said Allan Lafontaine. "We have most boat dealers in our area, so it's going to have a huge impact if we can't get boats on the water and sold."

On the bright side, with more than 50 boats and 50 vendors at Orillia's Sunshine Festival, it presents a crucial opportunity to keep up the enthusiasm around boating.

"Tons and tons of boats out there that are not impacted by the tax," said Layzell. "There's some great product."

Lafontaine also functions as the Port of Orillia's harbourmaster. "Traditionally, we have 10 to 20,000 visitors walking through the park," he added. "We're hoping that people come out in their boat by water, by land. That's what Orillia is about."

In addition to the boat show, the Sunshine Festival, which runs Friday through Sunday, will feature live music, food trucks, beer gardens, and more.