Major Win! The Luxury Tax on Boats in Canada is Finally Gone!
OTTAWA (November 4, 2025)—It's official: Budget 2025 is scrapping the devastating luxury tax on boats!
Canada Removes Luxury Tax on Boats
This news is a monumental relief for Canada's recreational boating sector. When this misguided tax was first rolled out in September 2022, industry leaders immediately warned of the crippling consequences: lost middle-class jobs, a slump in sales, and a drain on government revenues. They were right.
The elimination of this failed tax is a testament to the sustained and relentless advocacy of the National Marine Manufacturers Association (NMMA Canada), the Canadian Marine Retailers Association (CMRA), and countless grassroots supporters across the country.
⚓ Protecting Jobs, Revitalizing the Industry
This decisive move by the government is more than just a tax adjustment—it's an economic lifeline. It will protect boat manufacturing jobs nationwide, bolster domestic production, and give Canadian dealers a chance to rebuild and return sales to pre-tax levels. This relief extends to the thousands of middle-class families whose livelihoods depend on a vibrant recreational boating sector.
By removing the tax, the government has recognized a crucial truth: recreational boating is not a luxury, it's an economic engine and a vital source of connection for communities from coast to coast to coast.
“This is a major victory for Canadian manufacturing and marine businesses,” said Marie-France MacKinnon, Executive Director of NMMA Canada. “We’re grateful to our members, our partners at the Canadian Marine Retailers Association, and MPs from all parties who listened to the evidence and took action to protect Canadian jobs, local businesses, and consumers.”
⚓ Time to Get Back to Business
The tax removal is critical to safeguarding Canada's manufacturing capacity and allowing domestic boatbuilders, dealers, and retailers to recover ground lost during years of suppressed sales.
“The retail sector across the country is ready to get back to work, to bring sales back to Canada and to reengage with many Canadian families whose boating dreams have remained on hold as they refused to pay this frivolous tax,” added Rick Layzell, President of CMRA. “We know it will take some time to bring back the jobs already lost but we are committed to reengaging both consumers and our workers.”
NMMA Canada and CMRA are energized and will continue their work to champion policies that grow Canada’s marine economy, expand access to the water for all Canadians, and ensure a prosperous future for the recreational boating industry.
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⚓ What does this mean for you?
If you were holding off on a purchase or investment, the future looks much brighter for getting back on the water!
Are you excited about the luxury tax being removed? What's the first thing you think this change will impact for the Canadian boating community?
source: https://www.nmma.ca/press/article/25290
Details of the Now-Eliminated Luxury Tax
Effective Dates: The tax was in effect from September 1, 2022, and was eliminated as of November 5, 2025, in the 2025 Federal Budget.
Price Threshold: The tax applied to new recreational vessels (such as yachts, cruisers, and motorboats) with a purchase price over $250,000.
Manufacture Date: It applied to boats manufactured after 2018.
Calculation: The amount of tax was calculated as the lesser of:
10% of the total retail price of the boat, OR
20% of the price that exceeded the $250,000 threshold.
Additional Taxes: The luxury tax amount was included in the price on which the GST/HST and provincial sales tax (PST, where applicable) were calculated, meaning a tax was applied on top of the luxury tax.
Exemptions: Commercial fishing vessels, ferries, cruise ships, floating homes, and boats used for certain utilitarian business activities (90% or more) were exempt.
