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Canada-U.S. trade tiff rocking local boat dealers

Boat dealers in eastern Ontario say the ongoing Canada-U.S. trade tiff is threatening to sink their business this summer.

Tariffs on Canadian aluminum, U.S. imports hitting industry with double whammy

Sean Horsfall said Len's Cove Marina on Big Rideau Lake has paid $250,000 in import tariffs since they were imposed last July. (Stu Mills/CBC)

Boat dealers in eastern Ontario say the ongoing Canada-U.S. trade tiff is threatening to sink their business this summer.

Citing national security, U.S. President Donald Trump imposed punishing tariffs — 25 per cent on steel and 10 per cent on aluminum — on Canadian imports last July.

Canada hit back with a series of countermeasures targeting a wide range of goods including quiche, ball point pens, playing cards — and boats.

That's hitting many Canadian dealers with a double whammy because U.S. manufacturers paying more for Canadian-made metal are upping their wholesale prices by 20 per cent or more.

The wholesale cost of pontoon boats made in America with Canadian aluminum have risen by 10 to 20 per cent. (Stu Mills/CBC)

"It's a stressful time to run a business that is impacted," said Sean Horsfall, a third-generation marina operator and new boat dealer at Len's Cove Marina in Portland, Ont., on Big Rideau Lake.

Because financing doesn't cover the extra 10 per cent import tariff, Horsfall said he's had to pay out an extra $250,000 just to maintain normal stock levels.

Party's over for pontoons

While boat prices are rising across the board, there's one model in particular — pontoon boats — that have become especially costly.

The popular, slow-moving "party boats" sold at Len's Cove Marina are made from Canadian aluminum, but manufactured in Indiana.

If the tariff goes on for years, it will have a dramatic effect on the industry.- Sean Horsfall, Len's Cove Marina

The American manufacturer paid a 10 per cent premium for the shiny, silver metal, and the Canadian government added another 10 per cent to get the finished product back across the border.

The same luxury, high-horsepower pontoon boat that might have cost the dealer $60,000 now rings up at $80,000.

Horsfall said he can't raise his prices that steeply, so he's instead putting off improvements around the marina.

He's been steering customers toward stock that came in before the trade war began, and pushing boats by manufacturers such as Tennessee-based MasterCraft, which responded to the tariffs by absorbing the added cost for Canadian dealers.

He knows that strategy can only last so long, however.

"If the tariff goes on for years, it will have a dramatic effect on the industry," Horsfall said.

Dan Proulx of Orléans Boat World & Sport said the tariffs have placed a lot of pressure on his business to absorb the added cost, rather than pass it on to customers. (Stu Mills/CBC)

Sticker shock

At Orléans Boat World & Sport in Ottawa, co-owner Dan Proulx said most dealers are absorbing as much of the added cost as possible, but customers can expect to pay a bit more, too. 

"There's a bit of sticker shock from some of our customers," he said. "It's created some definite challenges for us."

The company has had to secure additional financing to cover the cost of the tariffs, which could run to as much as $14,000 on a high-end ski boat.

Dan Proulx, co-owner of Orleans Boat World, and Sean Horsfall, operator of Len's Cove Marina, say they've paid hundreds of thousands of dollars in new tariffs, which have had a big impact on their bottom lines. 1:30

Like Horsfall, Proulx said he'll have to reduce costs elsewhere, such as by hiring fewer summer employees to repair and clean boats this year.

"It's a trickle effect," Proulx said.

Last week, the United States announced it's working on a plan to lift the steel and aluminum tariffs from Canadian and products.

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