June 8, 2000

Run For The Border

"This article first appeared on 'Wes Boyd's Kayak Place' website and is republished with permission. All articles in this category were authored by Wes Boyd unless otherwise noted. [Woody]"

You may be able to have substantial savings on your new boat by making a

Run For The Border

Buying a Canadian built boat in Canada has some cost benefits for those of us close enough to the border to make it worthwhile. Many popular kayaks are Canadian built -- including Current Designs, Necky, Seaward and Feathercraft among the more popular brands. In addition, there are some smaller Canadian manufacturers, such as Rainforest Designs, Boreal, Dimension, Nomad, Mid-Canada Fiberglass, and others that often have interesting boats at sometimes even better prices.

After you take the currency conversion rates into consideration, list prices that I've been able to find on Canadian-built boats seem to be 10 to 20 percent less than the list prices listed in the Canoe and Kayak 2000 buyers guide. For example, one particular boat lists for $3295 CDN at a dealer in in Canada, or roughly $2190 US. Canoe and Kayak lists that boat at $2495 US in the US. The exchange rate varies a little from day to day, and at this writing is around 66.4 cents on the dollar -- close enough to two to three to be able to handle the math mentally.

The converse is also true.US built boats on sale in Canada are generally not bargains, with prices on boats from manufacturers like Wilderness Systems and Dagger at prices considerably over typical US prices once you get done with the dollar conversion. The savings either way, I am told, are not as good as they were before the passage of the North American Free Trade Agreement (NAFTA), but potential savings still exist.

According to a conversation that I had with a Customs inspector in Detroit, if a boat built in Canada is brought across the border by a private individual, there is no duty, thanks to NAFTA. You do, however, have to be able to point to somewhere on the boat, or paperwork, that indicates that the boat is actually built in Canada. If the actual point of construction of the boat is some other country, you may have to pay up to 10% duty on the first $1000 of the value of the boat in US dollars, and 2.7% after that. The actual duty depends on the country of origin.

The inspector that I talked to suggests that if you think that there's ever the possibility that you're going to take the boat back into Canada, say, on a trip, it's worthwhile to get a duplicate bill of sale at the port of entry, and have it stamped that the boat has passed customs. You'll need it, anyway, if you have to deal with Canadian sales tax.

The Canadian sales tax is another complication. A combination of a seven percent federal sales tax and a provincial sales tax of typically eight percent comes to 15% of the value of the purchase. However, when you cross the border, you can pick up forms that are submitted to the Canadian government to refund the sales tax. These forms may be available from the kayak dealer. The federal sales tax (GST) is refundable in any province once the boat is taken out of the country. The provincial sales tax (PST) may not be, depending on the province. The PST is refundable in Ontario, but I don't know about other provinces. As part of the submission for the refund, the various revenue agencies involved will want proof that the boat has been taken out of the country. If you cross the border at a location with a government duty-free store, stop there to get your tax refund validated. Usually, you will be able to get your GST refund on the spot. It can still take two to six months to get the PST refund.

Many dealers located close to the border will help you avoid the paperwork and delays involved with the GST and PST, by actually delivering the boat to you in the US, usually at the border checkpoint, but occasionally by motor freight straight to your door. This is especially true of dealers located in the Vancouver/Victoria area of British Columbia, I'm told.

One thing to watch out for is the actual fee on currency exchange. While banks and other businesses actually at or near the border may have no fee for this, or a token fee, banks farther away from the border often charge a hefty service charge for making the actual exchange -- one bank in my home town wanted 20 percent for a cash exchange!

One simple way around this is to use a credit card. Again, fees vary. Upon checking with the customer service people at the phone number on the back of the card, my main credit card proved to have an exchange fee of three percent. However, I had another card that hadn't been used in some time, where the exchange was free. On a couple of thousand dollars, that's worth making some free phone calls.