The Recreation Vehicle Industry Association commissioned an Economic Impact Study on the RV industry, released on June 7, 2016. The study found that the RV industry contributes about $49.7 billion in economic output or 0.28 percent of the Gross Domestic Product. Through its production and distribution linkages, the industry impacts firms in 426 of the 440 sectors of the United States economy.
Nationwide, the industry is responsible for 216,170 jobs, both directly and inderectly, creating an economic impact of $37.5 billion. The full study results, along with each individual state and congressional district's economic impact is available on the website by clicking here .
Wed Jul 6, 2016
The Recreation Vehicle Dealers Association of Canada has issued a letter regarding the concerns of the prospective increases to the threshold of de minimis rates, which could substantially threaten the RV industry in the country.
The changes to the 2012 Federal Budget in Canada to increase the value of goods travelers can bring into the country without taxes and duties would seriously impact the ability of Canadian dealers to compete with American dealers, who already have the advantage of a lower cost.
According to the letter, raising de minimis rates to a value of $200 would mean that any item costing less than $200 could be shipped into Canada free of federal and provincial sales taxes. Meanwhile, Canadian merchants would be required to collect sales taxes on the same or competing products. Foreign online sellers also would be exempt from the customs duties that Canadians are required to pay on imported goods. This would put Canadian businesses at a serious disadvantage and provide customers with a lack of incentive to shop locally and support the national economy.
The RV industry in Canada has a substantial economic impact. The manufacturing, purchasing, servicing and use of RVs contributes to billions of dollars, both directly and indirectly, to the national economy every year. In 2011, the total economic activity associated with RVs in Canada was estimated at $14.5 billion. There are more than 3,000 independently owned and operated campgrounds across the country.
In the same year, direct spending associated with recreation vehicles reached $11.5 billion. These expenditures generated $8 billion in net economic activity (GDP) and 98,800 jobs. In total, the retail sales and services associated with Canada’s more‐than‐400 recreation vehicle dealers generated $1.5 billion in net economic activity throughout Canada and supported nearly 98,800 jobs.
Because of the new exemption level, several popular aftermarket parts would now fall under it, giving customers plenty of reasons to take their business to the United States rather than keep it in Canada, which already has seen the value of the Canadian dollar fall precipitously during the last few months. The letter states that by not actively enforcing the current threshold, the government is sending a message that it is not serious about collecting duty and tax on imports by customers.
"An example of this is the astronomical costs that were recently announced in March 2015 that the Canada Border Services Agency increased tariffs on imported solar products," the letter states. "These products, which are used in RVs will now be subject to the significant collection of provisional duty rates on these imports, which is 281 percent. This results in a product being over twice the value of its current cost in the US which will not only discourage Canadians to shop in Canada but also reduce the number of goods sold nationally, leading to a significant decrease in government revenue."
While American online merchants and couriers will argue that the raised de minimis level in Canada is only a fractions of the United States’ current threshold of $800, the U.S. taxation process differs from that which is practiced in Canada, the letter reads. 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 is huge, while tax benefits on inbounds goods would be greatly reduced for Canada.
The United States already holds a dominant position in the online retail space, with only 22 percent of U.S. customers reporting having made a purchase from someone outside of the United States.
In contrast, 67 percent of Canadians report having made online cross-border purchases. The scale of U.S. warehouse operations is such that the U.S. can easily afford to offer a high de minimis level, while pushing other countries to raise their own levels. In order to remain competitive with the U.S. the RVDA of Canada is hoping that duties on aftermarket RV parts and add-ons be reduced to zero, a reduction from the current range between 7 and 18 percent.
If you have any further questions, contact Eleonore Hamm, President of the RVDA of Canada at email@example.com or 604-204-0559.