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post #1 of 11 Old 10-22-2016 Thread Starter
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Damn the Walloons!

Sometimes things happening in international affairs can affect your sailing. Canada has been in the midst of negotiating a free trade agreement with the EU for seven years. It appeared to be a done deal with signing scheduled for next week. The problem was that all 30 members of the EU had to sign on - 29 had done so with only Belgium to do so. To make it even more complicated the Belgian constitution requires approval by the national parliament (done!) and all four of the regional parliaments. Three of them approved with only Walloonia saying 'No'. This small district (3.5 million people) of a small country gets to stop an agreement involving 500 million people. Ignoring the good and bad of free trade agreements, what does this have to do with sailing? The agreement would eliminate tariffs on EU boats and equipment coming to Canada. For boats this would mean a saving of 9%. At one time Canada had a very large sailboat industry (C&C, Hinterhoeller, CS, etc) but it is pretty much all gone. If we want to buy a new boat it will be either US made (no duty because of NAFTA), or EU or increasingly Asian-built and have a tariff. Colour me selfish, but it would be nice to have a level playing field when it comes time to go boat shopping.
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After the refit we have decided to sell Ainia. We want something smaller that would be could for the light summer winds of Lake Ontario, although we plan to spend at least a couple of winters in the Caribbean before heading north.
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post #2 of 11 Old 10-22-2016
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Re: Damn the Walloons!

Three cheers for the Waloons objecting to the impositions of the one-size-fits-all 'global empire'.

The 'other side of the same coin' .... Perhaps, if the Canadians and Americans had done the same, maybe we'd still have (cheaper to buy from) domestic boat builders?
That 9% tariff is the probable result of one-sided VAT ... no VAT on exports exiting the EU; but, VAT generally applied to imports INTO the EU.
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post #3 of 11 Old 10-22-2016 Thread Starter
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Re: Damn the Walloons!

I suspect that the tariff predates EU VATs. Note that Canada has a VAT, which is 13% in Ontario that is added to the price of an imported boat (new or used, from US or elsewhere). The duty would have helped Canadian yacht manufacturers back in the day but does nothing to encourage boat building now and makes imports more expensive - except from countries that we have a free trade agreement with - the US, but also quite a few others through bilateral agreements. I am aware of any manufacturers in Mexico but there is a growing sailboat industry in China, but no free there - yet!

Rich, I don't see how US and Canadian governments could have decreased the decline of manufacturers. Perhaps if the duty had been 50% it would have encouraged companies like Beneteau to manufacture more here. In this case the prices would still be higher than with free trade because of loss of economies of scale and the need to import (and pay duty on) components.

After the refit we have decided to sell Ainia. We want something smaller that would be could for the light summer winds of Lake Ontario, although we plan to spend at least a couple of winters in the Caribbean before heading north.
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post #4 of 11 Old 10-22-2016
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Re: Damn the Walloons!

Decline of domestic business activity - just an opinion.

An economics argument would be, if the Canadian and American governments would not have imposed such draconian 'corporate taxes' upon manufacturers and other businesses that produce 'increased value' items, those applied taxes, etc. added to the 'price' wouldn't have left these businesses in such a competitive domestic and global market price point disadvantage. But then again, taxes applied to 'business' is only and entirely passed along to the ultimate consumer. So in functional reality the businesses pays NO taxes (ultimately, the consumer pays them); yet, the businesses slowly disappear due the competitive disadvantage that the corporate taxes impose upon the 'sale' price ... which includes all the 'pass alongs'.
Inother words, Canada - and more so the USA with a max. 45% corporate federal tax rate and mandated government 'overhead' charges such as 'payroll taxes' & compliance/regulatory, etc. costs - these businesses are increasingly removed from global competitive position (which also affects domestic competition - demand vs. supply of manufacturers) due to the increasingly added taxes vs. the rapidly dwindling manufacturing base.

Secondly, I really don't know about Canada; but, in the USA when one calculates ALL the applied taxes, mandates and regulatory, (+ pass along taxes / costs) against personal income ... 'total' combined government now seems to be approaching the 'taking' of 60-70% of total median/average income .... which includes the taxes 'passed along' and already included in the price of 'consumer' etc. items. Just take total GDP (per capita) divided by total combined govt.'revenue' (... plus 'govt. debt') as a good indicator.

My apolitical view is 'we' are now slowly eating the 'golden goose' that once supplied all the goodies. I make the assumption that this is one of the principal reasons in the apparent current downtrend of sailing, and most other 'disposable income' activities, as well as an increasing decline in the average 'standard of living'.

Id much rather prefer to buy 'local'; but increasingly, I can't afford it when 'imported stuff' is just as good and cheaper.
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post #5 of 11 Old 10-22-2016 Thread Starter
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Re: Damn the Walloons!

Rich, I can agree with much of what you say in particular if we compare the economies (and societies) of Canada and the US to those of Mexico or China. I think your thesis falls apart when the comparison is made to Sweden, the UK, or France (all major boat building nations). All of these countries have government presences in the economy at least as large as in US/Canada (in fact I would suggest that they are likely higher).

After the refit we have decided to sell Ainia. We want something smaller that would be could for the light summer winds of Lake Ontario, although we plan to spend at least a couple of winters in the Caribbean before heading north.
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post #6 of 11 Old 10-27-2016 Thread Starter
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Re: Damn the Walloons!

Turns out a deal was reached after all. The Canadian trade minister left the negotiations and said it was an EU issue. The EU worked with Belgium to find a solution that satisfied the Walloons - apparently giving the region some money. The EU really wanted to make this agreement not because of the amount of trade with Canada, but because there are bigger fish to fry, they see agreements with Japan and the US in the future. Don't know when the agreement will come into affect but it will save Canadians 9% on boats and boat stuff.

After the refit we have decided to sell Ainia. We want something smaller that would be could for the light summer winds of Lake Ontario, although we plan to spend at least a couple of winters in the Caribbean before heading north.
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post #7 of 11 Old 10-27-2016
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Re: Damn the Walloons!

The moral of the story: negotiate, negotiate, negotiate, and then negotiate some more.
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post #8 of 11 Old 10-27-2016
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Re: Damn the Walloons!

And you'll be even more stuffed, or rather your pockets will be less stuffed with Canadian dollar bills if the Orange man gets elected 'cause he's gonna dump NAFTA.
Poor (literally) Canadians you shall all be. lol But I'm sure you'll remain nice. lol

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post #9 of 11 Old 10-29-2016
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Re: Damn the Walloons!

Isn't it amazing that in the past before governments were so involved in taxing and regulating everything that moves and subsidizing that which doesn't, that trade happened, lives were improved, and employment opportunities were created all along the food chain?

The regulations put into effect by the "civilized" governments went a long way towards countering the productivity of manufacturers in these countries thereby causing the actual manufacturing process to be exported to lower regulated areas. As to why some European countries still manufacture certain products I imagine that either exceptions have been written into the law or that some form of subsidy or tax credit exists which lowers the cost of doing business which allows these companies to thrive. We are currently building a 2000 square foot house and the permit fees from the city totaled $38,000 so I think the damage caused by governments doing the collective "good" is pretty evident. Applied broad scale to all industry and individuals you should be able to clearly understand why productivity at a reasonable cost is fleeing the "civilized democracies".
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post #10 of 11 Old 10-29-2016
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Re: Damn the Walloons!

Quote:
Originally Posted by Rocky Mountain Breeze View Post
permit fees from the city totaled $38,000 .
I am awestruck!
Having not lived ashore since 1969 (basically my whole adult life) your post has reinforced the notion that my life at sea was the right choice for me.
If I want to tear out a wall (bulkhead), rewire my boat or add a mast, I can do so without interference from the government or permits. My taxes when I resided in the City Marina in Charleston were around us$100.00 a year.
Ah well, I wish you well. I've always said that a house is just a poorly built boat that can't go anywhere.

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