Small campgrounds no longer taxed as small business

The CRA says that some small campgrounds are too small to qualify for a small business tax deduction, a move that will increase their taxes from the current 15 per cent to 50 per cent.

'Too small to qualify,' lobby group complains

Small campgrounds may see and increase in their taxes because CRA says they are too small to qualify for small business tax deduction. (CBC)

Small campgrounds in Ontario are fighting for the same recognition as other small businesses. The Canada Revenue Agency (CRA) says that under its regulations, some campgrounds are too small to qualify for the small business tax deduction. The move will increase their taxes from the current 15 per cent to 50 per cent. One campground received a tax bill of $250,000.

In 2015 the Conservative government said it would review the rules. But in 2016, when the federal government changed hands, the Liberal government said the review was complete and there wouldn't be any changes made.

This decision by the CRA could mean that some smaller campgrounds will not be able to improve or expand their properties and some will most likely have to sell or close.

'Equal footing'

"No campground owner is saying 'we don't want to pay taxes,' that is not the case," said Alexandra Anderson, executive director of Camping In Ontario. "They just want to have equal footing with other tourism operators. They just want to be treated like any other small business."

One of the factors in the decision is that campgrounds are a seasonal business with seasonal staffing. Therefore, small campgrounds may not maintain the minimum number of employees to meet the definition required to qualify, Anderson said.

The CRA's decision leaves other campground owners frustrated and wary. Peter Bingeman, owner of the Country Gardens RV Park in Petersburg, Ont., has two campgrounds. He hasn't received notice from the CRA but he worries that it's coming soon. 

"I know that one campground won't be an issue but the smaller campground that I have, they might look at that differently," he said. "When they call us something different, a 'specified investment,' for the number of hours I spend on these properties on a daily basis it's not an investment, it's a lifestyle."

Harming tourism?

Camping In Ontario, an organization that represents 440 privately owned and operated campgrounds, is working with the Federation of Independent Business to push the Department of Small Business and Tourism, Finance Canada and the CRA to ensure that campgrounds are recognized as small business and pay the same taxes small businesses do.

"I don't believe that it was the intention of this government, nor the previous government to harm the tourism industry in particular the private campground owners," Anderson said.

She adds they are going to be working with the government during the summer months to come up with a solution.

Corrections

  • An earlier version of the story mistakenly referred to the Canada Revenue Agency as the Canadian Revenue Agency. It has been corrected.
    Jun 10, 2016 4:32 PM ET