Tax rule could force Ottawa-area campgrounds to fold up tents

As the 2016 camping season hits its stride, some campground owners are receiving higher-than-expected tax bills from the Canada Revenue Agency — and they're banding together to fight back.

Some campgrounds too small to qualify for small business tax cut, says CRA

Sleepy Cedars Family Camping co-owner Jim Lefebvre says if campgrounds aren't able to qualify for small business tax deductions, many of the operations could close. (CBC)

Some campground owners in the Ottawa area are fighting to be recognized as small businesses after a shift in the country's tax rules could leave them with insurmountable bills.

The Canada Revenue Agency has decided that certain campgrounds are too small to qualify for the small business tax deduction — a decision that could increase those operations' tax rates from 15 per cent to 50 per cent.

In 2015, the Conservative government said it would review the regulations. But in 2016, when the government changed hands, the Liberals said the review was complete and no changes would be made.

"It's going to have an impact on our campers, that's for sure. And maybe on the campground itself," said Jim Lefebvre, co-owner of Sleepy Cedars Family Camping, near Greely.

"We'll have to wait and see what the extent of the damage could be."

'Equal footing'

As the 2016 camping seasons hits full stride, many campgrounds have received CRA notices saying that because they employ fewer than five people, they may no longer qualify for the small business tax deduction, according to the group Camping in Ontario.

 'They just want to be treated like any other small business.'- Alexandra Anderson, executive director for Camping in Ontario

Representing 440 privately owned campgrounds in the province, the group claims that the surprising tax bills — one campground owner in southwestern Ontario recently received a bill for $250,000 — are putting the country's camping tradition at risk.

"No campground owner is saying 'We don't want to pay taxes.' That is not the case," the group's executive director Alexandra Anderson recently told CBC News.

"They just want to have equal footing with other tourism operators. They just want to be treated like any other small business."

The organization is now planning to deliver a petition to federal Finance Minister Bill Morneau, urging the government to allow campgrounds to qualify as small businesses — and therefore continue to receive the tax relief.

By Saturday, the petition had more than 5,000 signatures.

Raise rates or close

As for Lefebvre, he said Sleepy Cedars still hasn't received any communication from the CRA as to what their tax assessment will be.

But if the campground is hit with a significant tax increase, said Lefebvre, painful changes would be on the way.

"[We'll] either raise our rates, close the campground or something," said Lefebvre. "And that would be bad for Ottawa. It would be bad for the camping industry." 

With files from Stu Mills and Carmen Ponciano