By Eleonore Hamm
President, RV Dealers Association of Canada
We seriously need to unite with our campgrounds! We have been asking all of our partners: RV manufacturers, RV dealers and campground owners to educate themselves on the small business tax classification issue and contact their Member of Parliament (MP) to discuss how the RV and camping industries will be deeply affected.
The Canadian Camping and RV Council(CCRVC) currently represent 2347 private campgrounds in Canada.
Canada Revenue Agency’s (CRA) decision to rescind the small business tax deduction for campgrounds in favor of a much larger corporate tax rate.
The small business tax reduction lowers the corporate tax that Canadian-controlled private corporations would otherwise have to pay on the first $500,000 of their income derived from an active business. However, as per Canada Revenue Agency(CRA), an active business does not include a specified investment business, which is:
- A business with the principal purpose of deriving income from property-for example, interest, dividends, rents, and royalties, and
- A business that does not employ more than five full-time employees
This interpretation by CRA was enacted upon only this year, thus increasing the potential tax burden to a campground from about 15 percent to 48-52 percent, the income rate of an investment corporation.
CCRVC estimates that nearly 75 percent of its private campgrounds fall into this category, meaning that up to 1,760 campgrounds are in jeopardy of closing because they are absolutely financially incapable of sustaining their business if they are re-assessed a triple increase in their income taxes.
We need you to step up!
Contact your MP Constituency Office and the minister of finance immediately to voice your concerns and let them know how this would affect your business.
Please call and request your MP to contact the minister of finance to enact change in the 2017 Budget and Income Tax Act to ensure that campgrounds are eligible for the small business tax deduction.
Without this deduction, hundreds of campgrounds will potentially cease to exist if they are re-assessed next by the CRA.
To locate the name and address of your Member of Parliament please click here. You will be asked to enter your postal code to get the name and address of your MP.
Here is a sample letter if you like to send follow up correspondence to the minister of finance.
Please join CCRVC in their effort to help our campgrounds and the entire RV industry!
Eleonore Hamm is the president of the RV Dealers Association of Canada. She can be reached by email at firstname.lastname@example.org.