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Viability of private campsites threatened

Application of a higher tax rate against businesses, like private campsites, is causing some owners to look at other options ...
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Private campgrounds are at risk of closing due to higher taxes

°Õ´Ç»å»å91ÂãÁÄÊÓƵ™s RV and Camping has been a Peachland staple for 60 years.

The family business offers dozens of sites with access to the lake. °Õ³ó±ð°ù±ð91ÂãÁÄÊÓƵ™s a playground, store, hot showers and a volleyball pit 91ÂãÁÄÊÓƵ”w³ó±ð²Ô ¾±³Ù91ÂãÁÄÊÓƵ™s in full-swing, it feels like a throwback to quieter times in the Okanagan.

And it may be at risk of closure.

Graham Todd runs the site and he says that a recent increase to his income tax bill could do the business in.

91ÂãÁÄÊÓƵœT³ó±ð amount of taxes we already pay and then water, sewer and outrageous Hydro bills 91ÂãÁÄÊÓƵ” it is a challenge to keep a private campground °ù³Ü²Ô²Ô¾±²Ô²µ,91ÂãÁÄÊÓƵ said Todd. 91ÂãÁÄÊÓƵœN´Ç³Ù to mention one of our main competitors are provincial campgrounds, which are under ±è°ù¾±³¦±ð»å.91ÂãÁÄÊÓƵ

Campsite owners like Todd are facing a tax rate hike to 50 per cent, from the 15 per cent they were accustomed to, explained Shane Devenish, executive director of the Canadian Camping and RV Council.

The change is because Canada Revenue Agency started acting differently to corporations labelled 91ÂãÁÄÊÓƵœs±è±ð³¦¾±´Ú¾±±ð»å investment ²ú³Ü²õ¾±²Ô±ð²õ²õ±ð²õ91ÂãÁÄÊÓƵ in 2016.

A specified investment business is described in the Income Tax Act as a business with the principal purpose of deriving income from property, including interest, dividends, rents, or royalties and has a Corporate Tax rate of around 50 per cent.

However, income from a specified investment business is only eligible for the Small Business Deduction if the corporation employs five or more full-time employees all year.

With 75 per cent of privately run campsites, °Õ´Ç»å»å91ÂãÁÄÊÓƵ™s included, ³Ù³ó±ð°ù±ð91ÂãÁÄÊÓƵ™s no need to employ that many people when summer wanes.

Devenish said previously the CRA knew this but »å¾±»å²Ô91ÂãÁÄÊÓƵ™t bother to tax private campsites at the higher rate.

91ÂãÁÄÊÓƵœN´Ç·É ³Ù³ó±ð²â91ÂãÁÄÊÓƵ™v±ð hit three private campsite owners in Ontario, one in Quebec (with the higher tax °ù²¹³Ù±ð),91ÂãÁÄÊÓƵ he said. 91ÂãÁÄÊÓƵœT³ó±ðy91ÂãÁÄÊÓƵ™re taking two of those to ³¦´Ç³Ü°ù³Ù.91ÂãÁÄÊÓƵ

The Canadian Camping and RV council is backing those campsite owners in their legal battles because if the CRA sets precedence and continues doling out tax bills at the higher rate campsites across the country will likely fold.

91ÂãÁÄÊÓƵԨ´Ç³Ü have some campground owners who need second jobs to get ²ú²â,91ÂãÁÄÊÓƵ said Devenish.

91ÂãÁÄÊÓƵœT³ó±ðy »å´Ç²Ô91ÂãÁÄÊÓƵ™t make a whole lot and when ³Ù³ó±ð²â91ÂãÁÄÊÓƵ™r±ð charged tens of thousands extra in tax they ³¦²¹²Ô91ÂãÁÄÊÓƵ™t afford ¾±³Ù.91ÂãÁÄÊÓƵ

Of the three campsites facing legal action, Devenish said two will close if they lose.

Other campsite owners have indicated they will follow suit.

91ÂãÁÄÊÓƵœT³ó²¹³Ù91ÂãÁÄÊÓƵ™s why ¾±³Ù91ÂãÁÄÊÓƵ™s an industry-wide ±è°ù´Ç²ú±ô±ð³¾,91ÂãÁÄÊÓƵ he said.

91ÂãÁÄÊÓƵÀá´Ú we see campgrounds close, fewer consumers will camp and RV manufacturers will get less ²ú³Ü²õ¾±²Ô±ð²õ²õ.91ÂãÁÄÊÓƵ

Trying to add further perspective, Devenish said, there are six million Canadians who camp.

They, he said, ²õ³ó´Ç³Ü±ô»å²Ô91ÂãÁÄÊÓƵ™t have their options limited.

91ÂãÁÄÊÓƵœE²õ±è±ð³¦¾±²¹±ô±ô²â in our 150th year when tourism is trying to promote a 91ÂãÁÄÊÓƵ˜c´Ç³¾±ð into °ä²¹²Ô²¹»å²¹91ÂãÁÄÊÓƵ™ ³¾±ð²õ²õ²¹²µ±ð,91ÂãÁÄÊÓƵ he said.

91ÂãÁÄÊÓƵœT³ó±ðn on the other side we have the CRA impacting the number of us who will be around for the ²â±ð²¹°ù.91ÂãÁÄÊÓƵ

One hope for campsite owners, however, is coming from the standing committee on finance.

¶Ù±ð±¹±ð²Ô¾±²õ³ó91ÂãÁÄÊÓƵ™s organization made a presentation to them in the budget consultations and when they submitted their report Dec. 7, concerns of campsite owners were included as something to fix.

Central Okanagan-Nicola-Similkameen MP Dan Albas was part of the standing committee and listened to industry concerns.

±á±ð91ÂãÁÄÊÓƵ™s since toured local campgrounds and listened to area campsite owners, like the °Õ´Ç»å»å91ÂãÁÄÊÓƵ™s, and taken their concerns to Ottawa.

91ÂãÁÄÊÓƵœO²ú±¹¾±´Ç³Ü²õ±ô²â, there are offices both in Kelowna and in my former riding of °¿°ì²¹²Ô²¹²µ²¹²Ô91ÂãÁÄÊÓƵ“C´Ç±ç³Ü¾±³ó²¹±ô±ô²¹, in Penticton, and having toured them and met some of the people who are involved, I know they are certainly working very ³ó²¹°ù»å,91ÂãÁÄÊÓƵ Albas said in the House of Commons last month.

91ÂãÁÄÊÓƵœT³ó²¹³Ù being said, ±õ91ÂãÁÄÊÓƵ™d like to discuss the CRA a little. Obviously, ¾±³Ù91ÂãÁÄÊÓƵ™s somewhat at ²¹°ù³¾91ÂãÁÄÊÓƵ™s length from government, for good reasons. Because of that, there is an opportunity for us to talk about things that have been a reason for concern.

91ÂãÁÄÊÓƵœA²Ô example is the issue of campgrounds, particularly whether a campground is now no longer eligible for the preferential small business °ù²¹³Ù±ð.91ÂãÁÄÊÓƵ

Albas said he believed the problem was arising from the fact these businesses are seasonal.

91ÂãÁÄÊÓƵÀá²Ô British °ä´Ç±ô³Ü³¾²ú¾±²¹91ÂãÁÄÊÓƵ”I91ÂãÁÄÊÓƵ™m not sure if you are aware, ²Ñ¾±²Ô¾±²õ³Ù±ð°ù91ÂãÁÄÊÓƵÀ¹±ð²¹±ô estate prices have increased dramatically over the past 20 ²â±ð²¹°ù²õ,91ÂãÁÄÊÓƵ he said in the house.

91ÂãÁÄÊÓƵœT´Ç³Ü°ù¾±²õ³¾ is very important to the Okanagan, and many of these smaller campgrounds may decide that, if they cannot run as a small business and access ³Ù³ó²¹³Ù91ÂãÁÄÊÓƵ”i²Ô²õ³Ù±ð²¹»å of being classified as large operations, million-dollar ³¦´Ç°ù±è´Ç°ù²¹³Ù¾±´Ç²Ô²õ91ÂãÁÄÊÓƵ”t³ó±ð²â may simply sell. This is a concern in my ²¹°ù±ð²¹.91ÂãÁÄÊÓƵ

Albas said while discussions are ongoing there is hope for changes to save the industry.

 

 





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