A Penticton, British Columbia, campground operator is predicting last year’s whopping federal government tax increase could be a death knell for the industry.

“It will likely impact about 75% of campgrounds across Canada. Out of the 2,400 campgrounds the majority of them are going to be affected,” said Barefoot Beach Resort president Max Picton.

According to a Penticton Western News report, with a spike in property values and a tax increase, he said running a campground is going to get tougher.

“There’s a very real possibility that we’re going to see up to 50% having to shut their doors,” said Picton. “In a town like Penticton if we were to lose half the campgrounds  that’s literally hundreds if not thousands of people on any given weekend that wouldn’t be in Penticton.”

There are currently more than a dozen private campgrounds in the region that facing a tax rate hike to 50% from the 15% they were accustomed to according to Shane Devenish, executive director of the Canadian Camping and RV Council.

The change comes after Canada Revenue Agency (CRA) took a different approach to corporations labeled “specified investment businesses” 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%. 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.

Like most other local campsite operators the majority of the 12 people working at Picton’s campgrounds are seasonal with only three full time employees year round.

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