Founded in 1969, Camping in Ontario is preparing to celebrate its 50th anniversary during its annual CampEx, which is also celebrating 50 years in 2019.
Set to be held Nov. 17-18 at the JW Marriott-The Rosseau Muskoka Resort & Spa in Minett, Ontario, Camping in Ontario’s Executive Director Alexandra Anderson told Woodall’s Campground Management (WCM) that officials expect to have a record number of attendees at the conference.
However, the celebration will be somewhat overshadowed by a recent judge’s ruling that has stripped the small business status away from incorporated parks throughout Canada, something which Anderson said could have a devastating impact on the growth of the RV park and campground sectors moving forward.
With around 430 campground members, Anderson noted that legislative issues keep everyone at the association busy as it navigates numerous issues for its members, while also trying to reach out to the rest of the estimated 1,000 campgrounds and RV park owners throughout Ontario.
Woodall’s Campground Management caught up with Anderson during a break in her schedule in early September to get some updates on how the association is faring, the impact of the recent ruling on park owners’ small business status and some other pertinent issues.
Below is an edited version of our conversation.
WCM: In the United States the outdoor recreation industry is booming at the moment, with camper interest high and developers seeking places to build new parks. Are you seeing the same trend in Ontario?
Alexandra Anderson: It is booming from the perspective of the campers and the people interested in camping. I guess it is ironic because we do have an industry where we could accommodate a lot more campers but losing the small business tax deduction is not going to help the situation, because owners won’t be able to reinvest in their parks. Developing a campground under the current legislative burden in Ontario is exceptionally difficult. It’s very time consuming and we are working very hard in the office to try and speed it up, so that owners can get their expansions and/or a new park built.
WCM: Can you give a little background on the small business tax issue?
Anderson: This actually surfaced back in 2015 when Justin Trudeau, the current prime minister, was elected into office. The Canadian Revenue Agency (CRA) has been targeting Ontario parks by labeling them akin to a mobile home park and not a recreational campground. The government that is currently in power declined to fix the issue for us, so we tried going the court route. The decision that the court handed down was not what we wanted at all. In fact, it’s very damaging to the industry.
The decision doesn’t make any reference at all to the fact that the motivation for people go to a campground is for recreational purposes. Instead it says that these parks are more similar to mobile home parks and that they are more residential than recreational. That’s a very big distinction to lose. Campgrounds are recreational, people go to campgrounds because of the services that are offered at the campground. What seems to have been totally lost in the decision is why people go camping. Basically, the decision would be akin to every camper in North America wanting to go and park in a farmer’s field. That would be the camping experience.
WCM: If I am an owner, how does this impact me?
Anderson: In Canada, you can file your taxes as a sole proprietor or partnership, or you can become an incorporated business. This decision only affects incorporated campgrounds. Effectively, in Canada right now, a small business is paying income taxes of about 14% after receiving a small business tax deduction. This decision will take that deduction away and increase an owner’s income tax rate from 14% to about 43%. It’s a massive jump.
The ironic thing about this is that the small business tax deduction was created so that small business owners could be given a favorable tax rate, so they could actually invest in their own businesses. They would be able to pay the lower tax rate and take the difference to reinvest and grow their business. The campground owners are actually now being told that they no longer can grow their businesses, because they’ve lost this tax rate. All of the money that would have gone into creating jobs and improving their parks, is now going to be going to the federal government to pay taxes.
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