Banff-Airdrie Conservative MP Blake Richards highlighted concerns over what he feels is a very un-Canadian approach to small businesses.
According to this week’s Richards Report, the Liberal government is “unfairly targeting campground owners and small operations by saying they’re too small to be a small business.”
According to CRA’s website, businesses that do not typically employ more than five full-time year-round employees may not be eligible for the small business deduction. The CRA’s stance is that businesses that don’t meet these criteria are property owners seeking to earn rental income.
Richards said the ability for the CRA to determine whether a business is active or passive by basing it on criteria that isn’t complete is a clear example of government interference.
“Governments need to stop telling small businesses that they’re too small to be a small business,” said Richards. He emphasized campgrounds are usually family-owned with owner/operators working full-tilt in a number of capacities and may not have a full roster on payroll.
Similar businesses, such as mini-storage facilities may also be affected.
He also noted that campgrounds are usually seasonal businesses and the number of five full-time employees is not a fair marker of whether the campground fits the definition of small business.
Through the 2015 budget, the Conservatives committed to review this change in CRA rules, but the Liberals announced they would not be proposing any modifications through the 2016 budget.
According to CRA, businesses that do not employ five full-time employees year-round may be eligible for the small business deduction if they “provide significant additional services that are integral to the success of its business operations.”
These additional services typical to the industry are listed as coin-operated laundry, swimming pool/lifeguard, playground, refuse disposal, retailing food and supplies.
The website also states: “Generally speaking, the more services provided and the greater the importance of the additional services to the financial success of the business, the greater the likelihood that the corporation may be eligible for the small business deduction.”
Richards said businesses are hurting across the country and the current government is to blame.
He said “the Liberals broke their election promise to reduce the small business tax rate to nine per cent and then they imposed a CPP premium increase which will reduce the opportunity for small businesses to hire more employees.”
