The CRA Small Business Deduction Issue for Canadian Private Campgrounds

Since around 2016, a tax-classification issue under the federal Income Tax Act has been a significant concern for Canadian private campground operators. The issue centres on whether smaller campgrounds qualify as "active businesses" eligible for the small business deduction or are reclassified as "specified investment businesses" subject to a substantially higher corporate tax rate. The matter has produced a multi-year industry advocacy campaign and, in June 2024, the introduction of Private Member's Bill C-410 in the House of Commons.

This page is a factual summary of the issue, the relevant rule, the advocacy work to date, and the verifiable sources where operators can read further. It is not advice. Each campground's situation depends on facts specific to that business, and the analysis must be done by a qualified tax professional.

The specified investment business rule

Subsection 125(7) of the Income Tax Act defines a "specified investment business" as a business whose principal purpose is to derive income from property (including rent, interest, dividends, or royalties), unless the corporation employs more than five full-time employees throughout the year. A specified investment business is generally not eligible for the small business deduction available under section 125 of the Act.

The Canada Revenue Agency has issued public guidance on how this rule applies to campgrounds. According to CRA's published statement on campground eligibility for the small business deduction (canada.ca), the agency considers several factors when evaluating whether a corporation operating a campground qualifies as an active business or as a specified investment business. The five-full-time-employee threshold is one factor; the nature and extent of services provided alongside site rentals is another.

What CRA looks at

Per the published CRA statement, the assessment of whether a campground is operating an active business considers the full picture of services delivered. CRA's position notes that if a campground does not employ more than five full-time employees throughout the year, but does provide significant additional services that are integral to the success of its business operations, the agency may consider it eligible for the small business deduction.

The kinds of additional services CRA references in its guidance include — but are not limited to — the operation of food services, recreation programs, equipment rentals, retail concessions, and other services beyond the bare provision of campsites. The interpretation of what counts as "significant additional services that are integral" is fact-specific and is the kind of question a tax professional should address for each operator.

The industry-advocacy response

Industry response to the issue has been organized primarily through the Canadian Camping and RV Association (CCRVA), the Canadian Camping and RV Council, and the Recreation Vehicle Dealers Association (RVDA) of Canada, with support from provincial campground associations.

The Fair Camp Tax campaign

The Fair Camp Tax campaign (faircamptax.ca) is a public-advocacy site organized by these associations. The campaign provides background information on the issue, statistics on the affected operator base, and a tool for campground operators and campers to contact their Members of Parliament. The campaign argues that small seasonal campgrounds should be clearly eligible for the small business deduction without annual subjective review.

Bill C-410

On June 19, 2024, MP Lianne Rood (Conservative, Lambton-Kent-Middlesex) introduced Bill C-410 in the House of Commons under the title "An Act to amend the Income Tax Act (campgrounds)." The bill seeks legislative clarification of the small business deduction's application to seasonal campground operations. Like other Private Member's bills, its progress depends on the parliamentary calendar and the disposition of the government. The current status of Bill C-410 can be checked on the Parliament of Canada website at parl.ca.

The introduction of Bill C-410 represents the most significant single advocacy outcome to date for the campaign. Whether and when the bill becomes law remains a question of parliamentary process.

What this means for operators today

The issue is not new and is not resolved. As of 2026, operators are navigating a tax-classification framework where the CRA's position depends on fact-specific analysis and where Parliament has not yet enacted the proposed legislative clarification. The practical considerations for an operator are limited to a few categories:

1. Get advice specific to your business. A Canadian tax professional with experience in this area can assess your specific facts — employee count, service mix, ownership structure — and advise on the small-business-deduction question for your operation. This is not a question to answer from a website.
2. Document the services your campground provides. CRA's framework considers the full range of services beyond site rentals. Operators with food service, recreation programs, equipment rentals, retail concessions, concierge services, organized activities, or other ancillary offerings have facts that may be relevant to the active-business analysis. Whether and how those facts matter for your tax position is a question for your tax professional.
3. Follow the legislative process. Bill C-410 is the most direct legislative response to the issue. Its status can be checked at parl.ca. Operators with a view on the legislation can communicate it to their Member of Parliament.
4. Track the campaign. The Fair Camp Tax campaign at faircamptax.ca is the central public-information source on the industry advocacy effort.

The relationship between operations and the active-business test

The CRA's framework focuses on whether a corporation is operating an active business or is principally deriving income from property. The agency's published guidance references the importance of the services provided alongside site rentals. This has practical implications for how operators describe and document what their campground actually does day to day — not as a tax-planning strategy, but as an accurate record of operations.

The kinds of operational services that operators typically deliver alongside campsite rentals include reservations and booking management, on-site customer support, payment processing, check-in and orientation, recreation and activity programming, food service or concessions, equipment rental, retail sales, organized events, and digital services such as online booking and guest communication. Whether these activities are relevant to the tax-classification analysis for a specific campground is, again, a question for that operator's tax professional. The point here is descriptive: campground operations in 2026 typically include a substantial services component beyond bare site rental.

Primary sources

For operators who want to read primary materials, the verifiable sources on this issue include:

• CRA statement: Eligibility requirements for campgrounds in order to claim the small business deduction (canada.ca)
• Income Tax Act — section 125 (small business deduction) and section 125(7) (specified investment business definition)
• Parliament of Canada — search for Bill C-410 to confirm current status
• Fair Camp Tax campaign (faircamptax.ca) — industry advocacy site
• CCRVA: Advocacy Policy Positions

News coverage of the issue has appeared in CBC News, the Manitoulin Expositor, Woodall's Campground Magazine, and other industry publications.

What the board is required to do for members

Canadian camping associations are non-profit corporations governed by member-elected boards. Whether incorporated federally under the Canada Not-for-profit Corporations Act (CNCA) or under a provincial statute (BC Societies Act, Ontario NFP Corporations Act, Quebec Companies Act Part III, etc.), directors carry similar statutory duties to the corporation and its members. Per CNCA section 148, every director must act honestly and in good faith with a view to the best interests of the corporation, and exercise the care, diligence, and skill of a reasonably prudent person. Conflict-of-interest disclosure (CNCA ss. 141-142) is required when a director has a material interest in a transaction with the corporation. The corporation must hold annual member meetings, present financial statements (s. 161), and respond to records requests from members (s. 21).

For a member operator, that translates to a baseline of expectations: the board acts in the collective interest of the membership, conflicts are disclosed and recorded, financial reporting reaches members each year, and core corporate records are accessible on request. Provincially incorporated associations have substantially similar director duties under their respective statutes.

What is outside the board's scope

Director fiduciary duty runs to the corporation as a whole and the collective interest of members. It is not a duty to advance any single operator's commercial interests, and it does not extend to operating layers the association is not built to provide. The following are typically outside the scope of an association board:

• Booking software and payment processing — sourced from independent platform vendors
• Direct customer acquisition / camper marketing — the operator's own site, Google Business Profile, aggregators, paid search
• Operations management (calendars, dynamic pricing, dashboards) — provided by the chosen booking platform
• Tax and legal advice on a specific operator's situation — obtained from a qualified Canadian tax professional or lawyer
• Acting in any single member's commercial interest — director duty is to the collective

How to hold the board accountable

The accountability mechanisms are statutory. Members can use them; boards must respond. The administrative load on the board is part of the design: a member-funded organization with member governance answers to its members, and the answers go on the corporate record.

1. Request the annual financial statements. Every member is entitled to receive them before the AGM (CNCA s. 161 or provincial equivalent). Soliciting corporations — those receiving more than the prescribed threshold from public donations or government grants in a fiscal year — have additional public disclosure requirements (CNCA ss. 209-211).
2. Request access to corporate records. Articles, by-laws, member-meeting minutes, and the register of directors are accessible under CNCA s. 21 or the provincial equivalent. Procedural details vary by statute and by-laws.
3. Ask for a written advocacy track record. If membership materials describe advocacy as a benefit, members can request a dated list of submissions, parliamentary appearances, position papers, and named outcomes. The federal lobbyist registry (lobbycanada.gc.ca) is the canonical source for any registered federal lobbying.
4. Ask for the conflict-of-interest disclosures. Under CNCA ss. 141-142, directors must disclose material interests in transactions with the corporation, recorded in the minutes. Members can ask whether disclosures and abstentions are being recorded for sponsor and preferred-vendor decisions.
5. Submit a member proposal for the AGM. Under CNCA s. 175, members can submit proposals on matters of governance, policy, and strategic direction within the corporation's mandate. Procedural requirements (deadlines, signature thresholds) apply.
6. Verify lobbying activity. Federal: lobbycanada.gc.ca. Provincial registries exist in BC, Ontario, Quebec, Alberta, and elsewhere.
7. In serious cases, consult counsel about derivative actions or oppression remedies (CNCA ss. 251, 253, or provincial equivalents). These are higher-effort tools reserved for material governance concerns.

Frequently asked questions