The Canadian Federation of Independent Business (CFIB), an association representing small and mid-sized businesses, is lobbying on behalf of self-storage and campground operators in Canada that don’t have enough employees to qualify for the government’s small-business tax rate and are receiving unusually high back-tax bills from the Canada Revenue Agency (CRA) as a result. Hundreds of self-storage facilities and campgrounds are affected, according to a letter CFIB sent to the Canadian Department of Finance.

“CRA is punishing these hard-working, middle-class, small-business owners by taxing them at triple the rate of other small businesses—rates higher than even the largest corporations,” said Dan Kelly, president of CFIB, in a press release. “With penalties and interest, these back-tax bills are often in the tens of thousands of dollars, crippling otherwise healthy businesses and leading to ruin for others.”

Kelly was scheduled to appear today before the Standing Committee on Finance to discuss the issue. CFIB contends that so-called “passive” income rules are being misapplied to the self-storage and campground industries and has urged government officials to stop the audits until the matter can be resolved, the release stated.

“Requiring five staff to qualify for the small-business rate is deeply insulting to the entrepreneurs who are often a part of the daily operations of their businesses,” Kelly said. “It’s called the small-business tax rate. Being too small should not be a reason to exclude anyone.”

David Claeys, owner of R-Xtra Storage Centre Ltd. in Vernon, British Columbia, Canada, contends he will have to shut down his self-storage business due to the high tax assessment. “I’ll never forget the day my accountant told me that the CRA ruled my family business was a passive business and didn’t qualify for the small-business tax rate,” Claeys said in a released statement. “We couldn’t survive that level of taxation, even with everything we had saved for tough times. The ruling still doesn’t make sense to me. I worked 60 to 70 hours per week operating my business, and now it’s gone. I don’t want another family to ever have to go through what this decision has put my family through.”

CFIB has 109,000 members and represents small and mid-sized businesses across Canada in every business sector, according to the release.

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