Canada’s ACVRQ (association des commerçants de véhicules récréatifs du Québeccommerçants de véhicules récréatifs du Québec) and the RV Dealers Association (RVDA) of Canada are denouncing an unjustifiable retroactive tax burden imposed on Quebec RV dealers.
This problematic situation, created and overlooked by the Department of Finance (Canada) and now being enforced by the Canada Revenue Agency (CRA), directly threatens the survival of these businesses, which are key pillars of Quebec’s economy and communities.
On the basis of an ambiguous provision of the GST/HST legislation, the CRA is retroactively charging Ontario’s Harmonized Sales Tax (HST) at a rate of 13% on RVs and RV parts purchased by Quebec businesses from the United States. The CRA’s view is that Ontario HST applies to these purchases by Quebec businesses because the RVs crossed into Ontario on their way to their place of delivery in Quebec.
Multiple RV dealers across Quebec have received retroactive invoices capturing the 8% difference between the HST and the federal GST. Some of these invoices amount to over $3,800,000 with respect to RVs and parts purchased more than a decade ago. These charges make a mockery of Quebec’s conscious decision not to cede jurisdiction to the federal government and participate in the HST system and disregard the fact that the U.S. products in question are exclusively destined for Quebec customers.
“This is a scandalous abuse of the federal government’s taxation power,” said Steve Lapierre, executive director of the ACVRQ. “How can the federal government justify applying an Ontario tax to goods imported by businesses operating entirely in Quebec? This is not just a tax issue-it is a fundamental attack on interprovincial fairness and the ability of Quebec businesses to engage in cross-border trade.”
The consequences could be dire. Quebec RV dealers were already grappling with rising inventory costs, declining sales and an uncertain economic environment. These retroactive claims are forcing some businesses to consider layoffs or reducing investments to generate the liquidity demanded by the CRA.
“This decision could destroy our businesses,” said Josée Bédard, owner of Roulottes Chaudière, a Quebec RV dealership that received a retroactive tax bill of over $900,000. “We have been creating jobs in our communities for decades, and now we are being punished because of taxes that should never have been assessed. If this problem goes unresolved, we will have no choice but to scale back our operations, putting dozens of good-paying jobs at risk.”
Éléonore Hamm, president of the RVDA, added: “This situation truly borders on absurdity: a Quebec business imports an American product destined for Quebec, intending to sell it in Quebec, and is forced to pay Ontario sales tax merely because it transits through Ontario. Yet purchase the same product from someone in Western Canada, and no Ontario HST applies. The tax law treats U.S. suppliers differently from Canadian.”
“Moreover, this madness was brought to the attention of federal authorities in Ottawa over a year ago by our members and the involved manufacturers, yet no solution has been implemented.”
The ACVRQ and the RVDA of Canada are urging Quebec’s elected officials, at both the federal and provincial levels, to intervene immediately to encourage the federal government to resolve this issue. In October 2023, the Canadian RV Dealers “Sensible Border” Coalition proposed a retroactive amendment to section 178.8 of the Excise Tax Actto address this issue and prevent further harm to the industry.
“We demand swift federal intervention to put an end to this crisis,” said Hamm. “Quebecers should not tolerate policies that disproportionately punish Quebec businesses while ignoring fundamental principles of tax policy. We also call on Quebec’s elected officials to stand with dealers and advocate for fair treatment for the province’s businesses.”
The ACVRQ and the RVDA of Canada are calling on all relevant stakeholders to mobilize to resolve this situation:
“This is a moment where government leadership is badly needed,” concluded Steve Lapierre. “We need those in a position to protect Quebec’s interests to stand up and demand an end to this attack on businesses in our province.”
