The Association des commerçants de véhicules récréatifs du Québec (ACVRQ) and the Recreational Vehicle Dealers Association (RVDA) of Canada have issued a strong denunciation of a retroactive tax burden imposed on Quebec recreational vehicle (RV) dealers.
This tax, enforced by the Canada Revenue Agency (CRA) and rooted in an ambiguous interpretation of federal GST/HST legislation, threatens the stability of an industry that serves as a cornerstone of Quebec’s economy and communities according to an article by Yahoo Finance.
At the heart of the controversy is the CRA’s retroactive application of Ontario’s Harmonized Sales Tax (HST) at a 13% rate on RVs and parts purchased by Quebec businesses from the United States. The CRA claims the tax is applicable because these goods briefly transit through Ontario en route to their final destination in Quebec.
This retroactive measure imposes a significant financial burden on Quebec RV dealers, who already operate under Quebec’s decision to maintain provincial jurisdiction over sales tax rather than participating in the HST system.
For many dealers, the financial repercussions are staggering. Retroactive invoices issued by the CRA include the 8% differential between Ontario’s HST and the federal GST. Some businesses face bills exceeding $3.8 million for purchases made over a decade ago. These penalties are being levied despite the fact that the goods were imported for Quebec customers and exclusively intended for sale within the province.
“This is a scandalous abuse of the federal government’s taxation power,” declared Steve Lapierre, executive director of the ACVRQ. “How can the federal government justify applying Ontario tax to goods imported by businesses that operate entirely in Quebec? This isn’t just a tax issue—it’s a direct attack on interprovincial fairness and the ability of Quebec businesses to compete in cross-border trade.”
The fallout from these retroactive claims could be devastating. Already contending with rising inventory costs, declining sales, and broader economic uncertainty, Quebec RV dealers are now facing potential layoffs and scaling back investments to meet the CRA’s demands.
“This decision could destroy our businesses,” warned Josée Bédard, owner of Roulottes Chaudière, a Quebec RV dealership hit with a retroactive tax bill of over $900,000. “We’ve created jobs and supported our communities for decades, but now we’re being punished with taxes that should never have been assessed. If this issue isn’t resolved, we’ll be forced to downsize, putting dozens of good-paying jobs at risk.”
Éléonore Hamm, president of the RVDA of Canada, pointed out the glaring inconsistencies in the law’s application: “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.”
Efforts to address the issue have thus far been met with inaction. Despite raising concerns with federal authorities over a year ago, no resolution has been implemented. In October 2023, the Canadian RV Dealers “Sensible Border” Coalition proposed an amendment to the Excise Tax Act to retroactively address the issue, but the matter remains unresolved.
The ACVRQ and RVDA of Canada are now calling on Quebec’s elected officials at both federal and provincial levels to intervene. The associations demand immediate federal action to end this crisis, urging Ottawa to uphold principles of tax fairness and protect the interests of Quebec businesses.
“This is a moment where government leadership is badly needed,” said 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.”
As this critical issue unfolds, the RVDA of Canada and ACVRQ continue to advocate for a swift resolution to prevent further harm to Quebec’s RV industry—a vital sector supporting jobs and communities across the province.
This issue has nationwide implications for the RV industry, setting a dangerous precedent that threatens dealers, disrupts supply chains, raises consumer costs, and undermines regulatory confidence. Resolving it is crucial to ensure fair taxation and sustain the industry’s growth.
