Strength of opposition succeeds by one vote
Six passionate speakers representing a variety of accommodation sectors convinced council to forego the $400,000 in municipal accommodation tax that could have decreased taxes, at least for now.
A staff report before council Monday said the tax could provide additional revenue for the Town’s operating budget, and could offset the costs of tourism by funding infrastructure maintenance.
The report listed 32 other municipalities that have successfully adopted an accommodation tax, which is split by the municipality and an administrator who would distribute the remainder of the money to tourism-related businesses for marketing. In NOTL, that was expected to be the Chamber of Commerce, although there were still several details of the tax to be worked out
Paul MacIntyre and Carlo Robazza of Vintage Hotels, Jason Clements of Niagara Holiday Rentals, Tony Chisholm with a cottage rental, Janet Jones, owner of a bed and breakfast, and Tim Jennings, executive director of the Shaw Festival, spoke of the many reasons an accommodation tax, intended to boost tourism marketing, would do more harm than good in Niagara-
MacIntyre debunked a staff assertion, saying “32 municipalities are calling for urgent reform, to deal with the great amount of discontent created by the MAT implementation.”
In some of those municipalities, revenue for tourism marketing boards may be reduced, and the accommodation tax would be expected to replace their funding, rather than increasing current funding levels, said MacIntyre.
“Ontario municipalities are working with the Tourism Association of Ontario to force a restriction stating that MAT funds cannot be used to replace existing sources of tourism funding in a community,” he told council.
MacIntyre sat on a Town committee charged with investigating the municipal accommodation tax, which all stakeholders on the committee opposed, he said, yet the recommendation was to approve the MAT in principle and form another committee, again with stakeholders, to work out the details, with the intention of adopting the tax by June.
“Please do not vote this forward, even in principle right now. There has not been near enough properly focused discussion or answers around the impact of the legislation, and it can never be undone,” said MacIntyre. “There will be an impact on our economy which will put a strain on everyone who lives here: on our culture, employment, heritage and services to residents, agriculture and tour operators.”
Bed and breakfast owner Jones called the short-term rental industry in NOTL “a tourist attraction in of itself.”
Guests consider B&Bs in NOTL “their world standard by which they judge their future B&B stays,” she said.
Cottage rentals are equally highly-regarded, and are attractive to families, often travelling with their dogs.
“With the current selection available, people have a choice,” said Jones.
“B&B and vacation owners are private concierges for our guests. The introduction of a MAT will damage the relationship.”
There are about 400 short-term rentals in NOTL, she said, and no way to know whether property management systems can be adapted to a new tax.
She also suggested without a request from the tourism industry for the tax, “the assumption is that the Town needs the 50 per cent portion they would be allocated in order to balance the budget.” If that’s the case, she added, “stop representing it as anything else.”
She recommended that instead of dividing the town between residents and businesses, council reach out to the community for ideas, and show how much can be achieved with residents and businesses working together.
Clements told councillors many of the homes he manages are weekend getaways for owners who plan to retire to NOTL. Fees and taxes have increased in recent years, he said, “and I’m not sure we can handle an extra tax.”
His rentals are licensed, he explained, and the accommodation tax would give an additional unfair advantage to unlicensed rentals.
He suggested if it becomes even more expensive to stay in NOTL, more visitors will choose accommodations in Niagara Falls. “Council needs to fully understand the impact before moving forward with the MAT.”
Vacation rental owner Tony Chisholm told council he sat on the Town’s MAT committee as a stakeholder, and like the others in the accommodation sector, was against the tax being introduced.
There is a concern the tax will become a crutch — shoring up the operating budget, and driving away overnight visitors, some of whom come as a family for one, two or three weeks.
He suggested the Town form a working group of hospitality industry representatives to present their ideas and solutions, saying he’s willing to sit down and “help make a difference.”
Jennings too asked the Town to continue working out more details before considering the new tax. He said if the number of people visiting the Shaw decreases by even one per cent, all local tourism sectors will suffer, and smaller businesses will be hit the hardest.
Coun. Wendy Cheropita told councillors she found the presentations “very compelling,” and suggested going back to the drawing board on the tax. Too many businesses are talking about a negative impact, she said. “I don’t think we can let it go through. I think we need to engage with the business community.”
The tax will put NOTL businesses at a disadvantage, she added. “We can’t have that level of discontent from our top businesses.”
She recommended council “take a pause to do more work on the impact of the tax.”
Coun. Clare Cameron wasn’t buying some of the arguments she heard — she said adapting systems to chart the tax wouldn’t be complicated, and she wasn’t accepting the doom and gloom forecasts about it ending the tourism industry.
She pointe out that “everyone who has expressed opposition relies on the tourism industry for their livelihood, may have a self-interest, and may not represent the majority of the community.”
However, she agreed the tax targets the tourists NOTL wants to attract, and suggested “there may be critical gaps in information we need to address.”
Cameron made a motion to defer the accommodation tax until the Town can complete a tourism strategy, and was supported by others who thought approving it at this point would be premature, including Couns. Gary Burroughs, Stuart McCormack, John Wiens, and Cheropita.
Lord Mayor Betty Disero voted against the deferral, along with Couns. Erwin Wiens, Norm Arsenault and Allan Bisback.
“I stand by the fact that 18,000 people can’t continue to pay for infrastructure for three million tourists,” said Disero.
“We have to look at longer-term revenues.”