Budget discussion gets heated over accommodation tax

Niagara-on-the-Lake town councillors approved a $10.38 million capital budget for 2022, a little lower than the $10.5 million proposed in the report before them.

That’s because the municipal accommodation tax, much discussed in previous years and on the budget committee’s agenda for 2022, was defeated in a tie vote.

The budget committee, which includes five councillors, considered and recommended a two per cent tax on accommodations of five rooms or more, as was suggested at a meeting earlier this year.

But also discussed in September was that an accommodation tax should be part of an overall tourism strategy, with more data than was currently available, and some councillors said last night they were dissatisfied that didn’t happen. The fact that the hospitality industry was not consulted in the recent committee recommendation also was a concern to some councillors.

Coun. Erwin Wiens, who is not part of the budget committee, said he was surprised by how quickly the accommodation tax has moved forward since the September meeting. If it had been approved, about $310,000 would have been collected from June 2022 to the end of the year, a lot of money to collect and spend without a fulsome discussion, further analysis and a business model, he said. “I’m quite alarmed that this is going off the rails,” he added, objecting not to the tax itself but to instituting it in June.

Coun. Gary Bourroughs said the timing is poor, with the hospitality industry still on shaky grounds, and Coun. Clare Cameron went even further. “The timing is awful, doubly awful” with recent news of the increasing number of COVID cases, she said.

Coun. Wendy Cheropita agreed, while Lord Mayor Betty Disero, Coun. Sandra O’Connor and Coun. Norm Arsenault were just as emphatically in favour of the tax.

Disero called “shame” on councillors talking about saving money, not willing to spend money, and concerned about not meeting infrastructure needs, but also not willing to look for other sources of revenue.

Without the accommodation tax, she said, “we’re going to have a 20 per cent increase for taxpayers.”

“At some point you have to stop talking about things, and just move ahead with it,” said Arsenault.

Coun. John Wiens also voted in support of it, creating a tie that meant the motion in favour of the tax was defeated.

Coun. Allan Bisback, the chair of the budget committee who has spoken in support of the tax in the past, was absent.

Corporate services director Kyle Freeborn said other sources of funding for three items discussed last night will have to be found, with their costs subtracted from the capital budget that was approved, which was what brought it down to $1.38 million. Funding for NOTL Tourism, a Victoria Street landscaping project, and $100,000 for the NOTL Museum was removed from the budget — they were to be paid for out of the municipal accommodation tax.

The museum was recommended to receive a total of $500,000 over five years.

Arsenault made a notice of motion to reconsider the accommodation tax at the next council meeting, which will be in Januar,y unless a special meeting is called.

To bring the matter back to the table he needs two-thirds support, or six votes. Over the next little while, when emotions have subsided, he will discuss the tax with councillors, and hope to get enough support to revisit the issue.

“MAT is not dead,” he said. “It’s never dead. It’s just on life support at the moment.”

The report presented to council Monday said assessment growth will have a positive impact on the town’s 2022 operating budget, calculated to be a 1.15 per cent increase, equating to an additional $151,187 in new property assessment that will mitigate the existing increase.

With the capital budget approved before the year’s end, town staff can hope for more favourable results as they begin tendering projects in the new year, said CAO Marnie Cluckie.

The operational budget is expected to be discussed in January, with staff aiming for an increase over last year in the two to five per cent range, or between $262,540 to $656,350, an increase of $23.50 to $58.75 on the tax bill for the average residential assessment.

The capital projects approved for 2022 include work on the Irvine Road drain at $430,000; Canada Summer Games costs for the Memorial Park tennis courts, one replacement pumper at $855,000; a rainbow sidewalk at about $15,000; and work on Niagara Stone Road to cost $595,000.