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Accommodation sector wants input on new tax

Vhair of the NOTL Chamber of Commerce boardP aul MacIntyre (top, centre) stressed the need for “proper governance” of the municipal accommodation tax to create accountability for all stakeholders .
Vhair of the NOTL Chamber of Commerce boardP aul MacIntyre (top, centre) stressed the need for “proper governance” of the municipal accommodation tax to create accountability for all stakeholders .

Speaking to council Monday night about a municipal accommodation tax, Paul MacIntyre said he was not there to debate the tax, but to ask that it be “within the spirit and framework of the intent of MAT legislation.”

The chair of the NOTL Chamber of Commerce board, and vice-president of operations for Vintage Hotels, MacIntyre said he hopes it will create a new funding source to invest and drive sustainable growth — not to replace old funding.

As the province lifts some restrictions this week, tourism operators “are prepared to meet the challenges ahead - whether it is through creativity or innovation, or simple unrelenting focus on value and customer service. But over the past two years we have become exhausted — not only do we feel exhausted but many have exhausted their capital, their lines of credit and their cash flow.”  

Imposing a new tax levy on the hardest sector of this pandemic is asking the sector to also invest in time, resources, and possibly technology, he said.

“There is no new tax switch to flip on our point of sales technology or accounting software in June or July. And everyone’s systems are different. It may involve tech investment, contractual updates, training. The administration of collecting and administrating any funds from a new tax will take time and effort by us all.”

MacIntyre also stressed the need for “proper governance” to create accountability for all stakeholders, for the municipality, and for the DMO (destination marketing organization) that will administer a portion of the tax. 

“It is no secret experience in Ontario and other jurisdictions has shown that without proper governance, there is a strong tendency for municipalities to allocate MAT revenues inappropriately or ineffectively,” he said. 

MacIntyre referenced accommodation tax legislation in Huntsville, Ont., which allows the municipality to spend its 30 per cent of the revenue on tourism infrastructure such as signage, biking or hiking trails, capital investment of new tourism attractions or facilities, support of community events and organizations, enhanced funding to small community grants, and its Chamber of Commerce visitor information services.

What is not eligible includes ongoing road maintenance and repair, capital projects and capital repairs to municipal facilities, and operating costs of municipal facilities.

The tax funds should be aligned with an effective tourism strategy, he added, started in part and driven by the town, with the DMO for support and expertise, tourism stakeholders and residents, the day it goes into effect.

“Let’s bring the industry, elected officials, and as equally important the community together so we have a strong plan. Let’s include economic impact studies, let’s include forecasts for the future, let’s include any empirical data so we are not quoting numbers based on opinion, but rather fact.”

Janet Jones, chair of the chamber’s tourism advisory working group of business members, was at council to represent the accommodation sector, where the municipal accommodation tax has been “a hot topic,” she said.

She asked councillors for a governance document “to see things go forward in a transparent manner, transparency being the number one issue for many of us.”

She said some members of the sector “are confused about how we’re going to spend or consider spending money designed for tourism infrastructure, when we don’t have a tourism strategic plan.”

The tourism strategy should be in place prior to discussions about the money being spent, she said.

She also called for representation from the accommodation sector and other interested parties in the development of some form of governance document.

“If we want buy-in, if we want the best way to do this, I don’t know how we cannot consider the various members of the accommodation sector.”

She’s hoping that council “is looking for as much cooperation and communication as possible,” she said.

“Transparency looks to me like a separate bank account, looks like documentation of discussions available to public, and annual reporting.”

“My most concerning item is I don’t understand how we could possibly consider spending money we don’t have. We haven’t received one penny from this tax.”

There is no information about how much tax there will be to spend, and no implementation system in place, she added.

“I’m very concerned that this item is part of the 2022 budget. It needs to not be spent until 2023.”

Most accommodation bookings for this year are already in place, and the accommodation owners “will likely eat the increase,” she said.

While councillors approved moving ahead with the municipal accommodation tax by July 1, 2022, they also approved a governance committee that would include stakeholders and residents, to be put together as quickly as possible and work concurrently with the development of a tourism strategy in the coming months.




About the Author: Penny Coles

Penny Coles is editor of Niagara-on-the-Lake Local
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