/Accommodation tax 

Accommodation tax 

By Chad Ingram

"We need a bed tax” said one attendee of a tourism-focused town hall meeting last week and he has a point.

That town hall meeting was part of the consultation process for the creation of a destination development plan that a tourism marketing firm is producing for the County of Haliburton.

Many municipalities in many places – and not just those that consider themselves tourist destinations – have accommodation taxes. You may have noticed them appearing as a surcharge on a hotel room bill. The tax need not be a large amount but the benefits of it could be substantial.

In Ontario municipalities have had the option of imposing an accommodation tax referred to as the Municipal Accommodation Tax or MAT for a number of years. Under provincial regulations at least half of the revenue must be allotted to local tourism marketing boards.

Obviously and logically in communities where the tax has been instituted there has been some push-back from accommodators. This only makes sense and presents a political liability for councillors. However I’m going to suggest that most guests are not going to notice or care about a few extra dollars on their room bill. But a little extra money from a lot of people over the course of the year could provide a considerable amount of money for tourism promotion without having to rely on the tax base.

While the option rests with the lower-tier municipalities within the county for the sake of fairness the creation of an accommodation tax could require  buy-in from all four municipal councils. Everyone would have to be in to keep the playing field level. Then revenues from those taxes could be funnelled back to the county’s tourism department perhaps with a portion allotted for lower-tier economic development initiatives.

One of several issues that arose during last week’s meeting was that the county’s restaurateurs and accommodators can often have trouble finding adequate numbers of staff and at least in some cases that seems to be because prospective staff can’t find suitable and affordable places to live in the county. Among the ideas suggested last week were the development of a workforce development strategy for tourism-related businesses and an accommodations needs assessment study both of which would be large costly projects. Along with increased promotions perhaps revenues from an accommodation tax could also be used to complete these types of projects.

It’s something the county’s municipal councils should consider.