THUNDER BAY—A spokesperson for major hotel operators in Thunder Bay says it will be "a very positive thing for the community" if the city goes ahead with implementing a proposed Municipal Accommodation Tax.
Thunder Bay city council on Monday night authorized the civic administration to consult with hospitality industry stakeholders and report back to council on options for the tax, along with the necessary by-law.
The tax would apply to accommodations provided for a continuous period of less than one month in any hotel, motel, bed-and-breakfast or Airbnb-type rental. Campsites, campgrounds for RVs, and university and college residences would be exempt.
Municipalities across Ontario are currently at various stages of implementing the new revenue tool which is allowed under a provincial regulation that came into force in December.
Local councils are allowed to determine the amount of the tax.
In Toronto, all hotel and motel guests started paying a four per cent tax on April 1.
Although there is no decision yet on the tax rate that would be applied in Thunder Bay, a report prepared for council said a four per cent tax here could generate $2.5 million a year.
Roberta Sawchyn, chair of the 14-member Thunder Bay Hotel Association, told Tbnewswatch in an interview Tuesday that her group welcomes the move, saying "we can do some tourism product development, partner with different organizations on product development."
Under provincial guidelines, 50 per cent of the revenue must be remitted to one or more not-for-profit entities "whose mandate includes the promotion of tourism in Ontario or in a municipality."
In their report, city staff said the funds could be used for:
- sport and corporate event bid support and hosting
- investment in large-scale community tourism infrastructure
- cultural event development and ongoing support
- financial support to incubate new product development
The city's use of its 50 per cent share of the revenue would be unrestricted, but the staff report notes that the city already has a number of council-approved plans that would contribute to tourism product development—which have no source of funding—including the Wayfinding Plan (new street signs and maps for walkers and cyclists) and aspects of the Recreation and Facilities Master Plan.
Sawchyn said the new tax shouldn't have a negative impact on the local hospitality sector. "It won't drop business at all. The business community that's travelling, conferences, the leisure market, they're not going to not come to Thunder Bay because there's a tax. They're used to paying that tax in many, many cities" in Canada and the U.S., she said.
City staff met in January with hotel association members to discuss the plan including collection, enforcement and the potential use of the funds.
Their report to council said that discussions with the larger hotel operators have been "positive," but added that it will be important to engage and consult with the smaller independent operators as well.
Officials are expected to arrange for an Open House consultation within a matter of weeks.
