Board of trade pushes for local tourism agency
Mississauga city staff report recommends 4% hotel tax to raise $10M a year
The Mississauga Board of Trade is pushing for a dedicated tourism bureau after a report states the city will have to remit nearly $5 million in hotel tax revenue to Tourism Toronto.
“We as a collective must deeply examine where these valuable funds should be directed and dedicated and by whom they should be administered,” said David Wojcik, president and CEO of the Mississauga Board of Trade (MBOT).
Wojcik made the comments at a council meeting on Wednesday, where the staff report on the municipal accommodation tax, or the hotel tax, was presented to councillors.
City staff recommended the implementation of a 4-per-cent hotel tax, in line with what was approved in the City of Ottawa and the City of Toronto.
This would raise approximately $10 million per year in Mississauga.
Queen’s Park gave municipalities the authority to charge a hotel tax in May 2017 to help promote and maintain tourism-related infrastructure and attractions. But the regulations surrounding how revenue would be channelled and distributed re- mained unclear until recently.
The province pitched two revenue sharing models, the terms of which differed depending on whether the municipality was already charging a destination marketing fee (DMF) in its hotels.
If the municipality had a DMF program in place, it would have to remit the amount collected through the program to the regional tourism agency, Tourism Toronto.
In Mississauga, that would have been about $500,000.
If a DMF did not exist, the municipality would have to hand over 50 per cent of its hotel tax revenues to the tourism agency, which for Mississauga, equates to $4.9 million.
Mississauga had a DMF program in place, but two days before the hotel tax was to be approved by council, the Greater Toronto Hotel Association (GTHA) terminated the program without any consultation or notice to the city.
“That was a little underhanded,” Mayor Bonnie Crombie said.
Termination of the program means Mississauga will have to hand over $4.9 million to Tourism Toronto, instead of collecting nearly $10 million and deciding how to spend it locally.
The GTHA has been working closely with Toronto, and will likely be their collection agent when the hotel tax is implemented.
“I don’t think this council has any problem connecting the dots between the GTHA and Tourism Toronto,” Wojcik said, adding termination of the DMF appears to be an attempt to force the hand of council to ensure 50 per cent of the hotel tax would have to flow through Tourism Toronto.
Terry Mundell, president and CEO of the GTHA, shot back at Wojcik’s claim, adding termination of the DMF program in no way impacts Mississauga’s ability to oversee how hotel tax revenues are spent.
“The provincial regulation requires that the City of Mississauga and the eligible tourism entity — which, by the way, is not necessarily Tourism Toronto, it is the city’s decision — they have to enter into a contract and that contract clearly defines that the funds have to be spent in the municipality that the funds are raised,” Mundell said.
Calling the staff report misleading, Mundell said whether it’s Tourism Toronto or a locally established body that collects the hotel tax revenue, it all has to be spent in the municipality in which it is collected.
“We want to make sure we not only get the money spent in Mississauga, but the key in that is that we have more control over where and how it is spent in Mississauga,” Councillor Pat Saito said.
The city will consider options for the establishment of a local tourism body, separate from Tourism Toronto, to manage future hotel tax revenue.
The hotel tax will be in effect April1, 2018.