TOURISM TAX
City poised to charge levy on rooms
The City of Windsor is poised to join several other municipalities in Ontario taking advantage of new provincial legislation that allows them to levy a hotel-room tax of up to four per cent.
On Monday, council will decide whether to adopt the Municipal Accommodation Tax, which would see the levy for all stays of 30 days or fewer in hotels, bed and breakfasts, Airbnb and other specified uses with the monies collected going to a tourism entity, in this case, the Tourism Windsor Essex Pelee Island (TWEPI). “We’re certainly not leading the pack here, we’re following a lot of peers here on this,” said City of Windsor treasurer Joe Mancina. If approved, the new regime would go into effect on Oct. 1. He said the proposed tax of four per cent on each accommodation is projected to bring in $2.8 million annually, which would be split 50/50 between TWEPI and the city, which would put its portion into a Tourism Development Infrastructure and Program Reserve Fund.
“This is certainly a trend that is not new to the industry, and I think it’s a win-win because the money would then go back into supporting and promoting the tourism industry in the City of Windsor,” said Gordon Orr, CEO of TWEPI. The City of Windsor’s annual funding of $923,300 TWEPI currently receives from the city would be the initial deposit into the fund. “The people that are being charged the tax are those that are consuming the product,” said Orr. He said many jurisdictions in the U.S. have been charging similar fees for years. Ottawa, Toronto, Mississauga, and Brockville are already charging a four per cent fee, while several other cities such as Thunder Bay, Cornwall and London are doing so later this year.
Orr said TWEPI’s funding has been essentially flatlined for a number of years, and this scheme would allow for increased tourism promotion.
“We’ve seen some slight adjustments here and there to our budget, but overall it’s been status quo for a number of years,” said Orr. “What this will allow us to do is to spend more money trying to drive more overnight business. Put more people into hotels and thereby generating more in that municipal-accommodation tax, more funds back into the community.”
Orr noted that about 16,000 people are employed in the local tourism industry.
“And by having more money, more opportunity for growth, whether it be through marketing and promotions, whether it be by going after sporting events or conventions that all have a huge price tag on them, to bid on,” Orr said. “It gives us that flexibility to — not going back to the taxpayer — to give us the funds.”
Orr noted that when TWEPI was trying to entice the Association of Municipalities of Ontario’s annual convention here in 2016, organizers had to come to Windsor and Essex County councils with cap in hand in search of extra funds. “AMO is expecting some sort of an incentive to come here,” said Orr. “Maybe we could go after more things using these bid funds to go up against London or Toronto or Ottawa or Niagara.”
Orr said the extra funds could be used to increase the scale of advertising, the frequency, and the catchment area for their campaigns.
“We’re an industry-led organization, a pay-to-play organization, if the industry doesn’t want to go to that market, then you don’t find (TWEPI) in that market,” Orr said. He said aside from demanding all the revenues be reinvested in tourism, there has been little negative feedback from members. Messages left for comment at several local hotels were not returned.