New ‘room tax’ to take effect Jan. 1

Duane Hicks

Those staying at local hotels and motels will be paying a little more in the future after town council voted Monday night to adopt a new four percent municipal accommodation tax (MAT), effective Jan. 1, 2019.
The new tax is to help fund community development and tourism marketing, which ultimately will help the whole town, but some accommodation providers are concerned it’s being implemented too quickly.
“It kind of came down the pipe a little quick,” Paul Noonan, owner of La Place Rendez-Vous, told the Times after the meeting.
“It would have been nice to have a little more input and dialogue in terms of how this was going to come about,” he noted.
“They’re implementing something that’s going to take place now in three months’ time.
“It could have been planned ahead a little more,” Noonan added. “It would have made it a little more palatable to have done over a longer period of time, with more input.”
Noonan said the concept of a tax is good–devoting more money to promoting tourism in the area–but he felt accommodation providers have been pinpointed as an industry.
With only maybe half-a-dozen hotels and motels in Fort Frances, they’re the only ones affected.
“Our customers are and, in turn, we are, because it affects our rates,” he noted.
Meanwhile, Rendez-Vous general manager Sarah Noon requested during the meeting that guests who already have been booked for next year could be grandfathered in and not have to pay the new tax.
Caleb Firth of The Sleepy Owl on Scott Street said he’s concerned about overall transparency and whether accommodation providers will have any say in how the money is spent.
He also would like to have a little more time before the tax is imposed.
“At the end of the day, we don’t want it to be a deterrent for people visiting Fort Frances,” Firth stressed.
“We’re proud of Fort Frances, we’re proud to be part of the business community here in Fort Frances, and we want to be here for a great length of time.”
Economic development consultant Tannis Drysdale said in her presentation Monday night that she had contacted all of the accommodation providers in town, and some did not want to speak with her–either because they supported it or did not–while others did talk to her.
“Those ones I spoke with were not excited about the opportunity to charge a new tax,” she conceded. “Nobody greeted me with a big hug, for sure.
“But I think that dialogue is important going forward,” Drysdale added.
Coun. Wendy Brunetta suggested that more education should be provided to accommodation providers and the same presentation that council received be given to them, as well.
All of council supported the new tax in principle, although not everyone was happy with the process.
“I’m not sure that I’m in favour of this and moving ahead until I know for sure that every single one of those people impacted by this has had the opportunity to speak,” said Coun. June Caul.
Other councillors felt such a tax seems to be the norm elsewhere, so why not here?
“Anywhere my wife and me have gone in the last five-10 years, we’ve had to pay a tax,” said Coun. Kitowski.
“It was a hospitality tax, it was a city, it was whatever.”
He added tourists and frequent travellers understand this type of tax is common, noting, “It’s not a shock.”
Coun. Ken Perry reasoned the MAT doesn’t affect the residents of Fort Frances, it affects those visiting here.
“Wherever you go nowadays, you’re paying an accommodation tax, a destination marketing fee, a town tax, whatever you want to call it,” he agreed.
Fort Frances CAO Doug Brown felt there’s no doubt more tourism marketing is needed for Fort Frances.
“The [provincial] government gave us a tool to market our community,” he remarked. “We want to help the hotels get more people into them–this is a way of doing that.
“One of the things I am kind of embarrassed about is that when I go look at any brochure, we’re never mentioned,” added Brown.
“I see Dryden–and they’re in worse financial shape–and they’re advertising their town to death. . . .
“We’ve got to get to the plate,” he stressed. “We’re not doing as much as we should be doing.”
The new tax came as a recommendation from the town’s Economic Development Advisory Committee.
In last year’s provincial budget, municipalities were given a new tool to support tourism development and marketing through the Transient Accommodation Regulation 435/17 (this allows municipalities to impose a MAT).
Locally, the MAT is expected to provide considerable revenue–at least $300,000 a year, noted Drysdale.
Half of the revenue will go to tourism marketing, such as Rainy Lake Square programming, running the Fort Frances Tourism Information Centre, wayfinding signage, and marketing and promotion.
The other half would go towards infrastructure and development, such as a fund to assist small festivals, sporting tournaments, and events, studies and reports related to tourism development, the Rainy Lake Square, parks and waterfront development, the Shevlin wood yard economic development feasibility study, and beautification projects.
The RRFDC will be the town’s designated marketing organization.
The tax will be applied on all accommodation that is less than 30 days in the Town of Fort Frances, including hotels, motels, bed and breakfasts, resorts, outposts, AirBNBs, and tent and trailer sites.
Reservations which have been made at local hotels prior to Sept. 24, 2018, for the period of Jan. 1-Aug. 31, 2019, will be exempt from the new MAT tax.
Accommodation providers will have to remit the tax on a monthly basis.
The town will name an internal auditor to regularly inspect and verify remittances, and be able to charge late fees to businesses that do not make remittances according to schedule.
The town also will make available a $10,000 grant fund to help local businesses who have to upgrade or purchase new software to charge or remit taxes.
“Some are still looking into it; with some of the hotels, there’s no issue–it’s already on the receipts,” said Drysdale.
“I talked to a small one this morning and they’ll have to order new stubs.”
Other regional municipalities already have a similar tax, including Kenora, Sioux Lookout, Thunder Bay, and Winnipeg, and with the legislation passing last year, it’s expected many other Ontario municipalities will follow suit.
International Falls has had an occupancy tax for at least 20 years, Drysdale noted.
Town council will be able to review how the tax is impacting accommodation providers.
“There’s always the thought that, at some point, the price of a room will increase past the point where it [the tax] is helpful,” Drysdale remarked.
“The purpose of the tax is to help grow our tourism industry, not to shrink it,” she stressed.
“We want to be thoughtful of that.”
Drysdale noted the monthly remittances will include total gross sales, providing council with an indication of the relative health of the accommodation industry here.
“So if you impose this tax, and things go badly, we’ll be able to tell over a period of time if there’s a negative or positive impact from the marketing efforts or the imposition of tax,” she reasoned.