For the second time in a little more than six months, Niagara-on-the-Lake town council showed it has no appetite for an accommodation tax.
Coun. Paolo Miele tried to drum up support on social media recently for taxing tourists who stay in local hotels, an issue that was thoroughly discussed and dropped in January. It was made clear then that those in the industry were fearful of the negative impact an extra tax would have on accommodations providers and other tourism-related sectors
Miele has used Facebook in recent weeks to hold a very basic and informal survey, asking residents whether they are in favour of a tax that could save them about $600,000 a year that is spent on tourism-related programs – money he said could be directed toward items such as local infrastructure or more parks and trees.
At Monday's council meeting, he was promoting a provincial program that permits municipalities to collect an accommodation tax to split between the Town and a non-profit agency that would administer its portion of the revenue to market local tourism. He suggested $4 a night could be an appropriate amount as a test project.
But Janice Thomson, president of the NOTL Chamber of Commerce, and other industry representatives asked councillors not to burden visitors with a municipal accommodation tax.
Tourism spending in NOTL supports $21.4 million in wages and other expenses, and $7.4 million in capital investments and profits, Thomson said. An analysis of adding an accommodation tax on top of Bill 148, which increased the minimum wage, showed it could result in an annual reduction of $3.4 million in profits and capital investment for hotel properties and other businesses depending on the overnight visitor market.
Currently, through parking meters, bus parking at Fort George and the provincial gas tax rebate, the Town receives more than $2 million each year, revenue that stays in town, Thomson reminded councillors.
Instead of levying an additional tax on visitors and adding risk to local hotel and tourism operations, she asked council to focus on helping NOTL remain a competitive tourism destination.
“Please, council, do not put our competitive advantage at risk by implementing a tax on our visitors.”
John Crescenzi, general manager of the Holiday Inn Express in NOTL, spoke of his experience in the industry in other locations where another layer of tax was added. He agreed with Miele that many tourists don't see the extra charge on the bill, but added, “those who do are vehemently opposed to it. The value perception to the customer is gone.”
An added tax will be detrimental to all businesses, he said, imploring council not to agree to it. He suggested if councillors were even considering it, a discussion should involve the business community first.
Carlo Robazza, also representing the hotel industry, said such a tax would be negative not only for hotels but for their staff and families, due to the layoffs that would ensue. That loss of livelihood would extend to industries serving hotels, he said, and to other local businesses that benefit from tourists who stay overnight, as opposed to the day-trippers.
Coun. John Wiens said he wouldn't support an accommodation tax without hearing from residents and the business community, and that it wasn't fair to bring up the issue before the dissolution of the current council. “I think we really need to move forward slowly if we want to go this way.”
Coun. Betty Disero said it's too soon to know the impact from the minimum wage hike on the hotel industry and its employees, adding she would want more information before heading down the road of an accommodation tax. She suggested looking at other ways to increase revenue rather than adopting a tax that would harm the hospitality industry.
“Quite honestly,” summed up Coun. Jamie King, agreeing with Disero, “I thought we had a good discussion in January. I really regret whatever procedural process led us to having to talk about this again tonight. I fear we've wasted a lot of people's time, brought a lot of people out in the summer, and raised a lot of concern right in advance of the election. I thought we sent a pretty clear message of council. I think the intent of council from January needs to be maintained.”
Miele said he believes businesses are adapting to the raise in minimum wage, and he disagreed a $4 tax would destroy the accommodation industry, citing plans for more hotels in NOTL. However, realizing from the discussions of councillors that there was no support for his motion tor institute the tax or even continue a more thorough discussion, Miele took it off the table.