Niagara-on-the-Lake’s council has approved new criteria for how revenues from the municipal accommodation tax will be spent, with all funding in 2025 and 2026 restricted to town-led tourism infrastructure projects.
The decision, made Tuesday night, follows a staff report with recommendations from the town’s municipal accommodation tax committee, which proposed dividing the revenues into three funding streams.
Under the approved plan, funds will be allocated as follows: 20 per cent for town infrastructure projects, 20 per cent for a new grant stream for public and town-led projects under $100,000, and 60 per cent for a grant stream for larger projects over $100,000.
But grants won’t be available until 2027. Until then, only town infrastructure projects will be eligible.
Staff will report back by July 31 with proposed projects and again by Dec. 31 with what’s needed to implement them.
“This allows the (tax) revenues to be used for projects that are important to the town, without being a burden on the local tax base,” said Lord Mayor Gary Zalepa in an interview with The Lake Report. “That’s what the municipal accommodation tax was put in for the first place.”
The town will focus on things the committee flagged as immediate priorities — like more public washrooms, better parking, traffic management and improved signage, said Zalepa.
Before tax revenues became available, such projects were funded through NOTL taxpayers.
“Now, with this new revenue from visitors, the town can fund these projects without relying on local tax dollars,” he said.
Not all councillors supported the entirety of the motion, which was moved by Coun. Sandra O’Connor.
Couns. Wendy Cheropita and Gary Burroughs opposed one item of the report, which asked council to both approve the recommendations and direct staff to prepare implementation policies by the end of the year.
Burroughs said he supported the rest of the recommendations but disagreed with the structure of the funding streams.
Cheropita said she believes the 20 per cent earmarked for infrastructure should instead be 80 per cent, with the remainder going to discretionary grants.
“When I look at the allocation of funds, it almost strikes me,” said Cheropita, who is also on the tourism strategy committee.
O’Connor, who chaired the municipal accommodation tax committee, instead called the proposed split a “good balance of needs for the community.”
This item was voted on separately from the rest of the motion, but was carried.
Coun. Maria Mavridis asked whether the $500,000 committed by the previous council from this tax’s funds in 2023 was the reason for the temporary rule prioritizing town projects.
But town treasurer and director of corporate services, Kyle Freeborn, said that was not the deciding factor.
“We really just need time to explore and consider a grant stream,” he said. “We need to think hard about what’s possible in terms of who would own and operate those assets, and in the future, how do we guarantee that they’re publicly accessible for the foreseeable future.”
Zalepa, in an interview, said once 2025 and 2026 projects are prioritized and underway, the town will look at opening up applications to the municipal accommodation tax funds for broader uses. Public communication on how to apply for grants will begin in 2027, Zvaniga said at the meeting.
O’Connor took time at the meeting to recognize the tax committee’s work, “because they did so much work towards this,” she said, adding that it was not an easy task.
The committee members include John Foreman, Paul MacIntyre, Normand Arsenault, Brian Trnkus, Coun. Tim Balasiuk and Coun. Andrew Niven, who served on the committee until his election to council last October.
Zalepa agreed, in an interview, that the committee, which will now be phased out since the criteria are complete, worked hard and well.
“The mandate of the committee has been met, so there’s no further need for the committee,” he said, adding that council could create another committee to respond to suggestions that come forward after 2026, if need be.
Zalepa said the criteria for allocating the tax funds will now be integrated into the town’s budget process and will help future councils manage the pressures of tourism.
