Burlington City Council Approves Tax on Stays in Hotels & Motels to Boost Tourism
MY TAKE:It’s not often we have businesses asking for a new tax - but the Municipal Accommodation Tax (MAT) will help our businesses in the tourism industry compete for visitors. The funding will go directly toward initiatives that support tourism to Burlington, at a time they can use all the help they can get as one of the sectors hardest hit by the COVID-19 pandemic, and still recovering. The MAT will help to promote Burlington as a No. 1 destination spot for visitors, and also provide funding for city-sponsored initiatives. This is a major step forward for our tourism sector and the City and I wholeheartedly support it.For more details, the staff report and staff presentation at committee, and some frequently-asked-questions (FAQs) please scroll down.
*Please see below a news release issued by the City of Burlington.Burlington, Ont. — July 13, 2022 — Burlington City Council has approved a Municipal Accommodation Tax (MAT) for stays in hotels and motels to boost tourism efforts in the city. The tax would be placed on guests staying in accommodations in Burlington hotels and motels and will take effect on October 1, 2022.The 4 per cent charge would initially generate an estimated $450,000-$700,000 in revenue each year to support new tourism initiatives, attract visits, bolster current marketing efforts, monitor and evaluate tourism trends through research, and provide tourism related enhancements in the community.The City and Tourism Burlington have been working collaboratively with local hotels, motels and the Ontario Restaurant Hotel & Motel Association (ORHMA) who are supportive of the plans for a MAT in Burlington.Once collected, 50 per cent of the funds will be provided to Tourism Burlington for enhanced tourism promotion and development (as per regulation). The municipal portion of the funds (50 per cent) will be used for City initiatives that have some correlation to tourism, such as recreation, culture, collaborative marketing, event hosting, wayfinding and product development.Forty Ontario municipalities are now collecting or are in the process of collecting MAT. Municipalities include Oakville, Mississauga, Toronto, Vaughan, Waterloo, and Prince Edward County.Quick Facts:
- The Province of Ontario granted municipalities the authority to implement a tax on short term accommodations in 2017. Section 400.1 of the Municipal Act, 2001 and Ontario Regulation 435/17 authorize the establishment and collection of the MAT.
- The City will be partnering with the Ontario Restaurant Hotel & Motel Association (ORHMA) to administer the MAT. Accommodation providers will send the four per cent MAT collections to ORHMA monthly. ORHMA will then reconcile the MAT collection and send the funding, less an administrative fee, to the City of Burlington including associated reporting requirements.
- Tourism Burlington has been the designated destination marketing organization for the City of Burlington since 2003.
- The Burlington Hotel Association collected a Destination Marketing Fund from hotels from 2007 to 2014.
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FREQUENTLY-ASKED-QUESTIONS (FAQs):Q: Why is there a new tax in Burlington?A: The proposed Municipal Accommodation Tax (MAT) is a tax that would be placed on guests staying in accommodations in Burlington (hotels and motels). A vast majority of people staying in hotels or motels in Burlington do not live in Burlington; they are visitors to the city.Q: Will the City just collect it and spend it on anything it wants?A: No. There are rules for how the money has to be spent. Staff recommendations for how the funds would be spent are:
- Fifty per cent of the funds are provided to Tourism Burlington for enhanced tourism promotion and development (as per regulation).
- The municipal portion of the funds (50 per cent) is used for city initiatives that have some correlation to tourism such as recreation, culture, collaborative marketing, event hosting, wayfinding, product development, etc.
Q: Is this being forced on the hotels and motels?A: No. The City and Tourism Burlington have been working collaboratively with local hotels, motels and the Ontario Restaurant Hotel & Motel Association (ORHMA) who are fully supportive of the plans for a MAT in Burlington.Q: How will the tax be collected and administered?A: The City will be partnering with ORHMA to administer the MAT. Accommodation providers will send the 4 per cent MAT collections to ORHMA monthly. ORHMA will then reconcile the MAT collection and send the funding, less an administrative fee, to the City of Burlington including associated reporting requirements.Q: What will the money be spent on? A: The money will be used for the enhancement of current marketing and product development as well as new initiatives to raise awareness of Burlington as a destination. Examples are: Marketing to a wider audience, research and market trend analysis, branding, incentives to attract corporate business to Burlington, experience enhancements for residents and visitors and, some infrastructure enhancements that benefit tourism. Q: Who determines how the money is spent?A: Collection of the MAT revenues will be split 50 per cent to the City of Burlington and 50 per cent to Tourism Burlington. Oversight of the funds will be shared by both organizations. A working group for the city will include senior staff from multiple departments and a tourism representative. The city working group will make recommendations for city council’s approval. A working group for tourism will include board members, staff, and a city liaison. The tourism working group will make recommendation to the tourism board for approval.Q: How will we determine our return on investment?A: Tourism Burlington will provide regular communications through partner newsletters will highlight how the MAT tax revenues have been spent. The city will post approved projects on their website for public transparency. Media releases will also be issued as appropriate during or post-project completion. All projects will undertake post-project evaluations against pre-planned metrics.