Hotel owners say 4% hotel tax too high

Nick Seebruch
Hotel owners say 4% hotel tax too high
A neon motel sign. Photo courtesy of Public Domain Pictures.

CORNWALL, Ontario – Cornwall City Council heard at their last meeting the advantages of introducing a Municipal Accommodation Tax or, hotel tax, local hotel owners feel however that four percent is a steep increase that is being introduced too quickly.

“I appreciate that the trend around the province is four percent,” said Paul Lefebvre General Manager and Co-Owner of the Best Western Parkway Inn in Cornwall. “I would have preferred two percent.”

Two percent seemed to be the consensus amongst the hotel operators in Cornwall.

“I think two percent would be easier to implement,” said Kim Coe-Turner, General Manager of the Nav Centre.

Turner explained that the Nav Centre would be affected by a hotel tax and was consulted by the City of Cornwall.

Scott Lecky, General Manager and Owner of the Ramada Inn in Cornwall said that while he supported the proposed tax comes at a time when all businesses are facing increased financial pressures.

“Hotels are facing difficult challenges this year with changes to employment standards,” said Lecky, referring to Bill 148 which, amongst other things, provides more sick days and increases the minimum wage.

Lecky suggested that the tax should first be introduced at the lower rate of two percent to gauge its impact on the market.

Several other municipalities in Ontario have already introduced a hotel tax including Ottawa, Toronto, Mississauga, Brockville, London and Sudbury all at a rate of four percent.

In the report submitted to council, city administration states stays that are longer than 30 days would be exempt from the tax and this would include students staying at St. Lawrence College, the Ontario Hockey Academy and the Nav Centre.

The report calculates that if the 800 potentially available rooms in Cornwall were occupied 50 percent of the time for the whole year, the City would generate a revenue of $642,400 if the tax rate were set at four percent.

Administration stated that at least half of the revenue generated by this tax would have to go to a non-profit venture aimed at generating more tourism.

City administration proposed in its report to give 45 percent of the revenue to Cornwall Tourism, another 45 percent to a designated non-profit and the remaining 10 percent would go to the city’s administration costs.

If passed, the Municipal Accommodation Tax would come into effect June 1, 2018.

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[…] fund is sustained through proceeds from the Municipal Accommodation Tax, 45 per cent of which goes to the Tourism Development Fund, another 45 per cent goes towards […]