A majority of Midland council members narrowly passed a motion to explore the potential for creating a hotel tax in town.
The Municipal Accommodation Tax (MAT) was on the agenda during a recent regular meeting of Midland council, through a staff report which recommended that a MAT working group be established to provide input on a draft bylaw for stakeholder consideration, with staff reporting back to council in the fourth quarter of 2022.
Municipalities were given authority by the province in 2017 to levy a hotel tax, provided the MAT revenues are shared with a not-for-profit tourism organization with a tourism mandate; the amount shared must be 50 percent of the tax less reasonable administration costs.
For Midland, that could mean quite an intake.
Estimates were calculated in the staff report for the roughly 407 hotel and motel rooms in the town; with annual occupancy and minimal daily rates on the MAT, approximately $120,000 could go to the eligible tourism entity while the other $120,000 would return to the town.
Concerns were raised by members of council to the tax, first brought forward by Coun. Bill Gordon who had been speaking with upset community members, who would be directly affected by the loosely calculated four percent MAT.
“The notion of adding a four percent tax, to me, is kind of offensive quite frankly. I know that some of the people in the hotel and hospitality industry are equally dismayed that we’re even talking about this right now; it seems tone deaf,” said Gordon, who suggested a MAT working group shouldn’t waste staff time.
It was a sentiment echoed by others, including Deputy Mayor Mike Ross and Coun. Jim Downer, who felt that adding a tax onto businesses recovering from the COVID-19 pandemic wasn’t the right thing to do.
Staff offered a different opinion, as per their report. Andy Campbell, executive director of environment and infrastructure, explained that it was a tool provided by the province to help raise money, depending on whether a municipality chooses to use it or not.
“This tax is not for the residents of Midland, because they can all decline it if they were to stay locally in a hotel,” Campbell stated. “It is taxing the tourists that come to town, and (cultural development coordinator Karen Mealing) has written in this report the rates that are being charged locally, which are significant.”
In the report, 17 other municipalities were listed as having implemented a MAT, including Barrie, Orillia, Huntsville, Toronto, Kingston and Niagara Falls.
“We’re not talking $80 a night hotel rooms in town anymore; they’re in the hundreds of dollars,” Campbell noted. “And for a tourist to add $20 to their stay, or $10 or whatever it might be depending on the rate, would that really deter a tourist coming to town?”
Campbell added that the recent Ontario’s Best Butter Tart Festival was a $40,000 impact on the tax base in the Midland budget, and that a MAT tax could cover that cost.
Mayor Stewart Strathearn pointed out that while Gordon had been speaking with some who felt they might be negatively impacted by a MAT, other industry businesses were coming out of positive annual revenues; he raised his support to see a MAT working group explore all facets of the local hotel and motel industry providing their input. Several on council agreed.
Council voted to carry the staff recommendation. The MAT working group will have representatives including two from the municipality, three from local attractions, three from accommodations and one representative from the County of Simcoe.
The Municipal Accommodation Tax staff report, including calculated estimates and stakeholder considerations, is available in full in the council agenda on the Town of Midland website.
Council meetings are held every third Wednesday, and can be attended virtually through Zoom by contacting the clerk’s department of Midland town hall for a link to the meeting.
Council meetings can also be viewed on Rogers TV cable channel 53, or through the livestream on the Rogers TV website. Archives of council meetings are available through Rogers TV and on the Town of Midland’s YouTube channel.
Derek Howard, Local Journalism Initiative Reporter, MidlandToday.ca