Vancouver seeks 2.5% tax on short-term accommodation to raise revenue for hosting FIFA World Cup games

Canadian fans hold up a giant flag before a FIFA World Cup qualifying soccer match in Vancouver in 2016. Vancouver is one of 16 host cities for the 2026 World Cup. (Darryl Dyck/The Canadian Press - image credit)
Canadian fans hold up a giant flag before a FIFA World Cup qualifying soccer match in Vancouver in 2016. Vancouver is one of 16 host cities for the 2026 World Cup. (Darryl Dyck/The Canadian Press - image credit)

Booking a room in a Vancouver hotel could soon come with an additional 2.5 per cent tax as the city seeks to raise revenue to host games for the 2026 FIFA World Cup.

The city asked the provincial government on Sept. 30 to apply a temporary Major Events Municipal and Regional District Tax (MRDT) on sales of short-term accommodation in the years leading up to the tournament to help fund extra staff, security and resourcing, and event-specific things like training sites and a "Fan Fest" area.

The MRDT amendment to the Provincial Sales Tax Act has been introduced in the B.C. Legislature and will now be carried to a second reading.

The City of Vancouver declined an interview with CBC, but in a statement, it said it will have to run at "above and beyond normal operating city service levels" for the World Cup.

"The City of Vancouver is working with the province on how the MRDT could be applied within the city, and further details will be made public as the process is determined," it said.

Vancouver and Toronto are among 16 host cities in North America for the tournament and will host 10 of the event's 70 matches between them.

The specifics of the tax, such as when it will be implemented in Vancouver and for how long, have yet to be determined.

Communities can apply for a Major Events MRDT through Destination B.C. to get support and approval from the ministers of tourism and finance.

The Major Events MRDT is a limited-time tax of up to 2.5 per cent on hotels and short-term accommodations. It can be applied on top of an existing MRDT — already in place in more than 60 regions in the province — that communities can use to provide funding for tourism marketing, programs and projects.

But adding taxes on top of taxes is a concerning step for some.

"You have to be careful about the layer of taxation that you start to layer on things," said Peter Milobar, B.C. Liberal MLA for Kamloops–North Thompson, adding there are still plenty of questions to determine the criteria of which communities could apply.

B.C. Minister of Finance Selina Robinson says a temporary additional tax is not a new concept, citing the four per cent Resort Area Tax introduced in Whistler in 2007 to help the municipality foot the costs of the 2010 Winter Olympics.

"We see the potential benefits for other communities that are working to put B.C. on the international stage and bolster our economy," said Robinson.

The B.C. Hotel Association declined to comment.