The Town of Perth is continuing to study whether it should introduce a Municipal Accommodation Tax, or MAT, as a way to generate new revenue and help ease pressure on the municipal budget.
Staff presented council with an update on the research completed so far, stressing that no decision on implementing the tax is being requested at this stage.
A MAT would apply to short-term accommodations such as hotels, motels, bed and breakfasts and short-term rentals. The tax would be paid by visitors as part of their accommodation bill, collected by operators and then remitted to the municipality. It would not be a property tax or a direct tax on residents. Councillor Isabel Anne McRae said it would be an appropriate way to help offset the expenses of tourism.
She added that consultations with accommodation owners would be key before making any decision.
Staff say a growing number of Ontario municipalities have introduced accommodation taxes, with revenues commonly used for tourism promotion, events, visitor services and infrastructure.
Under the approach being considered in Perth, the municipality would retain 50 per cent of the revenue to support existing tourism programs and strategic priorities. The other 50 per cent would have to go to an eligible tourism organization for tourism promotion and development. A 4% tax could raise between $45K and $70K annually.
Staff are also considering a registration system for short-term rentals and a Municipal Accommodation Tax Advisory Committee to help determine how tourism-related funds are spent. Councillor Jim Boldt stated that as tourism was a major economic driver in Perth, an additional fee on visitors would be a mistake.
The Town plans to consult accommodation providers, tourism groups, businesses and other stakeholders this fall, with staff expected to return to council in the new year with a recommendation. Council’s committee voted to accept the update. Across the province, existing MAT rates range from 4% to 8.5%.
Story by Brian Turner
