Not your money

Taxation without representation is tyranny. The British learned this the hard way in the American colonies. So did the French royalty, eventually queuing up before the guillotine to pay for their arrogance. Indeed, many of the best history altering revolutions trace their origins to a ruling class that believed it had a divine right to abscond with the productivity of its workers without regard to their opinion.

With this bit of history lurking in the background, let us consider Shire Hall’s newest foray into destination management governance. Since February, Shire Hall has collected four per cent of the revenue generated by accommodation providers in Prince Edward County. (Not the tourism sector—not wineries, breweries, cideries, restaurants, beaches, or other attractions— only accommodation providers.) The municipal accommodation tax (MAT) was enabled by the province in 2017 expressly to support tourism and visitor experiences.

Queen’s Park knew that giving new taxing powers to municipalities could become a problem—so they spelled out the rules. Simply and clearly. The Act states that after reasonable costs for administering and collecting the MAT have been deducted, half the revenue collected must be used for the “exclusive purpose of promoting tourism.” Not tourism marketing and management. Promoting responsible tourism.

Some on County council have salivated over this new revenue stream for a long time. All the things they failed to do with $40 million in property taxes they might now accomplish with MAT revenue. Some campaigned on the promise they would grab it all to spend it as they saw fit.

With the proposal of a Destination Marketing and Management Organization (DMMO) last week, Shire Hall is attempting to do just that. With the insertion of the word “management,” all kinds of nontourism activities may now be funded through this new tax. Do they dream that MAT revenue is used to build out a vast army of mall cops roaming the County byways harassing dog walkers and weekend visitors on private property? As a County accommodation provider and funder of the MAT, I would like to have a vote on that.

But it won’t happen under the DMMO proposed last week. It can’t. The proposal prescribes the creation of a municipal corporation governed by representation from the tourism industry, the municipality and residents. Accommodation providers will hold a minority of a minority of the representation— if any at all—on a municipal corporation board established to govern the revenue dedicated to promoting tourism.

We will get a DMMO with little or no representation from the folks who actually pay the tax. You can see the problem. Rather like the way County waterworks is governed now.

If only there were an existing Destination Marketing Organization the County could work with.

Oh, but there is. StayPEC was formed several years ago with the express purpose of working with the municipality on the smooth transition to the MAT. StayPEC is governed by local operators—each respected and responsible. Each of them has invested in this community and understands the pressures and the opportunities of tourism in the County better than anyone.

Shire Hall rejected StayPEC because 1. it worried it would lose control. 2. StayPEC lacks the internal infrastructure to do the work of marketing the County and, 3. as the sole funder, it would assume the liability without the control. (Seems a repeat of point one, but let’s not quibble.)

Taking a closer look, Shire Hall already gets half the revenue. By law. It controls its piece. Entirely. To use however it sees fit. The provincial legislation states explicitly, however, that the municipality collecting this tax must share this revenue with a destination marketing organization where one already exists. Like StayPEC.

That StayPEC lacks the necessary infrastructure is ludicrous—it ignores the fact this organization has been up and running—collecting revenue and investing in tourism promotion for several years now. Any new municipal corporation will have to start from scratch to build infrastructure, establish workable governance and figure out who it serves. (A likely recipe for many iterations of dysfunction.)

That brings us to point three: “As the sole funder.” This would be funny were it not so revealing. All the MAT revenue comes from accommodation providers. They pay this tax exclusively. The royal court of Shire Hall doesn’t fund anything. It is not their money.

Shire Hall is encouraged to go back to the table and renew the conversation with StayPEC. These folks live here, work here, invest here. They aren’t appointed. They aren’t elected by 43 per cent or fewer of the population.

They have voted with their capital and livelihood. They are keenly aware of the challenges that come with the peak season. They are best placed to manage the challenges.

rick@wellingtontimes.ca

I own and operate an accommodation business in Prince Edward County. I am not, nor have I ever been, affiliated with StayPEC.