Tax certainty

Council sets the Municipal Accommodation Tax rate until the end of its term

It began as idle musing during budget deliberations: How might Council go about increasing the Municipal Accommodation Tax (MAT)? The tax on accommodation providers in Prince Edward County serves as the means to tax the tourism sector. It was implemented just two years ago. Some council members had heard that Toronto had hiked its MAT to six per cent from four per cent, and they wanted to know if the County could get in on that action.

But when the staff report came to Council last week, recommending against an increase to this tax, Council decided to extend some certainty to the businesses administering and collecting this tax. Council agreed to maintain the MAT at four per cent for the remainder of this term of council.

The County received more than $1.3 million in MAT last year. The report did not disclose how much the MAT generated in 2021.

A room full of local accommodation providers attended the council committee meeting to voice their opposition to any increase.

David Walcott is a member of StayPEC, an accommodation sector association. He also owns and operates Picton Harbour Inn. Walcott acknowledged that while the staff report was requested for information, he wanted council to understand the implications and disruption an increase would have.

“The bottom line is that Prince Edward County is seeing a reduction in tourism,” said Walcott. “This can clearly be seen in the Q3 and Q4 MAT stats of 2022 and anecdotally by talking to any business owner around.”

Walcott said the County is earning a negative reputation among potential visitors. He says three perceptions are forming about this place.

“Prince Edward County is expensive,” cited Walcott. “Prince Edward County is too busy and you can’t get into the beach. And to travel to Prince Edward County, you must book six months in advance. Do we really want to put another barrier in place?” he asked.

Ultimately, Walcott believes that if the MAT is increased, it will result in an overall loss in the MAT revenue.

“It’s a competitive market for destinations, and a lot of cheaper destinations exist,” said Walcott.

Ryan Kreutzwiser, a principal of Lake on the Mountain Resort, suggested the County should be encouraging overnight visitors rather than daytrippers.

“When does the tax become too much, and when do we scare people away?” he asked.

Kreutzwiser reported that a day-tripper spends roughly $70 in the County, while multi-day visitors spend at least $400 to $500.

“High-value tourism is those tourists that come here not as day-trippers, but stay overnight. This tax is on those people that stay here. We want people that spend more money than day-trippers.”

A motion was put forward by Councillor Phil Prinzen to freeze the MAT at four per cent for the term of council. It passed in a recorded vote, with four dissenters