Comment
To the MAT
The County’s economy seems a robust thing. A strong and increasingly diverse agricultural base. A vibrant visitor economy that draws folks from around the world. And a humming service and supply economy that supports both. (We would have a thriving new home building economy too, but for lingering systemic, regulatory and cultural impediments that make Prince Edward County less attractive to builders and developers than our surrounding regions. I’ve ventilated these concerns and the implications for schools, health care and such in previous columns, so won’t dwell on this today.) Our economy is marvelled and envied across this country.
But who is speaking for the County economy? Who is advocating for businesses, investors and entrepreneurs? The ag-innovators and value-added sector? Who is fighting for the job-creators in our community?
Traditional agriculture in the County has long-benefited from muscular advocacy from the Agricultural Advisory Committee, as well as influential groups including the Prince Edward County Federation of Agriculture. They have done impressive work to support the interests of these businesses and landowners and extract preferential treatment from the municipality.
No other economic sector in the County swings this much weight. Other business sectors will need to figure this out. Quickly.
The visitor economy, in particular, is under attack from many quarters. It needs a strong advocate. Now more than ever.
Tourism in Prince Edward County been central to its economic vitality for at least a century. Each summer in those early days, the rail line brought a horde of beachgoers and vacationers to this “tourist paradise”.
Yet tourism has tended to chafe those who don’t benefit directly. Some of the complaints are fair. Most aren’t. Most belie a poor understanding of how economies work and how easily they can slip away.
Some of the weakest, yet most persistent, attacks are expressed by some—though certainly not all-of those who have come to the County to retire. They have little interest in the local economy. Their earning days are done. These folks seek to crystallize the County as it was the day they fell in love with the place. They don’t want change. They want it to remain exactly as it was when they arrived. If possible, they would prefer we just blew up the bridges.
These folks see no value in the visitor economy. Worse, they resent that visitors and tourists clog up Main Street. Taking all the parking spots and filling up their favourite restaurants.
This would be fair game as long as it was confined to a few cranky letter writers and columnists. Yet this low-information prejudice is infecting Shire Hall. The populist, yet self-defeating, slogan “make tourists pay” is gaining traction. Thus, the need for better advocacy.
The County has a fully-functioning Community and Economic Development Commission (Full disclosure, I currently sit on this commission and serve as its chair.) Its mandate is to give a voice to businesses and community organizations and ensure these views inform policymaking at Shire Hall. It works well and has done some important work including driving the Developer’s Forum, which produced 34 recommendations to streamline new home building in the County.
Yet when it came to imposing a new tax upon a narrow set of County businesses, Shire Hall chose to bypass the CEDC. That is a problem. Here’s why.
On Thursday, council will introduce a new Municipal Accommodation Tax (MAT) at a special meeting—a four per cent surcharge on overnight stays in the County. (More disclosure, I, along with my wife, own and operate a small inn in Wellington.)
To be clear, there is nothing inherently wrong with a MAT in Prince Edward County. Both Belleville and Quinte West have adopted a MAT, as well as many other tourist destinations in Ontario. It will provide a useful new revenue stream that will offset some of the costs that municipalities incur from this economic sector, despite the extra administrative burden put on one select group of businesses.
Furthermore, the provincial legislation is clear. The revenue generated must be split evenly between the municipality and the tourism sector in order to promote tourism in the region.
This rankles some on council. Some are eager to confiscate the whole MAT revenue stream, arguing that the sector is already successful and needs no more marketing support.
This is wrong and short-sighted. No business or economy can afford to stand still. It must keep moving. Evolve. Adapt. And find new markets. Or else, it withers and dies. This remains an immutable law, even for economies as robust as this one.
The CEDC must seize the MAT introduction process. They must listen to businesses and entrepreneurs who will bear this administrative burden. They must hear testimony as to the competitive landscape and challenges. And the risks of standing still.
Shire Hall is only recently awakening to its financial challenges. It would be a profound mistake to believe this new revenue will alter its trajectory. A bigger mistake if it confiscates this revenue and then hobbles the engine generating it.
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