Mississauga council approves hotel tax to bolster local tourism efforts
A four per cent hotel tax is expected to generate $9.8 million for the city

Mississauga.com
Nov. 2, 2017
Rachael Williams

Visitors staying in Mississauga’s hotels will soon be faced with an extra four per cent tax added to their bills.

Mississauga councillors have approved the implementation of a hotel tax to generate revenue for the cash-starved municipality. The four per cent tax is expected to generate $9.8 million, 50 per cent of which will be dedicated to promoting tourism in the city.

The provincial government announced in May that it would be giving municipalities the power to implement a hotel tax to help offset soaring city budgets. With staff still awaiting specific regulations from Queen's Park, the expectation is that the other 50 per cent will be allocated to the city’s general revenues.

“ … Those funds will be used to support tourism through the city through our arts and culture, through our sports, promoting our festivals and providing greater opportunities for our residents and organizations,” said Coun. Pat Saito, chair of the city’s tourism board.

Mississauga’s tourism efforts are driven through Tourism Toronto, the official destination marketing organization for the Greater Toronto Area. Tourism Toronto is partially funded through a voluntary destination marketing fee (DMF) program, which is levied by hotels to fund tourism initiatives.

With only a handful of hotels in Mississauga charging a DMF, the city could only claim a small portion of the revenue collected.

The hotel tax would ensure the city has a dedicated revenue stream to promote the city’s amenities, including Square One Shopping Centre, the Hershey Centre, Living Arts Centre and the waterfront.

“I think we should keep in mind it doesn’t just go into promotion, it goes into building things that people are going to want to come and see,” said Coun. Carolyn Parrish.  This could include an Olympic-sized swimming pool, cricket pitches, sport stadiums, a distillery district or unique signage.

The Greater Toronto Hotel Association (GTHA) submitted a letter to the city requesting the four per cent be negotiable to ensure hotels aren’t hit hard by the implementation of the tax.

Arguing the tax could “seriously reduce the competitiveness of Ontario’s tourism sector,” GTHA president and CEO Terry Mundell requested the city consider a lower number.

But with the cities of Toronto and Ottawa looking at four per cent, Saito said Mississauga should be on par with other municipalities in the province.

Staff is also investigating how this tax will be applied to short-term accommodation booking sites such as Airbnb.

The proposed implementation date for the hotel tax is slated for July 1, 2018.