Mississauga accommodation by-law - tourism unfettered

NRU
Feb. 21, 2018
By Maryam Mirza

With a new municipal accommodation tax coming into effect April 1, Mississauga is one step closer to establishing its own tourism agency, one that would allow greater access to funds than its current partnership in Tourism Toronto.

February 7th, Mississauga council approved a 4 per cent tax on short-term accommodation, which is estimated to generate nearly $10-million in revenue. This replaces the 3 per cent voluntary destination market fee, which had been put in place by the Greater Toronto Hotel Association. The revenues collected went to the regional tourism agency, Tourism Toronto, for costs related to promoting Mississauga.

Mississauga Board of Trade CEO David Wojcik told NRU that the Greater Toronto Hotel Association had unexpectedly terminated the destination marketing fee in Mississauga, where an estimated two or three hotels participated, just prior to council considering the transient accommodation by-law. Under the provincial regulation the city is required to remit 50 per cent of the new municipal accommodation tax revenue, which is estimated to be $4.9-million, to the regional tourism agency. If the destination marketing fee had still been in place, staff estimates the city would have been required to remit about $500,000.

"The regulation stated that if a municipality had a DMF in place, prior to the by-law being enacted, then whatever was being collected under the DMF would continue to go to the regional tourism office," said Wojcik.

The Mississauga municipal accommodation tax applies to accommodation provided for a continuous period of 30 days or less in a motel, hotel, lodge, inn, bed and breakfast, and dwelling units, as well as online private short-term accommodation platforms such as Airbnb and HomeAway.

"We wanted [the municipal accommodation tax] to be made compulsory," Mississauga Tourism Advisory Board chair and Ward 9 councillor Pat Saito told NRU. "When we heard the province was considering the tax, I spoke with … the finance minister and told him it was a great idea and it would give us the flexibility and we would be able to market our city for a greater level of tourism than we are doing today."

The city's portion of the revenue is unrestricted, and Saito said it could be used to fund the initiatives outlined in the city's Tourism Master Plan and further the city's goal to become a dynamic tourist destination.

Wojcik says its time Mississauga has its own tourism agency. This way the city will have more autonomy over how the revenue generated by the accommodation tax will be used.

"Now we are in a situation where [we need to decide] who is best suited to get the money," said Wojcik. "We are an advocate for having a dedicated tourism bureau in the City of Mississauga that's dedicated to the City of Mississauga, and that tourism should be funded by this money that is coming from this hotel tax."

Saito agrees with Wojcik that now is the time to consider establishing a discrete tourism organization for Mississauga. Meanwhile, Mississauga plans to withhold revenue sharing until an agreement has been established with Tourism Toronto concerning how Mississauga's municipal accommodation tax revenue is to be used.

"We have said to council that we want to move tourism out of the department and make it a stand-alone business," Saito told NRU. "And now we have funding to do that. Until then, we are going to be very specific [with Tourism Toronto] about what we want the money spent on," said Saito.

Staff anticipate reporting to council in March on the use of the city's share of the 2018 municipal accommodation tax revenue, and a funding agreement with Tourism Toronto. Also, a tourism manager is being recruited to coordinate the city's relationship with Tourism Toronto and lead the Tourism Master Plan implementation. Staff expect to report to council by the end of the year on options for creating a Mississauga tourism entity.