Napanee Council votes no municipal accommodation tax ‘at this time’

Greater Napanee Town Hall on Tuesday, Apr. 9, 2024. Photo by Michelle Dorey Forestell/Kingstonist.

“Not yet” was a repeated theme at the Tuesday, Apr. 9, 2024 regular meeting of the Council of the Town of Greater Napanee, as they voted not to entertain a municipal accommodation tax (MAT) at this time.

Council first voted not to go ahead “yet” with licensing short-term accommodations (STAs), and instead asked for more information from Town staff. Then Council received a report on the MAT and engaged in a lively discussion on that issue, before voting to say no to the MAT “at this time.”

The Municipal Accommodation Tax report, prepared by Treasurer Ellen Hamel and presented by Clerk Jessica Walters, summarized public consultation results from February 6 to March 26, 2024. Twenty-two people attended an in-person open house in March, representing motels, STAs, bed and breakfast operators, residents interested in the topic, and local business owners. In general, most of the feedback received about the proposed four per cent MAT was negative, according to the report. 

A specific concern cited in the report was that while it would be the accommodation visitors, not the operators, who would pay the fee, the operators would bear an increased cost for the credit card and other processing fees attached to that four per cent. For example, on a $100 accommodation rate with a two per cent processing fee, providers would see an increased cost of $0.09 with the addition of a MAT.

“While small for a single transaction, the cost could be larger depending on the sales volume,” the report noted.

The staff report also noted that many people are already facing an affordability crisis and that “the imposition of another tax has very poor optics at this time.” Instead, staff recommended that the Town invest in developing tourist attractions before investing in marketing.

Feedback in favour of a MAT included the potential revenue of $81,000 plus, which would allow the Town to provide additional services that would otherwise require an equivalent tax rate increase of 0.6 per cent. According to the report, “the Town should be doing more to promote the businesses and tourism sector and to draw people in, and implementing a MAT could help in that goal. More municipalities are using this tool yearly to help bring in new revenue streams to supplement property taxes, and we could be one of them.” 

Councillor Angela Hicks, who has been a supporter of the MAT since Council first discussed it, asked for a recorded vote on the matter. Screen captured image.

“If Council wishes to continue investigating the use of a MAT, a clearly defined mandate should be established which engages the tourism and accommodation operators as the primary stakeholders, in addition to other community stakeholders,” the report noted. Some comments were received that more study and consultation should be done before making final decisions and that there needs to be full transparency and accountability about how the funds raised will be used,

Councillor David Pinnell began the discussion.

“We seem to be getting a lot of taxes lately… I don’t think that we need to be taxing people to come and visit our town. And [I know] I’m going to hear an argument about this from [other councillors]  that our neighbours are doing it. I’m not concerned about the neighbours. I’m concerned about Napanee,” he said before indicating his interest in creating a tourism committee that might be able to discuss and investigate the notion in more depth.

Councillor Bill Martin agreed, adding that he would like to see another open house on the matter.

“We didn’t have any of the hotel owners weigh in at the [March 2024] open house. That was one thing that was missing,” Martin said.

Councillor Angela Hicks, who has been a MAT supporter from the outset, seemed annoyed, pointing out that “the hotel chains didn’t show up at that meeting because [MAT is] already built into their software.” She had already noted at an earlier meeting that the major hotel chains are accustomed to having the MAT added to their bills in other municipalities.

“I am in favour of it because I think even if [the revenue from MAT] turned out to be $40,000 a year,” Hicks noted, “it’s $40,000 that we don’t currently have that could be spent on planning an event or fixing up the signage on the 401, which I agree is deplorable coming into Napanee. Actually, there’s a lack of signage everywhere in this municipality — but that’s a subject for another day.”

Councillor Bob Norrie said he would not support a MAT, saying, “I like the idea, but it’s just that in these times … Canadian citizens are being taxed to death. And unfortunately, they call it a tax; if they called it a fee or something, it may be more plausible, but at this time, with all the taxes we’re being hit with… I just can’t say yes to any more tax. I’m sorry. As much as I’d like the money used, the poor people are just getting” — he paused — “I won’t say the other word. Sorry.”

Councillor Mike Schenk then said, “Just so I understand this correctly: everybody on Council just passed a motion that we go ahead and investigate the STA [licensing]… The STAs are municipal owners; they pay taxes on their property — more, probably, per square footage than somebody as a corporate identity. So how would that be fair if I was a short-term accommodation, and you’re going to hammer me and you’re gonna make me [get a] license, but you’re not going to hit a corporate identity?” 

He went on, “So you have people who are just driving and staying for one night in a hotel [versus] somebody who’s going to be staying a whole week [at an STA] and spending their money as a tourist, staying for six nights.” 

Pinnell then made the motion “that Council receive for information the municipal accommodation tax report, and that Council direct that no consideration be given for an accommodation tax at this time.” Martin seconded the motion.

Hicks then asked for a recorded vote. Pinnell, Norrie, Martin, and Deputy Mayor Brian Calver voted in favour, while Hicks, Schenk, and Mayor Terry Richardson voted against. The motion passed, and the MAT went back on the shelf for discussion at a future date.

Meetings of the Council of the Town of Greater Napanee can be viewed virtually (or watched afterward) on the Napanee Town Council YouTube channel or attended in person in Council Chambers at the Napanee Town Hall, located at 124 John Street. Further information about council meetings is available on the Town’s CivicWeb site.

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