Town council to explore possible new Municipal Accommodation Tax

Amherstburg Municipal Building

Could a Municipal Accommodation Tax be coming to Amherstburg?

Town council voted Monday night to have a report brought back by no later than Aug. 31 on the subject, following a presentation from Tourism Windsor-Essex Pelee Island (TWEPI). There would also be an open house scheduled so businesses that would be impacted, such as bed-and-breakfasts (B&Bs) and hotels could provide feedback.

According to a the presentation from TWEPI CEO Gordon Orr, the province enacted the Transient Accommodation Tax in 2017 which allows municipalities to implement a MAT if they choose to. The purpose of a MAT is to support local tourism growth and development while providing municipalities another source of revenue. It would also amplify existing tourism investments through marketing and product development.

Should the town partner with TWEPI, revenue collected would be a 50/50 split between the two bodies with the money having to be spent on tourism expenses and development. Orr said implementing a MAT would not impact what is received through the county.

“A MAT is new revenue,” he said. “It is not a new cost to your residents.”

Orr added “this is the right time to look at it.”

The tax would be added onto bills of those who stay in accommodations like hotels or B&Bs. It is already being collected in Windsor, who would manage it should a county municipality opt in and team with TWEPI. Orr said there were 113 accommodation listings in Amherstburg as of Dec. 31, 2024 and those  had a 49 per cent occupancy rate. 

That creates total estimated revenue of $3.2 million and with a MAT of four percent, that would translate into $128,000 or $64,000 each for TWEPI and the town.

In a report to town council, Deputy CAO/director of development services Melissa Osborne stated collecting from short-term rentals (STRs) “can be challenging and usually requires active engagement and monitoring to ensure they are charging, collecting and remitting this tax to the municipality. Large municipalities such as Windsor, have several hotels which are more manageable in ensuring MAT is properly charged, collected and remitted to the municipality. STRs are challenging as they are more difficult to track and manage. Windsor has managed to mitigate some of this challenge by having agreements with corporations such as Airbnb whereby Airbnb forces the MAT to be added on to any accommodation listing it has within Windsor’s postal codes. The fee is charged by Airbnb and collected by Airbnb. This removes the STR property owner from the process reducing risk of MAT not being charged and/or not being properly remitted to the municipality.”

Collecting from STRs could be challenging, particularly if they are not registered with the town. There are also possible challenges in terms of getting agreements with booking agencies. Osborne’s report cautioned council that potential revenue projections are not likely to be realized without those agreements.

Partnering with TWEPI would remove part of the challenges, she wrote, in that they have agreements with agencies and the town would work with the city on the collection of a MAT. 

Osborne told council administration recommends looking into a MAT tax, but noted the obstacles and the resources could be needed to help implement and manage it.

Orr indicated the county levy is about $850,000 for tourism and that could be covered by a MAT and not the tax base.

Councillor Molly Allaire admitted she was angry when she had to pay a hotel tax when she was recently in Toronto. She questioned what the tax was for and the hotel said they had to charge it.

Orr stated the revenue generated helps bring in more visitors, boosts hotel rentals and drives more people to a region via more tourism promotion.

Councillor Diane Pouget wanted to know if hotels and B&Bs would have to declare the tax cost up front to customers. 

Orr said they would and they would have to advertise that as well. Pouget also wanted to ensure there was public debate on the subject, agreeing to have an open house.

Councillor Don McArthur called it a “fascinating proposal” but wondered if a “two-tier” system would inadvertantly be set up if some STRs were to charge it and others that are not tracked by the municipality were not. Deputy Mayor Chris Gibb also outlined concerns with STRs following the town’s already existing STR bylaw. Orr indicated they would have to work on ways to identify all STRs and suggested the town’s 50 per cent could be put towards that if they choose.

McArthur believed the MAT program would work better if all municipalities were involved, wondering what would happen if there were different rates by municipality.

Adding “we are a tourist town,” McArthur was in favour of it.

“This will help fund existing tourism,” he said. “We’re not paying for it, the people visiting are paying for it.”Councillor Linden Crain also voiced enthusiasm for at least looking into it. 

“I’m excited to see what the revenue will do for Amherstburg and the region,” he said.

“It’s worth pursuing for sure,” said Councillor Peter Courtney. “To me, this is a regional thing. I’d get behind it if everyone else does.”Courtney added he likes it being new revenue versus a tax on the residents.

“I think this is an exciting proposal,” said Mayor Michael Prue. 

Prue said if one or two municipalities succeed, everyone does. He noted he has travelled extensively in the past and it was not uncommon to pay a hotel tax wherever they were around the world.

“I don’t remember going to a hotel that didn’t have a hotel tax,” he said. “This is a universal thing. We’re late in the game.”

Town council to explore possible new Municipal Accommodation Tax

By Ron Giofu