Municipal Accommodation Tax

The City of Burlington is considering implementing a Municipal Accommodation Tax (MAT) on local accommodations to help increase visitation and their financial impact.

The report CM-23-19 was approved at the Council meeting on November 18 regarding establishment of this tax in Burlington. 

Recommendation:

Table report CM-23-19 regarding establishment of a Municipal Accommodation Tax in Burlington and report back to Committee in early 2020 to provide recommendations related to implementation and the associated by-law.

Options 2 & 3 outlined in the appendix of this report will be investigated and a more detailed report will be presented in early 2020.

If you have questions about this tax please refer to the information sheet or contact Pam Belgrade at 905 634.5594 #7241.

Extensive stakeholder consultation will take place to determine how these additional funds are best utilized to increase visitation and economic impact of tourism to the city.

Background 

  • In 2017 the Province enacted legislation to permit single-tier and lower-tier municipalities the ability to implement a Municipal Accommodation Tax (MAT) on transient accommodations (less than 30 days).
  • The purpose of the MAT is to enable growth in the tourism sector and increase tourism’s economic impact.
  • The MAT could generate an estimated $750,000$1 million of annual revenues in Burlington.
  • A MAT is currently being collected by numerous municipalities across the province including nearby cities of Toronto, Mississauga, Oakville, Vaughan and Niagara.  (Hamilton is collecting a voluntary DMF of 3%)
  • An industry consensus MAT rate of 4% has been established so visitors have consistent experience will travelling throughout the province.
  • The legislation indicates that a minimum of 50% of the revenue from the MAT must be shared with an eligible tourism entity. The remaining 50% can be utilized by the Municipality and most cities are using it for Tourism Destination Development.
  • Tourism Burlington (TB), the Destination Marketing Organization for Burlington has requested that the City of Burlington implement a 4% MAT and remit at least 50% of the revenue, net of a collection and administration fee, to Tourism Burlington and that the City portion of MAT be used for Destination Development.
  • A Destination Marketing Fee was voluntarily collected by the Burlington Hotel Association (BHA) from 2007-10 and Burlington Council recognized this funding as incremental revenue and retained Tourism’s core city funding (currently $400,000).
  • TB worked in conjunction with the BHA, Marketing Committee and Board to develop a comprehensive DMF marketing plan which included campaigns, sales missions and incentives.  This was seen as a very successful partnership and a similar consultative approach would be developed with MAT.
  • Local stakeholders including hotels have been consulted about the possibility of the MAT. The accommodations indicated they want to be involved in the direction of these funds. Many stated that Burlington would be at a competitive disadvantage without MAT as other adjacent DMO’s are collecting MAT enabling these cities to expand their marketing, incentives and product development.
  • The local culture boards (Burlington Public Library, Art Gallery of Burlington, Burlington Performing Arts Centre, Museums, and Tourism) and Team Burlington (Burlington Economic Development Corporation, Business Improvement Areas, City, and Chamber of Commerce) are key tourism stakeholders who have limited marketing funds to attract new customers and visitors.  A MAT could assist in collaborative marketing and product development such as creating new experiences and events, bulk media buys, package and itinerary development, updating of digital assets, event calendar integration, joint promotion at shows and events and way finding signage, to name a few suggestions.

It is estimated that 1.4m visitors come to Burlington annually spending $101M.  25% of visitors stay overnight most with friends and family. There are 1,889 tourism businesses and 24,491 tourism jobs in Burlington.