728 x 90

Hoteliers take issue with where new tax is going

  • In News
  • November 26, 2019
  • By

While they do not disagree with an accommodation tax, hoteliers in Dauphin have a different option on how the city should spend it.
A delegation, representing Dauphin Super 8, Canway Inn and Suites, the Highland Motel and the under-construction Best Western, met with city council at its regular meeting, Nov. 18.
Speaking for the group, Dean Cooley, a shareholder of Super 8, explained the group had an issue with the designation of the tax collected, solely to fund recreation.
“What I see is wrong with the proposal that you have in front of you, is that you’re trying to impose an extra tax on a small segment of the commercial people in town to benefit everyone,” he said.
“Recreation is to the benefit of everybody. Our facilities are to the benefit of everybody and for the infrastructure of those facilities, I don’t see why one industry has to pay, versus another.”
Hoteliers may support an accommodation tax, Cooley said, if it was focused on generating more tourism for the area.
“I think tourism is an area we lack in a little bit right now, quite honestly. We could do a better job, of course, if we had more money,” he said, adding hoteliers are in favour of a tax that would increase business, tourism and the way Dauphin is marketed for economic development.
The number one revenue generator for hotels in Dauphin, Cooley explained, is the commercial traveller staying from Sunday to Thursday.
The second largest revenue source is the construction industry, he said, with tourism coming in third.
“And honestly, recreation tourism is our smallest revenue source at a hotel. Having said that, it’s still a source and we’re happy about it. But, you know, it’s a source of revenue for restaurants and gas bars, sporting goods stores and potentially other businesses while those people are in town. And yet we only want to tax the one industry,” he said.
Additionally, hoteliers felt they should have been consulted regarding the proposed tax, Cooley said, because the group is recommending the city consider a set fee per room, per night instead of a percentage and asked that guidelines for the spending are set, to ensure the fees are not just absorbed into general operating costs.
“A hotel tax that acquires money for the reason of tourism to spend money on tourism, to attract events, whether they are recreational events or other to our community, is something that we would love to sit at the table and talk to you guys about. A tax that would stimulate the economy of our community, we would like to talk about that. But a tax to pay for capital cost expenditures, we don’t want that. That just seems unfair. It seems like the wrong way to raise revenue on things that the entire community would benefit from,” he said.
Scott Jocelyn, president of the Manitoba Hotels Association (MHA), offered some input into the proposed bylaw, noting once the accommodation taxes and the associated bylaws are in place and approved by the province, it is difficult to change or remove them.
“If I could make one point with you tonight, it is that it is essential to get them right when they are written, rather than facing the subsequent years of discord we have seen in other communities,” he said, adding accommodation taxes are one of the top issues for MHA members.
As a former board member of Dauphin Recreation Services, Cooley understands the difficult position the city is in, but, he suggested, facilities in the city are currently being undersold.
“I believe that we could host more events in our facilities. And I believe that, in particular, Credit Union Place, our swimming pool our curling club, are fantastic facilities. And yet we sell in a way where we compete with communities around us,” he said.
“We’re selling ice in a facility that offers so much more, but our rate doesn’t reflect that.”
For example, Cooley said, in the six years he has been involved with the Dauphin Kings hockey club, he is aware of just one rate increase, which was quite small.
“From the Kings’ side, I am thrilled, but I realize from your side, we can’t afford to do that. And there needs to be a rate increase on a regular basis,” he said, adding a fairly large rate increase may be in order now.
Cooley also pointed out the days of lowering mill rates and holding tax increases may have to come to an end, if the city is to appropriately deal with the rising costs of doing business and aging infrastructure.
The presentation from the delegation was accepted as information by city council.
Council gave second reading to the accommodation tax bylaw and, city manager Sharla Griffiths explained, councillors will review the comments received from the hoteliers before giving third reading.
She noted the bylaw must be reviewed and approved by the province before it can be applied and council anticipates it starting Apr. 1, 2020, instead of Jan. 1, 2020.
Council also gave first reading to a bylaw which authorizes the creation of a recreation and active living reserve fund.
The bylaw sets up the details of where the proceeds of the accommodation tax will be deposited, Griffiths said, along with other contributions to recreation and active living.
The bylaw can be passed and enacted before the accommodation tax bylaw is complete, she added, as it is not affected by those details.