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City, tourism officials discuss proposed hotel tax

Niagara Falls councillors and staff met this week with many of the major tourism stakeholders in the city to discuss a proposed hotel tax.

Mayor Jim Diodati said about 50 people attended the session, held Tuesday evening at the Scotiabank Convention Centre, which featured representatives from most of the major hotels, restaurants and attractions in the busy tourism district.

“It was an open mic. Anybody could talk as long as they wanted, as many times as they wanted,” he said.

“They all gave their input, their perspectives.”

Recent legislative changes by the provincial government have provided single-tier and lower-tier municipalities the option to implement a tax on transient accommodation. 

Should the City of Niagara Falls choose to implement a tax, it would have the flexibility to determine the design of the tax, including its rate, administration, collection and the scope of its application.

The province is encouraging municipalities to consider how a new tax on transient accommodation may bring greater transparency and consistency to existing practices through the sharing of funds with a tourism organization, application of a uniform rate, and clearer labelling of the charge on hotel bills. 

Diodati said surveys were handed out during the meeting for participants to fill out, ranking the importance of where revenue received from a hotel tax, if implemented, should be allocated.

The survey has also been posted to the city’s website, niagarafalls.ca, along with an email, where the public can provide feedback on the issue.

Diodati said one of the discussion points centred around destination marketing, and how other major destinations promote themselves.

He said industry partners voiced concerns about the provincially mandated minimum-wage hike to $15.

“They said it’s an unknown on how it’s going to impact us. If I had to say was there any one concern, that would have been the No. 1 concern. We don’t know what to expect yet, so they said we’ve got to keep an eye on that ball.”

Despite a recent city staff recommendation to implement a four per cent hotel tax starting April 1, Diodati said “we didn’t talk per cents” during this week’s meeting.

While most councillors were receptive to the idea of a hotel tax during a November council meeting, they decided to defer a decision until they consult with stakeholders.

“Overall, I’d say there was general acceptance, so long as the money was used for things that (tourism stakeholders) believe is important,” said Diodati.

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“They said, we don’t want you wasting the money on things that are not important or that don’t work. They are going to come back to us with their suggestions by ranking on the survey, so we can understand what’s important. Then we’re going to try to together come up with something that is a win-win. We don’t want to do anything that in any way hurts the industry, we only want to do something that supports them and what’s really key is their direct involvement.”

Diodati said he was “very impressed” by the turnout at this week’s meeting.

“They all came out. They weren’t shy. They were, overall, being very constructive with their comments on how something like this can actually work and actually benefit everybody.”

He said another meeting with stakeholders is expected in the next three or four weeks.

“Then we’re going to evaluate all the input we received and then we’re going to weigh some options before this comes back to council. We’ll have as many public meetings as we need to have to make sure that we have support from the industry with something that most of them can agree with most of the time.”

Niagara Falls Tourism chairman Wayne Thomson, who works in the industry, said the detailed information and clarity about the hotel tax the city provided stakeholders with this week should have been done prior to municipal staff making a recommendation on the issue.

Thomson, who is also a veteran councillor, declared a conflict when the issue went before council in November.

So did Coun. Vince Kerrio, who is a hotel and restaurant owner in the tourism district.

Thomson said a lot of the stakeholders attended Tuesday’s meeting to learn more about the whole situation and its potential impact.

“There was a great deal of discussion about why would you be doing this now when we just got an increase in the hourly rate and another one next year to $15 that is going to have a huge impact,” he said.

Thomson said some indicated the minimum-wage increase could eat up to 32 per cent of their revenue.

“There was a suggestion because of that we should just wait for a year and determine what we should do after we see the impact and the results of the provincial legislation with respect to the minimum wage.”

He said there were suggestions about a “minimal” hotel tax “just to make sure no taxpayer dollars” are spent on tourism-related groups or projects.

“There were other ones who were totally against the idea of a tax.”

Thomson said it was “disappointing” not to see a consensus.

“There was no strong feeling with respect to yes or nor or implementing an alternative.”

He said stakeholders are now “on their toes” to hopefully “come up with something they can agree on, whether pro or con or alternatives and I think that’s what the city is looking for.”

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