B&Bs were exempt from hotel tax

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Bed-and-breakfasts will be exempt from Brockville’s municipal lodging tax (MAT) following a decision by the city council on Tuesday.

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Councilors backed the move after approving an increase in the MAT – the tax paid by accommodation guests to support local tourism – which will come into effect next year.

They agreed to the bed-and-breakfast exemption – which will also come into effect next year – after staff reassured them it will have only a minimal impact on revenues.

Since the end of 2017, the provincial government has allowed municipalities to collect the MAT to support tourism. Brockville has been collecting a four percent MAT on most accommodation types since 2018, and $4 per night for B&Bs.

The Council’s general committee initially recommended increasing the MAT by two percent, for a total of six percent, effective Jan. 1, for all hotels, motels, lodges, inns and short-term rental properties of less than 30 days. a corresponding increase of $2 per night, for a total of $6 per night, will go into effect on the same date for bed and breakfast establishments.

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City staff calculates that eany percentage of the increase in the MAT The rate would generate an estimated $130,000 more if accommodation occupancy rates remain at current levels.

Count. Louise Severson, who supported the recommended committee-level raises last week, expressed reservations Tuesday when the issue came up for a final vote. She introduced an amendment limiting the MAT increase to one percent, keeping it at five percent.

Severson cited research she had done in the intervening week that showed many municipalities charge five percent or less as MAT.

“It seems to me that if we go from a four percent increase to a six percent increase, it’s too much for our little community and it could put us in a place where people might not stop here,” she added to.

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“A tax is a tax. We are just one taxpayer.”

Mayor Matt Wren countered that “it’s important to look at dollars, not percentages,” adding that in Brockville the average cost of a night’s stay in a hotel room is $140.

“So the difference between your amendment and what’s on the agenda tonight is $1.50,” Wren added.

Count. Katherine Hobbs said the MAT covers tourism-related costs for assets that need to be maintained.

“It hasn’t been a barrier for people to visit and stay at a property,” Hobbs said.

Instead, Hobbs proposed that the city exempt bed-and-breakfasts from the MAT.

While this issue was not addressed in Severson’s proposed amendments, it emerged that concerns raised by Sir Isaac Brock Bed and Breakfast owners David and Ida Duc, who were present on Tuesday, were among the feedback councilors received about the MAT increase.

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Count. Jeff Earle was the sole supporter of Severson’s amendment.

“There are always good reasons to raise taxes, but can they be justified?” Earle asked colleagues.

“I just can’t raise my hand for things that require a 50 percent tax increase.”

City officials need to find ways to do things more efficiently instead of trying to increase tax revenues, Earle added.

Count. Jane Fullarton, chair of the general committee, said the increase may be justified, joining Coun. Phil Deery’s suggestion that the MAT is more like a user fee because it puts pressure on the overall property tax base.

“We have to find some sources of income. Our local taxpayers can’t bear it all, and I think this is a way to spread those costs and distribute them to bona fide users, those who come here and stay overnight,” Fullarton said.

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“They are clearly using our infrastructure and I don’t mind if we charge them an extra night and a half to use that infrastructure that our residents pay for.”

Wren also mentioned the need to pay for the city’s tourism infrastructure.

“It seems to me that every time this municipality has an opportunity to generate a little more revenue to help us with our rapidly increasing expenses, there is resistance,” the mayor said.

“I don’t know how people in the community think the Corporation of the City of Brockville and this council can make inflation go away.”

Severson, realizing that her amendment was headed for defeat, eventually withdrew that amendment and then introduced a new call for an exemption for bed-and-breakfasts.

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Members were going to postpone the discussion pending more information, but the city manager came back with a figure: The city collected $2,200 in MAT revenue from bed-and-breakfasts last year.

“It definitely increases my comfort level,” said Coun. Cameron Wales unanimously supported the exemption before the council.

The Council subsequently approved the MAT increase, with Earle the only opponent.

After the meeting, David Duc welcomed the council’s compromise on the MAT. He said charging his customers the MAT creates an administrative burden for small business owners, and also makes it more difficult to increase base prices to keep up with costs.

“You can only charge so much for a room,” Duke said.

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