April 25, 2018 5:33 pm

Tourism industry worried about changes to the ‘hotel tax’

Tourism Vancouver is concerned tax changes could hurt the city's tourism industry.

Tourism Vancouver

Tourism Vancouver is worried that changes being made by the provincial government will take away valuable financial support to the tourism industry.

CEO Ty Speer has sent a letter to Finance Minister Carole James detailing concerns that a change to the Provincial Sales Tax Act will allow money previously allocated for tourism marketing, tourism programs and tourism projects to now also be available for affordable housing funding.

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“As you are aware, since its inception, the purpose of the [Municipal and Regional District Tax (MRDT)] program, formerly known as the hotel tax, has been to assist designated recipients to invest in tourism marketing, tourism programs, and tourism projects to help grow B.C. tourism revenues, visitation and jobs,” reads Speer’s letter to James.

“Any allocation of MRDT funds to other initiatives will be destructive to a vital industry in terms of job losses, revenues and overall visitation.”

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According to Tourism Vancouver numbers, the Metro Vancouver tourism industry supports over 70,000 full time jobs and generated $4.8 billion in 2017 in direct visitor spending.

The region also broke a new tourism record last year with 10.3 million visitors. Tourism Vancouver numbers show that tourist spending led to $2.4 billion in taxes for the province.

“Tourism is a competitive industry. Maintaining and growing Vancouver and B.C.’s share of the global tourism market requires strategic investment by Tourism Vancouver and our partner destination marketing organizations across the province,” wrote Speer.

“I would also add that tourism, like no other industry, does a superior job of taking the B.C. story to the world. And the more connected the world becomes, the more critical that we sell our amazing province well. Now is not the time to put this wonderful opportunity at risk.”

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The province included the potential change as part of its review in the PST. The province has not yet decided what tax changes are going to be made.

“This was something that was a footnote in the last provincial budget and it’s not something that has been put into regulations and is something we hope to avoid,” said Tourism Industry Association of BC CEO Walt Judas.

“We want to maintain what is presently in place, which is a successful way to fund tourism marketing in the province.”

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Finance Minister Carole James says changes to the MRDT would be up to the municipalities.

This means that each city government could choose if they want the money to be used for affordable housing or for the tourism industry. But James says there are some situations where it would benefit both.

“It is up to the municipalities, they have the ability to use some of the MRDT money to address affordability,” said James.

“I will give you an example. Tofino, for example, is a community that has really had pressures around housing the tourism industry. There are not places for people to live that work in the tourism industry, so they may want to utilize that.”

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