Huntsville’s accommodation tax kicks in this Monday, April 1st

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The cost of staying in a Huntsville hotel will increase by four per cent starting April 1, 2019, when a new accommodation tax is implemented.

The three-year pilot project is set to charge the tax on short-term accommodations in the municipality. Accommodation providers such as hotels, motels, inns and bed and breakfast establishments will be required to charge the fee and remit it monthly to the Ontario Restaurant, Hotel and Motel Association, which will then distribute the funds—30 per cent of those funds will go directly to the municipality while the other 70 per cent will go to a non-share capital corporation which will act as the Town’s designated “Tourism Entity,” according to a staff report.

The Board of Directors for the tourism entity will have four representatives from the Huntsville Hotel and Motel Association (HHMA), one representative from the Downtown Huntsville Business Improvement Area (BIA), one representative from the Huntsville/Lake of Bays Chamber of Commerce, and one representative from the Town of Huntsville. To date, its members are:

  • Jesse Hamilton – Deerhurst Resort (HHMA)
  • Scott Doughty – Hidden Valley Resort (HHMA)
  • Matthew Phillips – Holiday Inn Express (HHMA)
  • Kaushal Gandhi – Rainbow Inn (HHMA)
  • Jeff Suddaby – 3 Guys and a Stove (Chamber)
  • Christine Kropp – Whimsical Bakery (BIA)
  • Scott Aitchison, Nancy Alcock as alternate (Town)

But some smaller resorts have expressed concerns about the fee, stating that it would put them at an unfair disadvantage compared to similar resorts in other Muskoka municipalities that don’t have to contend with the added charge.

“In view of this, until such time that the majority of ‘American Plan’ and ‘Housekeeping Resorts’ in other Muskoka Area Municipalities are subject to this tax, Cedar Grove Lodge and Clyffe House Resort should remain exempt from the provisions of the by-law,” noted the Town’s Economic Development Coordinator, Scott Ovell, in a report last September, which was endorsed by council. The two resorts, at least for now, will be exempt from having to collect the tax from their patrons when April 1, 2019 rolls around. Others, like Airbnb and other businesses perceived as benefitting from Huntsville tourism, may be added later.

The Board of the tourism entity is expected to begin meeting the first week of April and meet at least once a month for the first six months while it addresses things like its corporate bylaws, governance documents, its service agreement with the Town and things like its Tourism Master Plan, according to Ovell’s March 25 report to council.

The sum of $750,000 has been bandied about as the amount that could be generated from the tax for all things related to supporting economic development in Huntsville by attracting and supporting more tourism to the area.

In terms of the municipal portion of the funds, it could be used to enhance existing infrastructure such as a hockey arena in order to host tourism-related events, said Huntsville Mayor Scott Aitchison.

“We have an arena for the citizens of this community, but it also serves the purpose of making it possible for us to do tourism-related things,” said Aitchison, who used hockey tournaments as an example. “You work out what sort of percentage of the facility is related to tourism and if there are specific projects that you want to do to the place because you want to host a tourism-related event, you can use a portion of the funds for that kind of thing.”

He said the tax would benefit Huntsville taxpayers.

We’re effectively moving some of the tax burden off the property taxpayer and onto this sort of consumption-based system, and I think that’s actually very good tax policy. You know the people that are working two or three part-time jobs, serving tables at Deerhurst trying to pay their property tax shouldn’t be asked to pay more property tax so they can get more people to serve. There’s a better way of doing that than taxing people struggling already to pay their property tax.

As for smaller businesses concerned that an additional fee would impact them adversely, Aitchison said, “A rising tide lifts all boats. The fact of the matter is if Huntsville is busier then they’re going to be busier too. If Huntsville is busier and some hotel is not busier as well, well then they probably need to look at what they’re doing, not what the Town is doing.”

In terms of Huntsville accommodation providers having to compete with other providers in Muskoka who do not have the tax, Aitchison argued that Huntsville will have more money to market itself.

“Although we’re charging it, we’re going to be generating probably upwards of a million dollars and that money will be invested in marketing this community and creating new events that people are going to come to. There may be some people that choose not to come here because we do it, but I use the example of places like Niagara Falls which has done it for years… I’ve heard people say well Niagara Falls I don’t go there, and I say well that’s fine but you know who does go there? Millions of people because they market the heck out of the place,” said Aitchison.

Do you have questions or comments about this tax? You can pose them to municipal staff on the Town’s new community engagement site at myhuntsville.ca/MAT.

Related story: Municipal Accommodation Tax ‘greatest economic development tool Huntsville has seen in decades’

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7 Comments

  1. Henk Rietveld on

    It’s too bad that this new tax happens to coincide with the imposition of the new carbon tax of five percent, or so on fuel. Nobody’s fault, just really unfortunate timing. Whether we agree or not with the carbon tax, it will be seen as yet another burden on the traveling public who might want to stay in Huntsville…just sayin…

  2. This is a game changer for Huntsville. Puts us in league with the big boys. We’ve always been proud to be the biggest tourist destination in Muskoka. With this new money we can promote far and wide and do all the extras that we could never afford before. Congratulations on making this happen.

    • Patrick Flanagan on

      Yes, this tax is good. Making Huntsville destinations less affordable will be good for businesses and will not drive away customers.

      The carbon tax is bad. Trying to save the environment will be bad for businesses and drive away customers.

      Perfectly logical.

  3. With Porter Airlines flying people to Gravenhurst from a radius of about 500 km (including the northern states); the extra monies for aggressive marketing of Huntsville will be well-spent. And with our 72-cent dollar, a 4% surtax would present no barrier at all to American visitors. Additionally, the convenience and comfort factor should certainly attract tourists from Toronto.
    .
    I understand the expenditures which could ideally come from the 30%, e.g. the new curling rink, the baseball diamonds, etc. To what uses, however, will the Tourism entity be put? Also, what are the criteria which define a representative from the Town of Huntsville? A layperson 18 years or older? A property owner 18 years or older? Or an employee/politician representing the Town? Personally, if the criteria allow it [and with no disrespect to the existing representative(s)], I think that our CAO or the Director of Planning may have been more appropriate choices; as their decisions would outlast the vagaries of the voters.

  4. Charles Wilson on

    The ability to collect tax on goods and services is set out under s.92(2) of the Act setting out the constitution of Canada. The Federal and Provincial governments both have the ability to levy direct tax on hotel rooms. The total is 13 per cent of the cost of the room.

    Toronto has been charging a 4 per cent “tax” on hotel rooms which looks more like a destination fee. Since its introduction and the increase on hotel room prices in the city AirBnB has taken off. This may be purely coincidental. Or it may not.

    The general public knows a little about Muskoka and rather less about Huntsville, Ontario. Shouldn’t the logical marketing block should be Muskoka, a brand already established in the general public’s mind not Huntsville?

    “The art of taxation consists in so plucking the goose as to procure the largest quantity of feathers with the least possible amount of hissing”. So said Jean Colbert, the man who virtually created the French Nation solely for the purposes of allowing his King, Louis XIV to build his lavish Palace of Versailles, a palace which created a system of centralized government which eventually led to revolution and his successor’s beheading.

    So, if I want to stay at a Huntsville hotel I either have to discuss the constitutional legality of this direct “tax” with the clerk or pay it or stay somewhere else in Muskoka. Not sure why I wouldn’t choose option C.

    To put it very simply if I am trying to find a hotel room at the best price, why would I pay a “tax” imposed by the city to promote more people to come and stay at the hotel so the price would be higher next time I came? Seems I am being asked to act against my own best interest? ”

    Hiss-Tory (sorry, bad double pun but irresistible) is something the Mayor of Toronto didn’t read before he started this “pluck the hapless tourist” campaign and, as Jorge Agustín Nicolás Ruiz de Santayana y Borrás said if you don’t read it you get to repeat it.

  5. Kathleen Gilchrist on

    All owners of rentals in the Town of Huntsville should be included in the 4% tax. There are places in Hidden Valley that are collecting easily over two to four hundred dollars a night. Most of the owners don’t even live here, so they are not trying to help pay their own taxes on the home they live in. One question I have is why is Cedar Grove exempt.

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