Proposed Ontario hotel tax has politicians, industry at odds

Jun 13, 2016

There is a new push underway in Ontario for a hotel tax, the latest call coming from the mayor of Niagara Falls. Any such tax would need the approval of the provincial government. Toronto's mayor has already had talks with the province and a hotel tax could be just months away.

Toronto mayor John Tory has confirmed that he is considering a hotel tax as a source of revenue. He and other leaders of large urban centers in the province say it's method of paying for tourism initiatives that would take some of the burden from taxpayers.

Facilities like the Niagara Falls Marriott Fallsview Hotel & Spa would be subject to a proposed hotel tax in Ontario.

New York City has a hotel tax of nearly 6 percent, Winnipeg has a 5 percent hotel tax and Montreal 3.5 percent.

Tory says he has already met with Ontario premier Kathleen Wynne, since he can't impose a tax without the province's permission. It is not yet clear what her position is, but some sources say she is likely on board.

Ontario's hotel industry, however, is anything but.
"We're an expensive destination and you also have to remember we're an expensive destination for the hotel community to operate in. We pay the third highest property taxes in North America, just less than New York City and Boston. So it's those types of things when you pay somewhere between $2,500 and $11,000 per hotel room for property tax, it's a lot of money," said Terry Mundell, the CEO of the Greater Toronto Hotel Association.
It is estimated that a hotel tax could bring Toronto between $7 million and $21 million a year. The hotel tax will be on the table for debate at Toronto City Council later this year. If it passes and gets provincial approval, other tourist centers such as Ottawa and Niagara Falls are likely to quickly follow suit.