4% hotel and motel tax starts July 1 in Waterloo region

Hotels and motels in Waterloo region will introduce a four per cent tax on stays starting July 1. The municipal accommodation tax (MAT) is forecast to raise $3.3M a year, the majority of it to fund to market tourism to the region.

Region's tax to help fund market tourism agency

Starting July 1, 2019 local hotels will implement the municipal accomodation tax (MAT); a tax that is forecast to raise $3.3M a year to market tourism to the region in Ontario and beyond. (Jeff Walters/CBC)

Staying in a hotel in Waterloo region will get a little more expensive with the introduction of a four per cent tax.

Starting July 1, 2019 local hotels will implement the municipal accommodation tax (MAT), a tax that is forecast to raise $3.3M a year to fund tourism marketing to the region in Ontario and beyond.

That's great news for Minto Schneider, the CEO of Waterloo Regional Tourism, who said the new money will give them a budget to be more competitive with other destinations to attract more than leisure tourism to the the area, to "bring people here for business purposes. To attend meetings conferences and events." 

"And also for sport tourism which is a huge draw in our region. Whether it's a small hockey tournament, or a national sledge-hockey tournament. It brings spectators athletes and potential visitors for another time," said Schneider. 

Marketing money for tourism

As the General Manager of Homewood Suites by Hilton in Cambridge, Vanessa Stevenson understands the impact sports tourism can have — especially after losing a marquee event.

Stevenson, chair of the Board of Directors for the Waterloo Region Marketing Corporation, said hoteliers are wondering what they'll do in April next year since the Ontario Volleyball Championship, held at  RIM park for a dozen years, won't be returning to the area.

"It's going to be in Toronto where a MAT tax was already in place and where rates were already higher," said Stevenson. "But they had the dollars to be able to sit down and talk to those decision makers and make that deal very attractive for them to move from here."

Breaking down the tax

Based on the average price of a room in Waterloo region, which is around $120.00, the MAT works out to about $5.00 per night. From that $5.00 collected, 50 per cent will head to the Waterloo Region Tourism Marketing corporation; lower tier municipalities will receive about 40 per cent; while the region takes ten per cent. 

The former Liberal provincial government opened the door to municipalities charging the tax through its Stronger, Healthier Ontario Act in 2017.

During discussions, Stevenson said there was concern business could be lost to other centres that don't charge the tax. But she said only a few municipalities in the province are not collecting the tax, and those areas are in the process of discussing implementation.

Tourism officials worked with the three cities and the townships to implement the tax seamlessly. 

Schneider said it was easier for some municipalities such as Toronto, Ottawa, Kingston and Sault Ste. Marie to implement the new tax because they had already been collecting a local destination marketing fee of three per cent.