Montreal hotel group supports higher room tax to save F1 race

Montreal's hotel association has agreed to a one per cent tax hike on rooms in an effort to save the city's Grand Prix automobile race.

Montreal's hotel association has agreed to a one per cent tax hike on rooms in an effort to save the city's Formula One Grand Prix automobile race. 

The association is prepared to support an increase in the room tax to four per cent to raise money that could be used to subsidize the city's popular F1 race.

The proposal will be presented to F1 boss Bernie Ecclestone before Nov. 20, Montreal newspaper La Presse reported on Wednesday.

The tax hike could generate up to $5 million a year, according to the hotel association. That money would be handed over to Grand Prix Canada, in addition to public subsidies already promised by the Quebec and federal governments, which pledged $2.5 million apiece to save the race.

The International Automobile Federation (FIA) announced in October that the Canadian Grand Prix in Montreal would be removed from the 2009 F1 season.

The race was dropped amid claims that the organizers had defaulted on payments to Ecclestone over the past three years. Montreal authorities disputed those claims.

Mayor Gérald Tremblay said losing the race would be a devastating blow to the city's hotel, restaurant and bar industry.