Hotel tax in the works
Yellowknife Hotel Association supports move
Walter Strong
Northern News Services
Published Wednesday, July 9, 2014
SOMBA K'E/YELLOWKNIFE
Yellowknife hoteliers may be facing a city room tax of up to three per cent, if city council follows through with the recommendations of Yellowknife's 2014 Tourism Development Strategy.
Yellowknife residents attend a tourism workshop at the Northern Frontier Visitors' Centre on April 22. Information collected during that workshop has formed a part of the city's comprehensive 2014 five-year tourism strategy, which includes a proposed hotel tax. Pictured here, Elijah Forget, front row left, reads a display while Mayor Mark Heyck speaks with Bill Braden. Meanwhile, Anthony Foliot, back row left, also reads a board outlining the city's plans while Chris Hewitt speaks with city communications officer Richard McIntosh. - NNSL file photo |
The report makes the case for funding a dedicated city of Yellowknife convention marketing bureau through the proposed tax. According to Nalini Naidoo, director of communications and economic development with the city of Yellowknife, the report estimates visitor spending on accommodations to have been $38 million in 2013. The report goes on to estimate visitors spent a total of $75 million that same year. A three per cent room tax on $38 million would generate $1.14 million for the city.
Although a formal funding distribution formula remains to be established, the revenue would be earmarked for marketing Yellowknife as a tourist and convention destination. The approximately $50,000 report was paid for with funding from the Canadian Northern Economic Development Agency.
The Yellowknife Hotel Association supports the proposal, which will be recommended for approval to city council on July 28.
"There's 100 per cent consensus that a levy is good," said Jenni Bruce, the association's past president.
Bruce said the association represents seven of Yellowknife's hotels and motels, including the Explorer Inn, Yellowknife's largest convention centre.
According to Bruce, the relatively small room tax, which wouldn't amount to much more than a few dollars per room, would have a large multiplier effect through effective spending on marketing.
"The money would finance a convention and visitors bureau," Bruce said. "If implemented and used properly, it's all about economic development. It (the convention marketing bureau) would bring millions of extra dollars into the economy."
But at least one hotelier in town opposes the proposed tax. Edward Tse, manager of the Discovery Inn, is concerned that no matter what local benefits might come with the proposed tax, the tax would remain unfair to NWT residents.
"We feel it (the proposed tax) is unfair to the general public," said Tse. "Yellowknife is the major traffic hub of the NWT, the Yukon and the Inuvik area. Funding for the convention (bureau) proposal unfairly favours local populations."
Tse is also concerned that the tax would increase the cost of living for out-of-territory workers travelling for mining or other resource-related work in the territory.
A 2011 attempt to implement a similar hotel room levy was supported by the city, the hotel association, and the NWT Association of Communities, but the proposal fell flat on finance minister Michael Miltenberger's desk. At the time, Miltenberger said that after meeting with a number of territory-wide organizations, the majority of formal submissions to his office were not in favour of the tax.
According to Bruce, the NWT Association of Communities continues to support the proposal. But she does acknowledge that a significant proportion of visitors to Yellowknife are NWT residents.
"Off the top of my head, I'd say that 50 per cent of travellers (to Yellowknife) are from within the territory," Bruce said.
Another consideration will be exempting medical visitors from the tax, something which Bruce said the hotel association is already discussing.
The report recommends that a four room threshold be in place, effectively exempting most bed and breakfasts from the tax.
Details of convention bureau staffing, room taxation levels, and city budget impact, would not be available until after city staff is given the go ahead to develop a full information package with budget details.
"We need to know that council is supportive of this strategy," Naidoo said.
If the proposal receives council support on July 28, city staff will put together budget details in time for 2015 budget considerations this winter.
