SOMBA K'E/YELLOWKNIFE
Although the idea of the City of Yellowknife bidding to host the 2023 Canada Winter Games may be close to death, a proposal that came with it - a hotel levy in the city - is still very much alive.

Edward Tse, manager of the Discovery Inn in Yellowknife, does not want to see a hotel levy imposed in the city. The Yellowknife Hotel Association says that the money from the levy would be used to help pay for tourism promotion. Tse, who is not a member of the association, says the levy would unfairly tax people who do not live in Yellowknife. - John McFadden/NNSL photo

Seven of eight city councillors said at a Monday meeting they would not be voting in favour of the Games bid but at least two councillors said they do support the idea of taxing visitors to the city to help pay for tourism initiatives.

Council will vote at this coming Monday's council meeting to discuss whether the city should approach the territorial government to see if it would change legislation so the city could impose the levy. It was originally proposed as a way to help pay for the Games.

"It would give the city a stream of cash that would allow us to better market ourselves for tourism. A lot of jurisdictions do this," Coun. Julian Morse said. "The motion that's proposed is just to direct administration to work with the GNWT to have the act amended to allow us to be able to impose a hotel levy. That wouldn't necessarily mean we are going to do it.

"Once we have the ability to do so then we will decide if we will."

Morse said he believes most hotel operators in Yellowknife support the concept of a visitors levy even if the city does not bid on the Games.

"Rather than spending (a hotel levy) on the Games we can spend it on tourism promotion to actually bring people up here," said Morse.

The idea of a visitors' levy has actually been around for more than a decade. In 2011, an attempt to implement a similar hotel room levy was supported by the city, the Yellowknife Hotel Association and the NWT Association of Communities but the proposal fell flat on then-finance minister Michael Miltenberger's desk. At the time, he said the majority of formal submissions to his office were not in favour of the tax.

Joey Cruz, general manager of the Days Inn in Yellowknife and president of the Yellowknife Hotel Association, also supports a hotel levy. However, he said it can only work in the city if it is applied to all accommodation providers including hotels, motels as well as bed and breakfasts. Cruz is also slightly skeptical on whether the Department of Municipal and Community Affairs (MACA) has the political will to make the changes.

He based that opinion on a letter sent to him last year by Robert C. McLeod, the minister responsible for that department at the time. He stated in the letter the levy would require amendments to various pieces of municipal legislation to allow NWT community governments the required authority to, through bylaw, create, collect and administer levies on local hotel rooms.

"The department is not in a position to move forward with any legislative amendments at this time," McLeod stated in the letter. "Community governments continue to have the authority to work with local tourism operators to create a voluntary destination marketing fee that can be applied within the municipal boundaries."

Cruz said a voluntary fee is not an option in his opinion. All the hoteliers within a given municipality have to be on board in order for it to work, he suggested. He expects the majority of hotel owners in the city would support the levy.

Some opposition

At least one hotelier opposes the proposed tax. Edward Tse, manager of the Discovery Inn on Franklin Avenue, is concerned that no matter what local benefits might come with the levy, it would remain unfair to NWT residents outside of Yellowknife and out-of-territory workers travelling for mining or other resource-related work in the territory.

"We feel it is unfair to the general public," said Tse. "Yellowknife is the major traffic hub of the NWT, and the levy proposal unfairly favours local populations." Tse is not a member of the hotel association.

Mayor in favour

Mayor Mark Heyck is cautiously optimistic the new territorial government will eventually allow municipalities to impose the levy.

"Local governments need to generate revenue as well. If the legislation is amended to include enabling provisions that doesn't force every community in the NWT to do it . then I don't see a whole lot of reasons that it should be held up," said Heyck.

Tom Williams, the deputy minister for MACA said changes in the legislation to allow a hotel levy are probably about two years away.

"We're looking at the Civil Emergency Measures Act and the Fire Protection Act. These are major pieces of legislation that have a higher priority than a hotel levy," Williams said.

Fees

The fee being proposed for Yellowknife is three percent, meaning there would be a $3 levy on a $100 hotel room. The vote on the hotel levy will come at the same meeting where it is expected council will officially vote against the city bidding for the 2023 Canada Winter Games. A 2014 tourism strategy report, commissioned by the city, indicated that in 2013, visitors spent an estimated $38 million on accommodations in Yellowknife. A three per cent room tax on $38 million would generate $1.14 million for the city.