Inuvik Hearing held on room tax
Malcolm Gorrill
Northern News Services
Inuvik (Feb 09/01) - Dennis Zimmermann supports the Hotel Room Tax Act, reluctantly.
If passed, the act will impose a five per cent tax on people renting accommodations in buildings with five or more sleeping units.
On Monday evening Zimmermann told the Committee of Governance and Economic Development that he supports the act because tourism in the NWT needs more funds.
"We're being held hostage and we're forced to accept this new revenue," said Zimmermann, the manager of Inuvialuit Tourism and Arctic Nature Tours. He is also a board member of NWT Arctic Tourism.
Zimmermann said the roughly $1 million the tax is expected to generate will allow the territory's tourism industry to become at least small players within a global industry.
However, Zimmermann said the tax funds should be sheltered and put into tourism development, and not simply absorbed into general revenue.
"It needs to be used for marketing the Northwest Territories. We need the money to create some brand awareness, some destination awareness in the minds of consumers all over the world," he said.
Zimmermann pointed out that the new tax will affect him, as it might make it harder to attract tourists to the area.
Zimmermann was the first of three presenters during a hearing Monday evening into the Hotel Room Tax Act. Conducting the hearing was the Committee on Governance and Economic Development.
Inuvik was the first stop for the committee, whose chair is Inuvik Boot Lake MLA Floyd Roland. Other members are MLA Paul Delorey, MLA Steve Nitah, MLA Sandy Lee, MLA David Krutko and MLA Bill Braden.
The committee, which was also hearing submissions on Bill 16 (concerning amendments to the Motor Vehicles Act), held another hearing in Inuvik on Tuesday. They held a hearing in Hay River Wednesday, and were to be in Yellowknife today (Thursday) and Friday.
Fairness questioned
The second presenter Monday evening was Vince Brown, shareholder and chief financial officer for Mackenzie Delta Hotel Group.
Brown questioned the fairness of the tax, as it targets some businesses and not others. He pointed out his group will be practically the only company in the Inuvik area which will have to remit the tax.
"Every single business, every single person in this town benefits from tourism," Brown said, arguing that a tax with a smaller rate and applied over more businesses might be fairer.
Brown said another problem is that the tax has to be visible, thus perhaps driving away potential customers. He said that it would be better if the tax were allowed to be invisible, so his company could perhaps absorb the cost themselves so as not to scare away customers.
Brown also said that every dollar raised here by the tax should be distributed here.
Mayor opposes tax
Mayor Peter Clarkson was the third presenter. He said town council opposes the tax because it would add to the cost of doing business at a time when local companies have had to contend with rising expenses.
Clarkson said that perhaps the main benefit of the tax will be to those employed to administer it.
Roland replied that Finance Minister Joe Handley has said that administering the tax is to cost $100,000 annually.
Clarkson said that the funds raised could be applied equally to marketing the NWT, local initiatives, and promotion of regional tourism plans.
After the meeting, Roland said that these hearings serve a useful purpose in that they will give committee members food for thought.
He said the committee would spend some time deciding whether to suggest any amendments to the act.
"We want to try and make sure we do our job and do it right," Roland said.
