Owen Sound council wants to take a closer look at a municipal accommodation tax on short-term rentals, and will be getting a report back from staff next year about it.
Coun. Richard Thomas introduced a motion that passed unanimously during a budget meeting on Nov. 12 to direct staff to report back to council sometime in 2022 regarding the potential of a municipal accommodation tax for stays less than 30 days at short-term rentals in the city.
Thomas mentioned hotel rooms, Airbnbs, bed and breakfasts and other short-term accommodations where this could apply.
The motion also included direction for staff to report on possible ways funds collected through a municipal accommodation tax could be utilized within the capital budget.
“I would see this as a way for us to continue narrowing the infrastructure gap in the City of Owen Sound, or to potentially fund future projects, ” Thomas says. “… I think there’s lots of possibilities. It’s an idea I’ve been thinking about for a number of years now. And I think the time is right as we continue to look for ways to generate revenue for our community and to replace all of the infrastructure that gets used by visitors who come to our community.”
A municipal accommodation tax is a fee paid by visitors when they book a stay with a short-term accommodation provider for a period of less than 30 days. Ontario gave municipalities the ability to implement the levy in 2017. Many cities and towns in the province have since done so.
Nearby, South Bruce Peninsula and Northern Bruce Peninsula have both passed bylaws to implement a four per cent municipal accommodation tax on Jan. 1, 2022.
- Northern Bruce Peninsula Considers Introducing Municipal Accommodation Tax
- South Bruce Peninsula Moving Towards Municipal Accommodation Tax
A portion of revenues raised through a municipal accommodation tax must be directed to a separate, eligible non-profit tourism entity for the purpose of promoting tourism. Municipalities can direct remaining funds for other purposes such as future projects at the discretion of council.
City manager Tim Simmonds says staff will return a “very high level” report for council likely by the third quarter of 2022 outlining a municipal accommodation tax and what it could start to look like in Owen Sound.