Kincardine council has directed staff to explore the implementation of a municipal accommodation tax.
Kevin McPhillips, Director of Research and Innovation, shared the analysis from McSweeney and Associates, and provided projected revenue based on occupancy rates.
“Typically, the MAT is a four percent surcharge,” he explained. “There are other municipalities that go higher — I think Toronto has gone up to eight percent, but realistically, small communities in Ontario are focused on that four percent number.”
A Municipal Accommodation Tax (MAT) is a tax that’s levied on visitors who stay at overnight and short-term accommodations within the municipality. That includes hotels, motels, and short-term rentals such as Airbnbs.
The report showed that projected annual revenue for an MAT on overnight accommodations at traditional hotels and motels would be between $300,000 and $474,000 per year.
Projected MAT revenue for short-term rentals would be expected to be $60,000 to $110,000.
That works out to projected annual revenues of $328,000 to $580,000.
Members of council were curious to know if the implementation of an MAT had had an effect on occupancy rates in other municipalities.
“We don’t get great data on it, but for communities that implemented a MAT that we could get information on, we really didn’t see any drop,” McPhillips explained.
The province introduced the tax to allow municipalities to generate revenue for tourism-related activities and projects.
Of Ontario’s 444 municipalities, around 50 of them have implemented or are in the process of implementing MAT.
Some municipalities that have implemented the tax include South Bruce Peninsula, The Town of the Blue Mountains, Midland, Barrie, Orillia, Niagara Falls, and Toronto.
