On March 21, Tourism Prince George asked city council to support its push to increase the current two per cent hotel tax.Tourism Prince George wants to increase the tax from two per cent to three per cent. The increase, if passed, would become effective July 1, 2017.
Erica Hummel, CEO of Tourism Prince George, stated in a Citizen article that this increase would be "insignificant" and further stated that "the cost of this is taken on by the visitor" and the extra dollar on a $100 room won't deter bookings, she said.
"It doesn't factor in."
Whether the one per cent increase is significant or not depends on whether you are the one assessing the tax or the one that has to pay this tax.In fact the one per cent is an addition to the two per cent that was implemented in 2010.
Further, these taxes are in addition to the provincial sales tax on accommodation of eight per cent and the GST of five per cent. So in effect the hotel tax is presently 15 per cent and this one per cent increase takes it to 16 per cent. Not really insignificant at all.
The two per cent tax is referred to as the Municipal and Regional District Tax (MRDT) and is used to fund marketing activities promoting Prince George as a tourism destination.This tax generates approximately $800,000 per year.
Adding the one per cent increase would mean a further $2 million in revenue over a five-year period and an immediate $400,000 each year from 2017 going forward.In addition, Tourism Prince George's mission starting
July 1, 2017 is to increase visitation to Prince George 40 per cent (as measured by growth in the MRDT revenue). So huge increases in revenue if this growth was to actually materialize.Do we really need these huge amounts of money to market tourism to Prince George?
The Province of B.C. requires that an applicant for an increase in the MRDT must demonstrate at least 51 per cent of accommodation property owners (that represent at least 51 per cent of accommodation rooms) are in favor of the MRDT enactment in order to support the application.
Prince George city council supported the application, mainly because it was ultimately up to the hotels to decide whether or not the application would move forward.
The hotel tax itself has some merit when applied to actual tourists coming to Prince George, or traveling through the city, or some business people coming to town from other areas, however it should not be used to tax residents from outlying areas who come to Prince George on a regular basis.
We know that people in north central B.C. come to Prince George for a variety of reasons, such as going to the hospital, seeing a doctor, dentist, other specialists, visiting students at the university, shopping, and to attend other functions.These people are part of the greater Prince George community and should not under any circumstances be lumped into the general heading of "tourist."
We know that on any given weekend we will have people from Mackenzie, Vanderhoof, Fort St. James, Burns Lake, and points west and north staying in Prince George.Some of these people come to Prince George once or twice a month, year in and year out.In fact I would wager that the majority of the revenue that is collected by the hotel tax, is collected from residents of north central B.C.
So when we are talking about a hotel tax, we are in effect talking about taxing some of our best customers that live in the interior under the guise of them being tourists. These people are in fact being taxed to support tourism in Prince George to a much larger extent than the people of Prince George are being taxed, and who are the ones who will benefit the most from any tourism that is generated.
So we need to rethink this tax with a view of not increasing it any further and then to seriously consider exempting anyone who lives within a radius of 250 miles of Prince George.
Having the accommodation industry in Prince George turn down this tax increase application would be a good start, and then city council and Tourism Prince George can look at exempting people in the greater Prince George area from this tax.Once this is done, we will then have a tourist tax that actually reflects the reality rather than a tax on people who rely on the various services in Prince George on a regular basis throughout the year.
Money generated from actual tourists should be more than enough to market tourism in Prince George.
