The proposed HST will hit almost all areas of Revelstoke Mountain Resort’s business, adding to recent ski industry woes that will combine to create hardships for the resort that will hit Revelstoke businesses and the community as a whole. Revelstoke Mountain Resort vice president chief operating officer Rod Kessler presented that message to Revelstoke City Council on Aug. 11 when he appeared as a delegation to express concerns about the provincial government’s plans to amalgamate the GST and PST into the HST.

“As we dug into [the HST] closer from the resort side, and to some degree from the community side, we began to realize the underpinnings of this tax has significant consequences,” said Kessler in his introduction.

Kessler said that the HST would be “challenging” for the ski industry, which is reeling from the effects of the recession.

Of note was a dramatic drop in the number of skier visits in B.C. last year. He said that in B.C. annual skier visits had grown from 2.2 million in the mid-1980s to 6.6 million the season before last.

However, last year, the industry in B.C. lost 1 million skier visits, and the same is predicted for this year. “And that’s without the tax. We think the tax is really going to complicate our business,” he said.

Kessler says most of the businesses that they operate and also those they are contemplating getting into will be impacted by the HST. Kessler provided a list of the activities that he felt would take a hit from the HST, including lift tickets, heli-skiing, Nordic skiing, their various snow school programs, snowmobiling tours, sleigh rides, dogsledding, accommodation, equipment rentals, daycare, providing ski patrol and first aid. Further down the road, other potential activities that could also be negatively impacted include mountain biking, food and beverage services and rafting tours. “Although we don’t offer all those services now, most of those are under review for upcoming development in the next year or so,” said Kessler. “And I’ll share with you that the margins on each of these business units, if you want to call it, is about equal to the tax on a good year. So, that’s really taking a big slice of our pie, and in most cases that makes those businesses non-sustainable.”

Kessler said that based on the current year, the theoretical “hit” to RMR would be about $750,000, “which is of consequence to us in every sense of the word.”

Kessler added that there will be implications for the real estate side of the business.

“The other big piece which is new to us, but we’re likely to lose is the 2 per cent hotel tax,” said Kessler, referring to Revelstoke’s status as a B.C. Resort Municipality.

Revelstoke earned resort municipality status in May, 2008. The B.C. Resort Municipality program returns a portion of the provincial hotel room tax to the municipality. When the resort municipality funding was announced, it was estimated that Revelstoke would receive $2.5 million over five years. The funds must be spent on projects that improve tourism infrastructure. “That’s community marketing dollars to promote Revelstoke,” said Kessler. “That’s of consequence to us.”

When the provincial government unveiled plans for the HST, they indicated plans to alter the resort program as well. “The provincial hotel room tax on short term accommodation will also be harmonized with the federal goods and services tax (GST),” they state on their Web site that introduces the tax.

Ministry of Finance communications director Graham Currie confirmed that the details of the provincial resort municipality funding under the HST have not been worked through yet. “The short answer is, the government is still considering options related to that funding,” said Currie in a telephone interview on Aug. 14. “So, they’ll be consulting with the stakeholders, but it’s something that is still being developed. So, no final answer as of yet,” he added.

Kessler said that the HST, combined with general economic woes related to the recession, were impacting the resort. “It seems like every day there is another piece of our business that is getting peeled away from us.” He said in the coming season poses imminent challenges including a rising Canadian dollar, a falling U.S. dollar, rising oil prices and issues related to the Canada/U.S. border. Kessler said that flights from the UK to Kelowna would not be proceeding. He also says flights to Calgary and Vancouver have been booked out due to the 2010 Olympics. “It looks like it is going to be a real problem for us.” He added this would have repercussions for the community as a whole.

Kessler asked council to give some serious consideration to raising the issue with B.C. Minister of Finance Colin Hansen at the upcoming Union of British Columbia Municipalities (UBCM) convention to be held in Vancouver starting September 28. “Ask him specifically to isolate the ski business and the tourism sector from the tax,” requested Kessler. Municipal staff and politicians are allotted brief meetings with provincial ministers at the annual UBCM event and most often use the sessions as opportunities to lobby.

Kessler also presented a letter written by the BC Council of Tourism Associations that was signed by 32 heads of constituent stakeholder tourism groups.

The Aug. 6 letter is addressed to finance minister Colin Hansen.

The letter expresses concern and states that “a full repealing of the HST decision is the best response we could hope for.”

It notes several challenges facing the tourism industry as a whole, including “severe pressure as a result of the global recession” and criticizes the timing of HST implementation plans. “The proposed tax shift comes at a most difficult time for price-sensitive travellers and small businesses struggling with shrinking markets and very tight margins,” they write.

The letter goes on to say that unveiling the tax at a time when many businesses are struggling through a recession will be a burden. “We strongly advocate that our province take a hard look at unshackling its fiscal policy to enable critical sectors to work through this recession successfully. By asking us to shoulder the tax burden at this time we will not be able to advance our mutual interest of a vibrant and diverse economy.”

Council of BC Tourism Associations president and CEO Stephen Regan said that while the HST is a major issue for the council, their focus is on moving forward in a constructive way. “We’re not lighting our hair on fire. We’re just trying to understand the impacts,” he said. “We’re trying to be very engaged with industry and then connect [with] the government.”

Regan says the next step is to work with government to see how the council can get positive outcomes for the tourism industry, but getting to that point will require further study of the HST. “Together we might come from a common understanding and say, ‘What’s the best we can do to get beyond the negative elements of an HST for our industry?’” he said.

***

Following Kessler’s presentation at the Aug. 11 Revelstoke City Council meeting, Councillor Tony Scarcella proposed supporting Kessler’s concerns and raising the matter at the UBCM meeting. The remainder of council agreed unanimously.