Williams Lake city council will be writing a letter of support for a new hotel tax in the region despite hearing opposition from local hotel owners, including Coun. Scott Nelson.
The Municipal and Regional District Tax (MRDT) which has been collected across other parts of the province for years is used to fund tourism marketing, programs and projects.
The tax, however, is being opposed by several lakecity hotel owners, including Nelson who owns the Super 8 Motel and Lakeside Motel and declared a conflict of interest in the matter.
Nelson signed a letter from five owners urging mayor and council not to support the new tax .
Copies of the letter were distributed to mayor and council by Coun. Craig Smith at the beginning of the regular meeting Tuesday, April 4, even though the letter was not on the agenda.
“This new information is coming very last minute and it surprises me there is no delegation to speak to it,” Coun. Jason Ryll said referring to the letter after Nelson excused himself from the meeting. “This tax would help Williams Lake and the region with the ability to market tourism in our area.”
Ryll said “to be clear” although Smith had distributed copies of the letter to council members it had come to council from Nelson.
Coun. Laurie Walters said other regions do great things for tourism collectively with the tax.
“But what the letter tells me is that there is a lack of communication and consultation,” she said.
Signed by Nelson and owners of the Best Western, Coast Fraser Inn, Ramada and Valley View Motel, the letter stated they were withdrawing their support of the tax until the opportunity to sit down over the next year with various parties and develop a vision to ensure there is no duplication.
“We need to ensure that key tourism targets that represent the city are undertaken,” the letter noted.
The Cariboo Chilcotin Coast Tourism Association is applying to the Minister of Finance to be the recipient of the three per cent tax over a five-year term and had asked the city for the letter of support.
Introduced in 1983, the tax is applied in the same way as the eight per cent PST.
Smith said in order for the application to go through the CCCTA needs three things — a letter of support from the city, and support from owners of 51 per cent of the eligible properties and 51 per cent of the rooms.
“They were close until a few days ago and this is now over 50 per cent of the businesses opposed,” Smith said. “Now they [local hotels] want to talk about forming their own hotel association and pooling the money themselves.”
Smith said he opposed the tax during discussions at the committee of the whole because he thinks it is something that should be kept local as opposed to being regional.
Council received the protest letter and agreed to refer it to the CCCTA, before Mayor Walt Cobb, Coun. Sue Zacharias, Ryll and Walters voted in favour of writing their own letter of support for the tax, while Smith opposed the support and Coun. Ivan Bonnell was absent.
After the meeting, Cobb said the tax would not cost hotel owners anything because it is paid by customers.
“When you look at the opportunity for regional advertising and promotion I don’t think a small organization, if they created their own association, would be able to generate the extra revenue that the CCCTA could get throughout the province,” Cobb said. “The mass media advertising that Destination BC does promotes the whole area.”
Cobb said he was told by the CCCTA there will be a group, including local hotel owners, who will decide where the tax money is spent.
After the meeting adjourned Nelson told members of council it was illegal for them to endorse a letter of support in light of receiving the letter from the hotel owners.
“This is well in excess of the majority of the hotels against this thing,” he said. “They have removed their endorsement.”
Nelson said he has never supported the tax and had forwarded a copy of the letter to the Minister of Finance.
Even though six of the lakecity’s large hotels have voiced opposition against the proposed accommodation tax, they may not have a choice in the matter.
CCCTA executive director Amy Thacker told the Tribune Wednesday their lack of support won’t impact the application.
“We have 150 properties in our application area and 80 per cent of them are outside municipal boundaries,” Thacker said. “We need 51 per cent of the properties and 51 per cent of the beds and we have about 68 per cent.”
Thacker said it was only after industry approached the CCCTA in 2013, asking it to make an application on its behalf for the MRDT, that the CCCTA pursued it.
“It took us a while because our board told us we had to do broad consultation to make sure we had support before going forward,” she said. “I can say that all eligible accommodations under the tax act in Williams Lake have had one-one-one meetings with us about this.”
Earlier this month, the Cariboo Regional District Board also voted in favour of sending a letter of support for the CCCTA.
Thacker said the application will go to Destination BC for a review and approval some time in April.
From there, the applications go to the Minister of Finance to be vetted before going to Cabinet for ratification.
“I’m told the average approval time is about nine months,” Thacker said.
As for the protest letter, Thacker said she will explore it with the hotel owners and follow up.
Best Western owner Paul Sangha told the Tribune Wednesday he signed the letter because he has not personally seen any benefits from the MRDT being collected in Kamloops where he owned a hotel previously and was part of the local hotel association.
“Even today I asked other hotel owners in Kamloops if they have seen any benefits from the tax and they said they have not,” Sangha said. “We were promised we would have a booking system that would advertise every property and nothing ever happened with it.”
Sangha said the city should not get involved with the MRDT because it will be people who come to Williams Lake that will end up paying more if they have to stay in hotels.