Prince Edward County Council hosted a virtual Regular Council Meeting on April 15th, passing a motion to approve the Municipal Accommodation Tax (MAT) By-law, while deferring the enactment of the bylaw until a later date.
The County, along with the world, has changed in unprecedented ways since early March, when the MAT Bylaw proposal was originally brought before council. Given the economic impact of the COVID-19 pandemic, staff recommended that while the bylaw be approved, its enactment should be delayed.
“Council believes strongly that the municipality should not implement the MAT on June 1, 2020, as previously proposed, given the current situation and the unknown longer-term impacts of COVID-19 on the local economy,” said Mayor Steve Ferguson. “The municipality is committed to consulting with the accommodation sector on an appropriate time to implement the MAT that best supports the economic recovery of the tourism sector.”
Apart from approving the MAT Bylaw, council received a report regarding the by-law from the Community Services, Programs and Initiatives Department.
They also approved staff’s recommendation to bring the report back to council to enact the bylaw at a later date, providing a minimum of 90 days public notice.
In the meantime, approving such a bylaw allows staff to continue with plans to conduct industry and public consultation regarding the allocation of MAT funds.
Both public notice and the allocation of MAT funds were contentious issues when the MAT Bylaw was last entertained by those around the horseshoe. At that time, several community members expressed concern both about the allocation of MAT funds and about the lack of communication between the municipality and accommodation owners regarding this new tax.
“These are extraordinary times for everyone, particularly our tourism related businesses, especially our accommodation owners. Although I’m very supportive of this tax, and have talked about it for a long time, I don’t agree with the bylaw now when so many of these businesses and the travelling public they will be hosting have been so significantly affected by the pandemic,” noted Ferguson.
Given the current health crisis, Ferguson stated the need to defer this issue until later in the year, with an implementation date not occurring until 2021.
“I want to hear the thoughts of others, but what I would like to see come out of this is a deferral of this matter until the end of 2020 with implementation sometime in 2021. I think this is, from my perspective, a fair thing to do given the current circumstances, but it does serve notice to all these accommodations that a MAT is coming, so they can prepare themselves accordingly,” Ferguson expressed.
Councillor Bill Roberts asked Todd Davis, Acting Director of Community Development and Strategic Initiatives, what the risks of deferring the bylaw might be.
“The risk of deferring the entire process would mean we wouldn’t be able to go out and negotiate with any platforms that would be collecting the tax in the future. They require a bylaw in place to do that. We are not asking to implement or enact the bylaw. We are asking to pass the bylaw and hold the enactment date to a date sometime in the future that would require a report to council and the 90 notice to operators,” said Davis.“We didn’t set a specific timeline on that date because we are confident that September or January, or at any point when we’re at full recovery, we would want to bring something like this back forward. We brought the report forward because it would allow us to do some of the other work that’s necessary for the implementation of the tax when the time is appropriate.”
Councillor Bill McMahon chimed in that he agrees with the staff recommendation, as it allows for notice to be given to accommodation operators.
“I concur with the staff recommendations as it allows that 90 days that’s been put in there. It allows the consultation that a lot of people felt they weren’t getting when the MAT was first brought to council.
I think the 90 day add-on was a good idea,” said McMahon.
According to a recent press release from the County, municipal staff will consult with the accommodation sector to help determine an appropriate MAT implementation date. Following the consultation, staff will recommend to council a new implementation date.
Councillor Janice Maynard also agreed with the staff report and recommendations, citing the added benefit of staff being able to work “in the background” while delaying the MAT implementation date.
“I’m in agreement with the staff report. I view this as effectively allowing some work to continue in the background but deferring the implementation date to some time into the future,” said Maynard.
CAO Marcia Wallace hearkened back to comments made by McMahon, emphasizing staff’s dedication to communication with regards to implementing the MAT and the incorporation of concerns raised by members of the public.
“I would just emphasize a point that Councillor McMahon made around communication. We certainly learned something when we brought this to the special meeting, and as it outlined in the report, but it is worth emphasis. We’ll be communicating by letter to every single STA Operator in hopes of doing a better job of explaining to them what a bylaw enactment now without an implementation until later means, what we are actually trying to consult on in the interim period, and a lot more direct communication between the municipality and operators,” said Wallace. “We certainly learned from the last effort that, although they may have known a MAT was under consideration, they felt blindsided by this so we are changing our strategy going forward.”
Staff will be consulting with the accommodation sector regarding how MAT funds should be spent in late summer/fall 2020.
Under provincial legislation, 50 per cent of MAT funds must be used by the municipality for infrastructure or services that support tourism. The remaining 50 per cent is to be used by an eligible tourism entity to support tourism promotion and development.
According to the municipality, the MAT applies to all roofed accommodations provided for a continuous period of 30 days or less. The tax only applies to the accommodation fee.
Visitors who stay at motels, hotels, inns, bed and breakfast establishments, and private, short-term accommodation (STA) rentals will pay the tax.
The tax will be added to guest invoices and accommodators are required to remit the MAT to the municipality.