Brandon mulls accommodation tax hike

Hey there, time traveller!
This article was published 15/04/2023 (1247 days ago), so information in it may no longer be current.

The City of Brandon’s accommodation tax could soon change from a flat fee of $3 per night to a five per cent levy.

At Monday’s Brandon City Council meeting, outgoing director of economic development Sandy Trudel will make the case for the tax to be increased for the first time.

Since 2012, Brandon has charged the fee to customers staying overnight at local businesses to raise funds for attracting events to the city and to help pay for repairs and upgrades at the Keystone Centre.

Of the funds collected through the tax, 85 per cent is deposited to the accommodation tax reserve fund and the remaining 15 per cent to the large event acquisition reserve.

A copy of a report attached to Monday’s agenda states around $524,000 currently sits in the former reserve and approximately $226,000 in the latter.

In its history, the city states, the tax has brought in around $7 million in revenues and $100,000 in interest.

Of that total, Brandon estimates $2.98 million has gone out in the form of grants that helped bring events to the city that in turn led to 144,713 overnight stays at local hotels and motels.

A further $3.3 million has been paid out to the Keystone Centre and $653,950 has gone to Brandon First to help with marketing and promotion efforts.

Trudel’s report argues that Brandon’s flat fee accommodation tax is extremely uncommon in North America, with most jurisdictions charging their taxes as a percentage.

With expenditures from the accommodation tax reserves exceeding revenues and growing capital needs for the Keystone Centre, city administration proposes that council approve a switch to a percentage-based tax effective July 1.

Last month, the Province of Manitoba and the City of Brandon announced they’d come to an agreement on a new five-year funding agreement for the Keystone Centre where each party committed to providing the venue with $7.97 million in annual funding.

To help businesses with the transition, the suggested plan is to grant a one-time tax collector credit grant worth $250 to businesses submitting tax revenue this year.

An occupancy rate of 60 per cent for local establishments — stated to be lower than the pre-COVID-19 occupancy rate but higher than what was seen in 2022 — would lead to projected annual revenues of $1,429,989 from the tax, more than double what would be collected under the current rate.

Reached by phone Friday, Brandon Chamber of Commerce president Tanya LaBuick said she understood why the city would want to change to a percentage, but wanted to know how the five per cent figure was reached.

“It seems like a dramatic escalation to go from a $3 flat fee to a five per cent tax on a bill,” LaBuick said. “Obviously, we want people to come to our city and visit here, spend nights in hotels and eat at our restaurants. We don’t want to unnecessarily tax them for other reasons. We would want the city to be cognizant of what the overall risk versus reward would be.”

She noted the City of Winnipeg’s accommodation tax, put in place at five per cent, has never been raised since it was introduced 2008.

Also on Monday, city administration will propose city council approve grant funding applications for four projects under the provincial government’s Arts, Culture and Sport in Community Fund.

Created last year, the fund provides successful applicants in the large capital project stream with funding for up to 50 per cent of eligible costs up to a maximum of $5 million.

Previously, Brandon applied to the program for desired renovations to the Library/Arts Building on Rosser Avenue.

This time around, the city is applying for funding for Phase 3 of construction at the outdoor sports complex at the corner of First Street North and Veterans Way, the replacement of the Park Community Centre, structural repairs and upgrades to the vintage Second World War-era hangar at the Commonwealth Air Training Plan Museum and for the creation of the Peter Sawatzky Sculpture Garden at the Riverbank Discovery Centre.

Phase 1 of the outdoor sports complex is already under construction with Phase 2 set to be tendered this spring. On top of helping pay for Phase 3 of the project, the city also wants to use funding to help with the creation of a FIFA-sized soccer field at the complex as part of Phase 2.

The Commonwealth Air Training Plan Museum has been closed since last November after damage was discovered to the trusses that hold up the hangar’s roof.

Though the museum engaged temporary repair efforts and received $171,000 from the city to help pay for them, funding is still needed to pay for permanent repairs and other upgrades needed to secure its long-term future.

Executive director Stephen Hayter told the Sun earlier this month the museum hopes to reopen to the public sometime in May.

The future of the Park Community Centre has been up in the air for several years, with the current facility facing serious structural issues that limit how many people it can accommodate inside.

Council voted last month to reject existing bids for the demolition and repair of the centre and create a replacement design.

Last year, the Riverbank Discovery Centre announced it would create a garden to showcase the work of Manitoba-born and internationally famous sculptor Peter Sawatzky but needed to raise funds needed to complete it.

» cslark@brandonsun.com

» Twitter: @ColinSlark