Council looks to boost accommodation tax

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This article was published 18/04/2023 (1244 days ago), so information in it may no longer be current.

Brandon is one step closer toward raising the accommodation tax it charges through local hotels and motels.

Since the tax was introduced more than a decade ago, it has always been set at $3 per night.

It was brought in with the intention of raising funds to attract events to Brandon and boost tourism as well as contribute to improvements and upkeep at the Keystone Centre.

However, charging a flat rate puts the tax at odds with other jurisdictions across Canada, which charge their accommodation or hotel taxes as a percentage, said Sandy Trudel at Monday’s city council meeting.

For instance, Winnipeg has charged a five per cent accommodation tax since 2008.

Trudel, Brandon’s outgoing director of economic development, proposed the tax be changed to a levy of five per cent per night.

She also proposed the city cap the amount of money it stores in the large event reserves to a maximum of $500,000.

An average occupancy rate of around 60 per cent is projected to almost double the city’s annual revenue from the accommodation tax from around $738,000 under the flat fee to around $1,429,989 under a five per cent levy.

Currently, Brandon removes around $845,000 from its accommodation tax reserve every year, meaning it is constantly running at a deficit.

One of the biggest flaws with the flat fee, Trudel said, is that it has not kept pace with inflation.

She acknowledged that new or increased taxes are never popular, but argued the change would bring Brandon in line with other jurisdictions, support the financial future of the Keystone Centre, end the yearly deficit experienced by the reserves and ultimately would not impact Brandon’s ratepayers since it would be charged to guests.

Though Coun. Shaun Cameron (Ward 4) wondered if large events like the Tim Hortons Brier, held in 2019, was more appealing to organizers because of Brandon’s low accommodation tax, Trudel said it is not a concern for 98 per cent of events because the taxes are so prevalent across North America.

At Monday’s meeting, council voted unanimously to approve the first reading for a bylaw that would implement the proposed changes.

Should the bylaw pass second and third readings, the changes would come into effect July 1.

Trudel noted the switchover would include giving affected businesses a one-time $250 credit on their remittances of collected accommodation taxes to help with the transition.

The one thing this tax will not affect is home-based accommodations rented out through websites like Airbnb, which are currently not subject to the tax.

According to Trudel, most local home-based accommodations offer fewer than four rooms. Currently, the bylaw exempts facilities that offer fewer than four rooms from having to collect the accommodation tax.

In speaking with Brandon First, a local organization dedicated to bringing events to the city, Trudel said it has been made clear to her the accommodation tax is an incentive that brings economic activity and is not just a “gap-filler.”

Last week, Brandon Chamber of Commerce president Tanya LaBuick told the Sun that while she understood the city’s desire to change to a percentage-based formula, she wanted to know how it had reached the five per cent figure.

» cslark@brandonsun.com

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