County STAs handed over $1.3M in MAT tax for 2022

UPDATE: Though the information received related to increasing MAT tax was for information, and not for consideration, council decided to heed the voices of several in the audience Tuesday night to keep the tax rate at four per cent. Council voted to freeze the rate for its term ending in 2026.

Comments from the audience spoke to focusing on getting STAs and the entire hospitality industry back on track following losses related to COVID-19: speaking to the province to fix a frustrating and “highly flawed” reservation system at Sandbanks Provincial Park and continuing efforts to get all unlicenced STAs licenced and to enforce bylaws in place.

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Short-term accommodations (STAs) handed over $1.3 million in municipal accommodation tax for 2022.

The amount may be low, a County report heading to council Tuesday night shows, as about a third of STAs made no payment. Many, the report states, have not operated during the COVID-19 pandemic, have sold or moved into their rentals.

In the 2022 MAT financial report to council for Tuesday night’s meeting, Rebecca Carter, Financial Services Supervisor, explains how the funds come in, and go out.

The Municipal Accommodation Tax (MAT) is governed by the province which states half of the funds collected after administration costs must be shared with a destination marketing program, or board. The other half the municipality may use for infrastructure or services that support tourism.

While there are 902 licensed accommodators listed on the STA map for Prince Edward County, MAT remittances in quarterly payments were received from 602 (Jan. to March for 10,444 rooms sold), 604 (April to June for 22,482 rooms), 671 (July to Sept for 51,618 rooms sold) and 576 (Oct. to Dec. for 10,484 rooms).

The $1,372,303 earned $45,284 in interest, and expenditures (wages and benefits mostly) were $109,803, leaving 1,307,784.

The County receives 50 per cent, or $653,892, Visit the County receives $548,912 and Stay PEC receives $104,980.

The municipality notes its Dec. 31, 2022 balance in the reserve for MAT is $818,500 of which $118,500 will go to fund needs of the 2023 Tourism Management Plan, with the balance of $700,000 being transferred to the reserve for roads construction, as directed by council, in January.

Staff was also directed by council to determine if four per cent was the full amount the county is eligible to collect.

The report notes the four per cent was industry standard when put in place in 2020 and though there were no restrictions from the province found, only Toronto has increased its MAT rate – to six per cent – effective May 1, 2023.

Staff recommend no increase to MAT for this year as it marks the first year with no COVID-19 shutdowns or restrictions and would provide a baseline for a normal operating year.

“Should council feel strongly that the MAT rate be increased from four per cent, staff would recommend that a communications plan be devised and that consultation take place with the local accommodators. Staff would require a council motion to direct staff to undertake this consultation in 2023 to allow for a Jan. 1 implementation,” the report states. “This would provide the accommodators the opportunity to have some of their 2024 bookings prepaid which would make those bookings exempt from the increase. By increasing the MAT in 2024 the full financial benefit of this would not be achieved until 2025.”