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Some concerns with voluntary regional tourism levy

Richard Johnston

By Nicole Kleinsteuber
Richard Johnston spoke of concerns and benefits of a voluntary levy to local accommodation providers which could be initiated by the province after 2012.
“We believe we need a significant shift in policy direction if we are to succeed in dramatically increasing tourism in our corner of Ontario,” he said.
Johnston, chair of The Great Waterway (RTO9) Tourism Region, said the board of directors is pleased to be one of the first RTOs to accept the challenges of initiating the new regional tourism approach advocated in the Discovering Ontario Report prepared by Greg Sorbara.
“However, we have some fundamental concerns about the viability of the new approach to tourism based on the voluntary levy to be initiated after 2012.”

He said accommodation businesses will have the option to chose from a one to three percent increase.  The accommodation sector is defined as operations with a fixed roof with more than three rooms and three beds. Bed and breakfast operations and camp parks are exempt from the levy.

“Prince Edward County is one of the few areas in Ontario that has the capacity to complete on an international level,” said Johnston.  “The levy will help fund television advertisements, billboards and product development.”

At lot of Ontario is not well organized to compete on those kinds of levels except for Toronto, Ottawa and Niagara said Johnston during his deputation.

Johnston said next weekend’s Taste The County event gives Prince Edward County the opportunity to re-brand itself while including the traditional brand of its well known beaches, culinary, wine and arts.

“When we used to go for destination marketing plans to promote the fall travel to the county in the past, we would go to our local partners through Taste and try to get matching dollars from the province. They would always be able to offer us more money than we ever able to raise ourselves,” said Johnston during his deputation.

“We were always caught in the 25,000 to 50,000 dollar range that we could raise locally, where as the RTO is given $1.5 million to work with,” he said.

“When the government decided to move to this region tourism approach, they basically suspended all the levies and within the context of the HST implementation, withdrew the capacity for those to have that right to tax, until the vote has been taken.

“When the province cut off the capacity for local municipalities to have their levies, they also cut off the money that used to come to Taste and other designated marketing organizations that did not have their own levy,” said Johnston.

“There’s a real danger that if we were left out of this whole thing that we’d be left without any money at all,” said Johnson.  Places like Kingston would garner the alliance share of these dollars.”

Johnston estimated that if businesses accept a three percent levy, then $5.5-$6.5 million would be raised annually.  Johnston said the RTO9 share would be $300,000 to $380,000 a year.

“It’s an unfair designation, because if we threw campgrounds and B&B’s into the equation then we would have the second largest number of operators in the region, after Kingston,” he said.

Johnston suggested implementing an attractions levy, as he owns and operates a local winery and feels this increase would benefit his business. He noted there are some elements of the accommodations levy that are unclear.

“If the levy were to be passed and agreed to by a vote, at the moment it’s not clear whether or not we would be able to pass it through to the local organizations,” said Johnston.

As a result, Johnston has written the Minister of Tourism and Culture and three party leaders highlighting inconsistencies within the province’s plan to implement the levy.

“We have to be able to pass money through to places with little infrastructure, like the county, which hosts events like Taste on a minimal budget,” said Johnston.  “We have to give them the equivalent of what they would be able to raise on their own levy or why would anybody participate?”

Johnston said the province would probably hold off giving him a real answer until the upcoming election is over and we see who forms the government.

Councillor Alec Lunn asked Johnson why businesses would want to participate and pay the levy.

“If everybody else is paying the levy and putting money toward attracting visitors and the county isn’t doing anything, then the question is, are we going to be able to compete?” answered Johnston.

He said there are a few factors that could deter businesses from voting in favour of the levy.

“Fear of lack of control of the money and inequality issues might act as deterrents,” said Johnston.  “Questions like ‘Why am I paying the levy when my neighbour isn’t and they’re benefiting from it too’ might arise.”

Councillor Terry Shortt asked Johnston if there would be any contributions from the levy to go toward construction or maintaining of infrastructure that will be used by an increased amount of visitors.

Johnston said the levy wouldn’t meet any municipality’s needs in terms of infrastructure and is strictly geared to marketing and product development to attract visitors to the region.

Councillor Jamie Forrester said the marketing plan seems to duplicate the efforts the county has put into marketing for the past six years and he would rather the provincial government not dictate how he markets his tourism business.

“My main concern is that once a levy is introduced it would drive the economy further underground,” said Forrester.  “There are some businesses in the county that can afford it and others that cannot.”

Council voted to accept Johnston’s deputation.

Filed Under: Local News

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