The Revelstoke Accommodation Association (RAA) is calling on members of the local hospitality sector to oppose proposed changes to the Municipal and Regional District Tax (MRDT) presented as part of the provincial government’s 2018 budget.
On April 4 RAA sent out an e-mail asking local businesses which are dependent on tourism to send letters to Columbia River-Revelstoke MLA Doug Clovechok.
“The government is proposing legislation to alter the way these taxes are spent, funnelling them towards affordable housing,” wrote RAA in their e-mail. “While we agree that this is an important issue in our province, this was not what the money was intended for, and affordable housing should not fall on the back of tourism.”
The MRDT was first introduced in 1987 to provide funding for local tourism marketing and associated programs.
The tax was intended to amplify B.C. tourism marketing efforts.
The proposed changes to the tax are intended to help finance affordable housing projects and are part of a more than $6 billion commitment the NDP provincial government made to build more than 34,000 affordable homes across the province when it presented its budget on Feb. 20.
The NDP also pledged more than $1.8 billion for rental housing over the next decade.
In the NDP’s budget and fiscal plan for 2018-19, the date of the proposed changes has not yet been set.
The document states the money “can” be used to fund affordable housing, but will not necessarily be allocated to that end.
“Effective on a date to be specified by regulation,” reads the government document, “revenue from the municipal and regional district tax collected by municipalities, regional districts and eligible entities, such as tourism focused non profits, can be used to fund affordable housing projects.”
Columbia River-Revelstoke MLA Doug Clovechok said that ultimately whether or not the MRDT dollars collected by members of the hospitality sector are diverted towards affordable housing would be a decision that City Council would have to make.
He said the government did not do any public consultation on the proposed changes, and that he spoke with a group in Revelstoke on April 4 who are opposed to the changes.
Clovechok said he will bring their concerns to the Minister of Tourism, saying while social housing is an important issue, financing for it shouldn’t come at the expense of promoting tourism and hospitality across the riding.
“I think that social housing is an extremely important issue in this riding,” said Clovechok. “But building it on the back of tourism and hospitality just doesn’t make sense.”
A spokesperson for the RAA called the funding “absolutely critical” to attracting visitors.
The City of Revelstoke has designated RAA to oversee the management and administration of Tourism Revelstoke, which includes marketing efforts supported by MRDT funds.
RAA is a not-for-profit organization which is composed of 23 accommodators who collect the MRDT.
RAA said that the MRDT generated over $700,000 in 2017.
The MRDT is charged in participating areas to raise revenue primarily for tourism marketing, programs and projects.
The MRDT is only applicable in designated accommodation areas.
It is not a compulsory tax.
The MRDT agreement is renewed every five years.
It is up for renewal in May 2018.
The tax applies to hotels, motels, resorts, boarding houses, rooming houses, bed and breakfasts, ships and trains.
Municipalities, regional districts and eligible entities can apply.
Eligible Entities can be not-for-profit business, have a place of business in designated accommodation areas, and must be actively engaged in tourism marketing or programs.
According to Destination BC, the maximum rate of taxation under the MRDT is three per cent.
“The key point is that this is a good tax, it works, and it’s really beneficial to have,” said Clovechok. “But what this minority government has done is that they have arbitrarily changed the rules. We’re going to fight tooth and claw against this.”
The City of Revelstoke’s Tourism Infrastructure Committee meets on April 11.