reprinted from the Toronto Star
Province rejects hotel tax
By Paul Moloney, Toronto Star Provincial Tourism Minister Frank Klees has poured cold water on Toronto's request for a hotel room tax to aid the city's tourism sector. "The branding of our government is not to increase taxes, it's to lower taxes," Klees said in a telephone interview yesterday. Klees said he agrees Toronto needs a strong tourism promotion fund to put it on a level playing field with other cities. He said the city takes in $50 million to $60 million in property taxes on hotels, and could direct some of that money for tourism. A recent city report said hotel occupancy has dropped to 65 per cent and will likely fall to 63 per cent in 2003. The number of visitors has slid from 16.36 million in 1998 to 16 million last year and is expected to be down again this year when final numbers are tallied. Approximately 87,000 jobs depend on the tourism sector. "This industry is a major revenue generator for the municipality," Klees said. "I think it's appropriate that they get strong support from the municipality in terms of trying to promote Toronto through a marketing fund." But city finance officials are recommending city council trim its annual grant to Tourism Toronto by $100,000 to $4.1 million, as part of a proposed budget aimed at limiting the property tax increase on homeowners to 3 per cent in 2003. The hotels argue that most major North American cities, including Vancouver, Montreal and most recently Calgary and Edmonton, charge a small room levy. Montreal's $2 a night levy raises about $9 million annually. "It's very simple: We need destination marketing," said Rod Seiling, of the Greater Toronto Hotel Association, which has 140 GTA members. "We're just not competitive in the marketplace and there has to be something to help turn the tide." In Ontario, the provincial sales tax on hotel rooms is 5 per cent; if it were raised to 8 per cent with the increase going to promotion, about $20 million would be raised, the city says. Klees said he recently told local tourism industry representatives not to expect action on that front. "My message was, don't go down this path," he said. "Don't waste any more time going in this direction." Klees added that the hotels themselves could unilaterally add a tourist promotion charge to their room rates, without requiring government tax changes. If they did so, Ontario would consider providing matching dollars. Councillor Norm Kelly, chair of council's intergovernmental affairs committee, said he's seeking a meeting with Klees to try to change his mind. "A room tax isn't a tax on the hotels, it's a tax on the customers, and I haven't seen anything to suggest there would be customer resistance to it," Kelly said. "The benefits other cities have from a room tax are unquestionable," said Councillor Denzil Minnan-Wong, chair of council's economic development committee. Meanwhile, city board of health chair Joe Mihevc says a program that provides basic dental care to seniors in nursing homes is facing the budget axe when it should be expanded. The executive management team, made of the city's most senior bureaucrats, is recommending the $213,900 program, which provides basic services to 4,300 in 22 nursing and seniors facilities in the former City of Toronto, be eliminated. The board of health is proposing the program be expanded to the entire city at an additional cost of $149,000. "These (seniors) are very often marginalized people, they are the ones public health takes special care of. To be denying that service to folks borders on the unethical," said Mihevc (Ward 21 St. Paul's). "It's something I think we owe our seniors. It's a service that should be harmonized city-wide," he added. The budget advisory committee made no decision on the program yesterday, but budget chair Councillor David Shiner (Ward 24 Willowdale) signalled the public health department faces a steep battle in trying to get its 2003 budget approved. Citing a $1 million cost overrun this year, Shiner accused the department of "poor fiscal management." "It is $1 million (overspent) and to me, that is a lot of money. There is no contingency fund in the city. We have zero because we can't afford to have one. So we need you to manage your money effectively," Shiner said. Councillor Anne Johnston (Ward 16 Eglinton-Lawrence), city council's seniors advocate, vowed to fight hard to retain and expand the program. "It's extremely dangerous for the health of seniors not to have dental care. I'm counting on seniors to speak out about it (the program)," Johnston said. The board of health, which is seeking a $5.3 million increase over its $65.2 million net budget, has already proposed eliminating an existing $107,000 program to pick up stray cats. In other budget news, the Toronto zoo is considering a $1 across-the-board increase in admission and parking rates to raise an extra $850,000 to balance the books in 2003. Under the proposal, on April 1 adult admission would rise to $18; children aged 4 to 12 would pay $10; and seniors $12. Parking would be $6. It would be the second adult admission increase in two years. Last year, the price was raised to $17 from $15. Zoo general manager Calvin White said he expects the zoo can maintain its annual attendance of 1.2 million despite admission increases, because surveys show visitors believe the zoo is a good deal. 'We're just not competitive in the
marketplace and there has to be something to help turn the tide.' |