County moves closer to an accommodation tax

By James Matthews

Local Journalism Initiative Reporter

Haliburton County staff have identified a path toward establishing its municipal services corporation.

Such an entity is required for the adoption of a municipal accommodation tax in the county and its lower tier municipalities.

But Scott Ovell, the county’s economic development and tourism director, told council Aug. 16 that staff are pretty much learning as they go in the process.

Ovell’s report to council about next steps was accepted as information by council.

“I expected there might be more questions at this point,” said Warden Liz Danielsen, the mayor of Algonquin Highlands.

One component of establishing a municipal accommodation tax for the county and the lower tier municipalities is the establishment of a municipal services corporation. Ovell said such an entity is new territory for him and staff, and that was the reason for the update to council.

“I look at that process as an evolution,” Ovell said. “As we gain more information and probably legal guidance, we’ll probably be back in front of you again, just to keep you updated.”

Department staff outlined to county council in July the municipal accommodation tax (MAT) legislation and some key questions each municipality would need to consider if they were to implement it.

Staff received direction to begin drafting a bylaw for the lower tier municipalities’ consideration, and for staff to begin the process of creating a municipal services corporation (MSC).

Because the county if a for-profit corporation, the MSC would be designated as the only tourism entity to receive the eligible 50 per cent of MAT revenue that the lower tier municipalities are mandated, by provincial legislation, to contribute for tourism marketing and development.

Of course, everything about the tax and the corporation is contingent upon support from the lower tier townships.

Although many destination marketing and management organizations (DMO) are not-for-profit or, in some cases, funded by a municipality, Haliburton County operates differently, Ovell wrote in his report.

“The county’s tourism division has acted as the region’s DMO and has been solely responsible for destination marketing and, most recently, destination management and tourism development for over a decade,” he said.

A DMO promotes a destination as an attractive place to visit while enhancing the destination’s public image as a dynamic place to live, work, study, and invest.

Its primary goal is to enhance the visitor experience and drive economic growth through tourism.

A municipal services corporation’s shares are owned by a municipality or a municipality and one or more other public sector entities. Such corporations are connected to the municipality, but are at arms-length as they have autonomy over their operations.

Much of the work to be done to create an MSC is dependent on the implementation of the accommodation tax by the lower tier municipalities and the acceptance of the proposed governance model pending legal review.

Phase 1 of establishing a service corporation begins with a proposed governance model reviewed by lawyers this month.

The second phase will include the adoption of the accommodation tax bylaw and proposed governance model by the lower tier municipalities

In October and November, a business case is to be created for a municipal services corporation and a service payment agreement will be established between the county and the local municipalities.

The business case will be presented to county council in December.

Phases 3 and 4 will be undertaken in 2024.

Council has previously been told that as much as $245,500 could be generated by the MAT at the county if the program were implemented. Further, the funding from MAT would cover the payroll costs of tourism staff that would support its mandate and objectives.

Danielsen said everything come to fruition as soon as possible.

“It seems like there’s a lot of enthusiasm for us moving forward with this process,” said Danielsen.