Tourism group calls for minister's resignation over hotel tax

Promoters of the New Brunswick tourism industry are not happy about a Gallant government decision not to introduce a hotel tax and they're calling on the minister of tourism to resign.

Ron Drisdelle, the CEO of the Tourism Industry Association of New Brunswick, said he was led to believe that Tourism Minister John Ames would bring in a $3 hotel tax on hotel rooms, and said the industry was surprised when Ames announced the opposite.

'The result of the hotel levy would inevitably tax New Brunswickers when they're on their holidays.'- Bill Fraser, cabinet minister

"Unbeknownst to us, without any prior discussion or forewarning, they put out that announcement a couple of weeks ago," Drisdelle told Information Morning Fredericton.

Drisdelle said a tax would bring in $6 million, which would be used to better market the province as a tourist destination.

During conversations in February this year, Ames led the association to believe a new tax was possible, Drisdelle said. Now, after pulling the rug out from an industry group that trusted him, he suggested, Ames should not be in cabinet.  

"If your major partner tells you one thing, and then comes around and blind sides you with an announcement contrary to what he's given you as an indication … it's very difficult to keep confidence levels where it was," said Drisdelle.

But Bill Fraser, the former tourism minister in the current Liberal government, said the association shouldn't have expected a new tax, since he'd already told the group's 2016 annual meeting that no tax would be coming.

"They don't need government to legislate another tax, mandatory, to every hotel in the province in order for them to have sustainable funding," Fraser, now the transportation minister, said on Information Morning.

Tax already exists in places

Fraser said tourism groups in Saint John, Miramichi, Bathurst, Charlotte County and Edmundston already have a hotel tax that helps pay for marketing.

But Drisdelle said it's not that simple.

"Some municipalities won't move towards collection because they would like to see the legislation in place," said Drisdelle.

Hotels that are part of large chains also won't add the tax unless there is provincial legislation, he said.

Neighbouring jurisdictions

A number of jurisdictions in North America charge some sort of hotel tax. In Quebec all hotels charge an additional 3.5 per cent tax on hotel rooms, while in Halifax the municipality charges a two per cent tax.

Fraser said one of the reasons New Brunswick doesn't have a hotel tax is the hotel market.

"Forty per cent of hotel rooms that were booked in 2017 were booked by New Brunswickers," he said.

"The result of the hotel levy would inevitably tax New Brunswickers when they're on their holidays."

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