Wawa, Ont. plans to implement 4% accommodation tax to raise revenues for tourism

The Municipality of Wawa is giving staff the green light to develop a 4 per cent municipal accommodation tax bylaw to generate funds to bolster local tourism.

Council will be presented with the bylaw for approval at a Sept. 17 meeting. If it passes, the municipality is aiming to implement it by April.

An accommodation tax is a fee paid on short-term accommodation purchases such as hotels and motels, Airbnb, and resorts. It does not apply to meal purchases, valet services, or parking. 

The extra fee would be charged to customers booking a stay of less than 30 days within the municipality.

Alex Patterson, Wawa's director of community services and tourism, says the revenues from the accommodation tax can be used to support year-round tourism, and to ease the burden for local taxpayers to support tourism development.

"A community like ours, a relatively small community that has lots of visitors over the summer time, we struggle to operate a lot of these amenities anytime else," said Patterson in an interview.

Following other northern communities

Many northern Ontario communities have already implemented an accommodation tax and 4 per cent is the standard, according to Patterson, pointing out that Marathon, Ont., a town 190 kilometres north of Wawa, has a rate of 6 per cent. 

With a current tourism budget sitting at $125,000, basically to operate Wawa's tourist information centre and amenities, the new tax is expected to generate roughly $400,000 extra every year. 

The money must be spent on tourism development. 

"Change is hard, and I think that whenever somebody says a new tax, that's a big, scary, hard thing to do, but fundamentally, the goal of this is to improve tourism in our community and diversify our economy," said Patterson.  

'It puts us in a real conundrum' 

A portion of the tax is tobe used to advertise the natural beauty of the municipality, however, Ray Vaillant, owner of Outdoorsman Motel in Wawa, isn't convinced it's going to do much to bolster tourism.

"We have signs 600 kilometres away from us saying 'experience Wawa,' I don't think that has much impact," said Vaillant.

"Has there been a cost benefit analysis done on this to say yes, for every dollar we spend on Wawa, we're getting five back in this town?" 

Vaillant said if the tax gets implemented, the Outdoorsman Motel won't be able to absorb the extra cost, and he will have to adjust the rates of the rooms, and pass it on to visitors.

He says it could jeopardize some of his long term deals with regular customers.

"I have signed contracts with corporate clients, for a negotiated rate. Now to have to add 4 per cent? It puts us in a real conundrum, so to speak. We're stuck in the middle here," he said.

"It's almost five and a half per cent more to the guest when people are travelling, and are we going to get fewer travellers because of this?"

According to Wawa Mayor Melanie Pilon, a number of engagement opportunities took place in the community to allow residents and business owners to voice their feedback. A range of input was recorded, she said.

"We do have to implement the program," said Pilon. "I believe that if we give it time and we really put our best foot forward like other communities, there's no reason why a program like this won't work for us."

The municipality will be tasked to create a local tourism organization responsible for holding 50 per cent of the program revenue. 

Staff expect that it would take a few years to set-up this third party entity and until it can be formed, the municipality would hold the revenue in a dedicated reserve.

At this time, there aren't solid plans on where the added revenue will go, said Pilon.