Hotel Tax Defeated

A property tax increase which would have seen hotels, motels and bed and breakfasts with 10 or more rentable bedrooms pay 1.5 percent of their taxable assessment for tourism promotion has been defeated.

On Monday Council voted 5 - 0 to defeat a motion approving the change made in Executive Committee on November 10th. Councillors Patrick Boyle (who sits on the Downtown Moose Jaw and Tourism Moose Jaw boards) and Carla Delaurier were absent.

If the motion would have been given final approval the expected $1 million plus tax increase would have been used to fund tourism/event promotion, $50,000 City of Moose Jaw administration fee, Tourism Moose Jaw and Downtown Moose Jaw.

For most hotels it would have added tens of thousands of dollars to their annual property taxes. In some cases over a 50 percent property tax increase.

On Monday there were representatives from seven hotels in attendance plus the Moose Jaw and District Chamber of Commerce opposed to the proposed tax.

Brian Swanson speaks on behalf of the Comfort Inn - MJ Independent photo

Familiar Face Addresses Council

Former councillor Brian Swanson, speaking on behalf of the Comfort Inn.

One of the big areas he centered on was what he saw the vote really was targeting financially and the negative impact to the hotels.

Swanson talked about the effect the proposed levy would have on the Comfort Inn’s property taxes.

He said from 2022 to 2025 the hotel had seen property taxes climb by 39 percent from $77,573 to $107,861.

The proposed levy would see hotel’s property taxes increase by $66,000.

Swanson attacked Executive Committee comments by Councillor Heather Eby about increasing the levy from 1 percent to 1.5 percent of taxable income.

“I read where you need no money and don’t want to come back next year for more.”

“It is not a DMF (destination marketing fund) it’s a tax increase….they are not the same,” he said, adding “a DMF is voluntary…a property taxes increase cannot be declined.”

Swanson spoke about the tax arrears to be announced and how was the City justified to increase property taxes in such an economic environment.

He continued on how some of the requirements of the chain hotel is they cannot charge a DMF on a room if the fee does not go to a DMF. So the hotel has no way of recouping the cost.

“Property taxes increase goes to the City of Moose Jaw.”

Under the proposed tax levy Swanson pointed out the hotels would be taxed for unoccupied rooms plus amenities such as pools and restaurants.

Swanson took a shot at the two groups - Downtown Moose Jaw Association (DMJA) and Tourism Moose Jaw.

He said DMJA has had three years to set up a BID (Business Improvement District) and it was up to them to pay for it and not the hotels.

“If they want to have a BID they should have a BID…it’s not the responsibility of hotel owners (to pay for it).”

He went on to speak about the approximate $70,000 line of credit provided to Tourism Moose Jaw by the City to pay for their “pigeon infested attic” and how the hotels would foot the bill.

“This proposal is anti-business.”

Swanson went on to speak about Prince Albert, Regina and Saskatoon with their BIDs being self funded and how funds collected for DMF in those communities is directed by the hotel associations.

He additionally announced that nine hotels had agreed and to fund a DMF where control went to the hotels to help fund events and tournaments.

“There’s a better way to do this, leave the hotels alone,” he said.

Council Backtracks From Executive Vote

Despite agreeing to a 1.5 percent of taxable assessment levy Council said they had made the decision too hasty.

Councillor Chris Warren spoke out against the decision agreed to in Executive Committee.

Councillor Chris Warren at Monday’s Council meeting - MJ Independent photo

“I felt we were going at this a little bit too fast,” Councillor Warren said, adding “there needs to be a lot of work that needs to be done.”

About the DMF he said “I just think that we need to take a step back. We need more time.”

“I ask that we send a signal that we heard (the message) from the hotels,” he said.

Councillor Dawn Luhning said she was not voting in favour of the Executive vote as she had not asked all of the questions at that time.

The question she said she missed asking “exactly how the amount of money is going to be collected from the hotels?”

Councillor Luhning indicated she didn’t realize it was a property tax increase and not a DMF - per occupied room fee.

Council vote unanimously 5 - 0 to defeat the Executive Committee vote.

Happy Hoteliers

It was a happy delegation after Council voted not to proceed with the proposed tax levy.

For 10 minutes following the vote they met in the hallway, congratulate themselves on what they saw as a victory.

Who would be there informal spokesman they appointed Brian Swanson the duties.

“I’m glad Council came to the right decision. I’m really looking forward to a bigger and better Destination Marketing Fee group that will increase the revenues and the hotels can decide what events (through applications to support).”

At present the Visit Moose Jaw group has four hotels. Informally nine hotels have agreed to come together to form a destination marketing group.

“I think it’s awesome. It will turbo charge the ability for them to fund events, tournaments, conventions…”

Swanson said going to DMF funding route was the best way.

“As I said tonight a tax is paid whether the rooms are occupied or not. Some hotels couldn’t charge a DMF. This way it’s based upon occupancy that’s so if there’s someone in the room there’s a good chance you’ll get the DMF from them,” he said.

Asked about the additional DMF funds bringing in more and bigger events he said “I would hope so.”