By John Francis
Stop me if you’ve heard this one…
Ratepayers tell our mayor and Councillors that “tourism should pay for tourism”. They are quite clear that they don’t want their tax revenues to be spent on tourists. Tourism revenues should take care of rescuing them, policing them, putting out the fires they start and generally cleaning up after them.
Enter paid parking and the Municipal Accommodation Tax.
But the businesses whose customers pay these taxes are feeling hard done by. They feel they pay too many taxes already. They’re not wrong. It’s just that the taxes paid on tourism revenues don’t go to the municipality. They go off the peninsula and they don’t come back.
Let me dig out my pencil again.
Commercial properties in our municipality pay a total of approximately $220,000 per year in property taxes. At a guess, $150,000 of that is from tourism-based businesses.
And out of that $150,000, MNBP is supposed to somehow fund OPP policing, fire and rescue services, garbage collection and recycling, bylaw enforcement, washrooms, porta-potties, parking lots, parks and picnic areas and so much more.
Good luck with that.
At a municipal level there is a huge imbalance between the revenues the municipality collects from tourism and the services it must offer.
But what other revenues come from tourism?
Well, sales tax for starters.
MNBP gets a lot of pushback for wanting to collect 4% Municipal Accommodation Tax. But on every one of those transactions, the province is already collecting 8% and the feds are getting 5%.
My back-of-the-envelope calculation is that tourism revenues (hotels, motels, restaurants, campgrounds, boat tours) in MNBP are close to $50 million per year. That means $4 million in Provincial Sales Tax goes to Ontario and $2.5 million in GST goes to Canada.
Bear in mind that this is just what they rake off tourism. I’m not counting the business taxes on the profits nor the income taxes paid by owners and employees. Just the sales taxes that are raked directly off raw tourism revenues.
There is a principle in government that there should be a connection between the tax revenues something generates and the government services offered in return. Quid pro quo. Fair play.
Does the Government of Ontario give back $4 million in services for tourism in MNBP?
Free OPP service during the tourist season, for example? Not a chance. A stoplight at Hay Bay Road? We’ve been asking for decades.
Does the Government of Canada give back $2.5 million in services for tourism in MNBP?
No again. We’re lucky they don’t try to bill us for the Coast Guard.
My point being that Canada and Ontario rake off $6.5 million a year from our tourism revenues and give nothing back.
MNBP gets a measly $150,000 a year in commercial taxes and is forced to provide a full smorgasbord of services to people who don’t live here and don’t pay tax here.
Hence paid parking and the Municipal Accommodation Tax.
But will they be enough?
Not even close.
As our communities get more and more crowded, we are going to need dramatically more infrastructure.
Wells are running dry in parts of Tobermory. The only solution is town water. That will cost millions.
Expanding the sewage lines in Tobermory will cost millions. Building a sewage system in Lion’s Head will cost millions. Extending the Lion’s Head water system to Ferndale will cost millions.
Dramatic increases in traffic are making it increasingly dangerous for pedestrians and cyclists in Tobermory, Lion’s Head and Ferndale. We need a much larger network of sidewalks, walking paths and bike lanes.
These infrastructure needs are all directly related to tourism. Tobermory needs town water because tourism increases water consumption. Lion’s Head needs sewers because tourism generates more sewage. Every road needs a sidewalk because tourism generates a lot more traffic.
We need to remind the senior levels of government how much money they get from tourism and how badly they are failing us. We need to do it over and over again. We need to be tiresome.
We need to bug MPP Rick Byers. We need to bug MP Alex Ruff. We need our Council to be tiresome on our behalf, keeping up the pressure on our MP, our MPP and the various ministers and ministries.
We need to be squeaky wheels, reminding them that they are getting millions of dollars a year and giving back nothing.
