MNBP Reporter’s Notebook: Taxes Up 8.28%; 4% MAT on Hotels/Motels for 2025

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By John Francis, Bruce Peninsula Press

The Municipality of Northern Bruce Peninsula has several controversial issues on its plate this winter and spring, which means it has several difficult decisions to make.

An upgrade to the municipal arena in Lion’s Head has been paralyzed by spiralling costs compounded by recently discovered drainage problems at the existing arena site. Alternatives are being explored; a staff report is eagerly awaited.

Municipal infrastructure is aging, while the costs of improvements are rising much faster than inflation, also much faster than recent tax increases. This is especially true of roads, which are by far the largest single element on both sides of the municipal budget — capital and operating.

MNBP’s capital reserves — funds set aside to fund long-term improvements — are nowhere near adequate to deal with the looming shortfalls. Council recently agreed to increase taxes by an extra 1% and designate that for Capital Reserves, but Mayor Milt McIver has stated repeatedly that this is not nearly enough.

Operating expenses are also increasing steadily — the Bylaw Enforcement department has more incidents to deal with each year, as does Fire and Emergency Services. These costs far outstrip overall inflation.

At its March 11, 2024 Meeting, MNBP Council passed the 2024 Budget, implementing a tax increase of 8.28% and a budget increase of 10.21%. Mayor McIver commented, “I’d like to see more going in to capital reserves; it doesn’t take long to spend it…”

Long-term strategies to generate more revenue without increasing taxes came up on two separate occasions later in the Meeting: an extension of the Municipal Accommodation Tax and a renegotiation of MNBP’s contributions to Bruce County.

4% MAT Will Apply to Motels, Hotels for 2025

One of this Council’s objectives is to find ways to make “tourism pay for tourism”. Property owners have long complained that it was unfair to pay for tourism-related expenses — washrooms, parking lots, bylaw enforcement, emergency response — out of property tax revenues. In a move to address this, the 2018-22 Council implemented a 4% Municipal Accommodation Tax on Short-Term Accommodations, aka STAs. (STAs are residential properties that are rented commercially for periods of less than 30 days.) After much discussion, the current Council voted on March 11 to extend the 4% MAT to hotels, motels, hostels, cabins, cottages and Bed and Breakfasts, (but not on campgrounds or marinas) beginning Jan 1, 2025.

Council members were not entirely comfortable with this decision. Councillor Todd Dowd pointed out that a lot of commercial operators oppose this, despite the fact that their Chamber of Commerce will benefit (half of MAT revenues must be given to a tourism-supporting organization, Tobermory Chamber of Commerce in this instance). He noted that he had yet to hear any suggestion of an alternative way of generating comparable amounts of revenue.

Mayor McIver noted that the business community wants to know where the MAT revenues will be spent.

Councillor Smokey Golden stated that Council had received many presentations in recent years; opposition to this kind of initiative is not new. STA operators resisted the licencing initiative and the MAT just as commercial operators are resisting now. “It’s fair to say there are mixed feelings.” She pointed out that Council had agreed at its last meeting not to implement the MAT extension in 2024 but in the long term, MNBP needs to “bite the bullet — I’m not sure we’ll ever get 100% support.”

Councillor Aman Sohrab is Council’s representative on Tobermory Chamber of Commerce; he has been privy to business reaction to the proposed changes. He argued for implementing a 2% MAT on commercial operators, not 4%. He suggested that commercial operators pay commercial taxes and have to meet many onerous regulations from which STAs are exempt. The 2% reduction was a matter of fairness. Councillor Golden agreed that it would be good to meet businesses part way. She felt that adding 4% to a bill might make a difference between people coming and not coming, whereas 2% “seems innocuous”. 

Councillor Sohrab suggested that MNBP could always raise it from 2% to 4% at a later date. Mayor McIver argued that if you’re going to 4%, you might as well start there.

Treasurer Teresa Shearer explained that charging two different rates would introduce a lot of complication. Many residential properties are owned and operated by commercial accommodators. What rate do you charge them and how do you decide? She suggested a single rate is preferable. In the end, Council followed her suggestion.

Tracking the $8 Million/Year We Send to Bruce County 

Under “Other Business”, Deputy Mayor Anderson once again raised the issue of tracking what we contribute to Bruce County. After completing the 2024 budget process, “we realize it will be a bit of a struggle as years go on”. He pointed out that Bruce County gets as much of our tax money as we do and strongly recommended that we do a cost/benefit analysis on that money. He asked other Council members for feedback.

Mayor McIver agreed that a cost/benefit analysis was a good idea. He asked if a consultant should be engaged to conduct it.

CAO Peggy Van Mierlo-West stated that staff would love to do this themselves, but it is simply too large an undertaking. She offered to prepare a report for Council’s next Meeting with information concerning costs.

Councillor Dowd wondered if we could put the shoe on the other foot and get the county to tell us what they give us. The Deputy Mayor argued against this, suggesting that “it would be interesting to compare our numbers with theirs”. Mayor McIver agreed, noting that he had discussed this with county administrators, asking for a summary of county expenditures in MNBP. “They are counting on doing that,” he said, “but I think it’s important that we do it too”.

Councillor Golden was cautious about spending money on this and wondered what the possible outcomes might be. Is it legally possible to leave the county?

The Mayor suggested a more nuanced approach. If there’s a huge discrepancy between what we’re sending and what we’re getting back, we have to prove it. Just saying we’re getting a raw deal isn’t enough. But we also need to look at reality — what is possible?

The CAO explained that other small municipalities have tried to de-amalgamate and have found that they could not do it. “But we can evaluate what we are getting in services; should we find that there are discrepancies and want to change that, we can start a negotiating process with the county”. Are the various county services a benefit to us? If not, why are we contributing to them? “We need to have that conversation. My belief is that at the end of this process, we will end up with a better relationship with the county.”

The CAO will bring a report to the next Council Meeting suggesting next steps and anticipated costs.

Proposed Communications Tower on Lindsay Rd 40

Shared Tower Inc proposes to install a telecommunications tower at 75 Lindsay Road 40 (the first concession north of Dyers Bay Road). The proposal has run into stiff resistance from some local residents and landowners. In letters and delegations to Council, they cite numerous studies linking microwave towers to health concerns, even cancers. They also claim the public consultation process was not conducted properly.

Shared Tower presented to Council on Feb 12. They stated that Federal regulations require that microwave radiation be kept to less than 2% of the level shown to cause harm. The Shared Tower facility will introduce a further safety margin — it will be limited to 2% of the amount they are permitted. They presented 62 letters of support.

On March 11, MNBP Council received a delegation of four presenters opposing the tower. (Their documentation can be found online in the Agenda for the Mar 11 Meeting.)

After the presentations, Councillor Golden kicked off the discussion by stating that her only concern was whether the consultation process was compliant. “The science is not for us to decide.”

Mayor McIver agreed that there is a process to follow. Council is waiting on a staff report as to whether the process followed the rules.

The CAO stated that there are a few things Council is waiting on, one of which is a letter from the municipality’s lawyer addressing whether or not to start over.