Hotels are mad about Toronto’s World Cup tax increase
The toll on tourism is projected to haul in $57 million for the city
Most people living in Toronto probably haven’t noticed, but the Municipal Accommodation Tax—an extra fee added to hotel and short-term-rental bills—went up from 6 to 8.5 per cent this past June. The motivation behind the move is to raise funds for the FIFA World Cup, taking place at BMO Field next June. The extra 2.5 per cent will be in place until the end of the tournament, and it’s expected to raise $57 million for the city. Toronto’s hotels, though, aren’t happy about it, suggesting that the increase will tank Toronto’s competitiveness against other cities, particularly for business tourism.
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That $57 million is a big purse, but it’s only a fraction of what’s needed to pay for these games. According to a city budgeting report, Toronto’s total World Cup costs are expected to be $380 million. The city and Ottawa have so far committed $104 million each, while Queen’s Park is chipping in $97 million. Where the additional $75 million will come from is anyone’s guess.
Funds raised via taxes will mainly go toward upgrades at BMO Field, planning and security as well as revitalizing Etobicoke’s Centennial Park as a destination for training and recreation.
Toronto’s tourism industry is a pillar of the local economy, bringing 26.5 million visitors and $12 billion to the city each year. Data projecting how tourism might be affected by the hotel tax has yet to be released, but Andrew Weir, president and CEO of Destination Toronto, isn’t worried. “Toronto has maintained a strong pace of booking future meetings and events, including from the vital US market,” he said in a statement. Numbers from this year’s second quarter also look promising, with a two per cent increase in visitor spending and a jump in accommodation demand.
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The World Cup is forecasted to bring in more than 300,000 visitors, generate $393 million in revenue and create more than 3,500 jobs. We’ll leave the book-balancing gymnastics to the bureaucrats at city hall.
