Municipal Accommodation Tax (MAT)

• The MAT is common in municipalities across the province/country.
• It ensures visitors contribute to the upkeep and development of the community they enjoy.
• Revenues are reinvested into projects that support tourism, economic growth, and infrastructure improvements.

When a municipality chooses to implement a MAT they determine the types of accommodation providers it applies to. Some examples of accommodation providers are: hotels, motels, online home sharing platforms, short-term rentals and campgrounds.

In general terms, the tax applies to overnight stays of 29 days or less that could be considered for the tax. The legislation includes exemptions for colleges, universities, the Crown, educational boards, hospitals, and long-term care homes. 

At this time, Council has not decided on the implementation of the MAT and who the MAT would apply to. That decision will be made at a future date.

The provincial regulation stipulates that the municipality can retain up to fifty percent of the MAT revenue. The remainder is distributed to an eligible, not-for-profit tourism entity to be used exclusively to promote tourism in the area. 

The fifty percent of funds retained by the municipality can be used at its discretion for services and infrastructure. However, these funds are typically used to enhance tourism related amenities while benefitting residents, including revenue support for parks, beaches, trails, facilities, and more.

Fifty percent of the funds generated through the MAT program are to be shared with an eligible not-for-profit tourism entity. An “eligible tourism entity” is a not-for-profit entity whose mandate includes the promotion of tourism in Ontario or in a municipality. The municipality is required to enter into an agreement with the eligible tourism entity that receives a portion of the MAT.

This agreement must include reasonable financial accountability measures to ensure amounts paid to the entity are used for the exclusive purpose of promoting and supporting tourism.

Since this not-for-profit entity does not exist in the Municipality of Kincardine, part of this work would need to include a process to identify the most appropriate and suitable governance structure for this entity should Council decide to proceed with a MAT.

Most municipalities enacting the MAT also implement short term accommodation (STA) licencing to regulate the use during this process. Preliminary discussions with municipalities indicate that STA licensing should occur prior to the implementation of the MAT and is a critical factor in the successful implementation of the MAT. 

The purpose of short-term licensing is to:

• Ensure that short-term rentals are operated in a safe and legal manner.
• Help the Municipality understand the housing supply dedicated to short-term rentals which is believed to remove the supply from the housing market.
• Ensure that rentals located within neighbourhoods do not adversely impact neighbouring property owners
• Ensure occupants that accommodations comply with the Ontario Building Code.

Several lakefront municipalities have started to regulate short term accommodations including Northern Bruce Peninsula, South Bruce Peninsula and Lampton Shores. 

If regulating short-term accommodations is deemed desirable by Council, then implementation of the program including developing a licencing by-law and related licencing fees, options for administration and budget would be part of this process. This would be investigated by staff and would be presented to Council for direction.

Once the MAT is approved it is a mandatory fee, and the collection details are established in the by-law. The municipal Treasurer is responsible for administering the by-law to collect the MAT and establish related procedures and documents.  

Community engagement will take place throughout the process to understand the potential impacts, both positive and negative, before implementing a MAT. To help inform the engagement process and provide your input, please share your comments or questions with us here. 

Sectors include commercial accommodators, short term rental accommodators, the Kincardine and District Chamber of Commerce, Lakeside Downtown Business Improvement Area (BIA), the tourism industry, businesses, the Regional Tourism Organization (RT07), realtors, Bruce County, other local municipalities, Air BNB, VRBO, and the general public.

Engagement and communication will take place throughout the process. The content audience might also change depending on where we are within the process.

Financial impact - Conduct a forecast of revenues generated by the collection of the Mat for both commercial and short-term accommodators. This includes the collection of data regarding the number of accommodators, existing and historical visitation patterns and occupancy, expected price etc.

Potential uses of the MAT revenue - how MAT revenues might be applied to tourism most effectively, and where the non-tourism related dollars could be spent.

Stakeholder communication and engagement – this work would involve the development of a communication and engagement plan to gather input from stakeholders to understand the feasibility and potential impact on the community, local accommodation providers and tourism stakeholders.