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 May 9, 2017 
SPOTLIGHT

» Are You Coming? ORHMA’s 14th Annual Provincial Golf Tournament

Join the Ontario Restaurant Hotel & Motel Association (ORHMA) for our 14th Annual Golf Tournament on Wednesday, June 21 at Nottawasaga Inn Resort & Conference Centre in Alliston. ORHMA’s Annual Golf Tournament brings Ontario’s hospitality industry together and is one of the best opportunities to reach the leaders and opinion-influencers in our sector! For participation details, click here. 

GOVERNMENT NEWS 
» Municipal Taxes Across Canada

On May 27, the Ontario government, through Budget 2017, authorized options for municipalities to add a hotel room tax. There are still details to be drafted surrounding this legislation but the ability for municipalities to add a room tax is open.  This is not the first municipal hotel tax legislation as it is a common practice in many North America jurisdictions. After all, the idea for a hotel tax stemmed from similar practices in other cities. Read more to view a  provincial comparison chart of the various tax measures currently in place across Canada.   

Province

Hotel Room Tax Measures Available to Municipalities by Province

BC

  • 2% Municipal and Regional District Tax (MRDT) on lodging in 45 municipalities and regional districts
  • Select hotels in Vancouver levy an additional 1.5 % Destination Marketing Fee (DMF) on top of the 2% MRDT, which makes a total of 3.5% additional taxes on some accommodation in Vancouver

-          Money is supposed to be used for marketing activities, most of it is however some communities try to stretch the definition to include funding events however there is now greater scrutiny by Provincial Government as they don’t support this type of usage  either

-          Key is the tax cannot be implemented without 51% of the rooms and 51% of the accommodation businesses supporting the application

-          It is only for 5 years so if the Hotels are not happy they vote the tax out after 5 years – this happened in 3 communities because local governments didn’t follow their proposed plan

-          The application is by the city however to get the support a business plan must be presented prior to the vote

-          The hotelier only support the tax if it meets their needs thus most of the money goes to a DMOs that the Hotels control

-          Tax can be up to 3% - most are 2% but abut 10+ are 3% - on 3% the Provincial Government take .2% for a special large event fund

-          Some communities have the 3% plus a DMF that they directly control – note the Provincial hotel Tax is 8% plus 5% GST plus the 3% plus 1%- 1.5% DMF = tax on tax to about 18% in Vancouver all in

This tax is in about 55 communities of the 145 in BC – almost all large ones and a few very small ones -he hotel industry is mostly supportive of it

Alta

Alberta has not yet given municipalities the authority to tax hotels.   However, they are monitoring very closely the development of "Big City Charters" by the province for Edmonton and Calgary that may grant them additional taxing authority.

 Alberta does have a provincial 4% Tourism Levy that all hotels collect and submit to Alberta Finance.  

When the Tourism Levy Act was enacted in 2005, 80% of the money went to marketing (Travel AB) and 20% went to product development (AB Tourism Division).  However, in recent years this has changed and the money essentially goes to General Revenue and the majority is still use for tourism marketing and product development but increasing dollars are allocated elsewhere i.e. parks, museum capital projects, and other government pet projects.

All of the DMFs in Alberta are voluntary and industry led with the exception of Banff which has a Tourism Improvement Fee that operates as part of their business license fee.  It's not clear that this is legal under the existing Municipal Government Act but it has never been challenged and the business community in Banff supports it.  The Town of Fox Creek tried to impose a similar business license fee 2 years ago, but the AHLA threatened a legal challenge and the Town ultimately rescinded the bylaw.

  • Some cities in Alberta levy an additional Destination Marketing Fee (DMF, up to 3%) on top of the 4% MRDT

DMF: 3% Calgary, 3% Edmonton, 2% Jasper, 3% Canmore,2% Lethbridge, 2% Medicine Hat, 1% Camrose, 1% Grand Prairie, 1% Slave Lake, Corporate Hotel DMFs:3% Canalta Hotel Group,3% Pomeroy Group

Sask

The Cities Act specifically disallows Municipalities from implementing a tax for any reason.  The DMP here is a self-directed – private sector initiative only.

The DMP in Regina and Saskatoon is self-directed, private sector initiative only.

Man

  • The cities of Winnipeg and Thompson levy 5% tax on accommodation within the city
  • The city of Brandon adds $3,- per night

Municipalities can pass a tax on hotel stays. In Manitoba there are 6 municipalities that have done this under the previous government. - Winnipeg, 5%:June 2008, Thompson, 5%: January 2009, Brandon, $3.00 per room night flat fee: July 2012, Flin Flon, 5%:Feb 2014, Portage la Prairie, 5%:  April 2014, The Pas, 5%:  2016

The tax starting with Winnipeg was setup to create tourism but the reality is that only a very small portion of the fund is actually being used for that. 

Municipalities have to approach the provincial government for room tax approval. Under the previous government this was a rubber stamp. Shortly after the government changed in April 2016, the town of Churchill passed an accommodation tax but as of today they have not received approval from the province (were told it would not be passed in the form it was written)

QC

  • Hotel room tax: $2 per room night - Québec City and area, Outaouais, Charlevoix, Saguenay-Lac-Saint-Jean, Chaudière-Appalaches, Eastern Townships, Gaspésie, and Centre-du Québec
  • 3.5 % Accommodation tax applies on lodging in Montréal and Laval

In Quebec, the Act governing the Ministry of Tourism and the Accommodation Tax allows the "voluntary" choice to implement a tax on accommodation only on a regional basis (Regional Tourism Association).

The Act currently does not allow the establishment of a tax on urban accommodation (the territory of the City of Montreal or the territory of the urban community).

It can not therefore be said that Quebec law allows implementation at the city level.

NB

  • The city of Bathurst adds $2,- tax per night on accommodation
  • MRDT is 2% in Miramichi, Saint John and Charlotte County

NS

The room tax is implemented in three regions, Halifax (2%) Cape Breton (2%) and South Shore at $2 per room night.

Halifax splits their tax income between Destination Halifax (60%) and Special Events for Halifax at 40%. Essentially the entire tax goes to funding efforts to drive more visitation.

PEI

Charlottetown and Summerside both charge a levy.  The levy is divided between the city tourism (discover Charlottetown), city of Charlottetown Special Events Reserve Fund, and Meetings and Conventions receives a portion.

Charlottetown will be going into negotiations for renewal. The levy was initiated by the hotel association with backing from M&C PEI.   

Cavendish has plans  to add a 3% levy on hotels, cottages and campgrounds. ( finding out if this will be driven by the city or municipality) 

NL

Saint John’s and Gros Morne additional room tax: 3%

Saint John’s 3% tax was set up with an industry  agreement that the city spend for 33% of the cost of building the original convention center. This was later renegotiated to financed an expansion of the convention center.

St. John’s has its own tax act separate from the rest of the province therefore when the hoteliers in conjunction with the city asked for the legislation to be changed.  There is a desire by other municipalities to have the ability to be able to do the same.  An industry campaign to roll out similar room tax implementations found that the only way  the operators would support this if the revenue is spend on tourism and controlled by the industry through a board.  There may be an upcoming ask to government to change the legislation based on this criteria.


» Fighting the Beverage Alcohol Excise Tax Increases

ORHMA has joined an industry-wide coalition calling for a Repeal to the hidden escalating tax proposed in the 2017 federal budget. Alcoholic Beverages are made up of several layers of tariffs, levies and taxes as an easy grab for governments. The following are estimate numbers but accurate enough to give you a sense of overall impacts.  The increase for excise on spirits is $0.07 on a 750 ml bottle of whisky, gin, vodka etc.  When you take into account LCBO mark-up and HST this is about $0.20 on a bottle.  Spirits has the highest excise rate by far. Wine – the excise increase on a 750 ml is just over a penny and a half.  Total price impact is about $0.02. Beer – the increase in excise is $0.0062 per litre, so not even a full penny.  On a 24 of 341 ml bottles total price impact is $0.05. Excise tax on spirits equal to $3.51 per 750 ml bottle (@40% alcohol content) and added here are a layer of  “ad valorem” (price-based sales taxes and provincial mark-ups) that brings the impact to a retail price of $6.00.

Background

The Canada Revenue Agency (CRA) administers the Excise Duty taxes through  the Excise Act . All alcoholic beverages full under this act with various tax fee formulas applied to domestic vs  imports and to the different categories in spirits, wine and beer. 

Wines

Canadian produced wines utilizing Canadian grown grapes does not pay federal excise tax.  (the excise duty on Canadian wine was eliminated in 2006)

Beer

Excise duty is applied through a tier system based on annual production from a brewery without any requirement of brewing domestic grown agricultural ingredients. 

Spirits

The Excise Duty is applied at $11.696 per litre of absolute alcohol (LAA), which is the equivalent of $3.51 per 750ml bottle of spirit at 40% alcohol by volume (ABV). (rates are listed prior to the recent federal budget increase.

» LCBO Potential Strike 

OPSEU announced its LCBO workers will not strike ahead of the May long weekend. LCBO workers collective agreement with the LCBO expired on March 31. The next bargaining dates are scheduled for the end of May and early June.   OPSEU president Smokey Thomas said his “members are fighting to save the LCBO” from the “creeping privatization” that allowed beer sales in grocery stores. OPSEU also announced it has filed with the Ministry of Labour to represent contract faculty at Ontario’s colleges. Thomas called it one of the largest organizing drives in Canadian history with thousands of cards signed. Thomas said unionizing contract workers is important because “we've reached the point where 70 per cent of those teaching are underpaid contract faculty with no job security.” Regardless of what you read in the papers, ORHMA is working directly with LCBO corporate to ensure plans are in place for Ontario licensees in the event of a strike. We will keep you updated as this issue moves forward. This round of bargaining LCBO is using this website: https://lcbonegotiations.com/ to provide information about negotiations and other bargaining related news.     

» Making changes or additions to licensed areas of your establishment? This is what you need to know. 

AGCO

Licensees with valid liquor sales licences may apply to the Alcohol and Gaming Commission of Ontario (AGCO) for additional licensed areas and/or building alterations to an existing licence. An application is not required for the following changes to a licensed establishment:
  • Change to décor
  • Installation or relocation of doors
  • Creation of openings to existing walls/partitions that separate the licensed and unlicensed area, providing after the change, the partition and/or wall is 36"/.9M or higher
  • Removal of wall openings, arches, etc. to combine two or more areas into one area
  • Installation or removal of windows
  • Installation or removal of weather breaks, buffets, or server stations

To read more, click here.  

» Ontario Budget 2017
Hicks Morley

On April 27, 2017, the Ontario government tabled its 2017 Budget “A Stronger, Healthier Ontario” (Budget) and Bill 127, Stronger, Healthier Ontario Act (Budget Measures), 2017 (Budget Bill), omnibus legislation designed to implement some of the proposals contained in the Budget. In this FTR Now, we highlight key proposals that are of particular interest to employers, human resources professionals and pension plan administrators.  Read more.

» 7 Facts About Guide Dogs

Access Innovation Media

Guide dogs are assistance dogs that are trained to guide blind and low-vision people around obstacles. Guide dogs have a very important job to do and are probably even more clever than you think! Read more.   


BENEFIT SPOTLIGHT 

» This Smart New App Finds Side-Hustlers New Work, Businesses New Side-Hustlers

Notable Life

Hyr is a fully mobile app that connects talent looking for a side hustle with businesses looking to fill shifts, on demand. Started by Erika Mozes, Hyr is the first of it’s kind, “the Uber of the hospitality industry,” and changing the way servers and businesses find and fill jobs. It’s truly remarkable and taking Toronto by storm – and with the wave of summer students returning home and looking for work this summer, it’s sure to pick up speed. Read more.  

IN THE KNOW - HOSPITALITY NEWS, TRENDS + UPDATES


» Centennial College, CAFP launch paid internship pilot program

Canadian Restaurant News 

A new hospitality internship program will pay students in experience as well as cash. Centennial College’s School of Hospitality, Tourism and Culinary Arts and the Toronto branch of Canadian Association of Foodservice Professionals (CAFP) partnered to launch the pilot program that will allow 12 students to work in some of Toronto’s best restaurants. “It’s a unique situation as they’re paid placements,” said Joe Baker, dean of Centennial’s School of Hospitality, Tourism and Culinary Arts. “It’s much closer to an employment reality than an internship.” To read the full article, click here.  

» So many great restaurant facilities, so little time to get it right!
Stephen Ayers, STAY Ahead Hospitality

The F&B department in most hotels is by far the most complicated to run, difficult to get right and hard to make good money on. It is critical that general managers offer advice and support to their F&B teams, but it is incumbent  upon the F&B Director to direct and rally the troops to deliver a great experience and product. It is a daily challenge, believe me. I have been fortunate to have been involved in the planning, design and concepts for many hotel food and beverage facilities including opening a 420 room resort hotel with over ten F&B outlets. To read the full article, click here. 


INDUSTRY STATISTICS

» Ontario Tourism Performance Newsletter, ONtourism,  has just been released
Ministry of Tourism, Culture & Sport

This quarterly publication reports the latest tourism statistics including Border Crossings,  Accommodation Statistics, Travel Price Index, Economic Indicators and Consumer Response Indicators. The ONtourism is available here

» INDUSTRY EVENTS  
  • Community Accessibility Forums 2017 – various locations and dates. Click  here  for more info and to register

  • OTEC: Training and Facilitation Excellence:  May 10-11, 2017 - 9:00 am – 4:30 pm – OTEC Learning Centre, 21 Four Seasons Place Suite 300 – For more details, click here.

  • ORHMA Waterloo Region – Annual General Meeting – Tuesday May 16, 2017. –  Time  8:30am

The Region of Waterloo International Airport  –  4881 Fountain Street N #1, Breslau, ON  N0B 1M0. Click here to RSVP 

  • ORHMA London Region – Annual General Meeting – Tuesday May 16, 2017 – Time 3:30pm – 5:00pm – Courtyard by Marriott, Click here to RSVP 

  • ORHMA Provincial Annual General Meeting - Tuesday June 20, 2017- Nottawasaga Inn Resort and Conference Centre. All members welcome- For more information, email cdirocco@orhma.com 

  • ORHMA 14thAnnual Golf Tournament- Save the Date!  Wednesday June 21, 2017 – Nottawasaga Inn Resort and Conference Centre. For participation details, click here.  

»  COMPLIMENTARY INDUSTRY SUBSCRIPTIONS