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Municipal Accommodation Tax

In 2017, the Ontario government, through legislation, provided municipalities with the ability to add a Municipal Accommodations Tax (MAT) and each Ontario municipality will now have the option to implement such a tax. ORHMA strongly opposed this and unsuccessfully advocated against a MAT. It is ORHMA’s belief that, with the exemption of large metro areas that draw new business from markets outside of the province, a MAT will only shift current Ontario business from one destination to another and, with a few exemptions a MAT will not generate incremental revenues to Ontario’s tourism industry.

Municipalities across Ontario are starting to embrace a MAT and with a minimum of 50 per cent of the funding collected aimed to be used for tourism promotion and development it will create tourism business shifts between destinations. Those with larger tourism budgets will steal market share from the others.

It’s not about not wanting to apply a MAT to one’s hotel rate. The industry advocated against a government hotel tax, however, this battle was lost. Now it’s about evaluating your market ensuring your municipality’s tourism budget has the capacity to prevent erosion of the existing city tourism business and having the ability to generate new business. Competition between municipalities will be fiercer.

Taking the right steps to put heads in beds:

  • While a MAT will be entertained by municipalities, it is advantageous for tourism organizations and the hotel community to work together demanding that the largest portion of the MAT go towards funding tourism.
  • When setting the MAT per cent amount consideration should be given to the amount collected in competitive markets to prevent a disadvantage especially with meetings and conferences.
  • The hotel sector is represented on the tourism organization’s Board of Directors to influence and impact decisions and activities aimed to support a destination’s hotel success. An empowered and influential hotel steering committee is highly recommended. 
  • If tourism development is included in the funding it is essential that it supports new business growth to hotels.
  • The hotel community should work with the tourism organization in support of maintaining existing city tourism funding. 
  • The local tourism organization’s performance should be measured through established metrics. 

Hotels will be generating the funding thus it is important in supporting a municipal room tax that the destination has the ability to generate revenue to support the hotel industry’s success. Hotel growth supports job growth and the local economy including attractions, restaurants, retail and many services and products. Furthermore the funding generated from hotels located in rural areas must be used to promote their own destination. The MAT is an option municipalities in need of dollars will initiate. It is important that synergies are established between tourism organizations and the hotel community to support a destination’s overall tourism success.

On Tuesday July 31, ORHMA President & CEO, Tony Elenis, represented Ontario's hospitality industry at a meeting with the Ministry of Tourism. ORHMA is committed to voicing the concerns of the foodservice and accommodation sector on a number of items including the Municipal Accommodation Tax: 

Through the powers of the provincial legislation, Ontario municipalities are in the midst of approving the implementation of a Municipal Accommodation Tax (MAT) on the sale of transient accommodation.


  • Legislate an amendment to cap the MAT at 4% as the existing rules will eventually lead to inconsistency of fees in the eyes of the consumer with the potential of having extreme higher fees penalizing the hotel sector as well as the hotel guests. Domestic travel, largely Ontarians, make up over 80% of hotel stays. 
  • In recognition of the accommodation industry’s role in generating the entire MAT funding in growing visitation and promoting tourism in municipalities, the hotel sector should have approval of the local tourism’s business plan. There is a fundamental right for a sector to be included in the decision of spending if the sector generates the funding. The hotel sector should have approval rights of the eligible spending generated by MAT.