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Tourism Ucluelet considering hotel tax increase

Destination marketing organization putting its next MRDT spending strategy together
Tourism Ucluelet is considering an increase in the district’s MRDT from 2 per cent to 3 per cent. (Westerly file photo)

Ucluelet’s destination marketing organization is putting its next spending strategy together and considering a tax increase to boost its budget.

The district’s five-year Municipal, Regional and District Tax financial plan expires next year and a new one is due on the province’s desk this September.

The MRDT, formerly known as the additional hotel room tax, is paid by tourists staying at the town’s local fixed roof accommodation providers that goes into Tourism Ucluelet’s budget. A recently added branch of the MRDT is collected by accommodations advertising through online accommodation platforms with those funds allocated towards affordable housing pursuits.

Neighbouring Tofino charges a 3 per cent MRDT while Ucluelet has stayed at 2 per cent, though that could change in the next plan.

“Most communities around Vancouver Island and the province are choosing to move forward with the 3 per cent,” said Calum Mathews of Tourism Vancouver Island during a Tourism Ucluelet delegation to the town’s municipal council on Jan. 11. “The general finding is that it generates more OAP revenue that can go towards affordable housing and it’s more general and incremental revenue to support tourism related activities in a community.”

Mayor Mayco Noel said he was supportive of the increase to 3 per cent if the additional money would be allocated towards easing tourism’s financial burden on local taxpayers.

“You see some of the shortfalls that we have here at the district as we’re sitting here with the impact that tourism has on our community, whether it’s picking up garbage and everything else,” Noel said.

He said moving visitor services from the local chamber of commerce’s umbrella to Tourism Ucluelet in 2017 was a “big win” and wondered if there are other tourism related expenses that could be covered by MRDT funds.

“What other things are possible to put under that (added) 1 per cent and maybe lessen the impacts on taxpayers? At the end of the day, when we’re talking about signs moving tourists around and parking, right now town’s quite fine the way it is, but when we’re looking at that 1 per cent, I hope you’ll come up with creative solutions,” he said. “I know you have restrictions from the province, but I think it’s going to take some creativity and I know the province is open to those conversations.”

Mathews said other issues being discussed in the financial plan’s preliminary discussions include whether to continue operating both the visitor centre at the Tofino-Ucluelet junction as well as the one on Peninsula Road and how sustainable tourism fits into the plan.

“There’s been a huge focus over the past two days of conversations at the start of this process around sustainable tourism and really trying to focus on ensuring that tourism is fitting within the needs of residents of Ucluelet and the broader natural environment,” he said. “Also digging deeper into this affordable housing issue and how MRDT can help to power some solutions towards that.”

Tourism Ucluelet board member and treasurer Julian Ling said the MRDT brought in roughly $2 million from 2018-2022 and suggested increasing the 2 per cent tax to 3 per cent would bump that up to $3 million over the next five-year plan. He added that the affordable housing allocation from the online accommodation platform portion accounts for about $100,000.

He said Tourism Ucluelet is expecting to collect $712,000 in 2022, with $355,000 coming from general MRDT funds, $100,000 from online accomodations, $46,000 from sales and $35,000 from grants, adding that there is currently an additional $177,000 leftover from last year.

“We got lucky last year with funding,” Ling said. “We cut back on our marketing because we were asked to and it was the right thing for us to do, so we didn’t spend on those things, but we were quite lucky and fortunate to get many grants from federal sources and the province, which helped maintain some buoyant funds. That gives us the ability to spend quite well this year, in fact spend beyond our means really as part of restarting and coming out of COVID.”

He said 2022’s funds will be allocated with $231,000 spent on marketing, $177,000 on visitor services, $150,000 on operational expenses, $100,000 on affordable housing projects and $54,000 on stakeholder support.

Matthews said Tourism Ucluelet’s draft five-year strategic framework should be ready for review in February followed by stakeholder engagement and a draft presentation in March with the plan ready to be submitted by September.

“We also plan to conduct a series of one-on-one and small group interviews to ensure that we’re having truly deep and meaningful engagement through the process,” he said.

“Working directly with council really is critical to setting us up for success and ensuring that the MRDT strategy reflects the goals and desires of hoteliers and the broader tourism sector, but also of community members and we believe that to be hugely important here.”

Coun. Marilyn McEwen asked whether accommodation providers with less than four rooms would be part of the engagement process.

Matthews replied that while those operators do not have an official vote on the plan, they will be included.

“From a legislative perspective, we are required to have properties that have four or more rooms actually sign off on a physical piece of paper in support of the renewal, so those properties require a bit of special attention simply because we have to go knock on the door and ask for signatures and support,” he said. “That said, we are looking to engage with any accommodation provider, whether they’re fixed roof or not. Short term rentals and bed and breakfasts are important contributors to the visitor economy and proprietors of those business types are individuals that we’re very much looking forward to engaging with through the process.”

Noel suggested the review timeline might need to be sped up as Ucluelet will be going through a municipal election this October.

Ucluelet CAO Duane Lawrence agreed and explained no major decisions should be made by the current council once campaigns get underway.

“Generally speaking, council should not be making any new policies, directions, bylaws or changes in direction once the nominations are out, so technically August 15 or around there, preferably mid-July at the latest,” Lawrence said.

Noel added that he looked forward to seeing a creative spending strategy.

“I look forward to the engagement. Get on out there and as Coun. McEwen said, don’t forget about the little guys out there that may not be the big producers,” he said.

He also questioned whether campsites could be added to the MRDT program as they are currently an untapped resource in terms of collecting the tax.

“It’s been going on for some time now and the campsites are actually, I think, the most labour intensive accommodation providers, but unfortunately they’re not contributing.,” he said.

Matthews explained the MRDT program only collects from fixed-roof properties.

“Unless there’s a higher level change to the legislation, that’s not something we would be able to impact here in Ucluelet through this renewal unfortunately,” he said. “But, there can be other opportunities to try to find some creative solutions to get campgrounds and other sorts of businesses to potentially contribute in different ways.”

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Andrew Bailey

About the Author: Andrew Bailey

I arrived at the Westerly News as a reporter and photographer in January 2012.
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