Strongly-worded letter from business owner prompts heated debate on accommodation tax

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As city council decides whether or not to increase the municipal accommodation tax (MAT) from four to six percent, a strongly worded letter from a prominent local business has prompted a lot of questions.

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A letter dated Dec. 12 was sent by Richard Lafleur, President of Cedar Meadows, to Mayor and Council for their review.

The letter was on this week’s agenda at city council.

“While I recognize the intent of the MAT to foster tourism and economic growth, the current practices raise substantial issues that warrant immediate attention,” said Lafleur in the letter.

Among the concerns was a lack of transparency surrounding what tangible tourism benefits recipients of the funds have been producing

Essentially, are these recipients actually bringing in accommodation stays?

“It is unclear what documentation or verification recipients are required to provide to demonstrate their activities result in increased accommodation use. In reviewing the recipient list from 2021 to 2024, there seems to be a lack of measurable evidence supporting this key objective,” argued Lafleur.

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Lafleur also raised concerns with MAT funds being allocated for school activities, uneven distribution, double dipping from the City of Timmins, a lack of transparency in the allocation formula, misuse of funds for long-standing events, and a lack of accountability measures.

“Private groups and associations are reportedly receiving substantial funding without providing proof of tourism impact. This practice undermines the purpose of the MAT.”

Lafleur added that he recommends that the City of Timmins publishes an annual recipient list and impact report for public review.

“The MAT has the potential to significantly benefit tourism in Timmins, but it must be managed with greater transparency, accountability, and equity. Until these issues are addressed, I cannot support an increase to six per cent.”

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Ward 2 Coun. Lorne Feldman was first to comment.

“While I am completely in favour of increasing this MAT tax to six per cent, Mr. Lafleur did raise, I think many valid concerns that I think we should address,” he said.

Feldman said he found it ‘refreshing’ to hear from a resident who was so engaged, and that it was a constructive letter.

City Chief Administration Officer Dave Landers told council that the reporting of MAT happens with the Timmins Economic Development Corporation (TEDC).

“What we’ll do is ask staff to provide an update on where we’ve been, maybe cumulative since the start of the program, and then answer some of the questions in there, for broader education on how it works, and how the bylaw has been put into effect,” he said.

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Mayor Michelle Boileau added that the TEDC’s MAT committee is in the process of reviewing their bylaws, having learnt from previous years, and looking at what may need adjusting.

“They’ve committed to reviewing the bylaws. They haven’t completed that yet. So this is a timely piece of correspondence because this can also be considered by the committee as they review and finally approve the new version of the bylaws.”

Ward 5 Coun. Andrew Marks said he was in full agreement with Feldman’s sentiments.

“I’d also recommend that once those bylaws are finalized, for the entire City of Timmins, and for this council, that we ask for a deputation again on the MAT tax. In particular, the economic development portion of it, and the focus for the community, so that we’re getting that message out there.”

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Ward 4 Coun. John Curley mentioned that council had deferred approving the increase to six per cent until the New Year, and wondered how soon they could make it official, as each day that passes is more lost revenue.

Boileau reminded him of the reasons for the deferral.

“We had heard from some of the hoteliers that they wouldn’t want to see an increase until there was a guarantee that short-term rentals were also remitting MAT funds,” she explained.

“We also did hear from some councillors around wanting to engage with the hoteliers, and hear their feedback, and then we did receive this piece of correspondence.”

Boileau said council hadn’t set a specific date to make their decision.

“It was to return once we felt that there was sufficient consultation conducted, and of course we had the deliberations around short term accommodations as well.”

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