KIRKLAND LAKE - A new hotel tax is bringing in extra cash for a Northern town.
Kirkland Lake has collect $36,736 from the municipal accommodation tax (MAT) that took effect on Jan. 1, council heard at its May 9 meeting.
Mayor Stacy Wight thanked the community and business owners for getting on board.
“I believe that their efforts will pay dividends in the future to tourism and economic development in our community,” she said.
For the Kirkland Lake MAT, a four-per-cent tax is collected on short-term accommodations, which is for stays less than 30 days in a hotel, motel or short-term residential rental.
Wight first introduced the concept in 2019 when she was a councillor. In November, council discussed the bylaw and it's been in effect since Jan. 1, 2024.
SEE: Kirkland Lake looking to create hotel tax
While the town has collected $36,736, director of development and enterprise services Dan Laverdure said $46,728 has been billed.
“We did see a slight above what we had predicted for the first quarter and we will continue to monitor going forward,” he said.
For businesses not yet on board, Coun. Lad Shaba asked Laverdure if there are any particular reasons why.
“A lot that we are noticing right now are from booking agencies online like Airbnb and VRBO. And in those booking sections, an address isn't provided until an accommodation is booked. So we are spending some time trying to see who and what residences within the town are currently using those models,” Laverdure said.
“It's a little bit easier when you're dealing with a registered hotelier or a bed and breakfast. But for items that are online, it's a little bit more challenging.”
Education is key to bringing more businesses on board, Laverdure said.
“Educating why we collected, what it will be used for, and sector enhancements, that could really enhance the experience and get more bookings for these individuals,” he said.
For the money collected, 50 per cent stays with the town to use. The other 50 per cent must be distributed back into the community through an eligible tourism entity (ETE) for projects to develop or promote tourism products, programs or services.
The town's portion is being put in a reserve fund for future economic development, said Leverdue. The other 50 per cent will be used by the Tourism Development Corporation of Kirkland Lake, which is in its infancy.
“We're in the process of adopting the procedural bylaws for the tourism development corporation. And that will also form a little bit more of a mindset or plan when the economic development and tourism strategic plan finishes in the beginning of June. So we will have a better idea and we will be creating a budget with ideas that will be adopted for the money spent,” he said.
Coun. Rick Owen said in his 42 years living in the community, he’s seen a lot of money spent on advertising.
“But I've never seen a plan and I think that's very important. In advertising, $36,000 is nothing. It's a drop in the bucket. We couldn't put forward a plan with that amount of money,” he said.
“I'm glad to hear that we're going to wait until we have a plan before we start reinvesting that money.”
Timmins implemented a MAT bylaw in 2019, charging a four-per-cent levy on short-terms stays. It partnered with the Timmins Economic Development Corporation to be the not-for-profit entity to reinvest the cash collected.
