Tourism levy sparks debate

Nigel Armstrong
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WINSLOE — A proposed tourism levy generated heated debate during a meeting Wednesday night of bed and breakfast operators.

The Bed and Breakfast and Country Inns Association hosted the meeting at the Winsloe Lions club to look at a proposed three per cent accommodations levy. Close to 20 people attended.

“Nobody has made a decision in favour or against a proposed provincial levy,” said Don Cudmore, executive director of Tourism Industry Association of P.E.I.

The idea is a proposal only, he said, and will only proceed if the industry gives it “significant” support.

“We are not pushing this thing ahead,” said Cudmore. “We are not even sure it is the right way to go.”

The industry is going to face continued government cutbacks to the Tourism Department, said Cudmore, but marketing and development need to continue to keep the momentum of success going. The association asked government to work up some data on a levy.

There is such a levy in place already in Charlottetown and Summerside and most places around the world.

Chris Jones of the P.E.I. Department of Tourism did the study and came up with an estimate of $2.1 million from such a levy on P.E.I.

The money will go to the five regional tourism associations, plus Meetings and Conventions P.E.I., with some going to an investment fund for marketing and support of events.

During the question period, association president Jane Dunphy said small accommodations like bed and breakfast operations don’t benefit at all from conventions.

“There is no taste in the convention people to getting the people to stay on Prince Edward Island any more than the five days the convention lasts,” she said. “I tried and it didn’t happen. I was shut out.”

Some wanted to know why the levy proposal does not follow Charlottetown and Summerside’s lead, apply only to businesses that have 10 units or more.

Then the discussion turned to why there isn’t a levy or something applied to all the attractions and restaurants that also benefit from tourists.

“We agree 100 per cent,” said Cudmore. “We would like to be able to spread the load but that is going to be a more difficult task.”

Others wanted to know how the levy was going to be collected and how much that administration effort would cost.

They were told it would be an honour system enforced with random audits and administration costs would be about two per cent of the total revenue.

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Recent comments

  • James MacGoo Lakeside
    November 29, 2012 - 09:53

    Is the Tourism group attempting to enhance the small tourism businesses or kill them? $2.1 million in total is not small change. However it is spread over a large base that has a small infrastructure and cannot easily administer these types of activities. This said, the potential loss associated with poor administration of this fee would not provide $2.1 million claimed. Why can't tourism develop strategies to grow revenue associated with small business tourism by $2.1M? Developing these strategies may be difficult, but it is preferable to levying fees that potentially adversly impact the livelyhood of this market segment. Assessing this type of additional fees on this group of business people requires no creative thought or assistance for their business growth. Mr. Cudmore and the government owe their constituents better.

  • Darrin Deveau
    November 29, 2012 - 09:51

    I have to state I am in no way in favour with any implementation of a 3% levy on my accomodation business. TIAPEI does not represent my businees or all accomodation owners. I seriously doubt all members of your association are in favour. I spent about $500 on marketing per year and I have no intention of forking over $2000+ to anyone for marketing. It is not going to happen. I increased my booking s over last year by 20% by due diligence and hard work on my part. I look at most of the Dept of Toursim marketing and promotional material as being archaic and wasteful. I have direct say where my money goes and I say it stays with me for me to spend as I see fit. I take great offense in any attempts to force money out of me. Any attempt to implement this will put me one step closer to exiting the Toursim Industry on PEI permanently..and taking along with my exit, 7 figures of investement in PEI will disappear. You best rethink what you are trying to do.

  • Time for Heads to Roll
    November 29, 2012 - 07:17

    TIAPEI is just another arm of the government. They are funded by the government to push through any agenda that the government decides needs to be pushed through. They pay absolutely no attention to the smaller operators on PEI and are only interested in catering to the large operators. Mark my words, this foolish room tax will be implemented regardless of how many are against it. That said, every accommodation operator on PEI should be against this. It makes absolutely no business sense to be implementing new taxes on an industry that is currently in decline. If anything, they should be decreasing taxes on rooms to try and attract more people but how many great business decisions have you ever seen the government make? Until the real tourism operators of PEI stand up and form an association that is totally funded by the operators to battle against hair-brained ideas like this, there will never be any progress made in the industry.

  • Terrible Idea
    November 29, 2012 - 07:07

    Leave the rural B&B's and lodges alone. This plan would grab 2.1 million to fund the dreams and schemes of the Charlottetown PNPer's in the so called tourism industry. Shame on you Mr. Cudmore, you no better than his....

  • intobed
    November 28, 2012 - 22:30

    When the HST was announced, this same Don Cudmore endorsed it as being good for the tourism industry operators, even though it was going to hurt most ordinary Islanders. Not a peep was heard from the operators. Now suddenly they discover a levy will be put on them, and they whine and cry about how it is going to cost them. You have no sympathy from me at all. None.