The Blue Mountains council has approved an agreement to share municipal accommodation tax (MAT) revenues with the Blue Mountain Village Association.
In a unanimous vote at its meeting on Jan. 27, council approved a three-year agreement for a 50/50 split (less town administrative costs) of all revenues generated by the newly implemented municipal accommodation tax.
Under provincial rules, a municipality with a MAT must share half the money generated with a destination marketing organization operating in the community. A MAT is a sales tax applied to all hotel rooms and other short-term accommodations in a community. Starting on Jan. 6, the town implemented a four per cent MAT.
Although MAT proceeds could be used as general revenue, The Blue Mountains council has approved a policy that will see the funds generated support tourism programs, initiatives and infrastructure. The town has estimated that the MAT could raise up to $4 million annually.
Accommodation providers in The Blue Mountains began collecting the MAT on Jan. 6 and will remit the funds raised to the town by April 30. The town provided a transition period during the early months of 2025 in recognition that some accommodations had been pre-booked.
At the Jan. 27 meeting, staff brought a report recommending approval of the formal agreement with the village association for the revenue split.
“This has been a long process. I’m glad we finally got there,” commented Coun. Gail Ardiel.
Tim Hendry, the town’s director of strategic initiatives, said the agreement includes regularly reporting to council about the funds raised and how they were spent.
Hendry also noted that the MAT is required to be full cost recovery with all expenses paid for by the revenue generated.
“Essentially, there is no impact to general taxation,” he said.