NIPIGON — A local motel owner is speaking out against the recent introduction of the municipal accomodation tax.
On March 26, Nipigon’s mayor and council passed a municipal accommodation tax (MAT) resolution for a levy to begin this summer – a decision which has drawn criticism from some local business owners and Coun. Gordon MacKenzie, who recently stepped down from his position on council.
MacKenzie, who recently shared the reasons he chose to resign, listed the passing of the MAT resolution and council’s alleged disregard for local motel owners and operators who were opposed to implementation of the new tax.
“There are absolutely no Nipigon motel owners who are in support of this initiative at this time,” MacKenzie wrote, in a statement provided to the media.
Alan Aubut, owner of the Birchville Motel, spoke to Dougall Media about some of the concerns he and fellow proprietors have about the MAT and why they believe Nipigon isn’t the place for it.
Aubut said he was invited to a MAT information session – along with other hotel owners – where Dan Bevilacqua, Superior Country’s executive director/president, gave a presentation about the tax and its potential benefits.
Aubut and other proprietors in-attendance were told the MAT would help them “generate more heads in beds.”
He said he spoke to other business owners following the information session to figure out if the municipality had consulted them about introducing the MAT, but he was surprised to discover they had not.
“It wasn’t consultation. It was held to inform us about what they were going to do and they were hoping we would go along with it,” he said.
“I appreciate the idea. We’d like to grow our local economy somehow but what bothers me about this is why pick on one segment of the local business community?”
In a petition shared with mayor and council on Dec. 5, 2023, Aubut and fellow local motel owners point to the potential pitfalls of implementing the tax, including motels going bankrupt, the rising cost of living which prevents people from spending money on vacations and getaways, and examples of places where the accommodation industry has “contracted due to bad tax policy by local governments and changing travel patterns.”
“Right now, times are getting tough and they’re getting tougher by the day," Aubut said.
"Everybody is starting to pinch their pennies more and more because their hydro bills higher, rent’s higher, food costs are higher. There’s less and less left over to do things like go on a vacation to, say, Nipigon.”
Aubut added that, in his experience, tourism sees a major decrease during the winter months with the exception of Nipigon’s Ice Fest held in late February/early March.
He also alluded to how much of a hit Nipigon has taken over the years with the loss of vital industries.
“With the closing of the paper mill in Red Rock – which was the main industry for both Nipigon and Red Rock – the school enrollment has gone down, one public school is closed and now being used for other activities by the school board, and a lot of the teachers commute from Thunder Bay,” he said.
Dougall Media caught up with Coun. Glenn Hart at the Northwestern Ontario Municipal Association conference on April 25 to speak about the MAT. He said the tax was something he championed and fought for in Nipigon.
“I am a firm believer in the MAT tax. I drove that through and that will become budgetable next year,” Hart said.
“It’s pretty new here. The root of it is advertising and promotion. Advertising and promotion works. The third aspect of it is about creating programs for the people of Nipigon so they can start benefiting.”
Hart gave the example of Edge Arts Studio & Gallery, run by Bernadette Langthorne, which has been putting on popular events in Nipigon all year long.
While some of Edge Arts' funding comes from the federal and provincial governments, the rest is up to the municipality. Using funds generated by the MAT, Hart argued, could increase Edge Arts' longevity and give Langthorne more paid time to develop and host events in the community – especially in the event that federal/provincial funding is discontinued.
“If you take the MAT tax – which can pay for this kind of stuff – and you create bridge funds, then you can keep that program going and you can actually expand it,” he said.
He also said the municipality could use MAT funds to hire a new economic development officer who would then research and pursue government grants and other funding streams.
He observed the MAT accounts for what would have been an extra two per cent increase in taxes for residents of Nipigon, meaning the MAT is actually saving taxpayers money.
“We’ve been trying to keep the taxes low but with inflation you can’t. I would not want to be in the position of some other municipalities that are raising theirs by six, seven, eight per cent – but, when push comes to shove, you have to . . . we’re being left to find our own means and that’s what we’re trying to do,” he said.
“I hope we get some sort of industry back in Nipigon but we still need to pull through with what we do have and what we do have is tourism and destination.”
Aubut, on the other hand, said he isn’t convinced about how Nipigon or the taxpayers will benefit.
“They see the dollar signs but they don’t have to do anything other than pass the by-law, wipe their hands of it, and collect the money. We, in the industry, are the ones who have to monitor this. We have to do the collection, we have to separate the money and then hand it back to them. We have to handle it and they think that doesn’t cost us anything. That’s just not right,” Aubet said.
Aubut suggested an amicable way forward would be to put the MAT back on council’s agenda and hold another vote or put it to a committee featuring equal representation from the municipality and the accommodation industry, making a final decision based on how the majority votes.
Also speaking with Dougall Media at the NOMA conference, Mayor Suzanne Kukko reiterated some of what Coun. Hart said and pointed out Nipigon is not the first and surely will not be the last community to implement this tax along the north shore.
“The municipal accommodation tax is something that is a benefit to our community. It is a source of revenue that is coming from outside of our community. Visitors are coming in, they’re paying four per cent on their accommodation bill, and that is coming into our community.
"Whenever we go out and travel, we are paying that accommodation tax – whether we’re going to Thunder Bay, Terrace Bay, Marathon, or into Duluth,” Kukko said.
She highlighted how the MAT can prevent “economic leaks” and contribute to Nipigon’s ability to accommodate a variety of events including the Thunder Bay District Municipal League conference, which they hosted in late February and the Northern Ontario Curling Championships in 2019.
“It’s important to promote our town to visitors and it’s not just about [traditional] tourism . . . when you think of tourism, you think about people travelling through in the summertime. It’s about conferences as well,” Kukko said.
“That can all go far when it comes to attracting more of those types of events. It’s a revenue source for our town which we don’t currently have – and it’s sustainable.”
