Here’s the long form information - Enjoy!
The most important aspect is to realize that Northern Bruce Peninsula has NOT proposed adding a 4% tax to Hotels, Motels, Lodges, & B&Bs who operate with Commercial Zoning.
NBP is in the stages of providing a new zoning & licensing classification for Residential Properties who operate high volume commercial accommodations. More clarity on their direction may be identified in a March 22nd council meeting after a lengthy 2 year consultation process.
ONLY Short Term Rentals on Residential Properties are currently suggested for a 4% MAT in Northern Bruce Peninsula ("It also recommends those operators be required to pay a four per cent municipal accommodation tax to address concerns that such rentals compete with hotels and bed & breakfasts, while not having to pay commercial taxes or fees that apply to commercial uses").
If this is maintained & TSBP adds the 4%, it creates a massive imbalance in the competitiveness of our largest commercial industry and indicates a stark difference in targets of a MAT between SBP & NBP. Our hotels, lodges, resorts & cottage resorts will have a 4% fee added while NBP may only charge the 4% on newly zoned Short Term Cottage Rentals in order to level the playing field with their existing businesses.
The amazing Tamarac Island Inn and By The Bay Resort just 10 minutes up the shore from us remain TAX FREE.
The amazing waterfront resort Wiarton already has, Waterview On The Bay Resort, remains tax free.
We get hit with a 4% disadvantage while the resort our town's Director of Financial Services owns up the Bruce remains tax free.
NBP has not passed or proposed their MAT bylaw, nor confirmed the specifics. Nothing so far from Council or via staff report indicates that traditional commercial accommodation is included. The consultant's recommendations indicate that a MAT will be used exclusively on Short Term Rental Cottages on residential zoned properties to help level the playing field with current commercial operators.
Please carefully review the following information and verify independently when possible.
TRANSPARENCY
Michael Humble, The newly hired Director of Financial Service in charge of the MAT owns a COMPETING RESORT to all of us in NBP.
He directly benefits from TSBP adding the MAT. His resort becomes 4% cheaper than ours across the board, based on his suggestions & recommendations.
This is so flagrant that it is borderline ridiculous.
https://neptuneshideaway.ca/ is his resort, his name has been taken off the website but you can read this newspaper article "Speaking with the Beacon Herald Wednesday morning, Humble said he made the decision to retire to allow him to spend more time with his family and dedicate more of his energy helping his wife run the cottage-rental business they own and operate in Tobermory."
- When photographed for a 2021 Bruce County COVID related grant, Mr. Humble skipped the press photo opting for his wife Kim to be the representative.
- Up until 2020, all communications list "Your host: Michael and Kim Humble" as verified by Google Cache.
- Had Mr Humble been on Council, he’d have had to remove himself from the topic like councillor Paul Mackenzie has due to his SBP rental.
- We rely on our town to vet and hire people without these types of conflicts as their presumed intention is to work exclusively for the betterment of the town
- There appears to be no governing body overseeing if staff are required to disclose conflicts such as this. To our knowledge this ownership has not been publicly disclosed anywhere.
- Based on our knowledge of the industry, Mr Humble’s town salary (120-150k?) likely exceeds the profit of his resort.
- My opinion is that there likely isn’t active wrong doing here and that Mr Humble is likely just doing his job. Regardless, even just the appearance of such a major conflict here brings so many questions to the vetting, decision making, and intention of town staff and council in hiring & assigning projects.
- Since our arrival in 2019 multiple high level staff positions with the town have seen turn over potentially indicating a turmoils workplace struggling with staff retention. The high cost of executive recruiting can add up quickly with so many vacancies.
Municipal Accommodation Tax in TSBP
Council is voting on the MAT Bylaw at the meeting this week - it here for review:
https://southbrucepeninsula.civicweb.net/FileStorage/1420E87DEE8C411FA80B350AC85492BC-By-Law%2030-2021.pdf
- It will likely have an implementation date of Jan 1st 2022.
- Deputy Mayor Kirkland originally proposed only having a MAT/Licensing on short term rentals which was not adopted by the rest of council. (similar to NBP's consultant suggestions)
- The MAT will charge 4%, of which 2% may go to a committee for allocating funds for tourism promotion that will "likely be one Council member, one member from each Chamber of Commerce and two business owners" (The Mayor to me on Facebook Messenger, confirmed via council documents)
Cottage Licensing Fee
- - Each cottage rental on residential land will need a license & be regulated, of which the Mayor's thoughts as per conversation with me are "Speaking for myself, I'm OK with $300-$400. The cost of one night's rental income." (Same FB Messenger convo as above)
- - "Those that pay commercial taxes will be exempt from the licence fee"
What the MAT will pay for:
- "The MAT revenue will NOT be put towards a town hall. That is entirely separate. The only connection it has to MAT is it will go on the same site as the amenities that will likely be built with MAT revenue"
- Revenue appears from previous staff reports to be heading for general accounts, which could/would then be used in the future at council discretion. The intent appears to be to use the MAT revenue to fund debt payments on a Community Hub with a number of local amenities on already purchased land in Wiarton.
- The bylaw states “The remaining 50% of the net revenues will be retained by the Town of South Bruce Peninsula, earmarked for projects and initiatives that promote and support tourism, infrastructure and economic development efforts that benefit residents and visitors”
- When asked, the mayor states “”No, those amenities are not being built to attract tourists. Those are recreational amenities for the benefit of the community.”
Consultation 2019-January 2021
- Currently the town has used the Open Mic web platform to run a survey, of which 115 respondents indicated various support for the MAT. They received 500 total views on the survey webpage.
- We've yet to hear from an accommodator who has directly consulted with the town over the previous year.
- According to council minutes, town staff were instructed "to reach out to tourism partners to gather community feedback"
- So far we and many business owners have had zero communication with the town on a MAT prior to a) the survey and b) this past week.
- A suggestion in TSBP report indicates the non-existent Bruce Peninsula Tourism Association to be consulted, which has been defunct since 2018 (I showed up to multiple scheduled meetings in Summer of 2019 with no one there, and was told via the Ferndale Info Centre that it was no longer active at the time)
Consultation January - February 2021
- We learned about the town's intention to put a 4% MAT in place this summer via the Owen Sound Sun Times on January 22nd - "“With so many cottage rentals in South Bruce Peninsula, on top of our motels and campgrounds for transient camping, we’re looking at quite a large revenue generator."
- Subsequent messaging from the town council indicates that Transient Camping will be excluded.
Current Communication - March 2021
- The mayor states to The Wiarton Chamber in response to our letter of concern:
“Following the last summer season, the town issued a survey to all Sauble businesses, to gage the success of their summer in the midst of covid. Only 25% of those we reached out to bothered to respond. Following the survey, Our Economic Development Officer contacted those 25% along with the Chamber in an attempt to set up a meeting where we would discuss the results, encourage suggestions and field any concerns. We also wanted to discuss the upcoming MAT program as well as any other news.
“Only 3 business owners wanted to meet to discuss these issues. In addition to that attempt, last fall we posted an info sheet and a survey on the town's website to explain the MAT program and get an idea of how people wanted to see the Municipal portion of the MAT spent. “
- It is especially important to note that this survey was being undertaken October 2020, during COVID19, in a time when all Municipality buildings were closed due to a CLUSTER OF COVID19 IN TSBP IN RELATION TO TOWN HALL.
- NO ZOOM or Digital options were presented to accommodators and the 3 businesses owners referenced have not made themselves known. TOWN HALL WAS CLOSED and no meetings were taking place.
- The Mayor also states, referring to the exact same Survey when justifying food trucks: "some tourism businesses here suffered but it seems most did not" & "it was reported to us that most businesses in Sauble did not suffer financially from a lack of visitors while many reported a banner year."
- How can the same survey both represent “most” & “many” while only having 25% response & disinterest from a small group?
- I reached out to the EDO at the time regarding the survey and its purpose and was told it was specifically in relation to federal funding available only for beach areas & specifically for Sauble Businesses.
- Regardless of the response, the justification of consultation is that the town reached out to The Sauble Beach Chamber of Commerce, of which membership includes approximately 10 Hotels & resorts of the approximately 50 operational in TSBP.
- The individual hotels and accommodators were, from all known resources, not contacted consulted or briefed until this past week.
- The Sauble Beach Chamber of Commerce is not a Political organization. It is a marketing collective run by volunteers that focuses on promoting the area for family and kids events. It has NO ROLE in the collection of data for the town.
- Conversely, The Wiarton Chamber of Commerce is a staffed organization consisting of a number of politically aware businesses owners focused on the long term growth of our community.
- The Wiarton Chamber of Commerce, located across the street from town hall, was not contacted nor offered this survey.
- TSBP website lists no press releases regarding consultation or the MAT.
- The town does not appear to maintain an email list of businesses owners for communication
- Our town's EDO, who is a fantastic resource for our community was not authorized to answer any questions on the MAT until recently in 2021. Last fall our EDO had no involvement in the MAT, as I had constant communication with her.
- To date our EDO is essentially the only town staff member to speak with us in the 18 months we've been here. Also, as far as I know, one of the only to frequent our restaurant as we struggled to survive the winter with a provincial lockdown.
- To note, our EDO has extensive background in implementing MAT in her previous municipality, yet was left outside the team until 2021.
Cost, Revenue & Economics
- One of the primary laws of economics is "The Law of Demand". It is a falsehood to claim that 4% tax added will not cause an impact on demand, and therefore both decrease price and profit. Not acknowledging this contravenes the basics of economics.
- Given the timing of the provincial lockdowns during 2020 & non-travel advisories/various closures covering March, April, May, June, July Long Weekend & late in the Holidays/New Years it appears to be a statistical impossibility for year over year revenue growth in tourism. If you had year over year occupancy/revenue in 2020 on comparable units offered please make me aware. So far I have yet to find any existing business expressing that they had a banner year annually in 2020.
- Staff had previously suggested in report FS24-2020 that "Every tent or trailer site supplied by a campground, tourist camp or trailer park" may be exempted. Via this wording, it can be conceived that rental cabins & cottages within Campgrounds are subject to MAT, while trailers being rented nightly may not be.
A key aspect to TSBP's communication is the assumption that NBP is also putting a MAT in place
- "Jackson said Northern Bruce Peninsula is planning to have a similar program implemented this year, which would ensure uniformity on the peninsula"
Northern Bruce Peninsula
- NBP hired consultants Skelton, Brumwell & Associates to research, report & provide recommendations on their STA regulations over the past 2 years beginning in 2019
- NBP Milt Mayor in June 2020 "there will be two more lengthy public consultation processes, one starting now and lasting until approximately the end of August, and another whenever the draft of a bylaw is approved by council"
- NBP set up this website to guide constituents through the consultation process.
- Updated: A NBP STA group mobilized on Facebook is now a formal non-profit called NBPCA ( https://nbpca.ca/ ) . Northern Bruce Peninsula Cottage Association Executive Quinn Ross is quoted in the OSST estimating 600 short term rentals in NBP. The group is being represented by Siskinds Law Firm in their consultation with NBP. To note, most members are for a version of MAT on STAs as communicated Mar 15 2021.
- Please review the extensive information on the NBP Website regarding both their consultant and staff reports over the past 2 years.
- NBP in Fall of 2020 created a STA Workshop (CAO 20-52) "It is being proposed that the workshop attendees would be made up of Council, three (3) members of the Short-Term Accommodation community and three (3) members of full-time residents. The Workshop would include; review of the amendments, bylaw and implementation strategy and to garner input from the group to come to consensus"
- NBP's consultants suggestion was to ONLY ADD A 4% FEE TO SHORT TERM RENTALS. (2.11). HOTELS, MOTELS, LODGES, B&BS are not formally included in the MAT recommendations in NBP. A group of STA owners has hired a lawyer to potentially challenge the municipality on the use of the 4% being only added to rentals as being uncompetitive. NBP has not yet said that they intend to add the tax to hotels & B&Bs. "It also recommends those operators be required to pay a four per cent municipal accommodation tax to address concerns that such rentals compete with hotels and bed & breakfasts, while not having to pay commercial taxes or fees that apply to commercial uses"
- While NBP hasn't presented their formal bylaw, "Ryan Deska, community services manager for Northern Bruce Peninsula, said the consultant’s final report will include recommendations that may or may not be adopted by council. “I don’t personally foresee sweeping changes across the board where things are going to be fundamentally changed,"
- It is a fundamental aspect of the current NBP consultant's proposal that the MAT is used to attempt to equalize municipal revenue via commercial & residential properties operating similar accommodation businesses.
- The consultant's recommendations were to use a MAT on properties in the newly established zoned STR classifications in order to generate commercial-like taxes from the property in addition to ensuring safety & bylaw compliance.
Uniformity on The Peninsula:
- “Northern Bruce Peninsula is also implementing a MAT program so we feel it will be helpful to tourists if there is unity on the Peninsula to eliminate confusion.” (Mayor letter to Wiarton Chamber March 11th)
- NBP Council has given no indication that a MAT will also be applied to commercial lodging and several contacted accommodation owners indicate a similar understanding.
- There will be NO Uniformity on The Peninsula, in fact this MAT cements TSBP's accommodators at a stark disadvantage to all surrounding areas.
The Next Sketchy Thing
At the same upcoming council meeting, town staff will consider rezoning the 3.4 acre waterfront town owned Campground (net profit 130k/year) in order to help market an abandoned privately owned property to a hotel developer.
They are being asked what type of tax breaks council will consider to attract this type of investment to the citizens of TSBP.
Watch this one closely while it develops over the next few months - ask AS MANY QUESTIONS AS POSSIBLE.
Appendix:
Multi-unit/Commercial Lodging in TSBP
Via the information presented, the Mayor is guestimating 21 multi-unit properties with an average of 10 units.
By the numbers we assembled prior to investing in our business here, we've identified 38 multi-cottage/motel/hotel/resort offering approximately 481 rooms in TSBP.
They are attached below with the approximately number of rentable cottages/rooms/units.
Every one of these businesses will be put 4% behind their neighbours in the worst economic disaster to ever hit our industry.
