Question.
Question has been called. All those in favour? All those opposed?
---Carried
What is the wish of committee? Mr. Beaulieu.
Thank you, Mr. Chairman. Mr. Chairman, committee would like to consider Committee Report 9-18(3), A Report on the Review of Bill 18, An Act to Amend the Cities, Towns and Villages Act; and Bill 18, An Act to Amend the Cities, Towns and Villages Act. Thank you, Mr. Chair.
Thank you, Mr. Beaulieu. Does committee agree?
Agreed.
Thank you, committee. We'll get right into it. Committee, we have first agreed to consider Committee Report 9-18(3), keeping in mind that we will then consider Bill 18. I understand that there are no opening comments from the chair of the committee, so I will open the floor to general comments on the report, itself, keeping in mind that the actual bill will be debated right after this.
So do I have general comments on the Report on the Review of Bill 18 from committee? Seeing none. Does committee agree that this concludes our consideration of Committee Report 9-18(3), Report on the Review to Bill 18, An Act to Amend the Cities, Towns and Villages Act?
Agreed.
Thank you, committee. Let's move right into the bill which we have agreed to consider. I will go to the Minister responsible for the bill to introduce it. Minister Moses.
Thank you, Mr. Chair. Mr. Chair, I'm here to introduce Bill 18, An Act to Amend the Cities, Towns and Villages Act. I would like to thank the Standing Committee on Government Operations for their review of this bill. In addition to the two suites of amendments I will present, this bill makes three housekeeping amendments that have been suggested by the Legislative Division of the Department of Justice.
Mr. Chair, tourist accommodation taxes exist in some form in all provinces in Canada, whether in the form of a tax on hotel rooms collected by the province or municipality, or a destination marketing fee charged by hotel and accommodation associations. After consideration of each of these options, and in consultation with community governments and stakeholders, the Department of Community and Municipal Affairs proposed amendments to the Cities, Towns and Villages Act to give communities the authority to choose to impose a tourist accommodation tax.
The second suite of amendments included in this bill fulfills a mandate commitment of the 18th Legislative Assembly. The proposed amendments will enable the municipal corporation to use local improvement charges to assist residents in making retrofits or implementing renewable energy technologies to private homes.
The types of projects that could be supported through these could include the installation of energy efficient furnaces or pellet boilers or the installation of solar panels. These long-awaited amendments respond to direct requests from community governments, meet MACA's stated goal of supporting governments in carrying out municipal responsibilities, and fulfill a mandate commitment for this Assembly.
In proposing these amendments, MACA has consulted with community governments and other stakeholders and has worked closely with the Departments of Finance and Industry, Tourism and Investment.
Although not all tax-based communities intend to pursue these opportunities immediately, all agreed that in supporting the option being available to their community government should they choose to use it. Should these amendments gain the approval of the Legislative Assembly, they will come into force upon assent.
This concludes my opening remarks, and I would be pleased to answer any questions that Members may have regarding Bill 18. Thank you, Mr. Chair.
Thank you, Minister. I will now turn to the Chair of the Standing Committee on Government Operations which considered the bill for opening comments. Mr. Testart.
Thank you, Mr. Chair. Bill 18 received second reading in the Legislative Assembly on May 29, 2018 and was referred to the Standing Committee on Government Operations for a review. To commence consultation on Bill 18, the standing committee invited input on the bill from 99 hotel and bed and breakfast operators offering tourist accommodations in the six tax-based municipalities. This consultation list was kindly provided by the Department of Community and Municipal Affairs, who used to same list when consulting on the development of the bill. On behalf of the committee, I want to thank the honourable Minister for his willingness to collaborate on this work.
The committee held a public hearing on Bill 18 in Yellowknife on September 19 of this year, where we received presentations from the City of Yellowknife, the Yellowknife Chamber of Commerce, and the Explorer Hotel. The committee also met with the mayor of Inuvik and the representatives of the town council in Inuvik on October 2nd. Finally, the committee received written submissions from those who presented at the Yellowknife meeting, as well as the Town of Fort Smith, the Yellowknife Days Inn and Suites, and Embleton House Bed and Breakfast.
The committee thanks everyone who provided input on Bill 18.
Individual Members, in addition to these comments, earlier today, we read our complete report into the record, and I encourage anyone who'd like to be informed of the committee's work on this bill to read that report, as it is quite substantive and clearly outlines the work we did in reviewing the bill.
That concludes my opening comments, Mr. Chair. Individual Members may have additional questions, concerns, or comments as we proceed with consideration of this bill. Thank you, Mr. Chair.
Thank you, Mr. Testart. Would the Minister like to bring witnesses into the Chamber?
Thank you, Mr. Speaker. Yes, I do.
Thank you, Minister. Sergeant-at-Arms, please escort the witnesses into the Chamber. Minister, please introduce your witnesses for the record.
Thank you, Mr. Chair. On my far right is my deputy minister of MACA, Ms. Eleanor Young; sitting on my right is Mr. Ian Rennie, legislative counsel, Department of Justice; and on my immediate left is Ms. Grace Lau-a, director of Community Operations from Municipal and Community Affairs. Thank you, Mr. Chair.
Thank you, Minister. Welcome to the witnesses. I will now open the floor to general comments on this bill before we get into a clause-by-clause. General comments from committee. Mr. Testart.
Thank you, Mr. Chair. Committee wrestled with this bill, and the biggest issue, as we mentioned in the report, was the exemptions. So I'm wondering if the Department of Municipal and Community Affairs has done a calculation on the prospective revenues that will be generated by this tax, specifically in the City of Yellowknife, which is the only municipality planning on bringing it in; if they have done just a rough estimate of what the total tax revenue will be? Thank you.
Thank you. Minister Moses.
Thank you, Mr. Chair, and as stated before, we don't have that current data. If you break it down by the exceptions such as medical travel, GNWT exempt, we don't have that type of information right now. I know that, should this bill get assent, that's the type of data we will be sure to be collecting as we move forward with this bill. Thank you, Mr. Chair.
Thank you. Mr. Testart.
Thank you, Mr. Chair. Some of the evidence committee collected in its hearings included a finance estimate produced by the Days Inn and Suites based on industry information, and their estimate was around $1.1 million of revenue. Further, the list of exemptions currently contained in this bill would consume around 30 to 40 percent of total revenues. Does the Minister agree with that estimation? Thank you.
Thank you. Minister.
Thank you, Mr. Chair. In terms of the collecting of that type of data, there is not a consistent method at this time to see what kind of data is being collected, and I do understand that committee did get some information from one of our local hotels, but that's something that we will be taking a look at and monitoring should this bill come to assent. Thank you, Mr. Chair.
Thank you. Mr. Testart.
Again, this was a difficult matter for committee because we wanted to ensure that the administrative burden of these exemptions was not overly, we wanted to make sure there wasn't additional red tape created with the creation of these bylaws for the hotel industry, or for the City of Yellowknife or any municipality that wants to implement these taxes. Further, we wanted to ensure that the tax revenue wasn't unduly impacted by revenues.
Can the Minister commit to doing that analysis of tax revenues and reporting back to a committee as soon as those numbers are available so we can see how this tax is performing in terms of its intended goals to support tourism services in municipalities in the Northwest Territories? Thank you.
Thank you. Minister.
Thank you, Mr. Chair, and definitely, we will be reporting back to committee on how this is unfolding. In terms of working with the municipality, we will be making sure that we have good communication with the City of Yellowknife, which is the only municipality right now that has shown any type of interest, and we will work with them to ensure that this rolls out in the smoothest manner possible. Thank you, Mr. Chair.
Thank you. Mr. Testart.
Further to that, in the future, when developing tax proposals such as these, can the Minister commit to providing more financial details to allow committee to properly assess things like this when it's made available? Because it would greatly improve our ability to assess the viability of these potential tax initiatives. Thank you.
Thank you, Mr. Chair. If that information is available, then, for sure, we will let committee be apprised of that information and data should it be available.
Thank you. Nothing further. Next, I have Mr. McNeely.
Thank you, Mr. Chair. I, too, had some concerns on the exemption portion of this bill, but overall analyzing the benefits created from this bill as we all said is really beneficial to the City of Yellowknife. In the context of defining "benefits" when statements were saying that if the levy is going to be directed to the incoming tourism community.
When you look back at the Department of ITI survey showing the traffic in the neighbourhood of annual tourists coming into the territories, right from the Arctic Ocean to the 60th parallel at 108,000 visitors, being conservative and saying, even if half of that was directed to the traffic going into the city for Aurora viewing, et cetera, and calculating a formula of assumptions on an average per charge for the hotel room, and assuming that you're going to charge a levy of 3 percent, one could figure out the sales generated by this levy. I've got no concerns with that. I think it's not an innovative idea, it's done elsewhere in other jurisdictions, but it's going to create benefits that would be directed to this city.
Also on top of that, I, from a small community, look at the benefits and I outweigh the benefits and say, okay, why should we place additional levy charges to our own people who view Yellowknife as a destination to go for additional meetings? The local governments come here and make it worthwhile to meet with this government, as well as doing their own regular business in the city of Yellowknife. It might be a small amount at the end of the day on a charge-per-night basis, but it's the principle of burdening the small communities with a 3 percent charge if it is, in fact, 3 percent. That might come out to $6 per night.
When I look at that, I say to myself, let's analyze the options so we can provide options to our leadership in the communities, or even if they, in fact, want to say, well, that's just the extra costs of doing business in Yellowknife, and we're willing to accept that. That's their prerogative. For me, it's the principle of charging our own people to benefit our own people in the Northwest Territories. There's a difference between our own people in the Northwest Territories when you look at the jurisdictions of the city, the regions, and the small communities.
I thought about it for a while, talked to my colleagues, and got some clarity and some options to present to the leadership of any region outside of Yellowknife that's going to be charged this levy outside of the exemption lists. More particularly, our regional land claim governments and local governments would be charged this levy. There is other options available to negotiate something between the city and the regions or the community organizations. I just mention that for the record. Thank you, Mr. Chair.
Thank you, Mr. McNeely. Next, I have Mr. O'Reilly.
Thanks, Mr. Chair. I just have a few thank yous at the beginning. I want to thank the Standing Committee on Government Operations on the thorough review they did on the bill. I sat in on some of the work and appreciated that opportunity.
The City of Yellowknife has done a lot of work on these two issues of the accommodation tax and local improvement charges for energy retrofits. These were live issues when I served on city council from 1997 to 2006. These have been a very, very long time coming.
This will provide some funding for tourism, promotion, and investment, and I just wish that our Department of Industry, Tourism and Investment would step up and increase the amount that they would put into tourism in Yellowknife. We still don't have a Yellowknife visitors' centre, an adequate one. We need a territorial one, perhaps. We need more investment from our friends at ITI, as well.
The biggest issue with the bill as it has come forward is this issue of exclusions, and we want to minimize the confusion for hoteliers. I want to ask a couple of questions of the department if I can: how widespread is it that provincial governments exempt themselves from paying a hotel tax in jurisdictions in southern Canada? How common is that practice? Thanks, Mr. Chair.
Thank you, Mr. O'Reilly. Minister Moses.
From my understanding, there is no other jurisdiction or no other governments that exempt themselves. Thank you.
Thank you, Minister Moses. Mr. O'Reilly.
Thank you. Thanks, Mr. Chair. I appreciate that. Why did the department include GNWT, then, in the exclusions here? Did they actually calculate how much this tourism accommodation tax would cost the government? Let's start with: why did the government exempt themselves from this tax in the bill that has come forward? Thanks, Mr. Chair.
Thank you, Mr. O'Reilly. Ms. Lau-a.
Thank you, Mr. Chair. The GNWT does have some initial information on how much we spend in terms of government travel and in terms of medical expenses. Part of the reason why we don't have any analysis to table is that every hotelier in the GNWT, we all collect our data as does Industry and Tourism in different ways. It's not comparable in many instances.
While we have done some initial impact on excluding the GNWT, it's not a number that we want to report or rely on. We know that the City of Yellowknife, who has done their research, feel that, even with the exclusion, they should still have some ability to collect enough levies to promote tourism.
Thank you, Ms. Lau-a. Mr. O'Reilly.
Thanks, Mr. Chair. Okay, that sounds like that there were some sort of, at least preliminary calculations done. Does the department have any kind of analysis that, even a rough estimate, of what the cost to GNWT would be without this exclusion? Thanks, Mr. Chair.
Thank you, Mr. O'Reilly. Minister Moses.
Ms. Lau-a.
Ms. Lau-a.
Thank you, Mr. Chair. When we collected the information in 2016, the GNWT estimates that we had about 5,000 room nights in terms of business travel, which equated to around $260,000.
Thank you, Ms. Lau-a. Mr. O'Reilly.
Thanks, Mr. Chair. Yes, I guess committee heard other information from, and I believe my colleague from Kam Lake, the chair of the committee, talked about how one hotel chain put together information based on industry-wide standards. It had indicated that there would be about a little more than $1.1 million with the existing exclusions. By my rough calculations, GNWT excluding itself, that would immediately reduce the revenue stream by about 25 percent. That's okay.
You know, my position, I think, is that there should be no exclusions. That's familiar treatment, that everybody pays the airport improvement fee on their tickets. Some folks felt that that should be transitioned in over a period of time, but everybody pays that. There's no exclusion for government employees or government travel from airport improvement fees. My preference would have been to have no exclusions whatsoever, but I can live with the exclusions that are in there. I wouldn't want them reduced any further, because I think then it will start to limit the revenues that are made available to our tax-based municipalities, should they wish to pursue this.
I want to thank the department for the information they have provided here today. Some of that's new to me. I do support the bill. I commend again the committee and the City of Yellowknife and the other individuals who did present on this legislation. I look forward to its passage. Thanks, Mr. Chair.
