Sidney’s not sleeping on a bid by town hoteliers to implement a tax – but not everyone’s in bed with the idea.
Council approved sending a letter of support to have the Sidney Business Improvement Area apply for a hotel tax – officially called a Municipal and Regional District Tax – that the business organization would manage.
The BIA asked for support to put into effect a three-per-cent hotel tax from 2025 to 2030, which would generate $410,000 annually from 2025 to 2030. It would impact six hotels with 257 rooms that have a 65 per cent average occupancy and an average $200 daily rate. The funds would be allocated to promoting the town as an overnight destination, specifically targeting the shoulder season of October through May.
Three members voiced concern while Couns. Terri O’Keeffe and Steve Duck outright voted against showing support during the Dec. 2 council meeting – citing a lack of a business plan and robust enough engagement.
The provincial program, which allows for a tax of up to three per cent on sales of short-term accommodation in participating areas of the province, started in 1987 to help grow revenue, visitation and jobs. Designated recipients can be local government, districts or a not-for-profit; in Sidney's case, the hotel group is specifically seeking to have the BIA handle the funds.
Sidney BIA and the Sidney Hotel Group are seeking the full three per cent tax with 0.2 per cent withheld as a contribution to support B.C. tourism programs, leaving 2.8 per cent of the levied tax to be returned to the BIA for its programs.
As two separate initiatives, it would not change funding for the Sidney BIA, staff told council in response to a question from Duck.
BIAs are funded through a special property tax on commercial properties within a specific boundary – in Sidney, that encompasses businesses between the waterfront and the Pat Bay Highway. Coun. Richard Novek questioned whether the town considered administering the tax. Staff noted the hotel group specifically seeks to have the Sidney BIA administer the tax.
O’Keeffe took the BIA question a step further, seeking clarity on the amount of engagement, pointing out that the hotel tax would apply to the entire municipality, while the BIA doesn’t.
“Yes it’s the hotels group that has brought this forward… but it’s not just a tax for the hotel group to administer as they see fit. It’s funds that are to come in that are to be for the benefit of the entire community,” O’Keeffe said. “It’s important if there’s this amount of money to be coming in that there be broader stakeholder consultation.”
She pointed to the Sidney parks budget which increases each year as the town aims for a high standard for visitors.
“(The Sidney BIA) mandate under their constitution and bylaws is restricted to the downtown area, and that’s who they’re required to support,” O’Keeffe said.
O’Keeffe suggested consultation should have included restaurants, attractions, retail businesses and others involved in tourism outside of the Sidney core – perhaps as far afield as Destination Greater Victoria.
“I don’t feel it’s my place to tell the Sidney Hotel Group who they should choose,” Coun. Scott Garnett said later in the meeting. “I like the fact we have a local group that knows our community. We often get lost in the shuffle in Victoria on many things.”
The ask is a tourism initiative to benefit tourism in an increasingly competitive environment, Mayor Cliff McNeill-Smith said ahead of the vote.
“It’s coming before council because we as the policy makers for the community need to determine if there is a detriment to our community from implementation of this. I do not see a detriment,” he said. “They are the ones that are imposing this tax on their rooms, on their services for their guests, to the benefit of tourism for our community which will have spillover effects for the larger community.”
The Capital Regional District board is scheduled to consider a similar request during its Dec. 11 meeting.
Should the application be approved by the province, the hotel tax could begin in late 2025.
