City Considers Mandatory Hotel Levy

Saint John could have a new mandatory hotel levy as early as next January.

City staff are in the process of drafting a bylaw, which will come before council this fall.

It comes after the province passed legislation allowing municipalities to impose mandatory levies.

Phil Ouellette, the city’s deputy commissioner of growth and planning, said the funds would be used to promote and develop tourism in the city.

“Tourism is a major contributor to economic growth and to our economic strategy so this will continue to play an important role into our future economic development ecosystem in the city,” Ouellette told the city’s growth committee Tuesday.

The Saint John Hotel Association currently has a three per cent voluntary levy, which collects nearly $1 million annually for Discover Saint John.

Ouellette said the mandatory levy, which would be around 3.5 per cent, would replace the voluntary one.

“We’d be looking at somewhere between $300,000 to $600,000 additional a year,” he said, noting the figures are still preliminary.

Paulette Hicks, president of the Saint John Hotel Association, said they have collected more than $5.8 million dollars since the voluntary levy was brought forward in 2010.

Hicks said Discover Saint John has been able to leverage those funds for major growth in the industry.

She said hotel occupancy has grown by 21.3 per cent — or 6.6 million — since Discover Saint John opened its doors in 2010.

“There’s no doubt Discover Saint John is considered a model for the rest of Canada,” she said, noting Moncton plans to emulate the city’s tourism model.

“Saint John is a success story. … It is a compliment that the province of New Brunswick is implementing a levy based on the success Saint John has done.”

Ouellette said will meet with stakeholders to discuss the proposed mandatory levy over the coming weeks. Staff hope to introduce a draft bylaw and October and have it adopted by council in November.