Hotel owners in Watson Lake are considering legal action over the accommodations levy bylaw the town’s council has approved to come into effect Jan. 1, says the owner of one of the hotels impacted.
“It’s just a money-grab,” said Phyllis Bergeron, who owns the Big Horn Hotel. “We’re the only sector being targeted.”
The tax would apply to all short-term accommodations — hotels, motels, bed and breakfasts and RV parks. While there are no Airbnb accommodations in Watson Lake at this time, mayor Cheryl O’Brien said it would also apply to those, as they are a short-term accommodation.
It will not apply to visitors who are staying in Watson Lake for medical treatment or their family members who may be there with them or to staff staying in employee housing.
She explained the levy would be phased in at a rate of three per cent per room rate in 2020, four per cent in 2021 and, finally, the full five per cent in 2022 and thereafter.
O’Brien said the town has been considering the levy for at least two years; a process the previous council had begun.
“We really wanted to do some consultation,” she said, adding the town heard both positive and negative comments on the levy over the two year process.
She acknowledged those who have accommodations businesses have been against the tax since the beginning. Otherwise, there’s been a mix of positive and negative feedback, she said.
The tax, O’Brien said, will help pay for the things that bring and keep tourists in town longer — upkeep and improvements to parks and trails, the Sign Post Forest and so on.
“This is just a way to off-set the costs,” she said.
The levy — which is estimated to bring approximately $100,000 into the town’s coffers annually once it is at the full five per cent — will not simply go into general revenue, the mayor stressed.
A policy will be developed over the next few months detailing how the funding will be directed. O’Brien said the town would be consulting residents on the development of the policy. That consultation is anticipated to happen in October.
O’Brien said town officials also spoke with tourists — many who are accustomed to similar taxes and aren’t expected to cut their visits short due to the additional cost.
Bergeron, however, expects it will have a major impact on business.
“It’s putting us on an uneven playing field,” she said, arguing that for such a tax to work for all it should be something the territorial government implements throughout the Yukon, similar to what’s done throughout British Columbia.
She went on to state hotel owners in Watson Lake are “seriously thinking” of shutting down their businesses in response to the levy.
It’s tourism that keeps the town going, she said, and it’s not just those in the accommodations business who benefit from that. There’s the gas station, restaurants, shops and more, yet it is only those in the accommodations sector being targeted by the levy, she stressed.
Bergeron also took issue with provisions of the bylaw she says would allow the town access to a business’s books.
“They’re invading our privacy,” she said.
Fines for failing to comply with the bylaw are set at up to $1,000 for individuals and up to $5,000 for corporations.
Contact Stephanie Waddell at stephanie.waddell@yukon-news.com