By Lorne Eckersley
In a scathing letter to the Town of Creston, Ramada Hotel and Conference Centre principal owner Lionel Gartner has protested the introduction of an accommodation tax.
“We are shocked that the Mayor and Council chose to implement a new Municipal and Regional District Tax (MRDT) effective June 1st, 2020 especially during this unprecedented time or at any time for that matter,” Gartner wrote.
The MRDT is designed to raise funds specifically to promote local tourism marketing, programs and projects, and its implementation requires support of more than 50 per cent of accommodators (hotels and motels) representing more than 50 per cent of total available rooms. The program is designed by the Provincial Government and can be adopted by regions throughout the province.
In discussing Gartner’s concerns at the April 14th Town Council meeting, CAO Mike Moore pointed out that the new Municipal and Regional District Tax was not a Town of Creston initiative.
“Mayor and Council did not choose the implementation of the tax, although in early fall 2020, Council endorsed the submission of the MRDT application by the RDCK on behalf of local accommodators who supported the implementation of a two per cent sales tax,” he said.
In a memo addressing the issue, Moore provided Council with the following information:
“In 2019, the RDCK Directors responsible for Service 108 (Economic Development) hired a contractor to work with the accommodators to determine actual support for the implementation of the MRDT. This included one on one meetings with principal owners of all accommodators and a couple of group meetings.
“By June 2020, all accommodators in Town of Creston, Areas B and C supported the MRDT to be implemented with the exception of the Ramada and Creston Valley Motel. The principal owner of the Creston Valley Motel was “undecided” while the principal owner of the Ramada refused to meet with the contractor to discuss.
“The MRDT application was submitted in the fall of 2019 by the Regional District of Central Kootenay (RDCK) on behalf of the accommodators in the Town of Creston, and Electoral Areas B & C.”
Citing the devastating impact the COVID-19 pandemic has had on businesses in the tourism sector, Gartner wrote, “Creston is not ‘open for business’—you are going out of your way to try and close businesses, while we are doing everything in our power to keep people employed and on the payroll. If the Town is trying to discourage any new business, then you are accomplishing your objective. Or are you going to step up like others and consider assisting businesses that have low to no revenue. Is this Town considering help with expenses or absorb other costs on such things as taxes on water/sewer, school, hospital, property and also assist with insurance, gas, electrical, and other utilities since we have no revenue?”
Moore also reminded Council that the Ramada Hotel and Conference Centre has received significant benefits from the Town’s Revitalization Tax Exemption Bylaw “that provided 5 years free municipal tax relief and 5 years 50% municipal tax relief. The tax relief is based on changes on assessed value on new builds and renovations.
“The Ramada is still receiving 50% tax relief under this program after receiving 5 years municipal tax free. Council at the time passed this bylaw in hopes that the local accommodators would improve, and that the principal owner of the Ramada would build, to improve tourism in the Creston Valley.”
“We now realize that coming to Creston was a mistake and regret developing here,” Gartner wrote. “This Town is over-taxing its citizens and you just don’t have good business sense—adding more taxes? Not smart. You are ruining us with already very high taxes and now causing more hardships. This is the wrong time to increase taxes and this tax grab is going to put some of us over the limit. We will lose customers because they will now have to pay more to stay in our hotel.”
In the entire Kootenay region, the Trail area is the only area in which accommodators have not agreed to join in the MRDT program.