Harrison Hot Springs will not be collecting hotel tax from the District of Kent and Fraser Valley Regional District, or even from itself.
In council Monday (Feb. 1), Harrison decided it will not be the designated recipient of the Municipal and Regional District Tax (MRDT), which brings a three per cent tax on vacation rentals to the municipality for tourism marketing purposes. Instead, Tourism Harrison will be making an application to receive the funds directly from the province.
“It’s just kind of an administrative change,” Robert Reyerse, executive director of Tourism Harrison, said.
“You basically have to redo your entire application every five years,” he said. “Because we’re effectively doing a new application, we have the opportunity to change this.”
In the past, Harrison Hot Springs had received the MRDT from the province and flowed through that money to Tourism Harrison. The money is then used to market tourism activities in the Harrison area.
According to Reyerse, this was a holdover from Tourism Harrison’s earliest days, when it was led by Harrison councillor Allan Jackson. At that time, it made sense for the administrative portion of the MRDT collection to be done through the village.
However, Tourism Harrison has now requested that the MRDT collection area be expanded to include the District of Kent and Electoral Area C in the Fraser Valley Regional District — and that means it makes more sense for the organization to collect its own funds.
“It really doesn’t make sense to have any one of them as the designated recipient,” Reyerse said. “And I can imagine from the perspective of the District of Kent, if all the money was going through the Village of Harrison, they might have some concerns.”
Tourism Harrison had already be doing marketing for areas within Kent and the FVRD — with the Circle Farm Tour, for example, and provides marketing for the Kilby Historic Site — and bringing the hotel tax to those areas would help fund activities that were already happening in those regions.
The MRDT makes up the majority of Tourism Harrison’s funding, with a nominal amount coming from municipal grants.
At Harrison council on Jan. 18, Tourism Harrison requested that the village send letters to Kent and the FVRD to request that they come on board with the hotel tax. The bylaw governing Harrison’s hotel tax is set to expire at the end of 2021, and an application that would possibly include those communities would have been sent to the province to upgrade the bylaw.
Reyerse said that at the time, they didn’t know it would be possible for Tourism Harrison to collect the money on its own, which is why they requested Harrison extend the area instead.
“Because the village had originally set up Tourism Harrison, it was not clear it could be switched,” Reyerse said. “It was a call to province to see if Tourism Harrison could still be made the designated recipient after the initial set up and it turned out we could.”
Now, Harrison has decided to let its bylaw expire and let Tourism Harrison take over the MRDT.
“We’ve been in discussion with the minister of tourism, and they said this shift to the designated recipient model is one that they strong support,” CAO Madeline McDonald said. “It’s increasingly replacing the old municipal bylaws that were originally put in place when this program was introduced.”
She also added that “it may also be more attractive to the other jurisdictions who are considering joining in.”
Some Harrison councillors did have concerns about whether letting Tourism Harrison receive the money directly would mean the village had less oversight over the way the funds were used. McDonald said that was not the case.
“This is a provincial sales tax,” she said. “So really the relationship is between the province and the service provided, who would be the designated recipient.”
Tourism Harrison will still need to report annually to the province on how the MRDT funds were used, and those reports will still come back to the municipalities in the MRDT area. The village also has a representative on Tourism Harrison’s board of directors (Coun. Samantha Piper), and the board is responsible for reviewing the plans, budgets and strategies.
Councillors also questioned whether the village would be losing out on any funds for their own use. That answer is also no.
The MRDT is entirely separate from the Resort Municipality Initiative (RMI) program, which the village does receive funding from each year. Although RMI funding is calculated in part by the amount of MRDT collected by the province (the three-year MRDT average or $100,000, whichever is higher), the MRDT money is not included with the RMI funds.
The two funding models also have very different goals: the MRDT is used for marketing the region only, which Tourism Harrison undertakes, and RMI funds are used for events and infrastructure projects to bring more tourists to the village.
Harrison council voted in favour of allowing its bylaw to expire and sending letters to the District of Kent and FVRD to let them know about the change. (Coun. Ray Hooper was the lone voice who voted in opposition.)
For Piper the change is one that makes sense for the future.
“I think the conversations from the last two times that this has been on our agenda shows to me a greater degree of clarity of why Tourism Harrison should be the administrator of the funds,” she said.
“For me it just makes it cleaner that (the MRDT) goes back to Tourism Harrison to administer themselves. I have no worries that Harrison or any of the other areas that sign on would be not treated as an equal.”
Tourism Harrison will need to complete its application to be the designated recipient for the MRDT funds by March 31 of this year. It will need agreement from the hotel, bed and breakfast, Airbnb and other short term accommodation operators in order to have its application approved by the provincial government.
“The MRDT is pretty much the bulk of our funding,” Reyerse said. “So if for whatever reason that doesn’t come through, that’s pretty much the end of Tourism Harrison.”
If approved, it will be in effect from Jan. 1, 2022 to Dec. 31, 2027.