Victoria is taking steps to increase the tax on hotel accommodation to three per cent from two per cent.
The city received the Capital Regional District’s consent for the increase — a provincial condition of approval — on Wednesday.
“It’s a municipal/regional tax, so if any changes need to be made, the CRD needs to approve it,” Victoria Mayor Lisa Helps said.
The increase in the tax was requested last year by Tourism Victoria, its main beneficiary, as the city moves to form a new relationship with the tourism organization.
That relationship is based on Tourism Victoria taking the lead on the sales and marketing of the Victoria Conference Centre, and the tourism industry making a $1-million contribution toward the David Foster Harbour Pathway, along with voluntarily agreeing to the tax increase.
The hope is to have the increased tax in place by Jan. 1.
Helps called the changes being negotiated between Tourism Victoria and the city exciting, with the end goal of setting the tourism industry on more solid ground.
“It’s a very positive and exciting negotiation between Tourism Victoria and the city to kind of modernize the city’s relationship with our tourism industry association,” she said. “I’m looking forward to it because we’ve been working so hard on it.”
There has been a two per cent hotel tax in Victoria since 1998. Most of the funds collected are used by Tourism Victoria, which gets about $2.5 million annually from the hotel tax. The Victoria Conference Centre gets about $600,000, and the city uses the balance for destination marketing.
The hotel tax, the Municipal and Regional District Tax, is in addition to the eight per cent provincial sales tax levied on hotel room customers.
The B.C. government announced last July that it would allow all municipalities in the province to increase the tax if desired. Vancouver started collecting a hotel tax of three per cent in September.
Tourism Victoria had no comment on the application other than to say the process is moving forward.
