Item - 2018.EX30.4
Tracking Status
- City Council adopted this item on January 31, 2018 with amendments.
- This item was considered by Executive Committee on January 24, 2018 and was adopted with amendments. It will be considered by City Council on January 31, 2018.
- See also By-law 296-2018
EX30.4 - Implementation of Municipal Accommodation Tax (Hotel and Short-Term Rental Tax)
- Decision Type:
- ACTION
- Status:
- Amended
- Wards:
- All
City Council Decision
City Council on January 31 and February 1, 2018, adopted the following:
1. City Council:
a. approve the implementation of a four percent tax on the sale of transient accommodations other than short-term rentals (the Municipal Accommodation Tax - Hotel, or "MAT-Hotel"), effective for all such transactions commencing April 1, 2018 and adopt the tax features for the Municipal Accommodation Tax - Hotel as set out in Attachments 1 and 1a to the report (January 10, 2018) from the Interim Chief Financial Officer; and
b. authorize the appointment of the Greater Toronto Hotel Association as the City's collection agent for the Municipal Accommodation Tax - Hotel, and direct the Interim Chief Financial Officer, in consultation with the City Solicitor, to enter into all related agreements on terms substantially as set out in Attachment 2 to the report (January 10, 2018) from the Interim Chief Financial Officer, and upon such other terms as may be acceptable to the Interim Chief Financial Officer.
2. City Council:
a. approve the implementation of a four percent tax on the sale of transient accommodations in short-term rentals (the Municipal Accommodation Tax - Short-Term Rental, or "MAT-STR"), effective for all such transactions commencing on the date on which the pending short-term rental by-law comes into force (expected to be on or after June 1, 2018), and adopt the tax features as set out in Attachments 1 and 1b to the report (January 10, 2018) from the Interim Chief Financial Officer; and
b. authorize the appointment of licensed short-term rental companies as the City's collection agents for collection of the Municipal Accommodation Tax - Short-Term Rental in respect of short-term rental operators associated with that company, and direct the Interim Chief Financial Officer, in consultation with the City Solicitor, to enter into all necessary agreements with such companies on terms substantially as set out in Attachment 3 to the report (January 10, 2018) from the Interim Chief Financial Officer and upon such other terms as may be acceptable to the Interim Chief Financial Officer.
3. City Council amend the Non Program Revenue and the Office of the Treasurer's 2018 Preliminary Operating Budget to reflect City Council's decision resulting from the adoption of the Municipal Accommodation Tax (MAT) such that:
a. the 2018 Preliminary Non-Program Revenue Budget gross revenue be adjusted to $34.667 million and net revenue of $16.100 million;
b. the transfer in 2018 of $18.000 million to Tourism Toronto;
c. the transfer of $0.225 million to the Greater Toronto Hotel Association for the administration of the Municipal Accommodation Tax as the collection agent for the City of Toronto for the hotel industry; and
d. the recovery of $0.342 million from Non Program to the Office of the Treasurer and increase in the Preliminary 2018 Operating Budget for the Office of the Treasurer by $0.342 million gross and $0 net, and 3.5 new positions for the administration of the Municipal Accommodation Tax.
4. City Council seek the appropriate Federal legislative or regulatory amendments to exempt the Municipal Accommodation Tax from the Harmonized Sales Tax.
5. City Council delegate the hearing of any Municipal Accommodation Tax appeals to the Government Management Committee.
6. City Council direct the Interim Chief Financial Officer, in consultation with the City Solicitor and upon such terms as may be acceptable to Interim Chief Financial Officer, to enter into an agreement with Tourism Toronto respecting the financial accountability required to ensure that all the Municipal Accommodation Tax amounts paid to Tourism Toronto by the City are used for the exclusive purpose of promoting tourism as required by Ontario Regulation 436/17.
7. City Council direct the Interim Chief Financial Officer to report to the Executive Committee on a strategy to protect the City should the Municipal Accommodation Tax drop below $18 million.
8. Council direct that the Short-Term Rental by-law to be enacted in accordance with Item LS23.1, headed "Licensing and Registration Regulations for Short-Term Rentals", include a provision establishing that all information collected in accordance with that by-law, is collected for the purposes of the administration and enforcement of both that by-law and the Municipal Accommodation Tax - Short-Term Rental by-law, and also a provision requiring that the transaction records that operators are required to maintain and provide to Municipal Licensing and Standards shall include information on the nightly price charged for the applicable short term rental.
9. City Council direct the General Manager, Economic Development and Culture to report back by the second quarter of 2019 on a review of the geographical boundary for Regional Tourism Organization 5 (RTO5) respecting municipal contributions to Tourism Toronto.
10. City Council authorize the City Solicitor to introduce the necessary bills to give effect to the Municipal Transient Accommodation Tax including: to add the Municipal Accommodation Tax By-law to the City of Toronto Municipal Code as a new Chapter of the Code; to amend Chapter 27, Council Procedures, of the City's Municipal Code to delegate the hearing of Municipal Accommodation Tax appeals to the Government Management Committee; and to amend the by-law with the Short-Term Rental Operator Registry referred to in Part 7 above as required, and City Council direct and authorize the appropriate City officials to take necessary actions to give effect to City Council's decision.
11. City Council direct the Interim Chief Financial Officer to undertake a review of the Greater Toronto Hotel Association Destination Marketing Program, including current and proposed business practices, collection experience, arrears policies, data security and any other applicable operational practices, prior to entering into a Collection Agreement with the Greater Toronto Hotel Association, and include any additional provisions in the agreement that will reduce risk, increase accountability and protect the public interest.
12. City Council direct the Interim Chief Financial Officer to report to the Executive Committee prior to exercising an option to extend the Greater Toronto Hotel Association contract, such report to include a detailed cost-benefit analysis and any other implications associated with extending the agreement.
13. City Council direct the General Manager, Economic Development and Culture to include, in the General Manager's report in the second quarter of 2019, the opportunities for the City of Toronto to have a position or positions on the Board at Tourism Toronto and to include recommendations on what that composition would be.
14. City Council direct the City Manager to review and report to the Executive Committee before the end of the Council term, with recommendations for governance changes to ensure the City's interests are represented and financial contributions are utilized effectively at Tourism Toronto.
Background Information (Committee)
https://www.toronto.ca/legdocs/mmis/2018/ex/bgrd/backgroundfile-110698.pdf
Attachment 1 - Administrative Design Features for the Municipal Accommodation Tax (MAT)
https://www.toronto.ca/legdocs/mmis/2018/ex/bgrd/backgroundfile-110752.pdf
Attachment 2 - Key Terms of Collection Agreement Between the City of Toronto and Greater Toronto Hotel Association
https://www.toronto.ca/legdocs/mmis/2018/ex/bgrd/backgroundfile-110753.pdf
Attachment 3 - Key Terms of Collection Agreement Between the City of Toronto and Short-Term Rental Company
https://www.toronto.ca/legdocs/mmis/2018/ex/bgrd/backgroundfile-110755.pdf
Background Information (City Council)
https://www.toronto.ca/legdocs/mmis/2018/cc/bgrd/backgroundfile-112285.pdf
Communications (Committee)
https://www.toronto.ca/legdocs/mmis/2018/ex/comm/communicationfile-78177.pdf
(January 23, 2018) Letter from Jane Humphreys (EX.Supp.EX30.4.2)
https://www.toronto.ca/legdocs/mmis/2018/ex/comm/communicationfile-78161.pdf
(January 23, 2018) Letter from Douglas Goold, Vice President, Toronto Region Board of Trade (EX.Supp.EX30.4.3)
https://www.toronto.ca/legdocs/mmis/2018/ex/comm/communicationfile-78189.pdf
Motions (City Council)
That City Council amend Executive Committee Recommendations 1a and 2a by deleting "4 percent" and adding "6 percent" so that the recommendations now read as follows:
1a. City Council approve the implementation of a 6 percent tax on the sale of transient accommodations other than short-term rentals (the Municipal Accommodation Tax - Hotel, or "MAT-Hotel"), effective for all such transactions commencing April 1, 2018 and adopt the tax features for the Municipal Accommodation Tax - Hotel as set out in Attachment 1 and 1A to the report (January 10, 2018) from the Interim Chief Financial Officer.
2a. City Council approve the implementation of a 6 percent tax on the sale of transient accommodations in short-term rentals (the Municipal Accommodation Tax - Short-Term Rental, or "MAT-STR"), effective for all such transactions commencing on the date on which the pending short-term rental by-law comes into force (expected to be on or after June 1, 2018), and adopt the tax features as set out in Attachment 1 and 1B to the report (January 10, 2018) from the Interim Chief Financial Officer.
Vote (Amend Item) Jan-31-2018 7:41 PM
| Result: Lost | Majority Required - EX30.4 - Campbell - motion 1 |
|---|---|
| Total members that voted Yes: 5 | Members that voted Yes are John Campbell, Janet Davis, Paula Fletcher, James Pasternak, Gord Perks |
| Total members that voted No: 33 | Members that voted No are Paul Ainslie, Maria Augimeri, Ana Bailão, Jon Burnside, Christin Carmichael Greb, Shelley Carroll, Josh Colle, Gary Crawford, Joe Cressy, Glenn De Baeremaeker, Justin J. Di Ciano, Sarah Doucette, John Filion, Michael Ford, Mary Fragedakis, Mark Grimes, Jim Hart, Michelle Holland, Stephen Holyday, Jim Karygiannis, Mike Layton, Chin Lee, Josh Matlow, Mary-Margaret McMahon, Denzil Minnan-Wong, Frances Nunziata (Chair), Anthony Perruzza, Neethan Shan, David Shiner, Michael Thompson, John Tory, Lucy Troisi, Kristyn Wong-Tam |
| Total members that were Absent: 7 | Members that were absent are Vincent Crisanti, Frank Di Giorgio, Norman Kelly, Giorgio Mammoliti, Joe Mihevc, Cesar Palacio, Jaye Robinson |
That:
1. City Council direct the General Manager, Economic Development and Culture to include, in his report in the second quarter of 2019, the opportunities for the City of Toronto to have a position or positions on the Board at Tourism Toronto and to include recommendations on what that composition would be.
Vote (Amend Item (Additional)) Jan-31-2018 7:42 PM
| Result: Carried | Majority Required - EX30.4 - Pasternak - motion 2a |
|---|---|
| Total members that voted Yes: 33 | Members that voted Yes are Paul Ainslie, Maria Augimeri, Ana Bailão, Jon Burnside, John Campbell, Christin Carmichael Greb, Josh Colle, Gary Crawford, Janet Davis, Glenn De Baeremaeker, Justin J. Di Ciano, John Filion, Paula Fletcher, Michael Ford, Mary Fragedakis, Mark Grimes, Jim Hart, Michelle Holland, Stephen Holyday, Jim Karygiannis, Mike Layton, Chin Lee, Josh Matlow, Frances Nunziata (Chair), James Pasternak, Gord Perks, Anthony Perruzza, Neethan Shan, David Shiner, Michael Thompson, John Tory, Lucy Troisi, Kristyn Wong-Tam |
| Total members that voted No: 5 | Members that voted No are Shelley Carroll, Joe Cressy, Sarah Doucette, Mary-Margaret McMahon, Denzil Minnan-Wong |
| Total members that were Absent: 7 | Members that were absent are Vincent Crisanti, Frank Di Giorgio, Norman Kelly, Giorgio Mammoliti, Joe Mihevc, Cesar Palacio, Jaye Robinson |
That:
1. City Council direct the Interim Chief Financial Officer to report to the Executive Committee on a strategy to protect the City should the Municipal Accommodation Tax drop below $18 million.
Vote (Amend Item (Additional)) Jan-31-2018 7:43 PM
| Result: Carried | Majority Required - EX30.4 - Pasternak - motion 2b |
|---|---|
| Total members that voted Yes: 33 | Members that voted Yes are Paul Ainslie, Maria Augimeri, Ana Bailão, Jon Burnside, John Campbell, Christin Carmichael Greb, Josh Colle, Gary Crawford, Joe Cressy, Janet Davis, Glenn De Baeremaeker, Justin J. Di Ciano, Sarah Doucette, John Filion, Paula Fletcher, Michael Ford, Mary Fragedakis, Mark Grimes, Jim Hart, Michelle Holland, Stephen Holyday, Jim Karygiannis, Chin Lee, Mary-Margaret McMahon, Denzil Minnan-Wong, Frances Nunziata (Chair), James Pasternak, Anthony Perruzza, Neethan Shan, David Shiner, Michael Thompson, Lucy Troisi, Kristyn Wong-Tam |
| Total members that voted No: 5 | Members that voted No are Shelley Carroll, Mike Layton, Josh Matlow, Gord Perks, John Tory |
| Total members that were Absent: 7 | Members that were absent are Vincent Crisanti, Frank Di Giorgio, Norman Kelly, Giorgio Mammoliti, Joe Mihevc, Cesar Palacio, Jaye Robinson |
That:
1. City Council direct the Interim Chief Financial Officer to undertake a review of the Greater Toronto Hotel Association (GTHA) Destination Marketing Program, including current and proposed business practices, collection experience, arrears policies, data security and any other applicable operational practices, prior to entering into a Collection Agreement with the GTHA, and include any additional provisions in the agreement that will reduce risk, increase accountability and protect the public interest.
2. City Council direct the Interim Chief Financial Officer to report to the Executive Committee prior to exercising an option to extend the GTHA contract, such report to include a detailed cost-benefit analysis and any other implications associated with extending the agreement.
3. City Council direct the City Manager to review and report to the Executive Committee before the end of the Council term, with recommendations for governance changes to ensure the City's interests are represented and financial contributions are utilized effectively at Tourism Toronto.
Vote (Amend Item (Additional)) Jan-31-2018 7:44 PM
| Result: Carried | Majority Required - EX30.4 - Davis - motion 3 |
|---|---|
| Total members that voted Yes: 38 | Members that voted Yes are Paul Ainslie, Maria Augimeri, Ana Bailão, Jon Burnside, John Campbell, Christin Carmichael Greb, Shelley Carroll, Josh Colle, Gary Crawford, Joe Cressy, Janet Davis, Glenn De Baeremaeker, Justin J. Di Ciano, Sarah Doucette, John Filion, Paula Fletcher, Michael Ford, Mary Fragedakis, Mark Grimes, Jim Hart, Michelle Holland, Stephen Holyday, Jim Karygiannis, Mike Layton, Chin Lee, Josh Matlow, Mary-Margaret McMahon, Denzil Minnan-Wong, Frances Nunziata (Chair), James Pasternak, Gord Perks, Anthony Perruzza, Neethan Shan, David Shiner, Michael Thompson, John Tory, Lucy Troisi, Kristyn Wong-Tam |
| Total members that voted No: 0 | Members that voted No are |
| Total members that were Absent: 7 | Members that were absent are Vincent Crisanti, Frank Di Giorgio, Norman Kelly, Giorgio Mammoliti, Joe Mihevc, Cesar Palacio, Jaye Robinson |
Vote (Adopt Item as Amended) Jan-31-2018 7:45 PM
| Result: Carried | Majority Required - EX30.4 - Adopt the item as amended |
|---|---|
| Total members that voted Yes: 36 | Members that voted Yes are Paul Ainslie, Maria Augimeri, Ana Bailão, Jon Burnside, John Campbell, Christin Carmichael Greb, Shelley Carroll, Josh Colle, Gary Crawford, Joe Cressy, Janet Davis, Glenn De Baeremaeker, Justin J. Di Ciano, Sarah Doucette, John Filion, Paula Fletcher, Mary Fragedakis, Mark Grimes, Jim Hart, Michelle Holland, Jim Karygiannis, Mike Layton, Chin Lee, Josh Matlow, Mary-Margaret McMahon, Denzil Minnan-Wong, Frances Nunziata (Chair), James Pasternak, Gord Perks, Anthony Perruzza, Neethan Shan, David Shiner, Michael Thompson, John Tory, Lucy Troisi, Kristyn Wong-Tam |
| Total members that voted No: 2 | Members that voted No are Michael Ford, Stephen Holyday |
| Total members that were Absent: 7 | Members that were absent are Vincent Crisanti, Frank Di Giorgio, Norman Kelly, Giorgio Mammoliti, Joe Mihevc, Cesar Palacio, Jaye Robinson |
EX30.4 - Implementation of Municipal Accommodation Tax (Hotel and Short-Term Rental Tax)
- Decision Type:
- ACTION
- Status:
- Amended
- Wards:
- All
Committee Recommendations
The Executive Committee recommends that:
1a. City Council approve the implementation of a 4 percent tax on the sale of transient accommodations other than short-term rentals (the Municipal Accommodation Tax - Hotel, or "MAT-Hotel"), effective for all such transactions commencing April 1, 2018 and adopt the tax features for the Municipal Accommodation Tax - Hotel as set out in Attachment 1 and 1A to the report (January 10, 2018) from the Interim Chief Financial Officer.
1b. City Council authorize the appointment of the Greater Toronto Hotel Association as the City's collection agent for the Municipal Accommodation Tax - Hotel, and direct the Interim Chief Financial Officer, in consultation with the City Solicitor, to enter into all related agreements on terms substantially as set out in Attachment 2 to the report (January 10, 2018) from the Interim Chief Financial Officer, and upon such other terms as may be acceptable to the Interim Chief Financial Officer.
2a. City Council approve the implementation of a 4 percent tax on the sale of transient accommodations in short-term rentals (the Municipal Accommodation Tax - Short-Term Rental, or "MAT-STR"), effective for all such transactions commencing on the date on which the pending short-term rental by-law comes into force (expected to be on or after June 1, 2018), and adopt the tax features as set out in Attachment 1 and 1B to the report (January 10, 2018) from the Interim Chief Financial Officer.
2b. City Council authorize the appointment of licensed short-term rental companies as the City's collection agents for collection of the Municipal Accommodation Tax - Short-Term Rental in respect of short-term rental operators associated with that company, and direct the Interim Chief Financial Officer, in consultation with the City Solicitor, to enter into all necessary agreements with such companies on terms substantially as set out in Attachment 3 and upon such other terms as may be acceptable to the Interim Chief Financial Officer.
3. City Council amend the Non Program Revenue and the Office of the Treasurer's 2018 Preliminary Operating Budget to reflect the recommendations in this report resulting from the adoption of the Municipal Accommodation Tax (MAT) such that:
a. the 2018 Preliminary Non-Program Revenue Budget gross revenue be adjusted to $34.667 million and net revenue of $16.100 million;
b. the transfer in 2018 of $18.000 million to Tourism Toronto;
c. the transfer of $0.225 million to the Greater Toronto Hotel Association for the administration of the Municipal Accommodation Tax as the collection agent for the City of Toronto for the hotel industry; and
d. the recovery of $0.342 million from Non Program to the Office of the Treasurer and increase in the Preliminary 2018 Operating Budget for the Office of the Treasurer by $0.342 million gross and $0 net, and 3.5 new positions for the administration of the Municipal Accommodation Tax.
4. City Council seek the appropriate Federal legislative or regulatory amendments to exempt the Municipal Accommodation Tax from the Harmonized Sales Tax (HST).
5. City Council delegate the hearing of any Municipal Accommodation Tax appeals to the Government Management Committee.
6. The Interim Chief Financial Officer, in consultation with the City Solicitor and upon such terms as may be acceptable to him, be directed to enter into an agreement with Tourism Toronto respecting the financial accountability required to ensure that all the Municipal Accommodation Tax amounts paid to Tourism Toronto by the City are used for the exclusive purpose of promoting tourism as required by Ontario Regulation 436/17.
7. Council direct that the Short-Term Rental by-law to be enacted in accordance with LS23.1, titled 'Licensing and Registration Regulations for Short-Term Rentals', include a provision establishing that all information collected in accordance with that by-law, is collected for the purposes of the administration and enforcement of both that by-law and the Municipal Accommodation Tax - Short-Term Rental by-law, and also a provision requiring that the transaction records that operators are required to maintain and provide to Municipal Licensing and Standards shall include information on the nightly price charged for the applicable short term rental.
8. The General Manager, Economic Development and Culture be directed to report back by the second quarter of 2019 on a review of the geographical boundary for Regional Tourism Organization 5 (RTO5) respecting municipal contributions to Tourism Toronto.
9. The City Solicitor be authorized to introduce the necessary bills to give effect to the Municipal Transient Accommodation Tax including: to add the Municipal Accommodation Tax By-law to the City of Toronto Municipal Code as a new Chapter of the Code; to amend the Chapter 27, Council Procedures, of the City's Municipal Code to delegate the hearing of Municipal Accommodation Tax appeals to the Government Management Committee; and to amend the by-law with the Short-Term Rental Operator Registry referred to in Recommendation 7 as required, and the appropriate City officials be authorized and directed to take necessary actions to give effect thereto.
Decision Advice and Other Information
The Executive Committee requested the Interim Chief Financial Officer to report directly to the City Council meeting on January 31, 2018 on alternative models for the collection of the Municipal Accommodation Tax (Hotel and Short-term Rental Tax).
Origin
Summary
This report responds to Council's direction to implement a municipal transient accommodation sales tax, at the rate of four percent of hotel accommodation sales, and up to ten percent of short-term residential accommodation sales.
The report recommends that the Municipal Accommodation Tax ("MAT") consist of two components: a sales tax on hotel accommodation ("MAT-Hotel"), and a sales tax on short-term rentals[1] ("MAT-STR").
Staff recommend the implementation of a 4 percent Municipal Accommodation Tax - Hotel and seek all necessary authorities to implement it on all hotel accommodation transactions effective April 1, 2018, including approval of the administrative design features for the tax, enforcement provisions for the tax, and authority to enter into an administration and collection agreement with the Greater Toronto Hotel Association.
The report also recommends that Council adopt the Municipal Accommodation Tax - Short-Term Rentals at the same rate of 4 percent, to be effective on all short term rentals transacted from the date at which the short-term rental bylaw (to be enacted in accordance with Council's decision on LS23.1 titled 'Licensing and Registration Regulations for Short-Term Rentals' on December 5-7, 2017) comes into effect (expected to be on or after June 1, 2018). In order to facilitate efficient collection of this tax, this report recommends that City staff be authorized to enter into agreements with all licensed short-term rental companies pursuant to which they would assume the role of collecting agent of the tax on behalf of the City in respect of all registered operators associated with the company.
A provision of $16.1 million in net Municipal Accommodation Tax revenue has been set up in Non-Program Revenue of the 2018 Operating Budget. This is the estimated gross tax revenues to the City less costs related to administration and collection and the estimated value of a transfer to Tourism Toronto.
[1] The definitions of the terms used in this report, including "short-term rental", "operator", "short-term rental company", and "principal residence" are the same as those in the Short-Term Rental by-law to be enacted in accordance with Council's decision on LS23.1, titled 'Licensing and Registration Regulations for Short-Term Rentals' on December 5-7, 2017.
Background Information
https://www.toronto.ca/legdocs/mmis/2018/ex/bgrd/backgroundfile-110698.pdf
Attachment 1 - Administrative Design Features for the Municipal Accommodation Tax (MAT)
https://www.toronto.ca/legdocs/mmis/2018/ex/bgrd/backgroundfile-110752.pdf
Attachment 2 - Key Terms of Collection Agreement Between the City of Toronto and Greater Toronto Hotel Association
https://www.toronto.ca/legdocs/mmis/2018/ex/bgrd/backgroundfile-110753.pdf
Attachment 3 - Key Terms of Collection Agreement Between the City of Toronto and Short-Term Rental Company
https://www.toronto.ca/legdocs/mmis/2018/ex/bgrd/backgroundfile-110755.pdf
Communications
https://www.toronto.ca/legdocs/mmis/2018/ex/comm/communicationfile-78177.pdf
(January 23, 2018) Letter from Jane Humphreys (EX.Supp.EX30.4.2)
https://www.toronto.ca/legdocs/mmis/2018/ex/comm/communicationfile-78161.pdf
(January 23, 2018) Letter from Douglas Goold, Vice President, Toronto Region Board of Trade (EX.Supp.EX30.4.3)
https://www.toronto.ca/legdocs/mmis/2018/ex/comm/communicationfile-78189.pdf
Speakers
Ben d'Avernas
Alyas Ali, Spacefy
Alex Dagg, Airbnb
Sue Colley
Thorben Wieditz
John J. Kiru, Executive Director, Toronto Association of Business Improvement Areas
Councillor Janet Davis
Motions
That the Interim Chief Financial Officer report directly to Council on alternative models for the collection of the Municipal Accommodation Tax (Hotel and Short-term Rental Tax).