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Chelsea mulls a tax on tourism

January 24th,2024 | Municipal News, News

A Chelsea councillor is suggesting a tax on tourism as one way of diversifying the municipality’s revenue sources. 

Councillor for most of Centre Village, Dominic Labrie, included the tourism tax proposal as part of his platform during his 2021 campaign for municipal council. 

He recently told the Low Down that he intends to bring it forward again during upcoming council discussions, which will be focused on revenue diversification. 

As of right now, there is no formal bylaw proposal to implement a tourism fee in Chelsea. 

Chelsea’s annual budget, released in December 2023, saw a 6.3 per cent increase in taxes and around $1 million in cuts to services, suggesting that the municipality’s growing tax base is not keeping pace with the rising cost of services and infrastructure.  

Labrie said that he would like to suggest a tourism fee similar to what has been done in other municipalities, like Ville de Percé near Gaspé, although exact terms and conditions, such as the percentage and services covered, will still have to be determined.  

“Essentially, [a tourism fee] involves collecting a fixed amount or a percentage on transactions, overnight stays and meals. Merchants collect the fee and remit it to the municipality. Residents are exempt from the tax on presentation of an identity card.”

Currently, Ville de Percé implements a fee on certain purchases and activities, including: restaurants, tourist accommodation, souvenirs and gifts, outdoor and sporting equipment, clothing and recreational tourism. 

Purchases of $20 and less are excluded from the tax, as are alcohol, tobacco, cannabis, gasoline, books and non-taxable goods and services like medicine, education and childcare, Ville de Percé’s website states. 

The fee is a fixed amount of $1 for any transaction over $20, excluding tip. 

Labrie admits this would not be a large source of revenue. 

He explained, “the idea would be to get visitors to share the costs generated by their presence,” such as hiring traffic controllers, repairing Chemin du Lac Meech and reconfiguring the intersection of Old Chelsea and Scott Roads, areas that experience most of the tourists in Chelsea.  

“These revenues could also be used to invest in public toilets and improve waste management,” he added. 

Labrie noted that a tourism fee cannot be successful without buy-in from local business owners. 

“[Merchants] have an interest in better management of traffic, parking, cleanliness and so on,” he explained. 

“To do this, we need to set up a dedicated fund and ensure that the sums collected are used for this purpose.”

Now’s not the time 

The Low Down spoke with four owners of well-known businesses in Chelsea to get a sense for how they would respond to a tax on tourism. 

For Manuela Teixeira, who owns several businesses in the Centre Village, including The Chelsea Pub, Biscotte & Cie and Lofts du Village, the timing just isn’t right. 

“Businesses have been in trouble for three years now,” Teixeira said, referencing the impact the pandemic has had on restaurants and the hospitality industry in particular. 

“Particularly at this time, when inflation is really high and people are struggling to pay their mortgage, if people then see an extra tax – it’s not good.” 

Teixeira said she doesn’t discount the idea altogether, however. “I think once we get out of the situation we’re in where people are scared right now about finances, I think this [idea] could be interesting,” she said, adding, “but the only way it could work is if businesses that contribute to this actually get to have the funds reinvested in their own touristic development.”

Peter Sudermann owns Camp Fortune ski hill, and he said he shares Teixeira’s view that now isn’t the time to be adding a fee to anyone’s bill. 

He said that as a business owner, “you’re trying to keep costs down to keep visitors interested in what you’re providing, so adding an extra cost onto that will not go over well. When people catch on to the fact that they’re being taxed to come to Chelsea…they might say, ‘Forget it, I’ll just go to Hull.’” 

Cindi Minnes owns Café Les Saisons on Old Chelsea Road. She said she worries about making visitors, who she relies on to keep her business running, feel less welcome. 

“My business could not survive without them, and I would not want to do anything to contribute to those customers feeling less wanted, less appreciated,” she told the Low Down. 

Greg Brayford, co-owner of Bougie Doozy Candles, did not mince words when it came to the idea of a tourist fee. 

“I do not want any extra taxes charged to my clients nor do I want any extra burden collecting more tax to ease the financial problems of the second wealthiest community in Quebec,” Brayford wrote in an email to the Low Down. “It is not my job as a business owner to bail out the municipality for their own financial mismanagement.”

The Low Down spoke with Chelsea Mayor Pierre Guénard, who emphasized that council is still in the midst of discussions about ways to diversify the municipality’s revenue and said nothing has been decided or implemented. 

Guénard also stressed, “The proposition is not from Coun. Labrie but from budget discussions between council members and staff on a variety of possibilities for revenue diversification options. What Coun. Labrie brings forward is not official, since no formal bylaw proposition has been made to council yet.” 

“Will options of getting revenues from tourists be integrated in the global diversification’s discussions? Yes,” Guénard said, adding, “but I can’t tell what and when. At this time of the process, it is too early to be precise on what, how and when something will be in place.”

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