HST debacle cancels key funding to Resort Municipalities in the Kootenays

The Harmonized Sales Tax (HST) isn’t just transferring tax burden away from corporations on to individuals, it has also resulted in the cancellation of a key funding stream to Resort Municipalities, says Columbia River-Revelstoke MLA Norm Macdonald.

The hasty announcement in 2009 by the BC Liberals that they were breaking their election promise not to implement the HST resulted in a series of unintended consequences including the termination of the Hotel Room Tax that funded both the now dismantled Tourism BC and Resort Municipality funding that resort communities in the Kootenays have come to depend on.

“For communities in my area, the implementation of the HST has had even wider consequences,” Macdonald said in a statement released Thursday.  “The cancellation of the Hotel Room Tax and the funding that flowed to resort communities from that tax will make it even more difficult for resort communities to provide the tourism infrastructure that is needed.”

With the cancellation of the guaranteed tax revenue through the Hotel Room Tax, resort municipalities are now dependent on grants to help to fund projects like improved visitor information signage, public square development and other tourism infrastructure.  Instead of a steady stream of income that could be used to leverage further grants or be accumulated to complete large projects, municipalities are now reduced to unreliable and likely temporary funding to develop much needed projects.

“Local governments in my area are telling me that this is a real blow,” he said.  “While the previous Hotel Room Tax system provided a clear revenue stream, the grant program that replaced it is still a broken promise to resort communities. As a former mayor, I understand the challenge that communities face.  With property tax as the only source of municipal revenue, the consistent funding that was supposed to arrive with the Hotel Room Tax was a welcome improvement.

“But the implementation of the HST changed all that.  Local resort communities that signed agreements with the province for Hotel Room Tax revenue have been left in the lurch. The HST is detrimental for the communities in my area.  That is why I’m voting Yes to scrap the HST.”