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Province to provide more of hotel tax

Additional $6 million in annual revenue eases but doesn't erase Whistler's athletes village concerns



Even though Whistler will receive a $6 million boost to municipal coffers, Mayor Ken Melamed remains anxious about funding for the athletes village construction.

"This is a momentous day for Whistler and not just for Whistler but for all resort communities around the province," Melamed said on hearing of Premier Gordon Campbell’s announcement last weekend that the province will increase the amount of hotel room tax revenue it dishes out to B.C.’s 13 resort communities.

It is the "financial tools" Whistler has been seeking for years.

Whistler’s share of the 10 per cent hotel room tax collected by the province will increase from 2 per cent to 6 per cent annually. At Whistler’s current hotel occupancy rates and prices that equates to a jump in hotel tax revenue from $3 million per year to an estimated $9 million in 2007.

The premier made the announcement at the B.C. Chamber of Commerce’s annual general meeting in Invermere May 27.

"This new revenue-sharing strategy… is one more tool we can give resort communities to unleash their vision for becoming world-class tourism destinations," Campbell said.

Under the new agreement, the province will give up an estimated $10 million in hotel tax revenue, which will be shared amongst Fernie, Golden, Harrison Hot Springs, Invermere, Kimberley, Osoyoos, Radium Hot Springs, Revelstoke, Rossland, Tofino, Uculelet, Valemount and Whistler. However, not every town will receive the same percentage of the hotel tax. A formula based on tourist accommodation per capita will determine how much hotel tax revenue each of the 13 communities will collect.

In terms of dollars, Whistler is the biggest beneficiary of the new formula. According to a 2002 KPMG study, Whistler generates about $1 billion in tourist spending annually, or 11 per cent of total tourist spending in British Columbia.

West Vancouver-Garibaldi MLA Joan McIntyre said Whistler’s patience paid off.

"In my several reports to council I had asked for Whistler’s patience on this issue," McIntyre said. "A new provincial mandate and finance minister last spring meant tax policies had to be reviewed as part of a provincial resort strategy.

"Unfortunately Whistler had to wait a little longer than they had hoped for… but hopefully it is a very happy result."

Legislation to enact the change still has to be passed by the legislature in Victoria.

Designed to help B.C. resort communities compete with American resorts that receive substantial subsidization through state sales tax revenues, B.C.’s room tax sharing strategy could allow Whistler to fund basic infrastructure like transit, a contingency fund, and resort marketing. It could also help build employee housing and go toward a portion of the athletes village budget, Mayor Ken Melamed said after council’s May 29 meeting.

"We will have greater flexibility to spend this additional four per cent than we had in the original (model)," Melamed said. And although he cited the new plan as being a good thing for B.C.’s resort communities, he cautioned against windfall thinking.

"In some people’s minds it’s already been spent but council has not actually put into mind money it didn’t have."

A hotel tax task force struck last month will prioritize items the new money could be used to address, including the athletes village. Construction of the village needs to begin soon in order to meet the 2010 Games deadlines.

Whistler has been scrambling to find supplementary funding for the 43-hectare village near Function Junction that will house 2,400 athletes during the 2010 Winter Olympic and Paralympic Games. In addition to new hotel tax revenue, Whistler has asked the province to consider other options in which the municipality could cover the gap between Vancouver Organizing Committee’s (VANOC) $45.5 million contribution and the estimated $180-million cost of the village. The municipality is still waiting to hear from the Minister of Economic Development, Colin Hansen, who said 10 days ago that Whistler would receive a response from the Ministry within one month.

"We don’t want to end up like Torino, putting in shower curtains while the athletes are walking into their rooms," Melamed said.

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