Vancouver City Council |
ADMINISTRATIVE REPORT
Date: February 12, 2003
Author/Local: D.Sherwood/7571
RTS No. 03184
CC File No. 6008Council: March 11, 2003
TO:
Vancouver City Council
FROM:
Deputy City Manager
SUBJECT:
Tourism Vancouver - Interim Payments of 2% Hotel Tax - 2003
RECOMMENDATION
THAT Council authorize on an interim basis, pending the implementation of Provincial legislative changes to the Hotel Room Tax Act, the remittance of the 2% Hotel Tax revenues for 2003 to Tourism Vancouver, the amounts of each remittance not to exceed actual receipts from the Province of the 2% tax.
POLICY
On an annual basis, City Council reviews the business plan of Tourism Vancouver and decides on the allocation of the 2% Hotel Tax revenues.
In nine of the last ten years, Council has authorized release of funds prior to approval of Tourism Vancouver's Business Plan. In 2002 no approval was required for interim payments due to the more timely approval of the 2002 business plan.
PURPOSE
This report seeks approval for the release of the 2003 2% Hotel Tax proceeds during an interim period of transition, and in addition, reports back on recommendations approved by Council in 2002 regarding the City_s role and responsibility for supporting funding for the Vancouver Convention and Exhibition Centre Expansion through the use of the 2% Hotel Tax.
BACKGROUND
In 1987, the Hotel Room Tax Act legislation of the Province of British Columbia enabled the collection of a tax of up to two percent on sales of accommodation in designated areas within the Province. The Hotel Tax is intended to assist municipalities and regional districts in financing and operating new tourist facilities and with tourism promotion.
Since 1988, the City of Vancouver has held the authority to receive from the Province the 2% tax on hotel revenues, and holds the responsibility to ensure the hotel tax revenues are used in accordance with the Provincial legislation and the City_s by-law. These state the revenues are to be utilized for _tourism promotions, projects and programs_. Since 1988, the City of Vancouver has allocated these revenues to Tourism Vancouver for these purposes.
On August 14, 2002 the Standing Committee of Council on Planning and Environment discussed the Industry funding contribution for the Vancouver Convention and Exhibition Centre Expansion. The following motions were approved:
1. THAT Council advise the Provincial Government and Tourism Vancouver that any commitments required by the City to provide funding for the industry contribution will require the safeguards to ensure Vancouver taxpayers face no financial liability;
2. THAT Council advise the Provincial Government and Tourism Vancouver that it supports funding of the $90 Million investment for the Vancouver Convention and Exhibition Centre expansion, to come from the annual 2% hotel tax, as outlined in the draft Memorandum of Understanding dated August 13, 2002, on condition the Provincial Government makes legislative changes to absolve the City from all responsibilities for administering the 2% hotel tax, and for any responsibility for financial and business plans of Tourism Vancouver during the period of the repayment;
CONFIRMATION FROM THE PROVINCE
The Deputy City Manager has now received written confirmation of the Province_s intentions with respect to the Additional Hotel Room Tax collected within the City of Vancouver under section 3.3 of the Hotel Room Tax Act.
An extract from the letter dated January 15, 2003 from Ken Dobell, Deputy Minister is as follows;
_ Consistent with the Council resolution of August 14, 2002, the Ministry of Competition, Science and Enterprise has put forward recommendations that will result in Tourism Vancouver being defined as an eligible recipient of the Additional Hotel Room Tax (the 2% tax) collected in Vancouver. This means all legal commitment from Tourism Vancouver to provide $90 million from that revenue pool for the construction of the expansion project. Tourism Vancouver has agreed that it will take sole responsibility for the risk of financing that obligation and the City will bear no obligation for the financing of the $90 million. The recommendations will also relieve the City of its current reporting and oversight obligations for the Additional Hotel Tax under the Hotel Room Tax Act.
Subject to final Cabinet ratifications, which we anticipate shortly, I believe these measures completely satisfy the requirements of Vancouver City Council as described in their August 14 resolution. Accordingly, I assume that Council will flow revenue to Tourism Vancouver as in the past, on an interim basis pending the implementation of these changes._
CONCLUSION
The City now has written confirmation of the Province_s intentions with respect to the 2% Hotel Tax. Subject to Cabinet ratification, City Council_s requirements, as outlined in Council resolution of August 14, 2002, have been met. It is therefore requested that Council approve the continued flow of funds to Tourism Vancouver on an interim basis pending implementation of the proposed changes.
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