Wednesday • May 11, 2016
Fernie's 2% Hotel Tax/MRDT approved for another 5 year term, begining February 1, 2017.
MRDT 5-Year Term Renewal Process
January 31, 2017 marks the expiry of the current 5-year MRDT term in Fernie. Led by Tourism Fernie, the renewal process is now complete and consisted of:
What is the MRDT?
The Municipal, Regional and District Tax (MRDT), previously known as the Additional Hotel Room Tax (AHRT), is a tax of up to 3% on the purchase of short-term (under 30 days) accommodation (fixed-roof lodging of 4 or more rooms) imposed in specific geographic areas of the province on behalf of municipalities, regional districts or eligible entities.
The MRDT program was originally introduced in 1987 and raises revenue for local tourism marketing, programs and projects. It is intended to help grow BC revenues, visitation and jobs, and amplify BC’s tourism marketing efforts in an increasingly competitive marketplace.
In 2002 only 7 communities in BC collected the 2% MRDT. In 2015, 54 communities/regions are collecting the 2% MRDT and investing over $28 million annually to bring visitors to their businesses.
MRDT Program Principles:
The MRDT in Fernie:
Since February 2007 Fernie accommodators have been collecting the 2% MRDT from their overnight guests. Accommodators report and remit the MRDT (along side the PST) to the Ministry on a monthly or quarterly basis. The Ministry then sends Fernie’s monthly MRDT amounts, less an administration fee, to the Regional District of East Kootenay who in turn sends it under contract, less an annual administration fee, to Tourism Fernie.
Since 2007 Fernie’s MRDT gross collections have totaled $2.5 million, an average of $295,000 annually.
The MRDT and the development of Tourism Fernie, a non-profit industry led organization, has allowed the community to develop and execute tourism destination marketing initiatives totaling over $5 million plus an estimated $2 million in additional value added marketing exposure and leveraging.
The MRDT has also allowed Fernie to become an approved Resort Municipality Initiative (RMI) community. RMI funds go directly to the City of Fernie, and are intended to assist small, tourism-based municipalities to support and increase visitation. Since municipalities like Fernie typically have a small tax base due to their size, the demands of their tourism activity often strain the resources available to provide infrastructure and event programming. RMI funding allows these communities to dedicate resources to improving tourism-based infrastructure and amenities to attract more visitors and encourage longer stays. Fernie has been an RMI community since 2009 and has received over $2.3 million as of 2014. In Fernie, RMI funding is calculated at 1.5 of the previous year’s MRDT.
The MRDT is a direct reflection of the strength of the tourism sector in Fernie.
The $2.5 million in Fernie MRDT translates to $125.5 million in accommodation revenues. Since 2007 accommodation revenues in Fernie have increased 25% (outside of a dip with the recession and the low-snow months of Jan-Apr 2015), with the most significant growth in the summer (46%).
Visit www.tourismfernie.com/stakeholders for more details about Tourism Fernie including how MRDT funds have been invested as detailed within the Annual Reports.
NEW MRDT Program Requirements
As of September 2015 the government released a document detailing the updated MRDT Program Requirements. In brief, the updated requirements include more detailed annual reporting, a 5-Year Strategic Plan (upon renewal periods), and an annual Tactical Plan. Full details can be found at this URL: http://www.destinationbc.ca/BC-Tourism-Industry/Municipal-and-Regional-District-Tax-Program.aspx
NEW 3% Option
As part of BC Government’s 2015 Budget, the legislature approved a 1% increase to the maximum Municipal and Regional District Tax (MRDT) program rate allowed under the Provincial Sales Tax Act to 3%, from 2% previously. This change to the MRDT rate is entirely voluntary (51%+ accommodator vote approves the increase within a community) and will only apply to municipalities, regional districts or eligible entities that request the increase, and whose applications are approved by government. Communities that choose to increase their MRDT rate will also support a new provincial Tourism Events Program. 0.2 percentage points of the incremental 1% collected would go back to the province for this program.
The additional 1% would equal approximately $150,000 in additional MRDT funds (27% increase in Tourism Fernie’s budget) to market Fernie annually. The Tourism Events Program would take approximately $30,000 of the $150,000. The Tourism Events Program is a provincial application-based program intended to support large events that drive significant overnight visitation to BC.
The 3% option will involve additional reporting including a stakeholder satisfaction survey and report on community collaboration.
Tourism Fernie Vision, Mission, Guiding Principles & Key Goals
TOURISM FERNIE VISION
Fernie is the most sought after tourism destination in the Canadian Rockies
TOURISM FERNIE MISSION
Increase visitation and revenue for stakeholders through tourism marketing
TOURISM FERNIE GUIDING PRINCIPLES
TOURISM FERNIE GOALS & OBJECTIVES
For more information please contact: