bill 42 | Behind the curtain

Finance Minister Selina Robinson spoke extensively to the Provincial Sales Tax Amendment Act during last week’s Committee Stage debate of Bill 42. MLA Peter Milobar (Kamloops-North Thompson) serving as the Critic for Finance brought up hotels many times throughout his remarks, as well as his disapproval of the MRDT.

Minister Robinson and MLA Milobar discussed the parameters of the MRDT, FIFA’s influence on the bill, and the role of municipalities and hotels, and some of their remarks are below.
 
Minister Robinson also directly mentioned the BCHA when discussing the consultations made with the hotel industry. The relevant excerpt is highlighted below, and the full transcript can be found here: https://www.leg.bc.ca/documents-data/debate-transcripts/42nd-parliament/3rd-session/20221122pm-CommitteeA-Blues
 
[On clauses 1 and 2]
 
P. Milobar: 
Again, I’ve personally gone through this MRDT debate in my city twice, once on the opposing, not agreeing to it…We did. Actually, my mother was the hotelier. She was the first female president of the B.C. and Yukon Hotels Association. And we pushed back against it because there was not going to be local control….Again, was there no discussion either with the industry or with DMOs around the creation of this bill as it relates to — especially because there was such a focus on FIFA, as the minister has referenced several times now, as this bill was created. It sounds like pretty much an exclusively FIFA-minded legislation. …  It's FIFA-related in an area of the province that the rest of the province, over the next seven years that this will likely be in place, will be travelling for all sorts of medical appointments, long stays, those types of things, business, on a regular basis, that have absolutely nothing to do with tourism.
 
The hotel becomes a critical part of that because they need to stay somewhere….So was there no discussion at all? Was there no modelling? Was there no attempt to try to broaden this to potentially lessen the impact to the hotel industry as carrying the load? But as I say, we've got sightseeing buses. You've got all sorts of things that are typically much more tourism-related than strictly a hotel.
 
Hon. S. Robinson: 
First, I just want to mention that while the member is correct — it was FIFA-driven, just as it was Olympics-driven when it was for Whistler — we've taken the next step, recognizing that this would be the second time that the province would be using a special events MRDT for an international gathering like this. And so where this is different is that it's a tool that will be used on a go-forward basis — that's available to be used on a go-forward basis. So I think this is something that other municipalities can use as they think about their own tourism opportunities.
 
We did talk to industry. Consultations were led by the city of Vancouver and Destination Vancouver. They supported that as well. There was consultation with the B.C. Hotel Association, the Vancouver Hotel Association and the Vancouver Hotel Destination Association. We're continuing to consult with them. There is still some work to be done around the exact rate. This bill talks about the maximum of 2½ percent. That's the maximum. So there hasn't been a determination yet on rate. That consultation work needs to continue, as well as the duration of this special MRDT.
 
The industry concerns that we heard…. I'm just going to share this so that the member…. I don't know if he has a question, but this will provide the answer. The three concerns they were worried about were competitiveness, time — they wanted it time-limited; they recognized that — and transparency. Those were the three issues that they wanted special attention paid to, which we have.
 
I think I'll leave it there, and I'll wait for the member's next question.
 
 
[On clauses 1 and 2]
 
P. Milobar: 
Just to kind of wrap up this area in the section…If I'm hearing correctly, the Olympic committee still has the potential to be able to talk to municipalities and see if there's a way forward for municipalities that aren't captured by a potential FIFA tax on this. At the same time, any municipalities that may have dealings with the Invictus Games and that aren't captured, potentially, by the FIFA tax would have the potential to put a package together to bring forward to the ministers after this hits royal assent on Thursday.
 
Hon. S. Robinson: 
Again, I'll read into the record what I had said before. This applies to all communities and jurisdictions.
 
When they enter into an agreement with the minister responsible for tourism, the agreement needs to provide a full budget, a proposed major events MRDT rate, the duration of the tax and information on how the tax will be spent. So any jurisdiction is able to put that application together, as long as it meets the criteria of a major international event. It has to, certainly, make sense in the context of the event.
 
Whoever it is that is interested in pursuing that and working together with a local government…. That certainly would be considered by the two ministers that would need to sign off on it, and that's what's here before us.
 
 
On clause 4
 
P. Milobar: 
Again, it's just wanting to make sure we cover these all off.…Vancouver comes forward and says: "We'd like to collect $150 million to be able to pay for X, Y and Z." They go out, and they finally price X, Y and Z officially and start getting tenders, and it comes in at $200 million. Do they have the ability to add either length of time or increase the taxation based on those new and updated, ballooning costs?
 
Hon. S. Robinson: 
Yes, as long as they stay below the cap, which is 2½ percent.
 
 
Hon. S. Robinson: 
The municipality or jurisdiction that applies for this additional MRDT is required to be transparent, as we've said. They need to report every year monies that they've collected through this additional MRDT and how money is being spent so that everyone is well aware of how these resources are being used. We also recognize — and we've always stated — that the industry needs to be engaged.