The proposed regions of the North in the Sorbera Report separate Northern Ontario into the Northeast and Northwest at Sault Ste Marie. The announcment states that the funds will be redistributed back to newly defined tourism regions. There is a rationale that $1 million collected by Thunder Bay municipal properties locally means $1 million should flow back to the municipality to fund its tourism marketing. Wheras a locally collected DMF stays 100% in the community, the new collected funds going into the Provincial Pool means the risk of loss of local control increases substantially.
So what's the concern? Loss of local control on reinvestment. The move is positive in that every accommodation business has to collect, locally and across the Province, putting everyone on equal footing. Having this legislated at the Provincial level is positive but there will be some details that have to be ironed out to alliviate the concerns this also brings.
The arguments against it all have solutions. They are valid concerns but given the fact that hundreds of other communities collect them successfully means that they do work. These include uncertainty of whether the funds collected will be reinvested entirely in tourism or used for wider city services, voluntary collection programs that benefit properties that don't collect it, fear that customers will turn away because they have to pay it and a general perception that commercial property taxes should pay for municipal tourism marketing. The resistance by the industry locally has been due to a number of reasons. The fact that Thunder Bay has not had one has put us at a competitive disadvantage against other communities for years. Sault Ste Marie, Duluth, Toronto, Dryden and Winnipeg all have DMFs and they can, if re-invested wisely-increase tourism marketing and product development. I am in favour of the destination marketing fee and they have, in other communities, raised tourism marketing budgets substantially. This move is essentially the implementation of a Province wide legislated destination marketing fee (DMF).
While details are thin on the source of revenue, it is likely they will come through an increase in the Provincial accommodations sales tax, currently at 5%. The bigger announcement, however, is the creation of a new destination marketing fund. We have to remember that we can't build the entire Northern Ontario tourism economy around one attraction or experience and hopefully there will be investments made in other public and private sector attractions to help build critical mass within the region and develop experiences that cater to a wider audience. Locally, the Ministry of Tourism's Fort William Historical Park will see $8 million in capital improvements over the next three years and although it is not certain if this is additional investment or part of the larger infrastructure budget, its good news for the attraction and the city. The massive infrastructure spending program is a start and improvements to municipal and regional roads and other projects could lead to improvements in visitor experiences to our community. There's some good news on the tourism front in all of this. The 2009 Provincial budget rolled out last Thursday and included, as expected, a significant deficit spending program to help the Provcince through tough times.
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