Don’t Kill the Golden Goose: What Would a Higher Tourism Tax Mean for PEC?

Tourism brings people to Prince Edward County, but it also brings a familiar funding question: who should pay for the roads, services and public spaces that make their visit possible?

At the mayoral debate, candidates were asked about increasing the Municipal Accommodation Tax, or MAT, from 4% to 5% or 6%. Brad Nieman favoured pursuing illegal short-term accommodations. Terry Shortt warned about operators absorbing the tax and suggested bringing Sandbanks into the system. Ernie Margetson acknowledged proposing an increase, then emphasized consultation and year-round tourism.

Each answer touched on a real concern. Together, however, they left an important question unresolved: how can the County collect a fair contribution from tourism while sustaining the accommodation businesses that help visitors stay, spend and return?

This is a community discussion. PEC Connect welcomes supporting information, corrections and experiences through public comments or private messages, and will update this article as verifiable information becomes available.

What another percentage point means

The County’s current MAT is 4%, collected through eligible short-term accommodation. Net proceeds are divided between the municipality and eligible tourism entities, Visit the County and StayPEC. The tourism allocation supports promotion and development; the municipal portion can support a broader range of services.

Moving from 4% to 6% would increase the MAT amount by 50%, while adding two percentage points to the accommodation charge. Those describe the same change, but create very different impressions.

Accommodation charge before taxes	MAT at 4%	MAT at 5%	MAT at 6%
$500	$20	$25	$30
$1,000	$40	$50	$60
$3,000	$120	$150	$180

Illustrative calculations; exclude HST and other charges.

An additional $20 on a $1,000 accommodation booking may seem manageable. It could nevertheless matter to a household comparing total holiday costs, particularly when accommodation is only one expense.

For a business absorbing the increase, the relevant comparison is also with its remaining profit. Hypothetically, an operator earning $100,000 in revenue with $20,000 left after expenses would lose 10% of that profit if it absorbed an additional $2,000 charge. That is an illustration, not an estimate of typical County profitability.

Neither example proves that an increase would damage tourism. Both explain why consultation needs actual numbers.

Who ultimately pays?

Shortt described the pressure this way: “Increasing the percentage of MAT tax is only going to dig into their pockets deeper.”

MAT is charged to the visitor and remitted by the accommodation provider. Economically, however, its burden can be shared. An operator may pass it through, reduce the underlying rate to keep the total competitive, or accept fewer bookings.

Shortt’s claim that most operators absorb the existing tax deserves investigation. Luxury properties, modest B&Bs and hotels serving different customers may have very different pricing flexibility. A tax included in an advertised price is not, by itself, proof that the operator absorbed it.

Platform changes complicate the picture. Airbnb’s single-fee structure generally deducts 15.5% from the host’s payout, while Vrbo’s published pay-per-booking guidance describes a 12% all-in commission, subject to applicable terms. 

Airbnb’s transition replaces a split structure that also charged guests. It therefore cannot fairly be described as a wholly new 15.5% cost added to the stay. Airbnb illustrates how repricing can approximately preserve the previous payout and guest price. Whether operators can make that adjustment successfully is a practical question.

Operators are invited to share before-and-after examples, publicly or privately. How have total guest prices, net payouts and bookings changed? Those figures would tell us more than adding fee percentages together.

Overnight stays support more than accommodation

Accommodation businesses provide the base from which visitors dine out, shop, explore and attend events. If overnight stays become less attractive, the effects could extend well beyond the property collecting MAT.

Statistics Canada reported average domestic trip spending of $440 for overnight trips and $106 for same-day trips in the fourth quarter of 2024. These national figures include accommodation and travel expenses; they are not a PEC-specific measure of money retained locally.

A local pilot offers another clue. Reporting on Visit the County’s presentation describes 195 overnight guests surveyed in October and November 2025: 92% dined out, 62% shopped and 38% visited a winery. The small, seasonal sample was heavily weighted toward older repeat visitors, so it should not represent all tourists.

Still, it raises a fair question. When overnight guests support many sectors, how should the cost of sustaining the visitor economy be distributed?

What would the community receive?

The County’s April 2026 financial report records $1,541,672 in MAT collected by December 31, 2025. Its larger payable total includes a separate prior-year remittance category, making it unsuitable as a straightforward measure of annual tourism growth.

Adding only the four 2025 quarterly accommodation-revenue figures produces approximately $36.14 million. Holding that base constant gives this illustration:

Rate increase	Additional gross MAT	Approximate additional municipal half
4% to 5%	$361,375	$180,688
4% to 6%	$722,750	$361,375

PEC Connect calculations from the quarterly figures, not a municipal forecast. Assume unchanged taxable sales, full collection, unchanged administration costs and an approximately equal split.

The report also identifies $347,056 reported but uncollected at year-end. That should not automatically be called delinquent tax: fourth-quarter remittances were due January 31, 2026.

The municipal benefit is therefore smaller than the gross increase. Before raising the rate, candidates should explain what their additional share would purchase and how the outcome would be reported.

Can Niagara show another way?

Niagara’s restaurant and attraction surcharges suggest a possible broader contribution, but they need careful description. Niagara Falls Tourism distinguishes municipal MAT from additional business service fees. They are not a municipal restaurant tax.

CBC/Radio-Canada reporting documented optional charges removed on request in 2017. That historical investigation does not establish that every current surcharge can be removed, or that its proceeds support public infrastructure.

A transparent voluntary partnership among tourism businesses could be explored. It would need clear participation, disclosure and accounting, with an agreed purpose. Restaurant charges would also reach residents, so they would not neatly isolate daytrippers.

Other options deserve comparison, too. Reporting on the County’s 2026 service-delivery review identifies seasonal paid parking and sponsorship among potential revenue sources. These are proposals, not guaranteed net revenues; parking can affect residents and businesses, while sponsorship can be uncertain. 

The useful exercise is to compare practical alternatives, including their costs, fairness and likely proceeds, before choosing the easiest existing collection channel.

Enforcement before an increase?

Nieman proposed: “Get them legal first and then receive more MAT tax.”

Fair enforcement matters. Compliant operators face inspections, licensing and tax obligations; competitors avoiding those requirements can gain an advantage.

However, the County no longer issues new secondary-residence STA licences for applications submitted after September 20, 2022. An illegal operation cannot necessarily become legal through an application. 

Enforcement might recover tax, close a rental, redirect guests to licensed accommodation or encourage another property use. Those outcomes have different financial and housing implications.

Local reporting also records staff saying that illegal STA operators must remit MAT when discovered. That complicates the suggestion that licensing must come first. 

We invite municipal staff to clarify active illegal operations, taxes recovered, enforcement costs and expected future collections. Unpaid reported tax, undiscovered taxable activity and licensing violations are related issues, but require different responses.

Sandbanks needs a provincial pathway

Shortt suggested: “We’d have a million customers paying 4%.”

The fairness concern is understandable. Visitors reach a provincial attraction over local roads, while accommodation elsewhere in the County generates municipal tax revenue.

The arithmetic needs correction. Ontario Parks lists Sandbanks day use at $21 per vehicle, not per visitor, and describes annual attendance as over 700,000. A hypothetical 4% charge on a $21 payment would be 84 cents. Every 100,000 such payments would generate $84,000 before adjustments; this is not a revenue estimate.

Passes, camping permits, buses and free or discounted entry complicate that calculation. Some park visitors also already pay MAT at a hotel or STA.

More fundamentally, admission is not accommodation. The provincial legislation establishing MAT prevents municipalities from requiring the Crown or its agencies to collect it as municipal agents.

A mayor could advocate for a provincial contribution, negotiate infrastructure funding and work with the MPP and ministers. Council cannot simply instruct Ontario Parks to collect local MAT.

There is precedent for advocacy: County representatives raised Sandbanks’ assessment, payments in lieu of taxes and a possible vehicle surcharge with the province in 2015. Current payment and agreement details are needed before judging provincial support today. Ontario Parks and municipal staff are invited to provide them. 

What does protecting the golden goose require?

Margetson cautioned that “we don’t want to, you know, kill the golden goose here.”

Protecting tourism requires examining cumulative policy effects. Under the 2026 licensing schedule, secondary STAs pay $325 per guest room in inspection years and $162.50 in renewal years. A four-room property would pay $1,300 or $650 respectively, before other applicable charges. Whether those fees reasonably reflect regulatory costs deserves examination. 

Housing protection also matters. Limiting rentals in existing homes can constrain accommodation supply, but tourism businesses need workers who can afford to live nearby. Existing licence holders may benefit from reduced legal competition. These are tensions a coherent tourism strategy must address.

Year-round tourism work already exists. Visit the County reports funding 15 off-season events with $26,750, while the Chamber leads a four-season visitor-economy partnership. The next question is what additional overnight stays, local spending and steadier employment these investments produce. 

Public washrooms, roads and transit can also improve an overnight visit, even when residents and daytrippers benefit. Shared use is reasonable; accommodation businesses can reasonably ask for visible investment in the demand that sustains them.

A clearer decision for voters

No candidate has yet established that increasing MAT would drive visitors away, that most operators absorb it, or that enforcement could replace the proceeds.

The strongest plan would identify the funding need, compare feasible alternatives, publish the expected municipal benefit and explain how overnight tourism would be supported alongside housing and community needs.

Candidates, accommodation providers, other businesses, residents and visitors are invited to respond through public comments or private messages to PEC Connect. What costs are missing? What alternatives are workable? What evidence would change your mind?

Protecting the golden goose requires more than repeating the phrase. It requires a clear account of what the County asks tourism to contribute, and what it invests in tourism’s future.