Stay overnight at any hotel in Canada and you will likely find a specific tax on accommodation on your hotel bill. Sometimes called a “hotel tax”, “accommodation tax” or “tourism levy”, the tax is collected by provincial or local governments and ranges between 1% and 5% of the price for accommodation. For example, a 5% hotel tax for a five-night stay at a $100/night hotel will generate $25 in hotel tax. In many instances, the revenue from these taxes is earmarked for local tourism initiatives or for a local tourism board. Increasingly, First Nations are including hotel properties as part of their overall commercial development strategy, and the fiscal benefits of an accommodation/hotel tax are hard to overlook.
In recent months, FNTC has been working with proponent First Nations to establish an accommodation tax under the First Nations Fiscal Management Act. While similar to accommodation taxes or hotel taxes levied by provincial and local governments, the First Nation Accommodation Operator Business Activity Tax Law is distinguished by its application; it is collected as a tax on the accommodation operator. Accommodation includes lodging at hotels, motels, resorts, and other lodging establishments included in the First Nation’s law. FNTC estimates that nationally, there are nearly twenty First Nations with close to 2000 rooms available for accommodation.
In support of this work, the FNTC is currently seeking public input on proposed Standards which would apply to business activity tax laws that provide for a tax on business operators providing accommodation on reserve. Please visit www.fntc.ca to view the proposed Standards.