When Prince Edward County introduced the Municipal Accommodation Tax (MAT) in 2021, it was pitched as a way to reinvest in tourism infrastructure and support local businesses by collecting a small levy from overnight visitors. The 4% tax applies to hotels, motels, bed & breakfasts, and short-term rentals. But several years in, many tourism operators are asking: who is this really helping? What was intended as a revenue tool has become, in practice, a drag on the very industry it claims to support—and a missed opportunity to capture the County’s largest source of tourism volume.
Sandbanks Provincial Park attracts approximately 750,000 visitors annually, yet it is exempt from Prince Edward County’s 4% Municipal Accommodation Tax (MAT), which applies to short-term private accommodations such as hotels, motels, and vacation rentals. If just 30% of those visitors—about 225,000 people—camp overnight at the park, the County is potentially missing out on over $1.5 million annually in lost MAT revenue. This estimate assumes an average private accommodation rate of $175 per night, generating $7.00 per person per night in MAT. Unlike private lodging providers, Sandbanks’ provincial camping fees do not support County infrastructure or services, despite placing significant strain on local roads, waste management, and emergency services. The County must engage with Mr. Tyler Allsopp, MPP, Bay of Quinte, to advocate for a fair funding framework in which large-scale provincial tourism operations like Sandbanks contribute equitably to local costs through a negotiated MAT revenue-sharing agreement or equivalent provincial offset.
A Burden on Small Tourism Businesses
The MAT may seem modest on paper, but for small operators—many of whom already face high regulatory burdens, rising utility costs, and seasonal income fluctuations—it adds complexity and cost:
- Competitive disadvantage: Visitors are highly price-sensitive. The MAT makes accommodations in PEC more expensive than nearby jurisdictions without the tax (like Lennox & Addington or rural Hastings), pushing budget-conscious tourists elsewhere.
- Administrative burden: For small-scale B&Bs and Airbnb hosts, collecting, reporting, and remitting the MAT has added a bureaucratic load that larger hotel chains are better equipped to absorb.
- Absorbed costs: Some operators feel pressured to keep prices level and quietly absorb the tax themselves, reducing already thin profit margins.
For a tourism industry that relies heavily on seasonal traffic and weekend getaways, even small disincentives can have outsized effects.
Where Is the Money Going?
In theory, 50% of MAT revenues are supposed to be directed toward tourism promotion, with the remainder allocated to general municipal purposes. In practice, there has been:
- Little transparency: It’s unclear how much MAT revenue is collected annually, how it’s being spent, or what metrics are used to assess impact.
- No visible benefit: Local operators report no noticeable increase in tourism promotion or infrastructure investment since the MAT was introduced. No new signage, no improved wayfinding, no regional marketing campaigns that demonstrably increased bookings.
- Bloated spending: Anecdotal evidence suggests MAT revenues are often absorbed into ineffective marketing initiatives or administrative costs—benefiting consultants and contractors more than the actual tourism sector.
Operators cite examples of County-funded promotions for events that are already sold out, or expensive campaigns targeting markets that yield little return. Worse, few operators are consulted before these decisions are made.
A One-Size-Fits-All Mistake
Prince Edward County is not Toronto or Ottawa. The MAT may make sense in large urban centres with robust year-round tourism industries and international conference traffic. In rural PEC, where tourism is driven by independent operators, weekend travelers, and seasonal demand, the MAT feels like a poorly tailored policy with damaging consequences. Moreover, it penalizes the very businesses that generate the tax in the first place.
What Needs to Change
- Full public reporting of MAT revenues, expenditures, and performance outcomes.
- Independent audit of MAT-funded programs to assess efficiency and impact.
- Business-led oversight: Tourism operators should have decision-making power over how MAT funds are used.
- Sunset review mechanism: Council should commit to evaluating the MAT’s future based on real-world outcomes—not theoretical intentions.
Conclusion: Tax Without Impact Hurts Everyone
The Municipal Accommodation Tax was sold as a way to help tourism. Instead, it’s quietly hurting the very people who built Prince Edward County into a destination. If there’s no demonstrable benefit, no accountability, and no strategic equity in how the tax is applied, then the MAT is just another poorly designed burden. Tourism businesses deserve better. So do residents. And so does the County.