The Question Behind the Consultation
Prince Edward County has launched a public consultation asking residents and businesses how the municipality should spend its share of Municipal Accommodation Tax revenue. The consultation is timely. Since February 2021, visitors staying for fewer than 30 days in hotels, inns, bed-and-breakfasts, vacation rentals and other roofed accommodations have paid a four-per-cent tax on the price of their accommodation.[1]
Residents should certainly have a voice in deciding how the municipal share is used. But the consultation begins with a narrower question than the moment requires.
The real issue is not simply how the County should divide the money. It is who should benefit most from a tax generated by tourism, and whether Ontario’s allocation formula still makes sense for a destination that is already attracting hundreds of thousands of visitors each year.
A Community of 25,700 Hosting Hundreds of Thousands of Visitors
Prince Edward County does not need to explain why people come here. Its beaches, wineries, restaurants, rural landscapes, villages and waterfronts have made it one of Ontario’s most recognizable destinations.
The scale of that success matters.
Prince Edward County had a permanent population of approximately 25,700 residents in the 2021 census.[2] Yet municipal economic-development data indicate that the County welcomed approximately 326,000 unique visitors in 2023 (360,300 in 2024) and —more than 12 visitors for every permanent resident. Those visitors reportedly spent approximately $37.8 million on accommodation alone.[3]
That is before restaurant meals, wine purchases, retail spending, attraction fees, fuel and other tourism expenditures are counted.
Tourism is therefore a significant economic sector. Statistics Canada reported that the County’s accommodation and food-services sector employed approximately 875 people in 2021, making it an important source of local employment.[4]
Those benefits deserve recognition. But they do not eliminate the public costs associated with serving a population that expands dramatically during the tourism season.
Accommodation Spending Exploded in 2025
The most definitive metric available for the 2025 season comes from the local Municipal Accommodation Tax (MAT) and short-term accommodation (STA) reporting:
- Total 2025 Accommodation Revenue: Total revenues from hotels, STAs, and Bed & Breakfasts surged to $47.2 million.
- Compared directly to the $37.8 million spent on accommodations in 2023, this represents an approximate 25% increase in total lodging expenditures over a two-year period.
- This surge generated nearly $1.89 million in MAT revenues for the municipality to reinvest into local infrastructure and tourism management.
- The 2025 data confirmed a recurring hurdle for the County: pronounced seasonality. Even with the massive $47.2 million in accommodation revenue, reports show that across the entire calendar year, only about one-third of total available rooms were consistently booked, as half of all local business sales remain strictly compressed between June and September.
Visitors Do Not Travel Through an Abstract Economy
Visitors drive on municipal roads, park on local streets, use public beaches, launch boats, visit parks, rely on public washrooms, generate garbage and recycling, and sometimes require assistance from paramedics, firefighters, police officers and by-law enforcement staff.
The infrastructure supporting those activities is not temporary. It must be constructed, maintained, repaired and eventually replaced by the municipality.
Every successful tourism season therefore creates two realities at once. Businesses receive customers and revenue, while public infrastructure absorbs additional demand. The benefits are immediate and visible. The costs accumulate gradually and often remain with local taxpayers long after the visitors have returned home.
A visitor may drive a County road for a weekend. Residents finance its maintenance and reconstruction over decades. A visitor may spend an afternoon at a beach. Residents fund parking management, garbage collection, washrooms, maintenance, enforcement and environmental protection throughout the season.
That is not a criticism of tourism. It is the fiscal reality of operating a successful destination.
The County Already Faces a $24.2-Million Annual Infrastructure Gap
The discussion becomes more urgent when the County’s infrastructure position is considered.
Prince Edward County’s 2025 Asset Management Plan estimated an annual funding gap of approximately $24.2 million for tax-supported infrastructure. The municipality allocated approximately $11.5 million to capital-related needs in its 2025 budget, but substantially more would be required annually to maintain and replace its tax-supported assets at sustainable levels.[5]
That gap includes much more than roads, but roads are among the County’s most visible and expensive responsibilities.
The 2026 capital budget dedicates approximately $14 million to road reconstruction and rehabilitation, including roughly $4.5 million for rehabilitation and preventative maintenance on 53 kilometres of rural roads.[6] The County’s road-maintenance and winter-control operating expenditures were budgeted at approximately $11.5 million for 2026.[7]
These figures show the scale of the challenge. Even a relatively successful accommodation tax cannot resolve a $24.2-million annual infrastructure gap by itself. But that is precisely why every visitor-generated dollar should be allocated carefully.
When a municipality is struggling to maintain existing assets, it should be cautious about directing scarce public revenue toward creating additional demand for those assets.
How Much Does the Accommodation Tax Generate?
The MAT is not a minor revenue source.
Local reporting based on County financial information indicated that the tax generated approximately $1.57 million in 2023, including accrued interest, compared with approximately $1.2 million in 2022.[8]
Because the revenue is divided, approximately half remains available to the municipality, while the other half is directed to eligible tourism entities. The County identifies Visit The County and the StayPEC Accommodations Association as its two eligible tourism entities.[9]
At the 2023 revenue level, a roughly equal division would mean that approximately $784,000 went toward the municipal share and a similar amount was allocated to eligible tourism entities, before any adjustments permitted under the governing framework.
That is a meaningful amount of money. Over several years, the cumulative tourism allocation can reach millions of dollars.
The important question is whether that allocation reflects the County’s most urgent needs.
Who Should Benefit First From a Visitor Tax?
If tourism places additional demands on roads, parks, beaches, waterfront facilities and public services, the first responsibility of a visitor-paid tax should be to help offset those costs for the people who finance the community year-round.
Ontario’s Municipal Accommodation Tax framework limits that discretion.
Under Ontario Regulation 435/17, a municipality that did not previously impose a destination-marketing fee must generally provide at least 50 per cent of the tax revenue, net of reasonable collection and administration costs, to an eligible tourism entity.[10] Such an entity must be a non-profit organization whose mandate includes tourism promotion in Ontario or within the municipality.
Prince Edward County describes the arrangement more simply: half of its MAT revenue remains with the municipality, while the other half must support tourism marketing or development.[11]
The municipality may use its portion for a broader range of purposes. In recent years, the County has directed MAT money toward roads, by-law enforcement, public transit, washrooms, garbage collection and tourism management. The County’s 2026 budget information also states that most of the municipal portion has recently been directed to road rehabilitation.[12]
That is sensible.
But it raises an obvious question: why should only half of a visitor tax be available to address the public costs associated with receiving visitors?
At What Point Does More Marketing Become Self-Defeating?
Marketing has a legitimate purpose, particularly for communities attempting to establish a tourism economy, overcome weak demand or extend a short seasonal market.
Prince Edward County, however, is not an unknown destination.
Its approximately 326,000 unique visitors in 2023 suggest that awareness is not the County’s principal problem. Its challenge is increasingly how to manage tourism, distribute it more evenly through the year and ensure that infrastructure and public services can support it.
There may still be a case for carefully targeted promotion during shoulder seasons or for supporting sectors that generate year-round employment. But that is different from assuming that more destination marketing is always the best use of visitor-tax revenue.
If roads are deteriorating, intersections require upgrades, beaches need more maintenance, public washrooms are inadequate and the municipality faces a $24.2-million annual infrastructure gap, advertising designed to increase visitor volume can become fiscally self-defeating.
The County may generate more private economic activity while simultaneously increasing the public costs that property taxpayers must absorb.
The proper question is therefore not whether marketing creates benefits. It plainly can.
The question is whether the next dollar of MAT revenue will create greater long-term value through advertising or through protecting the infrastructure on which tourism and community life both depend.
What Does One Million Dollars Actually Buy?
Tourism marketing and infrastructure spending produce different kinds of returns.
Marketing expenditures may generate digital impressions, website visits, media coverage, bookings and incremental tourism spending. Those results should be measured and publicly reported.
Infrastructure spending creates a more tangible public asset. It can resurface roads, improve intersections, construct washrooms, manage parking, maintain beaches or upgrade waterfront facilities.
The comparison is not always straightforward, but the County’s 2026 rural-road program offers some perspective. Approximately $4.5 million is expected to fund rehabilitation and preventative maintenance on 53 kilometres of rural roads.[13] On a simple average basis, that represents roughly $85,000 per kilometre, although the actual cost varies substantially depending on the condition of each road and the work required.
Using that rough average, $750,000 could represent the equivalent of preventative or rehabilitation work on nearly nine kilometres of rural roadway.
That does not prove that all tourism-marketing money should automatically be transferred to roads. It does demonstrate the scale of the choice being made.
Every dollar allocated by law to tourism promotion or development is a dollar the municipality cannot freely direct toward its infrastructure deficit, unless the tourism entity independently chooses an eligible infrastructure-related project.
Infrastructure Is Also Tourism Investment
The debate is sometimes framed as though tourism marketing supports the visitor economy while roads and public services benefit only residents.
That distinction is false.
A safe road is tourism infrastructure. So is an orderly parking system, a clean public beach, a functioning washroom, a maintained boat launch and a responsive emergency-services network.
Visitors experience the County through its infrastructure. No advertising campaign can compensate indefinitely for congested villages, deteriorating roads, inaccessible waterfront facilities, overflowing garbage receptacles or public spaces that have been used beyond their capacity.
Infrastructure spending therefore does not compete with tourism. It protects the tourism product while also producing lasting value for residents.
A repaired road serves residents, farmers, tradespeople, school buses, emergency vehicles, local businesses and visitors. A promotional campaign may attract a visitor once; a well-maintained road supports the community and its economy for years.
The County Needs a Tourism Balance Sheet
Residents are frequently told how much tourism contributes to the economy. They are told about visitor spending, business activity, jobs and accommodation revenue.
Those figures matter, but they represent only one side of the ledger.
The County should also report what it costs the municipality to accommodate seasonal visitor demand. That analysis will never be perfect because residents and visitors use many of the same assets. It is nevertheless possible to develop reasonable estimates and identify trends.
Prince Edward County should publish an annual Tourism Balance Sheet showing:
- total MAT assessed and collected;
- outstanding and late remittances;
- collection and administration costs;
- the amount retained by the municipality;
- amounts transferred to each eligible tourism entity;
- tourism-marketing and development expenditures;
- performance measures for marketing programs;
- road and parking expenditures in heavily visited areas;
- beach, park and waterfront-maintenance costs;
- seasonal waste-collection and public-washroom costs;
- policing, paramedic, fire and by-law demands associated with peak periods;
- tourism-related transit and traffic-management costs;
- provincial and federal tourism grants received; and
- the estimated net municipal fiscal impact of tourism.
The County should also disclose the methodology and limitations behind its estimates. The goal would not be to assign every pothole or emergency call to tourists. It would be to replace a largely ideological debate with a more complete body of evidence.
The economic benefits of tourism are routinely measured and promoted. Its municipal costs deserve equal scrutiny.
A Better Test for MAT Spending
The consultation should result in more than a list of preferred projects. It should establish a clear decision-making framework.
The municipal share of MAT should first be directed toward the roads, public spaces, services and infrastructure most affected by tourism, unless another proposed use can demonstrate greater measurable public value.
Each funding proposal should answer four questions:
- What specific public problem is being addressed?
- What measurable outcome will the expenditure produce?
- Will the benefit flow primarily to residents, visitors, tourism businesses or some combination of the three?
- Why is this use of the money superior to repairing or protecting municipal infrastructure?
Tourism organizations receiving MAT revenue should be subject to similarly clear reporting. Their annual disclosures should show not simply what activities were undertaken, but what results were achieved—such as incremental overnight stays, shoulder-season occupancy, visitor dispersion, business participation and attributable economic activity.
Marketing should not be exempt from the same value-for-money standards applied to other public expenditures.
Ontario Should Give Municipalities More Discretion
Prince Edward County should also ask the province to reconsider the mandatory allocation formula in Ontario Regulation 435/17.
A municipality experiencing weak visitor demand faces a very different problem from one managing crowded beaches, parking pressures and an infrastructure deficit. Yet the provincial framework largely treats them alike.
Local councils should be permitted to retain up to 100 per cent of MAT revenue when they can demonstrate that tourism-related infrastructure, public-service or destination-management costs justify doing so.
The requirement could be replaced with a more flexible system under which municipalities adopt a public MAT strategy, consult residents and tourism businesses, disclose tourism costs, and allocate funds according to documented local priorities.
Tourism promotion would remain an eligible use. It would simply have to compete transparently with infrastructure, visitor management and community protection rather than receiving a statutory claim on approximately half the revenue.
Tourism Should Help Pay Its Own Way
Tourism supports hundreds of local jobs and generates tens of millions of dollars in accommodation spending. Those are substantial benefits, and they should not be dismissed.
But a tourism economy is not sustainable when its private benefits are celebrated while its public costs are left primarily to property taxpayers.
Prince Edward County has roughly 25,700 residents, hosted an estimated 326,000 unique visitors in 2023 and faces an annual tax-supported infrastructure funding gap of approximately $24.2 million. Those three figures should frame the MAT debate.
The purpose of a visitor tax should not simply be to attract more visitors. It should ensure that the roads, beaches, parks, services and communities receiving those visitors remain functional and financially sustainable.
A visitor may enjoy Prince Edward County for a weekend.
Residents maintain it for the entire year.
A visitor tax should first protect the place being visited.
Footnotes
[1] County of Prince Edward, “Municipal Accommodation Tax.” The County states that the four-per-cent tax took effect on February 1, 2021 and applies to roofed accommodation stays of fewer than 30 consecutive days. (Have Your Say)
[2] Statistics Canada, 2021 Census of Population: Prince Edward County, City. The reported 2021 population was 25,704. (StatCan)
[3] County of Prince Edward, Economic Snapshot, citing Visit The County’s 2023 Annual Report: approximately 326,000 unique visitors and $37.8 million in accommodation spending. (The County)
[4] Statistics Canada, “Great Canadian Summer: Prince Edward County.” The accommodation and food-services sector employed approximately 875 people in 2021. (Statistics Canada)
[5] County of Prince Edward, Asset Management Plan for Tax-Supported Assets, 2025. The plan estimates an annual tax-supported infrastructure funding gap of approximately $24.2 million and identifies approximately $11.5 million in 2025 capital-related funding. (The County)
[6] County of Prince Edward, “2026 County Budgets Adopted” and 2026 budget materials. The capital budget includes approximately $14 million for road reconstruction and rehabilitation. (The County)
[7] County of Prince Edward, 2026 Tax-Supported Operating Budget. Budgeted road-maintenance and winter-control expenditures total approximately $11.47 million. (The County)
[8] Picton Gazette, “MAT Windfall,” reporting approximately $1,568,466 in 2023 MAT revenue, including accrued interest, compared with approximately $1.2 million in 2022. This article relies on the reported figure because a consolidated County MAT revenue table was not available on the consultation page. (Picton Gazette)
[9] County of Prince Edward MAT consultation page. The County identifies Visit The County and StayPEC Accommodations Association as the two eligible tourism entities receiving the tourism share. (Have Your Say)
[10] Ontario Regulation 435/17, Transient Accommodation Tax. The regulation establishes the rules governing payments to eligible tourism entities. (ontario.ca)
[11] County of Prince Edward, “Municipal Accommodation Tax.” The County states that revenue is divided equally between the municipality and eligible tourism entities, whose portion must support tourism promotion or development. (Have Your Say)
[12] County of Prince Edward, 2026 budget FAQs. The County states that most of its municipal MAT share in recent years has been directed to road rehabilitation. (Have Your Say)
[13] County of Prince Edward, “Council Awards Contracts for County’s Largest-Ever Rural Roads Program.” Approximately $4.5 million is allocated to rehabilitation and preventative maintenance on 53 kilometres of rural roads in 2026. The per-kilometre figure in the article is a simple average and should not be interpreted as a construction estimate for any particular road. (The County)