Municipal Accommodation Tax (MAT)

• The MAT is common in municipalities across the province/country.
• It ensures visitors contribute to the upkeep and development of the community they enjoy.
• Revenues are reinvested into projects that support tourism, economic growth, and infrastructure improvements.

When a municipality chooses to implement a MAT they determine the types of accommodation providers it applies to. Some examples of accommodation providers are: hotels, motels, online home sharing platforms, short-term rentals and campgrounds.

In general terms, the tax applies to overnight stays of 28 days or less that could be considered for the tax. The legislation includes exemptions for colleges, universities, the Crown, educational boards, hospitals, and long-term care homes. 

At this time, Council has not decided on the implementation of the MAT nor who the MAT would apply to. That decision will be made at a future date.

The provincial regulation stipulates that the municipality can retain up to 50% of the MAT revenue. The remainder is distributed to an eligible, not-for-profit tourism entity to be used exclusively to promote tourism in the area. 

The 50% of funds retained by the municipality can be used at its discretion for services and infrastructure. However, these funds are typically used to enhance tourism related amenities while benefitting residents, including revenue support for parks, beaches, trails, facilities, and more.

50% of the funds generated through the MAT program are to be shared with an eligible not-for-profit tourism entity. An “eligible tourism entity” is a not-for-profit entity whose mandate includes the promotion of tourism in Ontario or in a municipality. The municipality is required to enter into an agreement with the eligible tourism entity that receives a portion of the MAT.

This agreement must include reasonable financial accountability measures to ensure amounts paid to the entity are used for the exclusive purpose of promoting and supporting tourism.

Since this not-for-profit entity does not exist in the Municipality of Kincardine, part of this work would need to include a process to identify the most appropriate and suitable governance structure for this entity should Council decide to proceed with a MAT.

A Short-Term Rental Accommodation (STRA) is a dwelling unit that is used to provide sleeping accommodation for any period of less than 28 consecutive days and is operated by the owner of the property.

This includes properties such as homes, cottages, cabins, apartments or condos.

STRA licensing refers to the regulations and permits required by municipalities for renting out property, or parts of a property, for 28 days or less in exchange for payment. 

Most municipalities enacting the MAT also implement STRA licensing to regulate the use during this process.

Preliminary discussions with municipalities indicate that STRA licensing should occur prior to the implementation of the MAT and is a critical factor in the successful implementation of the MAT. 

The purpose of STRA licensing is to:

• Ensure that short-term rentals are operated in a safe and legal manner.
• Help the Municipality understand the housing supply dedicated to short-term rentals, which is believed to remove the supply from the housing market.
• Ensure that rentals located within neighbourhoods do not adversely impact neighbouring property owners.
• Ensure occupants that accommodations comply with the Ontario Building Code.

Several lakefront municipalities have started to regulate STRAs including Northern Bruce Peninsula, South Bruce Peninsula and Lambton Shores.

The Municipality of Kincardine has over 100 STRAs that contribute to our local economy and offer homeowners an additional income stream. The rise in popularity of STRAs has brought both economic benefits and challenges. 

As more and more people seek to vacation in the Municipality of Kincardine, there have been concerns voiced by residents related to noise disturbances, fireworks, waste management, parking, rental capacities, and septic system challenges. In response to the concerns of residents, while also acknowledging the advantages of STRAs, the Municipality of Kincardine is investigating the implementation of licensing requirements for STRAs along side the implementation of the MAT.

The Municipality hired McSweeney & Associates Consulting Inc. to conduct a forecast of revenues that could potentially be generated by the collection of the MAT for both commercial and short-term accommodators.

This included the collection of the following data:

• The number of accommodators
• Historical visitation patterns 
• Existing visitation patterns 
• Occupancy
• Expected rental rates

The Municipal Accommodation Tax Model and Application Analysis report was presented at the May 28, 2025 Council meeting.

If the MAT is approved it is a mandatory fee, and the collection details are established in a by-law. The municipal treasurer is responsible for administering the by-law to collect the MAT and establish related procedures and documents.  

Community engagement will take place throughout the process to understand the potential impacts, both positive and negative, before implementing a MAT. To help inform the engagement process and provide your input, please share your comments or questions with us. 

Sectors include commercial accommodators, short term rental accommodators, the Kincardine and District Chamber of Commerce, Lakeside Downtown Kincardine Business Improvement Area (BIA), the tourism industry, businesses, the Regional Tourism Organization (RT07), realtors, Bruce County, other local municipalities, Airbnb, VRBO, and the general public.

Community engagement will take place throughout the process to understand the potential impacts, both positive and negative, before possibly implementing a MAT and STRA licensing. 

During both April and May we met with hotel and motel accommodators with a focus on the MAT. Review the summary of their feedback. 

From May through to August, community engagement will involve:

• STRA Operators & Property Owners (Airbnb, VRBO, and independent rental hosts)
• Residents & Neighbourhood Associations (concerned about community impact)
• Local Businesses & Tourism Organizations (BIA and Chamber of Commerce)
• Hospitality Sector (hotels, motels, bed & breakfasts)
• Realtors
• Municipal Departments (planning, by-law enforcement, finance, emergency services)
• Bruce County Planning Staff (to align regional policies)
• Visitors & Seasonal Residents (who frequently stay in STRAs)

A variety of channels will be implemented to provide information and obtain input including the following: 

• A Community Survey - This survey aims to capture perspectives on issues such as noise, parking, and community character, ensuring that the Municipality’s policies align with the needs and desires of its residents.
• Public Open House and Roundtable Discussions - We will host open sessions and invite specific sectors to establish awareness as well as create opportunities to provide input.
• Presentation and Delegations to Council - The staff report will be presented to Municipality of Kincardine Council in August /September 2025 and delegations will be invited to attend to make a presentation at the August council meeting.

Complete a survey.

This survey aims to capture perspectives on issues such as noise, parking, and community character, ensuring that the Municipality’s policies align with the needs and desires of its residents. Complete the survey.

Participate in public round table sessions.  

When: July 16 or August 6, 2025. Register online for one of these roundtable sessions. 

Participate in roundtable discussion with realtors.

More information coming soon.

Participate in presentations and delegations to council.

The staff report will be presented to Municipality of Kincardine Council in August and September, 2025. Delegations will be invited to attend to make a presentation at the August Council meeting.

• Community Engagement (May to August) - Community Engagement will take place throughout the process to understand the potential impacts, both positive and negative, before implementing a MAT and STA licensing. 
• Identify Resources (May to September): This undertaking will require staff resources from across the organization and has additional budgetary implications over multiple years if they are both enacted. Work to identify both financial and human resources needed to implement STRA licensing, and/or MAT tax, including assessment of third-party resources will take place during this quarter. Cost comparison will be investigated and reported to Council in the next update. 
• Potential uses of the MAT revenue (July to September): We will identify how MAT revenues might be applied to tourism most effectively, and where the non-tourism-related dollars could be spent. 
• Potential governance structures and processes (August to October): We will explore options for the structure and accountability needed internally as well as for the not-for-profit tourism entity governance structure.
• Short Term Accommodation (STRA) licensing (September):  A draft STRA licensing by-law should council wish to proceed will be drafted. 
• STRA licensing (January 2026): Should council wish to proceed with the STRA licensing, STRA accommodators will need to obtain a permit in order to operate their STRA.