Municipal Accommodation Tax Implementation in Alberta
IT IS THEREFORE RESOLVED THAT Alberta Municipalities advocate for the Government of Alberta to amend the Municipal Government Act to establish a provincial framework that enables municipalities to implement Municipal Accommodation Taxes through local bylaws, with municipalities having the authority to determine tax rates, collection methods, and revenue allocation based on local infrastructure and tourism development needs while adhering to provincial standards for transparency and accountability.
WHEREAS municipalities across Alberta face significant challenges in developing and maintaining infrastructure to support visitor activity while also marketing their communities and strengthening their tourism sectors with limited revenue tools;
WHEREAS numerous provinces across Canada including Ontario, British Columbia, Quebec, and Manitoba have successfully implemented legislative frameworks enabling municipalities to establish Municipal Accommodation Taxes (MAT);
WHEREAS a Municipal Accommodation Tax represents a user-pay system that generates revenue from visitors rather than residents, aligning with principles of fiscal responsibility and ensuring those who utilize municipal infrastructure and services contribute to their costs;
WHEREAS accommodation taxes have proven successful in funding both tourism infrastructure improvements and destination marketing initiatives, supporting local economies and enhancing visitor experiences in jurisdictions where they have been implemented;
WHEREAS the Government of Alberta has established a goal of growing the province's visitor economy to $25 billion by 2035, requiring enhanced municipal capacity for tourism infrastructure development and destination marketing; and
WHEREAS the current legislative framework in Alberta does not specifically authorize municipalities to implement accommodation taxes, creating uncertainty and potential legal challenges for communities wishing to establish such revenue tools.
The absence of a Municipal Accommodation Tax (MAT) framework affects municipalities of all sizes across Alberta, from growing urban centers like Airdrie to smaller resource communities like Fox Creek that host workers and have tourism potential. Communities throughout the province with accommodation providers could potentially benefit from implementing a MAT, creating opportunities for both infrastructure development and tourism enhancement across Alberta's diverse municipal landscape.
Visitor activity places significant demands on municipal infrastructure and services province-wide, including roads, parking, public spaces, event venues, and visitor amenities, while municipalities also struggle to fund effective tourism marketing and destination development initiatives. Without dedicated visitor-based revenue tools, both infrastructure costs and tourism development needs are typically borne by residential and business property taxpayers across Alberta. A Municipal Accommodation Tax would create a direct connection between visitor activity and both the infrastructure costs it generates, and the tourism development investments needed to attract more visitors.
The revenue potential varies by municipality size and visitor volume, creating meaningful impact at every scale. Major urban centers could potentially generate millions annually, while medium-sized municipalities like Airdrie with growing accommodation sectors could see $800,000 to $1 million yearly based on a conservative 2% tax rate. Smaller communities like Fox Creek, even those with just seasonal visitor activity, could benefit from tens of thousands in dedicated revenue. This creates a sustainable funding source for both infrastructure maintenance and tourism development without increasing the burden on residential taxpayers throughout Alberta.
These funds would support diverse community needs across the province—from destination marketing programs and tourism product development in emerging destinations, to visitor amenities and infrastructure improvements in established locations, to both tourism promotion and infrastructure maintenance in resource communities. The flexibility of the proposed framework allows each municipality to balance infrastructure and tourism investments based on their unique needs and opportunities, while ensuring that visitors contribute fairly to both the municipal infrastructure they utilize and the tourism experiences they enjoy.
This resolution directly aligns with the Government of Alberta's goal of growing the province's visitor economy to $25 billion by 2035[1]. Achieving this ambitious target requires municipalities to have adequate tools and resources for tourism infrastructure development and destination marketing. A Municipal Accommodation Tax framework would provide the sustainable funding mechanism necessary for municipalities to contribute meaningfully to this provincial economic growth objective.
The resolution also supports Alberta Municipalities' strategic priority of "Empowering Municipalities" by advocating for expansion of local revenue authorities and tools. It advances the strategic priority of "Strengthen Municipal Viability" by creating a sustainable funding mechanism for tourism development, economic diversification, and infrastructure enhancement that directly supports provincial economic goals.
[1]Higher Ground: A Tourism Sector Strategy; Government of Alberta, February 2024
This resolution aligns with ABmunis 2021 resolution, Advocacy on Financial Measures and 2020 resolution, Fiscal Framework that focus on the need for expansion of revenue tools to reduce reliance on property taxes. While those resolutions have expired, they helped shape our ongoing work on municipal finances. ABmunis’ current research project highlights the cumulative pressure on municipal property taxes and a municipal accommodation tax would provide an additional option for how a municipality can structure its revenue to fund local services.