The Terrace Visitor Centre on June 4, 2020. (Ben Bogstie)

The Terrace Visitor Centre on June 4, 2020. (Ben Bogstie)

Two per cent hotel tax coming to Terrace and Thornhill

Tax comes into effect on Sept. 1, will support Kermodei Tourism

Starting Sept. 1, there will be a new two per cent tax on the price of hotel rooms in Terrace and Thornhill under the Municipal and Regional District Tax Program (MRDT).

“This is a really really amazing opportunity for Terrace and I feel that the timing of this is the silver lining in all of this bad going on with right now with COVID, is we will have some extra money to be able to promote our community,” said Liz Smaha, executive director at Kermodei Tourism.

Kermodei Tourism is a Terrace-based marketing body responsible for regional tourism promotion. It will use the tax money to market and advertise tourism in the Terrace and Thornhill area.

Kermodei Tourism applied for the tax increase prior to the COVID-19 pandemic. Originally, the tax was projected to generate $200,000 annually, but due to the pandemic the real figure likely will not be known until the tax has been collected for at least a year.

There is already an eight per cent provincial sales tax on accommodation, so when the MRDT begins to be collected in September, the total taxation rate will be 10 per cent.

“Council will continue to support Kermodei Tourism and is pleased that the organization will now have the resources to more fully realize the potential of our local tourism industry,” said Carol Leclerc, Terrace mayor, in a media release.

According to Destination British Columbia, a provincially funded Crown corporation that promotes tourism in B.C., the MRDT program was introduced in 1987. It is a tax of up to three per cent on the purchase of accommodation that can be imposed on a specific region of B.C. to raise revenue for local tourism marketing.

The MRDT program allows for up to a three per cent tax, but Kermodei Tourism decided to start at two per cent and re-evaluate during the renewal period five years from now. According to Smaha, the last time an MRDT tax existed in Terrace was about nine years ago.

Smaha has a positive outlook on the future of tourism in the Terrace area. She thinks that as B.C. reopens people will want to have their vacations in smaller, rural places like Terrace.

Locals have a big part to play in Terrace and Thornhill’s tourist industry recovery too.

“I just cannot stress enough the importance of supporting our local tourism businesses,” said Smaha.

“Check out your own backyard, we have so much to offer here and we need the tourism that we have here for Terrace to thrive.”

Kermodei Tourism was created in 2007. It is a not-for-profit society that is governed by a board of directors who are appointed by tourism industry stakeholders. The stakeholder model means that every tourism organization or business in the Terrace area is a stakeholder without paying a membership fee.

READ MORE: Terrace hotels and motels hope for Phase 3 or BC’s Restart Plan and a busy summer


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