Area resident Barbara Moody wrote to MidlandToday noting a nuance within a recent government tax incentive by the Ontario government.
Moody has been following the continued meetings of the Tiny Township Short-Term Rental (STR) Task Force as the group of Tiny council, staff, residents and STR owners attempt to sculpt draft bylaw legislation to deal with the contentious issue prior to the upcoming tourism season.
In the letter, Moody wrote that Tiny Coun. Gibb Wishart “has often referred to STRs as a commercial business operating within a residential zone.
“While he (Wishart) has raised the question many times in the meetings - I think the Ontario government has just answered it by providing a tax break to anyone booking an STR.”
During last year’s fall economic update, the temporary Ontario Staycation Tax Credit was announced at a cost of roughly $270 million to support inter-provincial travel in 2022.
Only applying to leisure stays between January 1 to December 31 of 2022, the tax credit will allow Ontario residents to claim 20% on their eligible accommodation expenses when filing their income tax and benefit return for this year.
From the press release, the overview states that the Staycation tax credit “aims to encourage Ontario families to explore the province, while helping the tourism and hospitality sectors recover from the financial impacts of the COVID-19 pandemic.”
Moody pointed out the wording of the province’s press release, specifically as it relates to the tourism and hospitality sectors.
“My interpretation is that this now legitimizes them (STRs) as being commercial businesses which should not be permitted in a residential zone,” wrote Moody, adding “my understanding is that an STR does not improve the economy like restaurants and the legitimate hospitality sector.”
The eligible expenses section explicitly states that a claim can be made “at a short-term accommodation or camping accommodation, such as a: hotel; motel; resort; lodge; bed-and-breakfast establishment; cottage; campground. Short-term accommodation would generally not include timeshare agreements, or a stay on a boat, train or other vehicle that can be self-propelled.”
In response to Moody’s assertion, Tiny communications/committee coordinator Jenna Reid explained that neither Ontario tax laws nor tax credits fall within the scope of the municipal official planning and/or zoning definitions used by Tiny, or any other municipality.
“This Provincial program will not impact how Tiny may determine to define, zone or license Short-Term Rentals within the municipality,” stated Reid through email. “That is the ultimate decision of Council and will not impact the Short-Term Rental Accommodation Task Force’s discussions, as their mandate is clearly defined in the Council-approved Terms of Reference.”
Coun. Wishart responded to Moody's message shortly after.
"It is interesting to note that the Provincial Government wants to micromanage in the Municipal world. I am thinking that they wish to affect the affordable housing situation," wrote Wishart via email.
"Lately there have been a number of Municipalities that are using the zoning excuse to try to exclude STR's based on the fact that they are not a residence but a business. We shall need to wait to see where the Court's land on this issue." Wishart concluded by expressing thanks for the interest.
As far back as its first meeting as the STR Task Force, the committee has struggled with finding the fine line definition where a property shifts between residential and commercial use.
Information on STRs and the Short Term Rental Task Force committee are available on the Tiny Township website page.
Archives of the STR Task Force meetings can be found on the Tiny Township YouTube channel.
