The U.S. border may be open but Premier Doug Ford is trying to keep Ontario vacationers close to home. In the 2021 Ontario Economic and Fiscal Review released last Thursday, the provincial government laid out a proposal for a “staycation tax credit” to help bolster a hard-hit tourism industry.
“Our government has a responsible and prudent plan that creates the conditions for an economic and fiscal recovery driven by growth,” said finance minister Peter Bethlenfalvy in a release.
The personal income tax credit—available during the 2022 tax year—would allow Ontarians to claim 20 per cent of the cost of vacation rental accommodations up to $1,000 for individuals or $2,000 for families. This means that individuals could get a maximum tax break of $200 and families $400.
The credit will apply to any vacation accommodation booked between January 1 and December 31, 2022, with Ontario residents able to apply for the credit in their 2022 tax return.
Eligible accommodations include hotels, motels, resorts, lodges, bed and breakfasts, cottages, and campgrounds in Ontario as long as the stay is less than a month in length and the reason for the booking is leisure rather than business.
The tax credit would cost the government $270 million and support an estimated one-and-a-half million families.
Ontario’s cottage country accommodations are optimistic about the initiative. “Anything that is supporting and incentivizing stays within Ontario would be welcome,” said Laura Kennedy, director of marketing for Deerhurst Resort in Huntsville.
“The timing of the incentive is good. As more travel destinations are starting to open up again, obviously there’s more competition with Ontario. So, I think it’s great to reward and incentivize Ontarians to stay in their province. And I think a lot of Ontarians have been discovering how many great travel destinations there are within their own backyard.”
While the pandemic did force Deerhurst to close its doors for three months in March 2020, demand over summer 2021 and into the fall has soared, Kennedy said. “There were actually times that we stopped taking bookings because of staff shortages.”
Heading into the holidays, Kennedy said that booking demand is pacing approximately 25 per cent ahead of where the resort would normally be.
Ontario NDP leader Andrea Horwath has criticized the Ford government for not going far enough. “Local tourism and hospitality businesses need and deserve more help to make it through the winter,” she said in a release.
In July 2020, NDP MPP Wayne Gates proposed an Ontario tourism tax refund of $1,000 per family. The Ford government initially walked away from the bill and have since reduced it to $400 per family.
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