By Pablo Fuchs
Rideau Centre merchants and Ottawa hotels say they’re against a proposed tax increase to expand the city’s convention facilities.
The stores at the Rideau Centre may face an undisclosed raise in property taxes while hotel guests could pay up to $3 more per night.
Tanya Mathieu, assistant manager at Ernest Men’s Fashions in the Rideau Centre, says no merchants in the downtown mall could be happy with that decision.
“The price to do business in this mall is high enough as is,” she says. “So why should others pay for someone else to open up a new business?”
The proposed new centre would include a renovation of the Ottawa Congress Centre. But most of the new facility would be built on top of the now-closed Eaton’s store in the Rideau Centre, along with a 400-room hotel.
Jadinder Jain, manager of Bass ‘n’ Crafts in the mall, says he agrees with Mathieu.
“Of course we don’t want to pay higher taxes, it’s already expensive enough,” he says. “The Rideau Centre is the most expensive mall in Ottawa to rent out a store.”
But Rideau Centre merchants say a new convention facility with a hotel would help their businesses.
“About 80 per cent of our clientele is made up of tourists from the Westin,” says Mathieu. “So, yes, it could surely help our store.”
Jain says increased tourism, combined with the current number of tourists from the Westin, which is attached to the Rideau Centre, will benefit his store.
Meanwhile, hotels are the only businesses in the province that don’t charge the full eight per cent provincial sales tax. Instead, they only charge five per cent.
The current proposal says hotels should charge the eight per cent and give the extra three per cent to the City of Ottawa to fund the new convention centre. That turns out to be an extra $2 to $3 per night for a room.
The region says Ottawa is now losing $85 million per year in delegate spending because there’s no proper convention facility.
John Jarvis, general manager of the Westin, says his hotel is not opposed to the new room tax if it’s used for marketing Ottawa.
But, he says, the Westin is “very much opposed to see the money being used for infrastructure.”
Jarvis says if there is a new hotel built along with the convention centre, the Westin will suffer financial losses.
“We’re going to be hurt because there will be meetings and dinners that won’t be going to my hotel,” says Jarvis.
“As far as I know, the new hotel will be a separate development that will be founded by its owners. The money raised from tax increases will be used for the convention centre alone.”
Zulli Hemanis, the general manager of Hotel Roxborough on Metcalfe Street, says a tax increase will cause financial losses at his hotel because people won’t be able to afford to stay in Ottawa.
“Individual travellers and groups will be hurt because of the increase,” he says. “Groups work on a very tight budget and an extra $2 to $3 per night might make them not come to Ottawa hotels.”
Instead, Hemanis says people would stay in other cities where the fares would be cheaper, such as Brockville, and then commute to Ottawa to tour.
In the worst case scenario, he says people might decide to go to other cities in Ontario, like Toronto, where the taxes would remain at five per cent.
But Kris Sharkey, a tourist from Phoenix, Arizona staying at the Westin, says the tax increase wouldn’t make much of a difference.
“If the increase was $10 to $12, it would be different.”