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Alberta boosting tourism funding, eliminating hotel room tax

The Alberta government is boosting the marketing and development budget for tourism in that province to more than $42 million annually, while also doing away with the hotel room tax.

While announcing a 75 per cent increase in sustainable funding for tourism last month Economic Development Minister Mark Norris also announced that the current 5 per cent hotel room tax surcharge would be eliminated as of March 31 next year.

The hotel room tax will be replaced with a 4 per cent tourism levy, effective April 1, 2005. All funds collected by the tourism levy will go toward marketing and development of tourism. No further details on the levy were announced.

"Taxes in Alberta only go in one direction, and that’s down," Alberta Premier Ralph Klein stated in a release.

In B.C., an 8 per cent hotel tax is currently applied to hotel rooms. Of the 8 per cent collected, 1.65 per cent goes to Tourism B.C., the body primarily responsible for marketing B.C. tourism.

Tourism B.C. received $24.2 million in hotel room tax in 2003/04. The Crown corporation’s total revenue for 2003/04 was $32.9 million.

Other tourism marketing agencies in B.C., including Tourism Whistler and Tourism Vancouver, also receive a slice of the hotel room tax.

The Alberta government estimates the total budget for all British Columbia tourism marketing organizations is $56.4 million.

In 2005, the $42.4 million that that Alberta government invests in tourism will be an amount equivalent to the revenue collected under the hotel room tax in 2003/04. In 2006, this amount is projected to be $48 million.

Tourism in Alberta generates more than $5 billion annually, and employs over 124,000 people. It generates over $680 million in revenues for the Alberta government through direct and indirect taxation, according to a government release.

Tourism in B.C. is a $9.3 billion industry directly employing 115,000 people. The tourism industry contributed approximately $990 million to the provincial treasury in 2002, according to Tourism B.C.’s Web site.