EDMONTON — The Alberta Hotel & Lodging Association in early January asked its members to help fund the legal challenge the AHLA launched last November against the town of Fox Creek, Alta., over a huge hike to local hoteliers’ business license fees introduced in April 2015.
“The town doesn’t have the authority to collect this fee, which actually meets the criteria for a tax,” AHLA president and CEO Dave Kaiser told CLN. AHLA’s 890 members are being asked to contribute a one-time fee of $3 per guestroom to help fund the legal challenge to “help defeat this bylaw and create a legal precedent that protects all hotels in Alberta,” according to the AHLA’s newsletter. Any collected money not used in the legal defense will be refunded back to AHLA members.
In late April, 2015, Fox Creek city council voted to increase hoteliers’ business license fees from $75 to 4 per cent of each property’s annual room revenue, which in some cases works out to as much as $100,000 — an increase of over 100,000 per cent. “This is outrageous,” said Kaiser.
Hotels are the only local businesses subject to the increased license fees.
The town, said Kaiser, justifies singling out hotels for the hiked fees by saying that the money is needed to fund infrastructure such as roads and sewers that are stressed by the influx of hotel guests. Kaiser counters that hotels generate economic activity, with guests spending money locally, and adds that “hotels are already paying property taxes.”
Located about 260 km northwest of Edmonton, Fox Creek is an oil patch and forestry town with a population of just over 2,100, and has about a dozen hotels totaling 685 guestrooms.
Kaiser said AHLA is concerned that if the new law goes unchallenged, it “could set a bad precedent.”
As of this Jan. 12, AHLA was awaiting the town’s response to its challenge. “Our legal counsel did extensive research and we’re quite confident we have a strong position,” said Kaiser.