Ontario introduced the Municipal Accommodation Tax framework in 2017.
Since then, more than 80 municipalities have implemented MAT programs, collectively generating approximately $250 million annually in visitor-generated revenue.
These revenues now support destination marketing, destination development, visitor infrastructure, festivals and events, cultural amenities and other initiatives contributing to local visitor economies.
The framework has been successful, but tourism has evolved significantly since the regulation was introduced.
Destination Marketing Organizations—recognized in the regulation as Eligible Tourism Entities—increasingly undertake destination management, product development, investment attraction, sustainability, international marketing and broader visitor-economy development in addition to traditional destination promotion.
Almost a decade of municipal implementation has also identified opportunities to improve governance, consultation, accountability and administrative consistency.
TIAO's Position
Ontario should modernize—not redesign—the Municipal Accommodation Tax framework to reflect how destination organizations and MAT programs have evolved while preserving the local flexibility that has contributed to successful implementation.
MAT should continue to operate both as a municipal revenue tool and as a visitor-funded mechanism supporting destination development, tourism growth and destination competitiveness.
What TIAO Recommends
Update Ontario's framework to recognize explicitly that MAT supports:
- destination marketing;
- destination management and development;
- visitor-economy growth;
- tourism-supporting infrastructure and amenities; and
- sustainable municipal and destination investment.
- This should complement—not diminish—MAT's role as a municipal revenue tool.
Update the regulation to reflect the contemporary role of Destination Marketing/Management Organizations.
An Eligible Tourism Entity should be understood as a not-for-profit entity established primarily to serve as the destination organization for a municipality or destination, with responsibility for destination marketing and management and broader visitor-economy development.
This would recognize both independent not-for-profit DMOs and appropriate municipal governance models while distinguishing destination organizations from entities whose primary purpose lies outside tourism.
Establish provincially endorsed principles supporting:
- meaningful tourism-industry participation;
- transparency and accountability;
- effective and appropriately independent destination leadership;
- collaborative municipal-industry partnerships;
- clear accountability agreements; and
- appropriate consultation when MAT programs, structures or rates are materially changed.
These principles should improve governance while preserving flexibility for locally appropriate models.
Provide clearer provincial guidance supporting:
- consistent application of MAT to eligible accommodation;
- appropriate inclusion and enforcement relating to short-term rentals;
- reasonable remittance and administrative practices;
- effective reporting and transparency; and
- greater consistency without imposing a one-size-fits-all municipal model.
Explore mechanisms allowing tourism operators and destinations outside incorporated municipalities to benefit from comparable destination-development investment where MAT cannot currently be levied.
Ensure regulatory modernization does not unintentionally weaken agreements or destination investments that exceed the minimum provincial revenue-sharing requirements.
What Success Looks Like
Ontario retains a flexible and successful MAT framework while municipalities, destination organizations and tourism businesses benefit from clearer expectations and stronger collaboration.
Visitor-generated revenues are reinvested effectively in destination competitiveness.
DMOs have the governance and resources required to fulfil their modern destination-development mandate.
Successful local partnerships are protected while problematic governance or administrative practices have clearer provincial guidance to support improvement.
Related Research & Resources
- Improving the Municipal Accommodation Tax Framework in Ontario — 2026
- TIAO Municipal Accommodation Tax Best Practices
- Municipal Accommodation Tax FAQ
- Ontario Regulation 435/17
