Yellowknife plans to implement hotel levy in April 2025

The City of Yellowknife plans to start levying a new four-percent tourism accommodation tax on April 1, 2025.

At a Monday meeting, city staff and councillors discussed a draft bylaw to impose the long-awaited hotel levy.

Kerry Thistle, the city’s director of economic development and strategy, said such levies are common elsewhere in Canada.

“We’re kind-of one of the last few remaining places that doesn’t have these types of taxes or levies,” she said.

“It’s just one of those costs that people seem to have become accustomed to paying.”

According to Yellowknife’s draft bylaw, the tax will apply to “any premises where accommodation is provided for remuneration” in the municipality. That will include hotels as well as short-term rentals that residents or businesses operate, such as Airbnbs and Vrbos.

The tax will not apply if the accommodation lasts for more than 30 days, if it costs less than $20 a night, or if the subject of the tax is the NWT government, a public agency, a person on medical travel, or anyone staying at a hospital or healthcare facility.

How will the tax revenue be used?

The city projects the levy will yield approximately $1.5 million a year. City Hall plans to use that revenue to develop Yellowknife’s tourism sector.

“We want to create more funding that supports tourism promotion and development,” Thistle told councillors.

Once the levy is established, the city plans to create its own non-profit destination marketing organization.

Accommodation operators will be required to collect the levy and transfer funds to the city quarterly.

Thistle said the city is working on guidelines, plans to update its website with information about the levy, and will contact operators to offer sessions on how to prepare for the collection of levies.

To help with that work, Thistle said the city has hired a consultant to create a list of short-term accommodation providers in Yellowknife.

She said that will help the city ensure all accommodation providers have registered for a business licence – as they were already required to do – which has been identified as an issue.

‘This is incredible’

Several councillors expressed support for the city’s plans on Monday.

“This has been a long time coming. I know the public have been waiting for this for a long time as well,” deputy mayor Garett Cochrane said.

“This is incredible. I’m glad we made it.”

“Really excited this is coming finally,” Rob Warburton added, while Mayor Rebecca Alty called the levy “a good opportunity.”

“That’s why other jurisdictions have done that,” Alty said. “It’s not taxpayers paying for this, but it’s visitors kind-of cycling the dollars through.”

Councillors are set to formally vote on the bylaw on December 9.

The city plans to hold information sessions with accommodation operators from January to March, present a draft destination marketing organization structure to councillors before the end of March, and implement the Tourist Accommodation Tax Bylaw on April 1.