Groups Headed to Canada after April are bracing for a proposed federal tax overhaul that would eliminate the rebate that non-Canadian meeting organizers, exhibitors, and attendees can apply for after paying Canada's 6 percent value-added tax, called the Goods and Services Tax, or GST (a federal component of the Harmonized Sales Tax). The rebate of the GST compensates visitors for the value-added tax imposed on convention and meeting space expenditures, audiovisual, hotel room rates (but not meals, which will continue to be GST-exempt), exhibit-related fees, attractions, other goods and services, and gifts that will be brought back home.
If the law passes, all these items will, in effect, be 6 percent more expensive for non-Canadian groups after its effective date of April 1. But some meetings-specific elements of the proposed law would not take effect until April 1, 2009, if they were negotiated as part of a contract before the proposal was announced September 26. For example, registration fees that U.S. meeting-goers pay to attend U.S.-organized meetings in Canada would still be exempt until that date.
The change needs to be voted on in both Canada's House of Commons and its Senate, but at press time, Canada's Department of Finance could not provide a timeline for an ultimate decision.
The Tourism Industry Association of Canada, which is based in Ottawa, is marshaling a coalition of Canadian hotels, airlines, and attractions to seek a compromise on the elimination of the rebate, and the Ottawa-based Hotel Association of Canada is also opposing the move. TIAC has published a document, “A Business Case for Maintaining the GST/HST Visitors' Rebate Program,” which can be found on Meeting Professionals International's Web site, www.mpiweb.org.
Christopher Jones, TIAC vice president of public affairs, says that he hopes a compromise might be adopted that would retain the GST rebate but relieve the government of administering it by putting that task in the hands of private companies, a common practice in European countries.
Says Tony Pollard, president of the Hotel Association of Canada, of the GST proposal: “The government is trying to save $78 million in rebates, but we may lose $218 million in business that goes elsewhere. Our position on the proposed law is very clear. We hate it.”