Municipal Accommodation Tax (MAT)

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by OpenCouncil
Published Jan 26, 2026, edited Mar 25, 2026

Municipal Accommodation Tax (MAT) is a mandatory fee that municipalities can choose to require on short-term accommodation stays of 30 days or less in Ontario, including at:

  • Hotels
  • Motels
  • Bed & Breakfasts (B&Bs)
  • Short-term rentals (e.g., Airbnb, VRBO)
  • Lodges
  • Inns
  • Resorts

The tax only applies to the room or space that’s being used for accommodation, not to other fees or service charges such as valet parking, laundry services, or meals and must be shown as a separate line item on the bill, receipt or invoice.

The MAT amount is subject to 13% Harmonized Sales Taxes (HST) as the Ontario government has not submitted a request to the CRA to exempt the MAT from HST.

50% of the funds collected must be given to an “eligible tourism entity” such as a Destination Marketing Organization, Regional Tourism Organization, or other not-for-profit tourism organization to fund local tourism, marketing, and municipal infrastructure without raising taxes for local residents.

The other 50% is managed by the municipality, and invested in projects that support tourism and provide benefit to residents, such as wayfinding signage, washroom and garbage maintenance in summer months, improvements to amenities like parks, boat launches and trails, or infrastructure improvements in tourism areas.

Background

The Wynne government’s Bill 127, Stronger, Healthier Ontario Act, 2017 implemented the measures contained in the 2017 Ontario Budget to give municipalities and tourism entities the financial means to continue promoting and developing tourism.

On Thursday, November 23, 2017, the Province of Ontario issued the Transient Accommodation Regulation 435/17, which came into force on December 1, 2017, and enabled municipalities in Ontario to implement a Municipal Accommodation Tax (MAT).

Section 400.1 of the Municipal Act, 2001 and Ontario Regulation 435/17 authorize the establishment and collection of the MAT.

A local municipality may, by by-law, impose a tax in respect of the purchaseof transient accommodation in the municipality in accordance with this Part if the tax is a direct tax.

Section 400.1 of the Municipal Act

To charge the tax, municipalities must pass a bylaw including:

1. It must state the subject of the tax to be imposed.

2. It must state the tax rate or the amount of tax payable.

3. It must state the manner in which the tax is to be collected, including the designation of any persons or entities who are authorized to collect the tax as agents for the municipality and any collection obligations of persons or entities who are required to collect the tax under subsection (4).

The bylaw may include:

  • (a) exemptions from the tax;
  • (b) rebates of tax;
  • (c) penalties for failing to comply with the by-law;
  • (d) interest on outstanding taxes or penalties;
  • (e) the assessment of outstanding tax, penalties or interest;
  • (f) audit and inspection powers;
  • (g) the establishment and use of dispute resolution mechanisms;
  • (h) the establishment and use of such enforcement measures as the council of the municipality considers appropriate if an amount assessed for outstanding tax, penalties or interest remains unpaid after it is due, including measures such as garnishment, the seizure and sale of property and the creation and registration of liens;
  • (i) such other matters as the council of the municipality considers appropriate.

50% of MAT funds must be transferred to a non-profit and used to promote tourism

Provincial legislation mandates that at least 50% of the MAT revenue (after costs) must be shared with an “eligible tourism entity” – a non-profit entity whose mandate includes the promotion of tourism in Ontario such as a Destination Marketing Organization (DMO), Regional Tourism Organization, or other not-for-profit tourism organization – for the exclusive purpose of promoting tourism.

Any amounts paid to the eligible tourism entity under subsection (2) shall be used by the eligible tourism entity for the exclusive purpose of promoting tourism.

Ontario Regulation 435/17

For example:

How municipalities use the other 50%

The other 50% is retained by the municipality and the legislation does not specify how they are to be used. Some municipalities place the funds in a Municipal Accommodation Tax (MAT) reserve fund to be used for promoting tourism and some report how the funds are used:

Blue Mountains

  • Destination Strategy Implementation: $150,000
  • Public Transit Service: $175,000
  • Comprehensive Parking Strategy: $50,000
  • Gateway Sign Project: $210,000
  • Parks and Open Space Master Plan & Leisure Activity Plan Update: $125,000
  • Economic Development Action Plan: $60,000

Council also supported a process to receive funding requests from external parties that will be conducted at the end of Q1 2026. This approach ensures that all interested parties, including Council-established committees and working groups, have an equal opportunity to submit a funding proposal to Council. Although there will be an open application process, certain groups have already made budget requests to Council through the 2026 Town Budget process, which Council shortlisted for potential MAT funding. These projects include, but are not limited to: 

  • Below Market Value Housing Initiatives/Projects ($250,000)
  • Collingwood General & Marine Hospital Contribution ($200,000)
  • Physician Recruitment ($100,000)
  • Meaford Hospital ($25,000)
  • Craigleith Community Visioning Workshops ($25,000)
  • Craigleith Area Crosswalk Detailed Engineered Drawings ($28,000)
  • Team Blue Local Business Association Requests ($526,000)

Stratford

  • 2024
    • $75,000 for Lights on Stratford
  • 2025
    • $150,000 for Lights On Stratford
    • $150,000 for Community Improvement Plan (Attainable Housing Funding)

North Bruce Peninsula

  • Municipal Website Refresh, including the incorporation of an online payment portal.
  • Building Condition Assessments 
  • Advertising 
  • Lion’s Head Community Centre and Arena Project
  • Surveillance Equipment
  • Receptacles and Bear-proof bins
  • Seating and Planters

Woolwich

The MAT Administration Policy was developed to guide how MAT revenues collected by the Township of Woolwich are reinvested into the local tourism industry. MAT funding requests will be presented to Council on an annual basis to determine priority projects and programs throughout the year. MAT funding requests will also be accepted on an ongoing basis throughout the year for any tourism opportunities that were not available during the annual allocation of funding period.

MAT exemptions

Mandatory

MAT does not apply to the following:

A municipality is not authorized to impose taxes under section 400.1 on any of the following:

  • 1. The Crown, every agency of the Crown in right of Ontario and every authority, board, commission, corporation, office or organization of persons a majority of whose directors, members or officers are appointed or chosen by or under the authority of the Lieutenant Governor in Council or a member of the Executive Council.
  • 2. Every board as defined in subsection 1 (1) of the Education Act.
  • 3. Every university in Ontario and every college of applied arts and technology and post-secondary institution in Ontario whether or not affiliated with a university, the enrolments of which are counted for purposes of calculating annual operating grants entitlements from the Crown.
  • 4. Every hospital referred to in the list of hospitals and their grades and classifications maintained by the Minister of Health and Long-Term Care under the Public Hospitals Act and every private hospital operated under the authority of a licence issued under the Private Hospitals Act.
  • 5. Every long-term care home as defined in subsection 2 (1) of the Fixing Long-Term Care Act, 2021.
  • 6. Such other persons and entities as may be prescribed.
Section 400.2 of the Municipal Act

Optional

Municipalities may choose to exempt other entities, such as:

  • Accommodation provided as shelter
  • Treatment centers that receive provincial aid under the Ministry of Community and Social Services Act
  • House of refuge, or lodging for the reformation of offenders
  • Charitable, non-profit philanthropic corporation organized as shelters for the relief of the poor or for emergency
  • Tent or trailer sites supplied by a campground, tourist camp or trailer park
  • Accommodation supplied by employers to their employees in premises operated by the employer
  • Hospitality rooms in an establishment that may or may not contain a bed and is used for displaying merchandise, holding meetings, or entertaining and not being used for accommodation

Municipalities with MAT

As of July 7, 2025 over 40 municipalities have implemented the tax.

Municipalities that charge a MAT, how much they charge as of January 26, 2026 and the date they started charging a MAT:

References

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